Sitting of 5 February 1981

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

PRIVATE BUSINESS
LONDON TRANSPORT (No.2) BILL (By Order)
Order for Third Reading read.
To be read the Third time upon Tuesday 10 February.
GREATER LONDON COUNCIL (GENERAL POWERS)(No. 2) BILL (By Order)
Order for consideration, as amended, read.
To be considered upon Thursday 12 February.
BRITISH RAILWAYS (NO. 2) BILL (By Order)
BRITISH RAILWAYS (PENSION SCHEMES) BILL (By Order)
BRITISH TRANSPORT DOCKS BILL (By Order)
GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
LLOYD'S BILL (By Order)
Orders for Second Reading read.
To be read a Second time upon Thursday 12 February.
LLOYD'S BANK BILL (By Order)
Order for Second Reading read.
To be read a Second time upon Tuesday 10 February.
LONDON TRANSPORT BILL (By Order)
Order for Second Reading read.
To be read a Second time upon Thursday 12 February.

Oral Answers to Questions
  Home Department

    Royal Commission on Criminal Procedure
    Mr. Severasked the Secretary of State for the Home Department if he will make a statement on the report of the Royal Commission on criminal procedure.
    Mr. van Straubenzeeasked the Secretary of State for the Home Department whether he has any plans to introduce legislation to implement the recommendations of the Royal Commission on criminal procedure; and whether he will make a statement.
    Mr. Kilroy-Silkasked the Secretary of State for the Home Department what representations he has received on the report of the Royal Commission on criminal procedure.
    Mr. Christoper Priceasked the Secretary of State for the Home Department what action he proposes to take in the light of the report of the Royal Commission on criminal procedure.
    The Secretary of State for the Home Department (Mr. William Whitelaw): I should like to thank the chairman, Sir Cyril Philips, and the members of the commission for a comprehensive and valuable report. Their thoughtful discussion of a wide range of important issues affecting the role of the police and the liberty of the subject, supported by an imaginative research programme, deserves very careful and considered reflection. Before reaching their own conclusions the Government will be studying the commission's recommendations and taking full account of public discussion and comments.
    Mr. Sever: I am grateful to the Home Secretary for his response. Is he prepared to accept that one of the important facets of the report is the question of telephone tapping? Will he give an undertaking to the effect that he is not prepared to allow anyone else to take decisions on telephone tapping and that he will not give authority for anyone else to authorise tapping other than his own office?
    Mr. Whitelaw: There is another question on that matter. I think I had better answer it then.
    Mr. van Straubenzee: Will my right hon. Friend, in considering the report, bear in mind the anxieties of many people about the considerable increase in crime, particularly sophisticated crime? Will his response take into account the belief of many that the exercise of police powers requires that the arrangements shall be both sensible and workable?
    Mr. Whitelaw: I am grateful to my hon. Friend. The commission has put before us the arguments on which any balanced judgment must be made. Irrespective of whether one agrees with the commission's conclusions, no one can doubt the value of the research that has been done and the way the arguments have been set put. It is obviously right, in a free society, that the protection of our citizens against increasingly sophisticated crime, on the one hand, must be balanced with the rights and liberties of the subject, on the other. That is what this important report is all about. I hope that hon. Members, in their comments, will be careful and seek to find the right balance through Parliament.
    Mr. Kilroy-Silk: Does the Home Secretary agree that if some of the commission's proposals such as those on arrest and detention were implemented, they would swing the balance of power still further and unnecessarily in favour of the police and potentially worsen police relations with the public? Will the right hon. Gentleman give an assurance that, as part of his careful consideration, he will take fully into account the views of individuals and organisations on these issues and will implement the recommendation for the tape recording of interviews of suspects, given the unanimity on this issue?
    Mr. Whitelaw: The first point illustrates the importance of achieving a balance. There will be those who believe that some increase in police powers under proper safeguards is right if we are to be successful in protecting our citizens against sophisticated crime. There will be others who think that these powers go too far. Those are the arguments which we must all follow. On the second point, I cannot give an assurance that I will pluck one part out of the report. First, we must look at the report as a whole. We may decide to bring out some parts of it later.
    Mr. Lawrence: Will my right hon. Friend bear in mind the findings of the Royal Commission to the effect that the time had passed for feasibility studies into the tape recordings of interviews of suspects, that many of the conceived objections have less validity than was earlier thought and that nothing could do more to speed the process of criminal trial at the same time as protecting the innocent than the speedy introduction of tape-recorded interviews of suspects?
    Mr. Whitelaw: Anyone in my position who is not sensitive to the need to speed up trial procedures would be very unwise. I want to see trials speeded up and shall take account of what my hon. Friend says.
    Mr. Arthur Lewis: May I deal with the right hon. Gentleman's last point about speeding up trial procedures and his earlier remarks about freedom of the individual? As his Department refuses to give the information, am I right in assuming that instead of hundreds there are thousands of unconvicted persons on remand in prison, while self-confessed and convicted criminals such as Lord Kagan go straight into an open prison? Why cannot these unconvicted people go into an open prison instead of being kept locked up for as long as 18 months without charge or allegation being made against them? Will the Home Secretary give the figures of the thousands of prisoners affected?
    Mr. Whitelaw: I have made clear to the hon. Gentleman that there are certain figures which it would be extravagant—well beyond sensible costs—to produce. The hon. Gentleman has formed a great habit over the years of asking questions that could be answered only at disproportionate cost. He has done it to all Governments for years. When he does it he assumes the answer that he wants to assume. He has no right to pursue that course and I do not intend to play that game with him. His comments about Lord Kagan do not arise from the report of the Royal Commission on criminal procedures. The hon. Gentleman is quite right to say that everyone wants to see shorter periods of remand, but he does not need to wrap it up in a whole lot of rubbish.
    Mr. Gorge Cunningham: While recognising that a decision about a debate on the Royal Commission report is for the Leader of the House, may I ask whether the Secretary of State agrees that a sensible way to proceed would be for us to have—after not too long a delay—a debate, probably on a "take note" motion, so that the House may have an opportunity of expressing provisional views before the Government finally make up their mind on the recommendations in the report?
    Mr. Whitelaw: The hon. Gentleman has made a reasonable proposition. He will realise that that is not for me but for my right hon. Friend the Leader of the House. If such time could be found—a suitable time, not too soon—I should welcome it.
    Mr. Alexander W. Lyon: Although there are many good things in the report, does the Home Secretary realise that its central weakness is that there is no substantial sanction against breaking the rules by the police? Will he consider bringing in some mandatory rule to the effect that the judge should exclude evidence that has been obtained in breach of any rule?
    Mr. Whitelaw: That matter should be carefully considered. I recognise that if the police are to have increased powers, the need for safeguards for citizens is important. These are all parts of the process of achieving a balance which, on reading the report, we all want to achieve.

    Television Licence Fee (Pensioners)
    Mr. Winnickasked the Secretary of State for the Home Department if he will give further consideration to exempting retired pensioners living in their own homes from paying the full television licence fee:
    The Minister of State, Home Office (Mr. Patrick Mayhew): No, Sir. The Government consider that it is better to continue to assist retirement pensioners by benefits in cash which they can spend as they choose rather than by benefits in kind such as concessionary television licences. Any concessionary scheme would make the licensing system more costly and difficult to operate.
    Mr. Winnick: Will the Minister accept that that is a disappointing reply, especially to so many of our elderly constituents? Will the Government recognise the justice of the claim made by so many retired pensioners that they should not have to pay the full television licence fee, for reasons which must be obvious to the Minister? Cannot a start be made by reducing the fee for those people by at least a half?
    Mr. Mayhew: What must be borne in mind is that any concessions to this class of television viewer should be paid for only out of additional costs imposed upon other licence holders. If we were to make a free licence available for all pensioner households the amount involved would be between £155 and £170 million a year. That is about one third of the licence revenue.
    Mr. Farr: Is my hon. and learned Friend aware that that is a disappointing reply, especially as the colour TV licence is likely to increase to £50 fairly soon? That figure is well beyond the reach of the average pensioner. Will my hon, and learned Friend look at this matter again to see whether there is any possibility of introducing a scheme whereby old-age pensioners may have a black and white TV licence without charge?
    Mr. Mayhew: I naturally share my hon. Friend's concern that those who are by far and away the poorer section of the community should have such benefits as the country can afford. However, my hon. Friend knows, equally, the extreme financial stringency which applies to all areas of Government expenditure. I am afraid that it applies here.
    Dr. Summerskill: Will the hon. and learned Gentleman assure the House that the licence fee will not be increased? Is he aware that, if there is a further increase, pensioners will find it far harder than they already do to meet that cost? Does he accept that either he should allow them a concession or should assure them that the fee will not be increased?
    Mr. Mayhew: With her experience in this office the hon. Lady knows very well that I could not give that assurance. She knows that what the Government are being asked to do is something that her Government neglected to do.
    Mr. Fell: Will my hon. and Learned Friend consider getting out of all this trouble about the television licence fee by not renewing the BBC franchise when it falls due for renewal and instead making the whole thing subject to advertising revenue? Does he accept that he need not worry about the unpopularity of such a move because the fewer people who watch television the better off the nation will be?
    Mr. Mayhew: I should be delighted to get out of this trouble, but I think that I should get into more trouble if I advocated the policy enshrined in my hon. Friend's last sentence.

    Telephone Tapping
    Mr. Cryerasked the Secretary of State for the Home Department if the review by Lord Diplock on telephone tapping has yet been completed.
    Mr. Whitelaw: My right hon. Friend the Prime Minister has received Lord Diplock's first report on the interception of communications in Great Britain.
    Mr. Cryer: Will the Home Secretary agree that telephone tapping is an interference with the freedom of the individual in a democratic society? To that end will he accept that the first report should be published as a matter of urgency, as it is 10 months since the review was first announced, in order to avoid charges of a cover-up? Will he give serious consideration to publishing subsequent Diplock reviews so that the matter may be brought under public scrutiny in the House and those suspicions about telephone tapping may be eradicated by proper and full public scrutiny?
    Mr. Whitelaw: My right hon. Friend the Prime Minister made it clear that Lord Diplock's first report will be published shortly. Thereafter, we shall consider what the hon. Gentleman has said.
    Mr. Grieve: Bearing in mind the value which will undoubtedly attach to the dispassionate review by Lord Diplock, will my right hon. Friend also bear in mind that his first function is the protection of the State and that some measure of telephone tapping will remain essential to that end, whatever Government are in power and under whatever circumstances?
    Mr. Whitelaw: I agree with my hon. and learned Friend.
    Mr. George Cunningham: Does the Secretary of State remember that this report and the White Paper published last April related only to the police, Customs and Excise and the security service, which is under his own authority? In view of recent public allegations, can he assure the House that there is no trespassing on the Home Secretary's preserve by any surveillance conducted by a service answerable to the Foreign Secretary?
    Mr. Whitelaw: I set out the position in my previous statements. I have nothing to add.

    London Boroughs—Metropolitan Police (Liaison)
    Mr. Norman Atkinsonasked the Secretary of State for the Home Department if he is satisfied withthe current liaison arrangements between the London borough councils and the Metropolitan Police Authority; and if he will make a statement.
    Mr. Whitelaw: The Commissioner is anxious to maintain and develop arrangements for liaison between district commanders and local authorities. In this he has my full support.
    Mr. Atkinson: Does that mean that the Home Secretary is moving towards agreeing to set up watch committees in London, similar to those elsewhere in the country? Will he reconsider his attitude to what he calls democratic liaison between London Members of Parliament and the Metropolitan Police Authority, who at the moment is Lord Belstead, who is in another place, who is not answerable to this House and who is certainly not elected?
    Mr. Whitelaw: I am sorry to have to disabuse the hon. Gentleman. The police authority is standing here, is answerable to the House, has been elected, whether the hon. Gentleman likes it or not, and is always ready to answer questions from London Members—and they greatly gain thereby.
    Mr. William Shelton: Has my right hon. Friend seen the wretched report on police and community relations in Lambeth, instigated by Lambeth council, most of the malicious allegations in which are anonymous? Will he accept that in the part of Lambeth that I represent the police are highly regarded and welcomed on the streets and the only regret is that there are not more of them on the streets?
    Mr. Whitelaw: I am grateful to my hon. Friend for making clear that large numbers of people of all parties—and he mentions particularly his constituency—give great support to the police and are grateful for the way in which they carry out their extremely difficult task, although I do not wish to pretend for one moment that everything is perfect. The Commissioner of Police of the Metropolis attaches the highest importance to achieving good relations between the police and the community, and, as the House knows well, so do I. It is important to have more police on the streets and the Commissioner has done a great deal to that end. That, in turn, raises problems over effective contact between local police and the communities concerned. There is great need on both sides for more communication and determination to work together. I agree with my hon. Friend. I cannot

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    believe that any good is done to that necessary co-operation by publishing a series of anonymous statements under headings like "Army of Occupation".
    Mr. Tilley: Can the Home Secretary confirm the news reports to the effect that he has decided to ask police throughout the country to monitor and investigate racialist attacks? Will he accept, if that is so, that we welcome his decision? Does he agree that if the investigation is to be a success in the Metropolitan Police there is need for greater liaison with the boroughs, community relations councils and the groups of black people who are suffering the attacks?
    Mr. Whitelaw: I met representatives of the Joint Committee Against Racial Discrimination yesterday, who put to me their concern about attacks on minority communities—for example, Asian and Jewish communities. I agreed to look into the activities of those who may be responsible. I also undertook to get in touch with chief constables and to consider a suggestion made by the committee to the effect that special units might be set up in police forces to investigate and deal with such problems. The Commissioner of Police of the Metropolis and chief constables are already doing a great deal in that regard. They deserve every encouragement from this House. I should like to add that co-operation is a form of two-way traffic. It applies equally to the police—and they are aware of the fact—the leaders of ethnic minority groups and everyone in the community. Co-operation with the police can be achieved only with the will to co-operate. Attacks such as those in the pamphlet are not a wise way to proceed.

    Elections (Business Vote)
    Dr. Edmund Marshallasked the Secretary of State for the Home Department what is his estimate of the number of local government electors in England and Wales who are entitled to vote in respect of more than one entry in the electoral registers.
    Mr. Mayhew: The information needed to make such an estimate is not available and could be obtained only at very considerable cost.
    Dr. Marshall: Will the hon and learned Gentleman confirm that it is an offence for an elector to exercise his franchise more than once in the annual elections for a particular local authority? Would not that basic democratic principle be breached by reintroducing the business vote?
    Mr. Mayhew: The hon. Gentleman is right. It is an offence to vote more than once in an election for any one authority. However, I do not believe that if the law were changed to restore the business vote there would be a breach. By definition, it would become lawful. However, there are many difficulties and no one has sought to go behind them.
    Mr. James A. Dunn: Will the Minister take steps to remove some of the financial difficulties of acquiring the information by altering the electoral registration forms? Does he agree that, if people were asked to declare whether they were registered on more than one constituency or ward boundary register, the information would be readily available?
    Mr. Mayhew: It is not quite as simple as that. There are 400 separate electoral registers in Great Britain. The
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    concern that the hon. Member for Goole (Dr. Marshall) is voicing relates to those who are prepared to be dishonest. The only way to get a clear indication of the true position is to have one central register, which we do not have.

    Open Channel
    Mr. Warrenasked the Secretary of State for the Home Department if he will make a statement about progress towards citizens band radio.
    Mr. Viggersasked the Secretary of State for the Home Department if he is yet in a position to make a statement of Government policy on open channel citizens band radio following the replies received to the consultation document.
    The Minister of State, Home Office (Mr. Timothy Raison): In the light of the response to the discussion document, we have been reviewing the possibility of introducing a service on a lower frequency, in addition to one around 930 MHz. We hope to be able to announce our conclusions shortly.
    Mr. Warren: I welcome my hon. Friend's willingness to support my belief that everyone should be able to communicate freely in a free society. May I ask what is his best estimate of when he will authorise CB radio in order to give British industry the best chance of getting into the market and remove the stamp of illegality that is now upon tens of thousands of people who wish to communicate with one another?
    Mr. Raison: I have said that we hope to announce our conclusions shortly and I mean what I say. However, I cannot give my hon. Friend a precise date".
    Mr. Viggers: Is the Minister aware that there appears to be a tidal wave of opinion in favour of CB radio and that the Government still have the chance to play the part of a surf rider rather than King Canute? What does he mean by "shortly"? Is it not possible to legalise immediately the 930 MH3 band?
    Mr. Raison: I am well aware that there is a strong body of opinion in favour of legalising CB radio, but there is also widespread concern about interference, especially with television. We are giving the matter careful attention. I repeat my assurance that we shall make an announcement as soon as possible. May I add that my hon. Friend has misinterpreted the role of King Canute.
    Dr. M. S. Miller: Will the hon. Gentleman accept that the paper which I sent him and which he kindly commented on represents my views? Will he remember that he has to strike a balance between making CB radio too cheap and easy so that any Tom, Dick or Harry can use it and interfere with other services and not making it too expensive so that it cannot be used by people who will use it responsibly?
    Mr. Raison: I am only too well aware that in this, as in most matters affecting the Home Office, there is need for balanced consideration.
    Mr. Freud: When he makes his announcement shortly, will the Minister bear in mind that it is crucial to the radio industry to be able to manufacture equipment which would not have been possible had the very high frequency wavelength been determined?
    Mr. Raison: I believe that there would be argument about the hon. Gentleman's comment about whether particular types of equipment could be manufactured here. However, one consideration is the capability of the radio industry.
    Mr. Gorst: Will my hon. Friend acknowledge that there are a large number of illegal users of the CB frequencies that he says will be considered? Will he immediately announce an amnesty, or at least say that there will be no further investigation and waste of Post Office engineers' time in seeking out illegal users until he has made his statement?
    Mr. Raison: I am not in a position to announce an immediate amnesty.
    Dr. Summerskill: Will the hon. Gentleman bear in mind that his statement gives some hope to over 70,000 users of illegal sets? From what the hon. Gentleman has said, in addition to a lower frequency, there will be a frequency of about 930 MHz. Does the hon. Gentleman accept that will be welcomed by those illegally operating who might otherwise persist in defying the Government and continue to use the 27 MHz frequency against their wishes?
    Mr. Raison: I am delighted that the hon. Lady has come round to a proposal that her Government did nothing to support.

    Causes of Fire
    Mr. Thomas Coxasked the Secretary of State for the Home Department when the standards for checking the causes of fires in England and Wales were last reviewed.
    Mr. Mayhew: There are no national standards as such, but police and fire brigade procedures are kept under review in the light of experience.
    Mr. Cox: Although I note that reply, may I ask whether the Minister is aware that a recent press report indicated that a large percentage of fires were the direct result of arson, which not only causes substantial damage to property, but sadly, the tragic deaths of more than 100 people a year? Against that background, will the hon. and learned Gentleman ensure that there is the closest co-operation between the fire service and the police and that the most modern methods of detection are used to discover the real causes of fires, about which we hear so often and so tragically?
    Mr. Mayhew: The hon. Gentleman is absolutely right to draw attention to the gravity of the incidence of arson. In 1979, 81 people died as a result of fires for which arson was the probable cause. The hon. Gentleman is equally right to draw attention to the need for the fullest co-operation between the police authorities and the fire authorities in determining the cause of fires. The Home Office has acted on the report of a working party that draws attention to this matter. In that regard, there are proposals to improve the syllabus for training fire officers at the fire service technical college.

    Guard Dogs Act 1975
    Miss Fookesasked the Secretary of State for the Home Department if he will seek to amend the Guard Dogs Act 1975 so that guard dogs may not be left secured on their own for long periods.
    Mr. Mayhew: No, Sir. The Protection of Animals Act 1911 already makes it an offence to ill-treat or cause any unnecessary suffering to a captive or domestic animal.
    Miss Fookes: Is my hon. and learned Friend aware that that Act does not deal with the distress that is caused to animals, and that that is a loophole? Will my hon. and learned Friend please think again about the Guard Dogs Act?
    Mr. Mayhew: I am well aware of my hon. Friend's deep interest in the welfare of all animals and of her position in the Royal Society for the Prevention of Cruelty to Animals. It would be difficult to make a statutory distinction between distress and unnecessary suffering. It is a matter for the court to consider on the facts of the case. In a particularly bad case, where an animal had been tied up for a very long time it would be open to a court to find that there had been a breach of the Act.

    Royal Observer Corps
    Mr. Moateasked the Secretary of State for the Home Department what priority Her Majesty's Government attach to the maintenance of Royal Observer Corps observation posts.
    Mr. Mayhew: We attach great importance to the 870 posts which provide the field reporting element of the United Kingdom warning and monitoring organisation. They are maintained at a high state of readiness and used regularly by the Royal Observer Corps for training, including national and NATO fall-out reporting exercises. Modernisation of communications between the posts and group controls is part of the improvement in home defence announced by my right hon. Friend on 7 August.
    Mr. Moate: Does my hon. and learned Friend agree that proper public recognition should be given to those volunteers who man the Royal Observer Corps and who play such a vital part in our civil defence arrangements? Should not the Home Office defend the observation posts more vigorously and with less feebleness than was used to defend the Sittingbourne post against other arms of government that want to surround it with gipsy caravans and all the associated paraphernalia?
    Mr. Mayhew: I am grateful to my hon. Friend for the tribute that he paid to the Royal Observer Corps. It is important that it should be acknowledged. I know about the case in my hon. Friend's constituency that causes him concern. The Royal Observer Corps post at Sittingbourne was threatened not by gipsies but by the screening of trees that Kent County council initially proposed to put up. At one stage that was thought likely to interfere with the operation of equipment. It was therefore made the subject of an interim objection. Fortunately, that was put right and the Home Office did not feel obliged to continue.
    Mr. Cryer: In the recent "Operation Square Leg" exercise were not all the observation posts, on paper, obliterated—along with the majority of the United Kingdom—by "tactical" nuclear weapons that were supposedly dropped on this country during a "tactical" exercise? Is it not part of a most cruel confidence trick to promote the idea that the civil defence corps would have any role in a nuclear war? Is not our best means of defence to get rid of our nuclear weapons, which make us a prime target?
    Mr. Mayhew: I am sorry to disappoint the hon. Gentleman, but every single feature of his question was wrong.
    Mr. Cryer: Publish the maps.

    Firearms Offences
    Mr. Teddy Taylorasked the Secretary of State for the Home Department what percentage change has taken place in the number of offences and crimes involving the use of firearms over the past 10 and 15 years, respectively.
    Mr. Newensasked the Secretary of State for the Home Department how many incidents of the use of firearms in crimes of violence are on record for the last year for which figures are available.
    Mr. Whitelaw: The numbers of serious offences recorded by the police in England and Wales in which firearms—including air weapons—were reported to have been used rose from about 1,300 to about 6,550 over the 10 year period 1969 to 1979; a 400 per cent, increase. The percentage increase over the past 15 years is not available, as information was not collected centrally on a comparable basis before 1969. Of the 6,550 such offences recorded in 1979, some 4,250 were offences of violence against the person or of robbery.
    Mr. Taylor: Are not those figures disturbing and alarming? Has the Secretary of State been able to identify reasons for this sharp increase in the use of firearms, whether of air guns, pistols or shotguns? Has the right hon. Gentleman any new plans to curb this dangerous threat?
    Mr. Whitelaw: Over the same period there has been a considerable increase in all sorts of crime. These figures must be seen against that background. However, the figures are serious. The secure holding of firearms is important. I have taken steps to that end in conjunction with the British Shooting Sports Council. I believe that they will be effective. We have to consider every method available if we are to ensure that firearms do not get into the wrong hands.
    Mr. Newens: Does not the Secretary of State agree that access to firearms is important, and is relevant to the increase in the use of firearms in crimes of violence? Given the figures that the right hon. Gentleman has announced, is there not a strong case for tightening up the requirements for the issue of shotgun licences, at least to the level that applies in the case of other firearms? Surely that could be done without placing an undue burden on legitimate users of shotguns.
    Mr. Whitelaw: I said that I would review the whole question of firearms and shotgun certificates, and I am doing that. However, these certificates are a matter for the police. It is an important issue and I am sure that the police will pay attention to the hon. Gentleman's remarks.
    Mr. Eldon Griffiths: Does not my right hon. Friend agree that the more firearms are used in the commission of crime, the more the police are forced to take up firearms to maintain the peace? Will my right hon. Friend treat this matter with the utmost seriousness? In particular, will he say what he is doing about replica guns, which are increasingly used in the commission of crime and which should not be available?
    Mr. Whitelaw: As regards my hon. Friend's first point, I accept that that is a very worrying development.
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    In the past, I have spoken to my hon. Friend about that. In the past day or so I have written to my hon. Friend about replica firearms and I have offered to discuss this further with him and with the right hon. Member for Norwich, North (Mr. Ennals) who came to see me on another occasion. I should be very pleased to hold that meeting.
    Mr. Flannery: Is it not a fact that in the past few years shotguns in particular have been used in the commission of crimes? Does not a powerful shotgun lobby exist—particularly in Tory areas—which exerts pressure? Will the right hon. Gentleman make a statement about that lobby and the pressure that it exerts?
    Mr. Whitelaw: Those who hold shotguns legally for sporting purposes are not those who are in any way responsible for crimes committed with firearms. That must be said immediately. I have asked the British Shooting Council if it will introduce a voluntary code of practice on the security of firearms in private hands. I am glad to say that at the meeting that it held yesterday, it agreed to that request. That is by far the most sensible and constructive way forward.
    Mr. Farr: I am sure that my right hon. Friend would wish to be absolutely fair in this matter. Will he confirm that one of the reasons for the big increase in air weapon offences is that in 1971 the qualifying level for an offence was reduced from £100 to £20? Is he aware that the latest criminal returns, made in 1979, show that the use of shotguns has been halved, from 20 per cent, in 1971 to slightly under 10 per cent, in 1979?
    Mr. Whitelaw: My hon. Friend shares the same anxiety that I have about the use of any firearms in crime. I am sure that he would agree with me that our success—and he has helped me in this—in getting a voluntary code of practice with regard to secure control of firearms has been a very sensible way forward. I thought that in what I said I was being extremely fair to those who use shotguns for sporting purposes, but apparently not all Members of the House thought so.

    Prisoners (Children)
    Miss John Lestorasked the Secretary of State for the Home Department what is the number of children at present in prison with their mothers.
    Mr. Mayhew: Twenty-three on 23 January.
    Miss Lestor: Is the hon. and learned Gentleman aware that many people eminent in child care are very concerned indeed at the possible long-term effects of imprisoning young children with their mothers over a long period of time? Does he not think it advisable, before this practice is allowed to grow, to set up some kind of research into the possible effects on such young children, which has never so far been carried out?
    Mr. Mayhew: Clearly, this is a matter of serious importance. The prison department has been conducting a review of policy for mother and baby units in consultation with child care experts in the Department of Health and Social Security. I hope that this will enable policies to be developed on allocation criteria and the regime and staffing of such units, which will take into account all proper factors.
    Mr. Kilroy-Silk: Is the hon. and learned Gentleman aware that at any one time about 1,000 dependent children

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    are in care because their mothers are in prison, whereas there are only about 70 places in mother and baby units in prisons? Given the cost and the disruption to families of this kind of imprisonment, will he give an assurance that he will take all possible steps to ensure that mothers are not imprisoned unless it is absolutely essential for the safety of the public?
    Mr. Mayhew: Whether mothers are sentenced to prison is a matter for the courts. As the hon. Gentleman will know, all the family circumstances are taken into account, but I am afraid that it is not possible for considerations of children to be decisive in every case.

    Parliamentary Boundaries
    Mr. Knoxasked the Secretary of State for the Home Department when he expects the Parliamentary Boundary Commission for England to make its final recommendations following the current review of parliamentary boundaries.
    Mr. Mayhew: The Boundary Commissions are independent bodies and are not accountable to my right hon. Friend for the time they take to complete their reviews within statutory limits. I understand, however, that the English Commission is likely to have completed its current review of parliamentary constituencies by the end of 1982.
    Mr. Knox: Is my hon. and learned Friend satisfied that this will allow sufficient time for the recommendations that are implemented to be effective for the next general election in view of the great disparity in the size of constituencies at present?
    Mr. Mayhew: I would certainly hope so. The English Boundary Commission, which is totally independent of the Government, and rightly so, has a statutory time in which it has to complete its functions. They must be completed by April 1984.
    Dr. Edmund Marshall: What is the hon. and learned Gentleman's best estimate of the minimum period of time that must elapse between the submission of the commission's report and the holding of any general election on proposals contained in that report?
    Mr. Mayhew: I do not make estimates on matters which are not my responsibility.
    Mr. Freud: While the Boundary Commission may not be accountable to the Minister, will he point out that it would be advisable to inform the Member of Parliament before it informs the district council and local newspapers of its intention to change boundaries?
    Mr. Mayhew: I have no doubt that the hon. Gentleman's comment will be noted by the chairman of the boundary commission.
    Mr. Waller: Can my hon. and learned Friend confirm that when the Government receive the final recommendations of the commission they will take steps to implement those recommendations speedily and thus not follow the disgraceful precedent set by the Labour Party on the last occasion?
    Mr. Mayhew: There is absolutely no chance whatever of my right hon. Friend following the precedent of 1969,
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    which was regarded as a disgraceful blot on our constitutional history. My right hon. Friend will fulfill his functions as quickly as he properly can.
    Mr. George Cunningham: Is it not a fact that the Government brought a Bill to the House recently for the sole purpose of increasing the Conservative figures at the next election by 15 or 20 seats?
    Mr. Mayhew: That point was made—and disgracefully made—in the debate on that occasion, and I fully answered it.

  Prime Minister

    Scottish TUC
    Mr. Ron Brownasked the Prime Minister when she next proposes to meet the Scottish Trades Union Congress.
    The Prime Minister (Mrs. Margaret Thatcher): I have at present no plans to do so, but my right hon. Friend the Secretary of State for Scotland has met representatives of the STUC on several occasions and has made it clear that he is prepared to meet them whenever this would be useful.
    Mr. Ron Brown: Does the Prime Minister agree that if she has the courage of her convictions, as she so often tells the House she has, she should meet workers' leaders in Scotland, an area devastated by Government policies? Will she face the music for once, or will she hide in her London bunker while the Tory Reich crumbles and workers fight back, because she leaves them no alternative? That is the message of the Labour and trade union movement.
    The Prime Minister: I have not the slightest doubt that if the Scottish Trades Union Congress wishes to see me, it will ask to do so. I have seen the English Trades Union Congress and the Wales Trades Union Congress.
    Mr. Ancram: Will my right hon. Friend point out to the STUC that, bad as the Scottish unemployment figures are, the trend in Scotland is better than that in the rest of the United Kingdom? Does she not agree that the prospects for attracting jobs in Scotland would be much enhanced if the Opposition and the STUC would stop talking Scotland down?
    The Prime Minister: I entirely agree with my hon. Friend. What he says about the unemployment trends is correct. Scotland benefits from the enormous oil-related industries, and some parts of Scotland are doing very well. I agree with my hon. Friend that the way to get more jobs there is to preach and practise the virtues of Scotland and not to talk it down.
    Mr. James Hamilton: If the Prime Minister cannot meet the STUC, will she instruct the Secretary of State for Scotland to make it clear categorically to the people of that country that in no circumstances will the youth opportunities programme be used, either in or out of uniform, in conjunction with the Services? Will she also reconsider the money paid to the youth opportunities programme and ensure that at least it gets something more than what is paid in social security insurance?
    The Prime Minister: I think that the hon. Gentleman is mistaken in his first question. I have not refused to see

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    the Scottish Trades Union Congress. So far as I am aware, it has not yet asked to see me. If it does, I shall of course be pleased to see it.
    The hon. Gentleman will be aware that there is a substantial increase in the number of places available in the youth opportunities programme in Scotland next year. Opportunities being made available by the Ministry of Defence, would, of course, have to comply fully with the youth opportunities programme. If they can, it would seem reasonable to offer young people that extra chance to work.

    Engagements
    Mr. Robert Atkinsasked the Prime Minister if she will list her official engagements for Thursday 5 February.
    The Prime Minister: This morning I presided at a meeting of the Cabinet. In addition to my duties in this House, I shall be having further meetings with ministerial colleagues and others.
    Mr. Atkins: Will my right hon. Friend make my birthday today even happier by adding her good wishes to the sale, widely announced today, of British Aerospace shares? Will she draw particular attention to the generous special offers to employees and the preference expressed for small shareholding applications?
    The Prime Minister: I congratulate my hon. Friend and hope that both he and his constituents are happy with the birthday present that he has been given. I hope that his constituents will take up the offer to which he referred. I also hope that we have not raised his future expectation of birthday presents too high, but, we shall do our best to follow that same path in future.
    Mr. Foot: Has the right hon. Lady had a chance to study the serious and dangerous suggestion as some of us see it, that the United States Administration may wish to return to the development of the so-called neutron bomb? Does she not agree that one result, which would be extremely dangerous for everyone in Europe, is that it could lower the nuclear threshold? Does she not think that that should be an over-riding consideration? What steps will the Government now take to try to ensure that these and kindred weapons are never stationed in Europe?
    The Prime Minister: It is clear that that is one of the possibilities which the new United States Administration may want to consider. So far, we have not been asked to look at any new proposal but, at his press conference the United States Defence Secretary said that the allies would be fully consulted before any decision was reached.
    Mr. Foot: Will the right hon. Lady give an assurance that the House will be fully consulted before she makes up her mind?
    The Prime Minister: That is not wholly a matter for me, but I have no doubt whatever that the matter will arise in the House on many occasions.
    Sir Walter Clegg: Is my right hon. Friend aware of the grave crisis facing the British fishing industry, including the port of Fleetwood? What steps will the Government take to help?
    The Prime Minister: I am very much aware of the grave crisis facing the fishing industry in Fleetwood, as
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    well as other ports in Scotland and England. My colleagues and I briefly considered the matter this morning and agreed that we must now look at both the timing and the level of help to the fishing industry.
    Mr. Frank Allaun: Does the Prime Minister accept that people in countries with differing political systems must live together or die together? Will she tell President Reagan that if he wants to relax East-West tensions the use of words such as "cheats", "liars" and "criminals", and the deployment of the neutron bomb, are not the way to go about it, particularly as Russia would no doubt follow suit and introduce the neutron bomb?
    The Prime Minister: I am certain that Russia has as many nuclear weapons as she wishes to have. She has put enormous resources into research and technology for all weapons of destruction in preference to raising the standard of living of her own society. The purpose of the neutron bomb is to attack massive concentrations of armour, which the Warsaw Pact countries have. Therefore, it is unlikely that such weapons would need to be based here.
    Mr. Adley: In the light of what Shirley said to Bill and what Tommy is saying about Mike, may I ask whether any of them has presented my right hon. Friend with any more credible and viable ideas for controlling inflation than the policies that she is already pursuing?
    The Prime Minister: No, but what I have watched seems a strange demonstration of brotherly and sisterly love.
    Mr. Dubsasked the Prime Minister if she will list her public engagements for 5 February.
    The Prime Minister: I refer the hon. Gentleman to the reply which I have just given.
    Mr. Dubs: When the Prime Minister goes to Washington to meet President Reagan, will she impress upon him that the people of this country and the whole of Europe are anxious about the increasing steps being taken towards nuclear weapons? Will she impress upon him the need to consider returning to SALT 2, and perhaps even SALT 3, as a much better way forward than devising yet another horrible weapon which threatens us all?
    The Prime Minister: When I see President Reagan I shall tell him that I believe that the vast majority of the people of this country are anxious to have proper deterrents to the weapons which the Soviet Union possesses in such abundance, and that the first duty of a Government is to defend and protect their own people.
    Mr. Churchill: Does not my right hon. Friend agree with the hon. Member for Bolsover (Mr. Skinner), who last week so accurately referred to the immoral earnings of the Labour Party? [Interruption] Is it not a scandal— [HON. MEMBERS: "Yes".]—and a denial of democracy that union bosses should be able to wield 90 per cent, of the votes at the Labour Party conference and additional votes through the abuse of the block vote system?
    The Prime Minister: What my hon. Friend has said is true. I am glad that we Conservatives are nobody's creatures.
    Mr. Skinner—
    Mr. Speaker: Dr. David Owen.
    Mr. Skinner: What about me?
    Mr. Speaker: I shall take any points of order after questions. I have called the right hon. Member for Plymouth, Devonport (Dr. Owen).
    Dr. Owen—
    Mr. Skinner: The Council for Social Diseases.
    Dr. Owen: Now that European theatre nuclear weapons negotiations have just commenced, does not the Prime Minister agree that in her forthcoming visit to Washington she should urge President Reagan to make no decision about the deployment of the neutron bomb, put this whole issue into the European theatre nuclear weapons negotiations and hope that it may be possible to negotiate a substantial reduction of battlefield nuclear weapons in Europe?
    The Prime Minister: We are all anxious to reduce the level of battlefield weapons and, indeed, of all armaments. As the right hon. Gentleman is aware, the problem is that if we agree we must be absolutely certain that all agreements can be effectively monitored; if not we shall lose the essential defence which a government must provide for their people.
    Sir Graham Page: Will my right hon. Friend today warn against the continuing damage of the seamen's strike, such as the immense loss of revenue, the loss of British ships to foreign management and ownership and the loss of future employment for British seamen?
    The Prime Minister: I am happy to endorse everything that my right hon. Friend has said. If this strike continues, it will mean fewer jobs for our people and fewer ships flying our flag.
    Mr. Foot: May I press the right hon. Lady on her last reply? Is she not aware that on two or three occasions I have asked the Government to make up their mind to intervene in this dispute? Will she not confirm to the House that the National Union of Seamen has said throughout the dispute that it is ready for the matter to go to arbitration? Will not the Government intervene to help to prevent the damage to which she referred?
    The Prime Minister: Certainly not. It is for the employers and employees to sort out their own problems in their own way. The era is past when everything came to No. 10 Downing Street to be solved.

Business of the House
Mr. Michael Foot: Will the Leader of the House state the business for next week?
The Chancellor of the Duchy of Lancaster, Paymaster General and Leader of the House of Commons (Mr. Francis Pym): The business for next week will be as follows:—
MONDAY 9 FEBRUARY—Second Reading of the Employment and Training Bill.
Motion relating to the Control of Pollution (Special Waste) Regulations.
TUESDAY 10 FEBRUARY—Second Reading of the Atomic Energy (Miscellaneous Provisions) Bill and of the Armed Forces Bill.
Motion on the British Railways Board (Increase of Compensation) Order.
WEDNESDAY 11 FEBRUARY—Supply [8th Allotted Day]: Debate on an Opposition motion on the Government's attack on housing and the building industry.
Motions on Northern Ireland consolidation orders on legal aid, advice and assistance, and weights and measures.
THURSDAY 12 FEBRUARY—Second Reading of the Education (Scotland) (No. 2) Bill.
FRIDAY 13 FEBRUARY—Private Members' Bills.
MONDAY 16 FEBRUARY—Until Seven o'clock, consideration of Private Members' motions.
Second Reading of the Gas Levy Bill.
Mr. Foot: May I put to the right hon. Gentleman three matters that I have mentioned to him before? I raised the first with the Prime Minister a few minutes ago. Will he undertake to ask the Minister responsible to come to the House and make a statement about the seamen's dispute? Is he aware that the right hon. Lady has now confirmed that it is causing serious damage throughout the country, and therefore we urge that a statement should be made to the House on the matter?
Secondly, has the right hon. Gentleman had a chance to look into the matter that I raised a week ago about the debate on heavier lorries? Is he aware that the more we look at the debate on the Armitage report and at what was said by the Government spokesman in that debate, the more I think that the right hon. Gentleman—who must have read it—will confirm that the Govenment are committed to bring the matter back to the House for a vote to see whether the House will confirm our previous vote against heavier lorries in this country? I urge the right hon. Gentleman to deal satisfactorily with that.
Thirdly, can the right hon. Gentleman say whether there will be a debate on the Government's attitude to the corporate plan of the British Steel Corporation?
Mr. Pym: With regard to the seaman's strike, I have made clear on many occasions in the House that my right hon. Friend the Secretary of State for Trade is keeping in close touch with the situation. As it is up to the unions and the employers to resolve their dispute, and as the Government do not intend to get involved, there is no obvious advantage at present in making a statement. I shall keep the matter in mind, and if the circumstances change we can consider it again.
With regard to the Armitage report and the debate on it, I have noted the right hon. Gentleman's comments. It is fair to say that the Government are still some way from
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a final decision and we are still receiving representations. We have had a full day's debate on the matter, but I note the right hon. Gentleman's request.
The matter of steel is still under consideration by the Government. I hope that there will be a statement shortly—possibly next week, but I cannot be sure. There will be opportunities for a debate later, but for the time being the position rests as I have described it.
Several Hon. Members rose—
Mr. Speaker: I should inform the House that over 50 right hon. and hon. Members have already indicated to me that they are hoping to take part in the debate on the main business of the day. The longer we take on business questions, the fewer hon. Members I shall be able to call. Also, there are two applications under Standing Order No. 9 before we reach the main business.
Mr. Patrick Cormack: Is my right hon. Friend aware that 55 questions were put down to the Prime Minister on Tuesday, 49 of which were couched in the same language? Is he further aware that today there are 47 questions, of which 43 are the same? Does he not agree that this is becoming quite a farce? Will he refer the matter to the Procedure Committee?
Mr. Pym: This matter comes up from time to time. Other hon. Members have expressed disquiet at the present arrangements. I shall take an opportunity to discuss it with my right hon. Friend and to consider whether at some time in the fairly near future it may be referred again to the Select Committee. I have no decision to announce today.
Mr. Joseph Ashton: Is the right hon. Gentleman aware that for the past nine out of 10 Thursdays there has been controversial business in the House with a three-line Whip on both sides at 10 o'clock? Is he further aware that many hon. Members on both sides of the House represent constituencies with poor train services, which means that we have to drive north at 10 o'clock on a Thursday night in January and February in order to carry out our constituency work the day after? Would it not be possible next week, for instance, to swap the uncontroversial business on Tuesday for the controversial business on Thursday so that northern Members on both sides of the House can carry out their constituency business?
Mr. Pym: I shall keep that in mind. For various reasons, I do not think that I can make the change that the hon. Gentleman requested next week. On the whole, most hon. Members appreciate that under our present procedures their presence here until 10 o'clock, at least on a number of Thursdays, is part of our normal practice.
Mr. A. J. Beith: As the Government are considering major policy changes in the responsibility for polytechnics, and as there are motions on the Order Paper showing a great deal of concern about overseas student fees and student union finance, may we have a debate on higher education policy in the near future?
Mr. Pym: I shall keep that request in mind.
Mr. Dudley Smith: In view of the unanimity expressed in the Standing Committee yesterday by both the Government and the Opposition in rejecting a European proposal on hormones in animals, will my right hon. Friend take due note of what

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happened and of the disturbing facts that arose? In due course—perhaps not next week—will he consider providing time for a debate in which we can examine the whole question of European regulations that are put before the House?
Mr. Pym: The House has spent some time on the matter in the Procedure Committee and in other ways. I shall keep the point in mind.
Mr. Arthur Lewis: In the knowledge that the Government are very interested in cutting all public expenditure, including that which they claim to be wasteful, and in view of the fact that, according to several newspapers, European Members of Parliament are swarming around the world at a cost of millions of pounds, is it not time that the Government found a way of controlling that wasteful expenditure of British taxpayers' money? When the right hon. Gentleman responds to the advertisement in The Guardian today, he might suggest that Mr. Roy Jenkins could subsidise them rather than asking the British taxpayers to pay.
Mr. Pym: The Government deplore extravagant travel by Members of the European Parliament or by Members of any Parliament, particularly at present. I do not think that that is a matter for debate, but I agree with the hon. Gentleman.
Mr. Dafydd Wigley: Will the Leader of the House take note of early-day motion 150 on access for disabled persons, which stands in my name and the names of 67 other hon. Members?
[That this House, mindful of the recommendations of the Silver Jubilee Committee which called for legislative action by the Government to help safeguard the provision of suitable means of access for disabled persons to buildings used by the public, and in view of the fact that 1981 is the International Year for Disabled People, calls on the Government to facilitate legislative steps that will accomplish this objective.]
In view of the strength of feeling that was expressed at Question Time yesterday from both sides of the Chamber on the need for legislative provision to improve access for disabled people, can the right hon. Gentleman guarantee that the Government will not block a Bill that will provide such legislative framework for access for disabled persons, that will be brought before the House on Friday, and that is supported by the all-party disablement group?
Mr. Pym: Obviously all Governments are concerned about ensuring that the best possible access will be made available for disabled persons. With regard to the Bill, that is a matter for the House to decide.
Mr. John Bruce-Gardyne: In the light of this morning's report in the Financial Times that the De Lorean motor company is asking for another £8 million from the long-suffering British taxpayer as of right and in total conflict with the assurance given by the Secretary of State for Northern Ireland to the House in August that our obligations to this company were completed with the payment of £67 million, may we have an urgent and early statement from the Northern Ireland Office?
Mr. Pym: That matter is still under consideration by the Government, as it ought to be. I cannot promise an early statement, but I shall convey my hon. Friend's request to my right hon. Friend.
Mr. Bob Cryer: May I emphasise to the Leader of the House the importance of a statement on this confused position, in which threats appear to have been made by the De Lorean company against the hand that has fed it so very well? May I also request a debate on Monday 16 February, or earlier if possible, on the textile and clothing industry, which is still losing thousands of jobs a year, because if such a debate is held on 16 February, it will be on the same day as a large lobby of trade unionists are coming down to London to express opposition to the Government's policies and so protect their jobs in the textile and clothing industry?
Mr. Pym: I know that there have been a number of debates on this very important industry and the difficulties through which it is going. I shall bear the hon. Gentleman's point in mind, but I am doubtful whether it will be possible to arrange things on that day—unless the hon. Gentleman himself is fortunate in the ballot for Private Members' motions.
Mr. John Ward: Is my right hon. Friend aware that there is still a great sense of injustice felt by those who pay both domestic and commercial rates? Will he find time for a debate on this matter to see whether we can devise a system which is much fairer than the present one?
Mr. Pym: I do not think that I can find time in the business of the House for such a debate, which is, of course, a matter of public discussion at present.
Mr. Robert C. Brown: The Leader of the House will have noticed early-day motion 128 on the proposed closure of Tate and Lyle's Liverpool refinery.
[That this House deplores the proposed closure of the Tate and Lyle cane sugar refinery at Love Lane, Liverpool, and the effect this will inevitably have on present and future employment over the whole of Merseyside; recognises that many employees have given lifetimes of active productive service to the company, that industrial relations and co-operation between workers and management have been excellent at all times and joint efforts have constantly improved productivity; appreciates the difficulties imposed on company cane refinery activities by the inequities of the Common Agricultural Policy and the expansionist production and marketing policies of the British Sugar Corporation; but remembers with pride that past Labour governments have been able to resist those policies and provide sufficient support to enable cane sugar refining to be carried on in Liverpool, whereas this present Government have significantly failed to provide any measure of similar support; notes the cynicism with which the London Stock Exchange has reacted to the news of the loss of 2,000 jobs on Merseyside, by increasing the value of the company shares by 12p, and will not lightly forget such reaction; and calls upon Government Ministers, honourable Members, local organisations and individuals, to join with the local workers in urging the company to look again at their proposals which are bad for the cane sugar producers, bad for consumers, bad for workers and managers alike and bad for many industrial endeavours in the area which are dependent on the ready availability of refined cane sugar and its products.]
Bearing in mind the devastating effect that this will have on the employment of British refinery workers and the

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catastrophic effect that it could have on the ACP sugar producers, will the right hon. Gentleman arrange for a statement to be made by the Minister of Agriculture and for a debate on this subject?
Mr. Pym: I do not think that there will be time for a debate, but I believe that I am right in saying that a deputation is going to see my right hon. Friend the Minister of Agriculture to make representations direct to him. I do not think that it will be possible to fit in a debate next week.
Mr. Jonathan Aitken: Will my right hon. Friend consider finding time for a debate on the report of the Select Committee on Foreign Affairs on the role of Parliament in reforming the Canadian constitution? Is he aware that, with so much growing interest in this subject on both sides of the House, a debate on the issue and the problems related to it might well save many days of debate later this Session if a request is received from Canada?
Mr. Pym: That report was published only last Friday. I am doubtful whether it would be appropriate to debate that subject while proceedings are in process in the Canadian Parliament in Ottawa, but that is a possibility which I can keep in mind.
Mr. George Robertson: Has the Leader of the House had an opportunity to watch the actions of his colleagues over the closure of colleges of education in Scotland, inasmuch as the Minister with responsibility for education in Scotland announced in the streets of Glasgow, to students of the colleges, that the colleges were to be shut in June of this year—an announcement made for the first time—yet within days his own Department was advertising three-year and four-year courses in the very same colleges? Will the right hon. Gentleman recognise the deep feeling that exists on both sides of the House about the closure of these colleges and give Government time for an urgent debate on this matter?
Mr. Pym: Those representations have been made to me previously. I ought to say that the advertisments to which the hon. Gentleman refers are not and were not the responsibility of my right hon. Friend or the Government. They were the responsibility of the Joint Committee of Colleges of Education in Scotland. I believe that there was a part of the advertisement which was omitted by oversight, but it was not the Government's responsibility.
Viscount Cranborne:I am sure that my right hon. Friend will have noticed the reports in the newspapers of late about the negotiations that have been taking place between Her Majesty's Government and the Russian Government about the resumption of relations after the break which occurred as a result of the invasion of Afghanistan. Would it be possible for my right hon. Friend to make time for a debate on foreign affairs, particularly in view of the apparent way in which the Russian action in Afghanistan has been forgotten and in which the West seems to be rapidly coming to accept the status quo there?
Mr. Pym: I should like to arrange a debate on foreign affairs but, unfortunately, that cannot be done in the near future. However, I am looking forward for an opportunity in due course, when I hope that we can debate such matters.
Mr. John Prescott: In view of the obvious failure to convince either the Prime Minister or other Ministers of the need to intervene in the seafarers' dispute in the belief that a settlement can be freely arrived at through negotiations, will the right hon. Gentleman consult the hon. Member for Dorking (Mr. Wickenden), who, as a large shipowner, has conceded the reasonable demands of the seafarers? Other shipowners are quite prepared to concede them but fear the intimidating factor of the closed shop of shipowners on shipowners who would agree. Will the right hon. Gentleman ask the Department of Employment to look at that aspect of the closed shop?
Mr. Pym: The present Government believe that it is not usually helpful for a Government to intervene. The issue is essentially one between the employers and the unions. We hope that they will reach an early settlement.
Mr. John Silkin: Has the Leader of the House considered the advisability of a debate on the report of the Royal Commission on criminal procedure? Ought not the House be allowed to express its views before the general process of consultation is concluded?
Mr. Pym: I shall consult my right hon. Friend the Home Secretary and take into account the representations made by the right hon. Gentleman.
Mr. A. E. P. Duffy: Will the right hon. Gentleman look at early-day motion 146 on the rocketing rise in unemployment in South Yorkshire?
[That this House deplores the further increase in the level of unemployment in South Yorkshire in January, the biggest rise since July 1980; notes that unemployment in Mexborough is 5,155, 17·6 per cent. of the potential workforce, up 0·7 per cent. on December 1980, in Rotherham 8,156, 12·6 per cent., up 0·8 per cent., in Barnsley, 9,745, 11·8 per cent., up 0·8 per cent., in Doncaster 14,595, 13 per cent., up 0·8 per cent., all of which are development areas of varying status, whilst in Sheffield, which is due to lose its assisted area status in 1982, 27,405 people are out of work, or 9·3 per cent., up 0·7 per cent. on December 1980; calls upon Her Majesty's Government to recognise that rocketing unemployment justifies a far higher level of aid to South Yorkshire; and urges it to match the vigorous employment, promotion and development programmes of the South Yorkshire County Council and the district councils.]
Will the right hon. Gentleman appreciate that the sea change that is taking place in employment prospects in areas of traditional and long-standing industrial employment now requires the House to examine this problem not merely on a regional basis but, increasingly now, on a sub-regional basis, and preferably in the northern half of the country? Will he make provision?
Mr. Pym: The Government are as concerned as anyone about the rise in unemployment. It has been considered on a number of occasions in the House.
Mr. Duffy: Not in that context.
Mr. Pym: Not in that particular context—but the House can address itself to this problem in that context. Indeed, it would be open to an hon. Member to do so this very day.
Mr. Michael English: Will the right hon. Gentleman confirm that the record of his

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discussions with Prime Minister Trudeau has been published in Canada? Can it be published here, and can the other records of discussions be published, since Prime Minister Trudeau is reporting words of the Prime Minister and we have no means of proving whether his report is true?
Mr. Pym: I do not think that that arises on the business for next week.
Mr. Harry Ewing: May I press the Leader of the House about the colleges of education? In his anwer to my hon. Friend the Member for Hamilton (Mr. Robertson), did the right hon. Gentleman forget to say that he would be giving Government time for a debate on these colleges? As the committee which published these advertisements has on it a representative of the Secretary of State, the Leader of the House cannot escape that responsibiity by saying that it was the governors of the colleges who published that advertisement when the Secretary of State's representative was on that body.
I am sure that the Leader of the House must be aware that the Government's policy has been rejected by 40 votes to nil in the Scottish Grand Committee, with not one Minister voting in favour of his own policy. Does not that convince the Leader of the House that we ought to have a debate on the Floor of the House in Government time?
Mr. Pym: I have nothing to add to the answer that I gave just now to the hon. Member for Hamilton (Mr. Robertson) concerning the advertisement. I stand by what I said then. I do not think that there will be time to debate this matter on the Floor of the House. The Secretary of State for Scotland has made his position clear.
Mr. Robert Kilroy-Silk: Is the right hon. Gentleman aware that the answer that he has given to my right hon. Friend the Member for Deptford (Mr. Silkin) on the possibility of there being an early debate on the report of the Royal Commission on criminal procedure will be welcomed? Will he also announce that there will be an early opportunity to debate the White Paper on young offenders?
Mr. Pym: I shall consider that proposition.
Several Hon. Members rose—
Mr. Speaker: Order. I shall call the five hon. Members who have been rising in their places.
Mr. Dennis Skinner: Will the Leader of the House introduce some new procedures to enable Members who are mentioned in statements such as that made by the hon. Member for—what is it?—Stretford (Mr. Churchill)—
Mr. Robert Atkins: Manchester United.
Mr. Skinner: Yes, Manchester United, or whatever —to enable other Members such as myself to comment on the "Council for Social Diseases", or whatever else it is called—"Common Market Solidarity"—and to say that the people involved are living an immoral life inside the Labour Party while touting for custom outside it?
Mr. Pym: The hon. Gentleman takes considerable advantage of the procedures that we already have.
Mr. Dennis Canavan: Instead of having next week the Second Reading of the Education
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(Scotland) (No. 2) Bill, most of which is either irrelevant or damaging to Scottish education, can we not use next Thursday for a debate on the need to fight the Government's disastrous proposals to close Scottish colleges of education? In view of the promise that the Leader of the House gave to me last week that he would see the Secretary of State for Scotland about that matter, when can we expect a statement from the Secretary of State that he will abandon those disastrous proposals?
Mr. Pym: I do not think that my right hon. Friend has it in mind to make a further statement. However, I dare say that the issue that has been raised on three occasions this afternoon might be relevant to the debate on the Bill.
Mr. Bruce George: As the Leader of the House negotiated with the Canadian Government on 19 December, will he now consider having questions on defence to include the subject of the patriation of the Canadian constitution? In what capacity was the Leader of the House negotiating with Mr. MacGuigan on 19 December?
Mr. Pym: There was no question of my negotiating with Mr. MacGuigan or the Canadian Government when I was there.
Mr. Stanley Newens: Does the right hon. Gentleman recognise that there are developments in many parts of the world that merit a debate on foreign affairs at this juncture? For example, does he recognise that many of us feel strongly about the appalling situation in El Salvador, where many people have been murdered over recent months, and about the policy of the new American Administration towards El Salvador? Will he tell us when it will be possible to bring such matters to the Floor of the House?
Mr. Pym: I have already said that that cannot be done in the near future. I shall look for an opportunity to have a debate on foreign affairs as soon as possible.

European Parliament (Members' Foreign Travel)
Mr. David Stoddart: 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 extravagant use of taxpayers' money by the European Assembly on foreign travel."
I believe that the matter is specific. Several newspapers and broadcasting authorities have today and yesterday drawn attention to the scale of overseas travel of Euro Assembly members, which is costing taxpayers dear. According to The New Standard yesterday and many other newspapers today, following a trip to Bogota by 38 members of the European Assembly, accompanied by 60 staff, at a cost of £250,000, 60 European Assembly persons and more than 100 staff are now to travel to Sierra Leone at a cost of several hundred thousand pounds more. Further trips are planned to countries such as Australia and Japan, and total costs could be as high as £5 million. There is much puzzlement about travel. No responsibility rests with the European Assembly for trade, defence or foreign affairs.
The matter is important, because British taxpayers' money, which is paid through levies, VAT and high food

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prices, is involved. In many areas, public expenditure in the United Kingdom is being reduced due to constraints on our finances. It is relevant that even after the rebate, when it is received, Britain will be the second largest net contributor to Community funds.
It is also important because when the public are becoming increasingly disillusioned with the EEC, the House has a duty to try to check extravagant, outrageous and insensitive expenditure by any of the institutions in the Common Market, including the Assembly.
The matter is urgent, because it is necessary for the House, which is not against overseas visits but which is sensible and circumspect about the scale of those visits, to make its views known to the European Assembly. It is necessary that it should also make its views known to British members, because their membership of the Assembly depends upon the continuing consent of the House, and their salaries are paid through the Consolidated Fund.
The matter is urgent also because the House should be given the opportunity to express its views to Ministers, who, I feel sure, will be as concerned as I am about this gross extravagance, so that those Ministers, backed, I hope, by the Prime Minister, can take action, when they meet their European counterparts next week, to curb such excessive expenditure by the European Assembly.
Mr. Speaker: The hon. Gentleman gave me notice before noon today that he would seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the extravagant use of taxpayers' money by the European Assembly on foreign travel."
As the House knows, under Standing Order No. 91 am directed to take account of the several factors set out in the order but to give no reason for my decision.
I listened carefully to what the hon. Member had to say, but I have to rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

Seddon Atkinson Vehicles (Preston)
Mr. Stan Thorne: I beg to ask leave to move the Adjournment of the House, under Standing
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Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the closure of the Seddon Atkinson Vehicles factory at Preston."
Seddon Atkinson Vehicles announced at 10.30 this morning that it would close two factories in my constituency, with a loss of 470 jobs, and it also announced a closure at an Oldham factory, with a loss of 338 jobs. In other words, about 800 jobs are being lost at one go. The effect of this on my constituency will be considerable, particularly in the South Ribble area and on the working people there who will suffer in consequence of those closures. The firm, which is a subsidiary of International Harvesters, was originally Atkinson Engineering, which has a long history in the town. There is considerable disquiet about the closure.
The main reasons given by the management are high interest rates, import penetrations of trucks and other vehicles, and the failure to plan our economy by the Government. It is an urgent matter, as I am sure you will appreciate, Mr. Speaker.
Mr. Speaker: The hon. Member for Preston, South (Mr. Thorne) gave me notice before noon today that he might seek leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the closure of the Seddon Atkinson Vehicles factory at Preston."
The House will have listened with concern to what the hon. Gentleman has said. As he knows, I do not decide whether this matter shall be debated by the House. I decide merely whether there should be an emergency debate tonight or tomorrow. After listening with great care to the hon. Gentleman, I must rule that his submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.

STATUTORY INSTRUMENTS, &c.
Mr. Speaker: By leave of the House, I shall put the Question on the two motions together.
Ordered,
That the draft Shipbuilding (Redundancy Payments Scheme) (Great Britain) (Amendment) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Shipbuilding (Redundancy Payments Scheme) (Northern Ireland) (Amendment) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Thompson.]

Economic and Industrial Policy
3.59 pm
The Prime Minister (Mrs. Margaret Thatcher): I beg to move,
That this House approves the economic and industrial policies of the Government; welcomes the continuing fall in the rate of inflation, greater realism in wage bargaining, and increasing awareness in industry of the need to be competitive; and recognises that lower inflation, higher output, an expanding private sector and better industrial relations provide the only secure basis for more jobs.
Mr. Speaker: Order. I have selected the amendment in the name of the right hon. Member for Ebbw Vale (Mr. Foot).
The Prime Minister: The debate takes place when there is growing concern, inside and outside the House, about the very high level of unemployment. Despite all the measures that the Government are able to take in the provision of unemployment and supplementary benefits, and other forms of help, the loss of a job and the inability to find another is a human tragedy as well as a tragic waste of resources. That, at least, is common ground for every hon. Member.
I think that it is also common ground that a stable currency and the restoration of honest money ought to be the objectives of any Government. Nevertheless, in recent years we have suffered both high inflation and high unemployment, and what divides the House is how best those twin evils can be overcome. I want to set out the policies of the Government and, in doing so, to look at some of the proposals that the Opposition and the TUC are urging upon us.
The centre-piece of the Government's strategy is, and will remain, the conquest of inflation. That would be a worthy enough end in itself. Indeed, to have any other objective would be to set out to cheat all those who have saved. But the fight against inflation is far more than that. It is the only way in which we can achieve our other economic goals. For inflation and unemployment are not alternatives, except in the very short term.
For years there was a widespread belief that we could have inflation and a high level of employment at the same time. For years there was a belief that we could secure more jobs if we were prepared to put up with a little more inflation—always a little more, it was thought.
However, the experience of the past 25 years has taught us on the Government Benches that those beliefs were a most damaging illusion. Inflation and unemployment, instead of moving in opposite directions, rose inexorably together. As Governments tried to stimulate employment by pumping money into the economy they caused inflation. The inflation led to higher costs. The higher costs meant loss of ability to compete. The few jobs that we had gained were soon lost; and so were a lot more with them. And then, from a higher level of unemployment and inflation, the process was started all over again, and each time round both inflation and unemployment rose. In Parliament after Parliament, each new Government had a higher average rate of inflation and unemployment than the preceding Government. It is that cycle that we have set out to break.
Labour Members and their friends in the TUC are advocating that we should do just the same again. But what do their proposals amount to? They would mean a huge
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injection of money into the economy, which would take us on to still higher inflation and no prospect of unemployment ever coming down. That is one of the main differences between the Opposition's policies and those of the Government. Their case is that extra public spending would reduce unemployment. But it would not work. That is not a recipe for more jobs; it is a recipe for more inflation and even fewer jobs.
It seems to us that the Opposition have deliberately turned their backs on the lessons of the past quarter of a century. They have put forward a prospectus that has been discredited by experience. Their proposals are a return to the very policies that led to our problems in the first place.
Instead of relying on wage and price controls, which never work for long, the principal weapon that we have chosen for getting inflation down is control of the money supply. Although the new Shadow Chancellor has abandoned the monetary convictions of his predecessor, some Labour Members—and some Members on this side of the House—will still consider that the rate of monetary growth in the second half of last year was too rapid. But the fact is that, whatever the figures for one indicator may show, monetary conditions taken as a whole have been tight and have helped to bring down inflation. Over the past six months retail prices have gone up by only 3.7 per cent., although I believe that the figure understates the underlying trend, because of the pattern of price increases during the year.
The second aspect of the Government's strategy, which goes hand in hand with the fight against inflation, is the sustained effort that we are making to reduce the pressure on the economy created be excessive Government spending. Unless that is done there will not be room for the private sector to prosper and to create jobs, and most jobs are created by the private sector. An overgrown public sector financed by an overburdened and over-taxed private sector struggling to cut its costs to the bone would be another recipe for unemployment.
We have made some progress in reducing the extravagant plans of the previous Government, but, because of the effects of the recession, there have been some unavoidable spending increases, particularly on nationalised industries and unemployment benefit. However we shall come out of the recession with a substantial reduction in the underlying level of public spending. That will leave room for expansion in the private sector, where most of the new jobs will be created.
The proposals that we have had from the TUC to increase public spending by £4.7 billion at the same time as reducing taxes would take us in completely the wrong direction. If the TUC's proposals were financed honestly they would lead to increased borrowing, and thus to higher interest rates, which would damage industry's chances of recovery. But if, as is much more likely, they were not financed honestly, we should be on the road to hyperinflation.
Thirdly, to secure more jobs and a higher level of employment, unit labour costs must be competitive with those of our rivals. The fact is that for years our industries have been overmanned and have had a lower level of productivity than those of our competitors. Hence our decline. But the policies that we are following are obliging employers to increase efficiency and cut costs. If we are to be competitive and to get more jobs in the future, that is exactly what we must do. It is no good Labour Members

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laughing. It is just that attitude that has lost us orders and given orders to our competitors, so that they have more business and more jobs than we have.
Because employers have been so successful in cutting costs and increasing efficiency, we find that the fall in output has been accompanied by a much larger increase in the level of unemployment than would have been expected. That is a measure of both the extent of overmanning and the progress made in solving it—progress that is essential for survival.
The level of wage increases unrelated to output has been the other main factor in making some of our industries uncompetitive. For a time that position was obscured, as increased pay was offset by a falling exchange rate. That could not go on. Many of us can remember the alarm felt in the House and in the country when, because of the policies of the Labour Government, the pound fell below $160, and we know the difficulties and shame that that caused to Britain.
Of course, the exchange rate has risen rapidly, and the speed at which it has risen has led to considerable problems of adjustment. I do not underestimate those problems. They make it more important than ever that higher pay should be matched by higher output. Although pay settlements have moderated in recent months, some are still too high. The Ford settlement, at 9.5 per cent., was widely acclaimed, because it was in single figures. However, Fords in Germany settled at 5.8 per cent. Unless, therefore, our productivity takes a leap, our competitors will pull ahead even further.
Pay negotiators are now learning—alas, the hard way, and not with much help from Opposition Members—that excessive settlements mean bankruptcies and fewer jobs. But, Mr. Speaker, competitiveness is not only a question of cost and price. We have been losing out for years in terms of new technology, new investment and new products.
One of the reasons has been the declining profitability.
Mr. Peter Tapsell: Why?
The Prime Minister: One of the reasons for the declining profitability is that people earning wages and salaries have taken too much out for today and left too little for investment tomorrow.
Mr. Tapsell: If my right hon. Friend has finished her interesting and clear remarks about the exchange rate, may I draw her attention to the report issued by Reuters this morning, which has already been transmitted all over the world, that the British Government now intend to pursue a different exchange rate policy in order to help British industry? If that is so, there are many people in industry and elsewhere who will welcome that announcement, because it may help to restrain the rising levels of unemployment.
The Prime Minister: I know the particular interest that my hon. Friend has taken in this subject for a long time. The problem with the exchange rate has been the speed at which it has increased. It is, of course, noteworthy that it now stands at $2.34.$2.35—precisely the rate at which it was standing when the Labour Party came to power in 1974. After that, it rose slightly. But the real problem was that the exchange rate plunged sharply under Labour stewardship. It has gone up quickly again.
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That rapid increase in the exchange rate caused tremendous problems, particularly for industries that are exporting. We do not have a positive policy for intervening in the exchange rate. Such intervention cannot resist the market for long. We do not know the precise relationship between interest rates and exchange rates. But, of course, we shall bear in mind the height of the exchange rate when taking other decisions. We cannot constantly intervene to keep it down, because there is nothing that can resist the market for long. Moreover, we have to bear in mind that one of the influencing factors is what happens in other countries. It would not be possible to have a policy in this country which constantly sought to overcome and take into account those factors.
Mr. Dennis Skinner: It is the same old story.
The Prime Minister: Of course it is the same old story. Truth usually is the same old story. That fact has never penetrated the hon. Gentleman's mind.
Mr. Skinner: The truth about this Government is that they deliberately engineered 2½ million people on the dole—the figure is still rising, and will probably rise to well over 3 million—in order to subjugate the trade unions and the workers, through fear. That is the policy of the Government, and that is why we shall eventually get the right hon. Lady out of power, either in this Chamber or outside.
The Prime Minister: That is not the truth. It is just plain rubbish. It is the sort of rubbish that we expect from the hon. Gentleman. It would appear from the latter part of his remarks that he is more interested in what happens outside this Chamber than in the process of democracy. Indeed, he is the face of the true new Labour Party—not of its democrats—those who have moved further and further left, towards the East European type of economy.
In reply to the hon. Gentleman's particular comment that he, his party and his Government had all the answers in a magic formula, why did they allow unemployment to rise to 1·6 million?
We were discussing matters that are important if we are to lower the level of unemployment. I was talking about declining profitability, which has left too little for investment. Another of the reasons for declining profitability has been that companies that have invested have often been unable to use their new machinery efficiently because of restrictive practices and resistance to change. Clearly, companies will not invest unless unions allow them to use the new equipment and machinery for the benefit of the companies and of all those who work in them. It does not seem to occur to Opposition Members that one of the main reasons why British industry—
Mr. Arthur Lewis: A moment ago, the right hon. Lady said—I accept her word—that she is interested in trying to reduce unemployment, subject to work, output and productivity. Can she give any logical reason why the Government cannot reduce to 60 the pension age for men, on a voluntary basis, as a means of giving genuine help to the unemployed? Those who want to go on pension could do so, and thus make way for younger people. The Government could do that without any trouble, but they have said that they will not do that. Why not?
The Prime Minister: We already have a limited job release scheme for those who retire early—I think at the age of 64. Their places are taken by young persons on the register. It would be financially difficult to reduce the pension age to 60. There are already about 9 million pensioners. The national insurance scheme is financed on a pay-as-you-go basis, namely, that contributions put in this year are paid out in pensions and benefits this year. The main reason is the enormously increased pension that would be paid out as many more people took advantage of much earlier retirement. That cost would have to be met by much larger contributions, both from employees and employers. The sums involved would be very large.
I return to the subject of what we have to do to get people back into good jobs with a future, during their working lives.
Mr. Lewis: What I say is intended to be helpful to the people who are concerned. I agree that it would cost money, but it is not inflationary. Is it not true that those old-age pensioners of 60 would be replaced by people who are now on the dole? The dole money would be saved, and younger people with families would be helped. They are the people who want the work. A lot of money would be saved on supplementary benefit.
The Prime Minister: Yes, but the best estimate that we can make of what the hon. Gentleman proposes would be a net cost of £1.7 billion. That is a net increase on top of the already high social security budget.
I turn to the vital need to be competitive if we are to get more orders to our factories. It does not seem to occur to hon. Members opposite that one of the main reasons why British industry has been short of orders has been that it could not compete, and a reading of the TUC Economic Review for 1981 suggests that they have not learnt this lesson, either. There is scarcely a reference to competitiveness, productivity or profitability in the whole document.
Our competitiveness will decline further unless management and work force share an understanding of the need to earn sufficient profits for investment, for development and for innovation. It is not enough to look only at next week's wage packet if one wants job security.
The Government, and particularly the Secretary of State for Employment, are doing all that they can to promote this understanding. But the Opposition say that we should return to their tired old formula of more Government intervention, more controls, more nationalisation. That is the last thing that the country needs.
Our approach is to return the responsibility and the initiative to where it belongs—to the management and to the workers in the business itself. It might take some time to achieve that, but it must be done if we are to realise the full potential that is in Britain.
Mr. Gordon Wilson: Does the Prime Minister recognise that in some parts of the United Kingdom, particularly in Scotland, de-industrialisation has proceeded so fast and so far that one cannot leave everything to the management and the work force, because industries are being obliterated day by day? If there is no change in Government policy there will be nothing left to revive.
The Prime Minister: The hon. Gentleman has misunderstood. Industrial relations inside the factory must
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be left to the management and the work force. Responsibility for matters connected with the factory must be returned to them. Of course, in Scotland we have regional policies. New inward investment factories that go there receive grants under the Industry Acts to help them set up and expand.
The fourth element in the strategy is that the Government have to set the right economic framework. This Government recognise that unless the economic climate encourages enterprise and risk-taking, new jobs will not be created and old jobs will disappear.
That is why we reduced the basic and higher rates of income tax nearer to the levels of our main competitors, so that those who have the talent and energy to create new business will do so in this country. That is why we also reduced or abolished many restrictions that prevented companies from responding to the needs of the market and developing their own initiatives. Now prices are set not by a price commission but by competition. That policy is of much more benefit to the housewife.
These are the only policies that will succeed in the long run. However, we recognise, of course, that there are real difficulties during the transition period. As a Government we are therefore doing everything that we can to cushion the harsher effects of change, to help people through the difficult times, and to stimulate new industries, especially in areas where unemployment is at its worst.
That is why we accept that we have a special duty to young people who have not been able to find a job. The schemes that we use were instituted by our predecessors. They faced similar problems. They, too, knew from experience that there was no magic solution. If there had been, the right hon. Gentleman who was Secretary of State for Employment at the time would not have presided over the doubling of unemployment. We have extended the programmes so that we can offer every unemployed school leaver work experience or training within six months of leaving school.
That is why we have increased our training programmes, so that older people who have been unemployed for a long period can train for new skills. That is why we have continued the temporary short-time working compensation scheme. Special employment and training prorammes will cost about £850 million this financial year, and they are currently helping about 800,000 people. All of that is because we recognise that it is our duty to do everything that we can to cushion the harsh effects of change, to help young people, and to help people retrain for the jobs that are ahead.
On the industry side we have done everything that we can to encourage overseas investment in development areas.
Mr. Alexander W. Lyon: Will the Prime Minister give way?
The Prime Minister: May I carry on a little further?
We have introduced the concept of enterprise zones. They will bring a real stimulus to the worst-hit areas, where they will help to provide a sound base for future prosperity. Nine zones have already been announced, and we have promised a further zone in the North. I am glad to be able to tell the House that we have decided that there should be two northern zones—one in Hartlepool and the other in South Kirkby, near Wakefield. [Interruption.] I had hoped that Opposition Members would be glad that

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there are to be more enterprise zones. If they are not, I can assure them that many of my hon. Friends would like enterprise zones in their areas.
I am bound to say that our concern about employment was an important factor when we took the decision on British Leyland. I hope that all concerned at British Leyland will make a real success of their opportunities. The money for British Leyland must come ultimately from profitable industry, and we shall therefore watch the company's performance closely. Those who receive the money have a duty to be as efficient as those who provide it.
These selective policies are an essential part of our strategy. The important thing is that they should work towards the markets of the future rather than preserve those of the past.
I shall now deal with the cost of unemployment, a matter that has been raised frequently by Opposition Members and that was raised recently at Question Time. The argument is that if the nearly 2½ million people who are out of work were all employed profitably it would be of great benefit to our country and to the Exchequer, and that therefore it would be better to use the money now paid out in unemployment benefit and social security benefits to create new jobs for them.
However, the money that we spent on unemployment benefit this financial year—£1.2 billion—and on associated social security benefits—also £1.2 billion—is not nearly sufficient to create the necessary jobs. The costs of equipment, accommodation, supervisors, materials and other overheads would put the total cost of such a scheme far, far above £2.4 billion. Where would this extra money come from? Would we borrow it, or would we print it?
We are, of course, already spending substantial amounts on schemes to help the unemployed. Indeed, I have referred to them already. To spend money on the scale suggested by some of our critics is just not on. It would almost certainly be at the expense of some people now in work.
Mr. Skinner: Will the Prime Minister give way?
The Prime Minister: I shall give way first to the hon. Member for York (Mr. Lyon), who tried to intervene a few minutes ago, if the hon. Member for Bolsover (Mr. Skinner) will kindly contain himself in patience.
Mr. Alexander W. Lyon: When I intervened the Prime Minister was talking about the YOP programme. Will she give an assurance that there is no prospect of any people involved in that programme doing military service?
The Prime Minister: As was announced yesterday, the Ministry of Defence already provides some jobs on the youth opportunities programme. At present it is considering whether it can contribute to that programme by providing more jobs. It seems that a number of people would appreciate the opportunity of working under that scheme with the Ministry of Defence. Of course, any scheme would have to comply fully with the rules of the youth opportunities programme and, of course, it would be voluntary. It would merely be an extension of opportunity. I now give way to th hon. Member for Bolsover.
Mr. Skinner: It is well known that the amount of money that is lost as a result of having to pay people to
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be out of work is much greater than the £2.4 billion to which the Prime Minister referred. She carefully avoided reference to tax rebates and the tax that would be paid if people were in work, and many other contingencies.
The Minister for Agriculture, Fisheries and Food, when speaking at a meeting at Worcester last year—a speech that was well reported in The Guardian—said that when unemployment was at 1.6 million the cost to the Exchequer, taking into account all the contingencies that the Prime Minister mentioned, that I mentioned, and that some others mentioned, was £7 billion. That means that it would cost between £11 billion and £12 billion today, when there are nearly 2½ million people out of work.
The Prime Minister: The Prime Minister will make her own comments. She hopes that the hon. Gentleman will have the courtesy to listen—if hope is a triumph over experience. If all of the 2½ million people were in profitable work producing goods and services that other people would buy, that would be of benefit to all. They would then pay tax to the Exchequer. Unfortunately, they are not. We have to consider the cost of putting them back in to work. The cost would be overwhelmingly greater than the amount paid out in benefit. If they were put wholly into subsidised jobs producing goods and services, they would compete with other people doing similar jobs elsewhere, and those jobs would be undermined. I hope that the hon. Gentleman fully understands that.
Mr. Michael Meacher Mr. Michael Meacher (Oldham, West)rose—
The Prime Minister: I shall not give way, as I want to continue with my speech. The hon. Gentleman may be able to catch Mr. Speaker's eye later and make his contribution. Many hon. Members wish to speak.
Of course, it is not possible to put right things that have been wrong for such a long time without experiencing pain in the process. I recognise that manufacturing industry has stood in the front line in the battle against inflation. Management and work force alike are having to adjust at an unprecedented rate against the background of a severe world recession and a high exchange rate. Britain is not alone in experiencing severe unemployment. A number of countries in Europe are facing higher unemployment.
Even so, many companies are not only holding their own but are expanding. Most companies will emerge from the recession more efficent, with more competitive products, and with more aggressive marketing policies. Not only is progress now being made among some existing companies; inward investment projects started or decided in 1980 will create new jobs in the future. I was encouraged to hear that Nissan, whose proposals were announced in the House last week, said that it was attracted to this country primarily by the underlying strength of the British economy—and it is not alone. There are many other examples of international companies investing in areas as far apart as Cornwall, the North-East, and Scotland.
I am often asked where all the new jobs will come from, and when. But how many of today's jobs were predictable 30 years ago, before the computer revolution, the transistor revolution or the microchip revolution? The history of technology suggests that even the greatest inventors could not anticipate the market potential that was unlocked by their inventions. Radio was seen as a device

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only when the use of wires was impossible. Oil was used only for lighting purposes. It took time to realise its potential as a chemical feedstock.
We may not be able to predict precisely where the jobs will come from, but I can predict that they will come if we adopt competition policies, taxation policies and financial policies that promote the enterprise economy. Selective help in a time of change is a vital part of our policy, but we shall not be deflected from our long-term economic strategy.
Now, what is the policy of the Opposition? There is no merit in turning to their amendment for guidance. It contains not a single alternative to the present policies of the Government. But we do know that the Opposition are now advancing policies even more extreme than those that they followed when in office. They call for massive extra spending of money that we do not have, that we could not borrow, and that we would be forced to print—-the very policy that led Britain into the hands of the International Monetary Fund, and would do so again. Stripped of all verbiage, their policy is to create a new round of inflation to cure the present unemployment, quite forgetting that the present unemployment was partly caused by the last round of inflation. They neglect to point out that the inflationary dose would have to be repeated in ever-larger quantities and at ever-shorter intervals.
We on the Conservative side want to get things in this country on a sound basis for the longer term. Our aim is to encourage an economy that will stimulate the creation of wealth. We shall not pursue short-sighted policies that conflict with that. The fact is that inflation is coming down. Wage settlements are moderating. And those things have been achieved without controls on prices or incomes. For the first time for many years we have the chance to move into expansion without those inbuilt distortions to correct, and that is a tremendous advantage. And all that against the background of our own secure supplies of energy.
The prize in prospect is the United Kingdom trading with a stable currency and making much better use of the most valued of our natural resources, namely, our manpower. That prize would be imperilled if we resorted to an economy of import controls, capital controls, exchange controls and every other Socialist control. That prize would be imperilled if we resorted to massive increases in public spending and borrowing and printing.
When the wealth-creating conditions in our economy are right, when there is confidence about the value of money, when there is a realism in wage bargaining that leaves a satisfactory reward for enterprise—when those conditions are satisfied, which they will be as our policies are pursued, wealth will be created, wealth will be spent, and in being spent will provide the jobs—and the prize will be won.
4.36 pm
Mr. Michael Foot: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"deploring both the massive rise in unemployment and the massive fall in industrial output, calls upon the Government to abandon its economic and monetary policies which are crippling British industry and inflicting great and lasting damage to the whole economy."
The Prime Minister began her speech with a reference to what she called "common ground." I do not think that
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there was very much in her speech on which there could be common ground, unless we accept her compliments about some of the past schemes that we introduced, and which she has taken over, to deal with some of our unemployment problems. Some of us remember the fulsome tributes that she paid to the schemes during the days of the general election, saying that if she had the chance she would carry forward our schemes to assist employment. In fact, she went from one end of the country to the other deriding those schemes as not providing real jobs.
It is common ground that 800,000 people—the right hon. Lady's figure—are in jobs because of the schemes that we introduced, and which the Government have carried forward. We are grateful for that piece of common ground. I wonder how the right hon. Lady distinguishes what she describes as the tired old formulae of the Labour Party. Hardly a week passes when a Minister does not tell the House that he intends to spend £1 billion on a tired old formula—one day it is British Leyland, and the next day, presumably, it will be British Steel, not that that scheme is necessarily the one of which we approve.
Some Conservative Members like to hold to the propositions that they made during the election campaign. The right hon. Lady was candid enough to admit that a great deal of employment is sustained because the Government have voted money to sustain what the right hon. Lady described as the tired old formulae of the Labour Party. We propose that, with the highly critical state in which Britain finds itself, those formulae should be carried further.
The origin of the debate was our constant demands that the unemployment position throughout the country—not merely in the old places of heavy unemployment, but in the Midlands, the South-West and London—was so serious that we should have a major debate on the subject every month. We claim that, as the Government have played a major part in the creation of these appalling unemployment figures, they should provide the time for a debate every month on the situation throughout the country. I trust that the Government will respond to that demand, because these unemployment figures are the worst since the 1930s and almost the worst in the Western world as a whole, as I shall illustrate in a moment, despite all the right hon. Lady's denials.
May I turn to what the right hon. Lady described as the centre-piece of the Government's policy—their fight against inflation. I am certainly prepared to acknowledge that that is the centre-piece of the right hon. Lady's policy. I am sure she is passionately sincere in her desire to bring down the rate of inflation. I believe also that she is single-minded almost—it is a criticism in this sense—in thinking that that is pretty well the only question with which they have to deal in economic affairs. I am all in favour of bringing down the rate of inflation, because a rate of inflation of 15 per cent. such as we have today inflicts great injury on the economy and great injustice on individuals, and this would be the case even if the rate were lower. So we in the Labour Party are strongly in favour of the fight against inflation.
The right hon. Lady must acknowledge that she wavered at one moment. If the most passionate determination of her policy right from May 1979 when she came into power has been to fight inflation, she has not been very successful. Although I do not dispute for a second that she is sincere in her claims today and

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throughout the country that that is the centre-piece of her policy, as she described it this afternoon, there was one moment when she and her Government wavered with very serious consequences.
There are many on the Government side of the House who have underlined the fact that that was the moment when she and the Chancellor of the Exchequer introduced that first Budget. I wonder whether there is anybody on the Government side of the House, including the right hon. Lady, who thinks that that Budget was a great anti-inflation Budget. I do not suppose there is. Of course, it was not only the raising of the VAT rate and the departure from the single intention of fighting inflation, but it was all the consequences that it had throughout the economy in wage settlements. There is not one person on that side of the House who would dispute the argument that the increase in VAT and the other goods that were heavily charged had an effect on wage settlements and on the inflation rate.
So there was one moment—one great, critical moment—when they wavered, and they wavered because they thought that it was more important to fulfil their election promises to one small section of the community than it was to fulfil them to the rest of the community. So I say to the right hon. Lady that she can make the claim, and I do not dispute that what she intends—
Mr. John Townend Mr. John Townend (Bridlington)rose—
Mr. Foot: I will give way in a few seconds. I do not dispute that that is what she wishes to pursue, but I say to her that, if she pursues the proposals to reduce inflation by the means she has been adopting up to now, she may succeed; the inflation rate may eventually come down to the figure it was when she took office. It is quite likely that she will get it down further still. If she does it by the means she is presently employing, the results for British industry and British employment will be catastrophic.
Mr. Townend: Does the right hon. Gentleman accept that the awards of the Clegg Commission which this Government inherited cost them £1.6 billion? As he has claimed that it was the Government's first Budget that caused wage inflation, would he like to put a figure on that?
Mr. Foot: I was in favour of our Government accepting the Clegg Commission report, and the right hon. Lady gave her pledge during the election. She should not try to wriggle out of her responsibility now. It was perfectly open to the right hon. Lady, if she wished, during that election to say that she would not implement it. But she made her own choice and she should not pretend that the responsibility for these matters rests with anybody but herself.
Mr. Townend: Will the right hon. Gentleman please answer the point I made? He claimed that the Government's first Budget increased wage claims substantially. I quoted a figure of £1.6 billion as the cost of Clegg. Would he like to put a figure on his claim?
Mr. Foot: I was in favour of that report, and I do not try to run away from it, as the right hon. Lady does. She runs away from it; I accept it. I think it was right to accept the Clegg Commission report. I think it was fair to the low-paid workers who were dealt with under that report. One
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of the many shameful actions that this Government have taken has been to run away from their commitments to low-paid workers. Certainly when we get power again we will take measures to try to assist low-paid workers.
Mr. Townend Mr. Townend rose—
Mr. Foot: I have given way to the hon. Gentleman twice. If the Government are going to fight inflation successfully over a long period they have to have a policy for protecting low-paid workers as well as one of making big handouts to the high taxpayers.
The Secretary of State for Employment (Mr. James Prior): Would the right hon. Gentleman perhaps go on to say why it was that after five years of Labour Government there were those low-paid workers who had to have the increase that Clegg awarded?
Mr. Foot: I should have thought that the right hon. Gentleman would understand the point. The problem of the low-paid workers cannot be solved in a single Parliament. We made considerable moves in that direction, however, which were not very well—[HON. MEMBERS: "Oh".]—Yes. I remember these matters vividly because the £6 across the board, which I carried through the House as Secretary of State for Employment, with precious little assistance from the Tory side of the House, was a plan to assist the low-paid, and it is along those lines that we will have to deal with the problem in the future. No policy for fighting inflation can be successful over a period unless it has written into it proper protections for the low-paid; perhaps our experience confirms this. It is true that we searched for a solution and did not secure it in the way that we wished, but we believe, in contrast—
Mr. Ian Lang Mr. Ian Lang (Galloway)rose—
Mr. Foot: No, I shall not give way. I have given way three times already.
I turn to another section of the right hon. Lady's speech. This is indeed one of her principal arguments, against both the plan for growth and against the policy which the TUC has put to her. I suppose that it is an argument, too, against the much less formidable or fruitful policy that has been put to her by the TUC, but it is also her argument, reiterated today, for doing nothing, in effect, about the general situation. The right hon. Lady says, in effect, that reflation equals inflation and that it is not possible to distinguish between the two. That is what she said in the television programme on Sunday. She says that reflation equals inflation equals unemployment. She says that the cause of unemployment in recent times has been almost entirely the high inflation rate.
The right hon. Lady's central argument is that any attempt to solve our problems by a fresh round of reflation—call it reflation or inflation, whichever one wishes—will produce greater unemployment. The right hon. Lady had the temerity to say that that is based on experience. It is not based on the experience of the 1920s and 1930s. I suppose that in those years the economics of monetarism were working. Indeed, they were working all too well. In those years—soon after 1921 until 1939—there was no great inflation. However, there was mass unemployment. It could not have been inflation or reflation that caused the mass unemploymentof the 1920s and 1930s.

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The right hon. Lady treated the post-war period in the most extraordinary historical fashion. I shall come to exactly what she said. From 1945 until 1968—I know that the right hon. Lady said 1955, and I shall not forget that or let her forget it—there were about 18 different attempts by different Governments to reflate the economy. Throughout that period unemployment did not rise above 2 per cent. or 2½ per cent. During the period when Keynesian policies were being applied it would be difficult for anyone to say that the reflation or inflation was the cause of unemployment.
One of the right hon. Lady's extraordinary achievements is that she has made the era of "stop-go" sound like the golden age of plenty. That age must be regarded as a great improvement on what she has been doing. Of course, we are glad to have the presence of the right hon. Member for Brighton, Pavilion (Mr. Amery), who is looking at me so earnestly, but we would like to see the right hon. Member for Sidcup (Mr. Heath) in his place.
The right hon. Lady's condemnation of the post of war period condemns the entire period of the Government of the right hon. Member for Sidcup. Indeed, it goes back futher than that. The right hon. Lady spoke of 25 years. That takes us back to 1955 and takes in the Governments of Sir Anthony Eden, Mr. Harold Macmillan, Sir Alec Douglas Home, the right hon. Member for Sidcup and all the rest of them. There were about four or five elections during that period, including the ones that the right hon. Lady fought. I wonder what she said then. Of course, the right hon. Lady's 25 years takes in the "You never had it so good" era. We are now told that the whole of that period is to be condemned. I know that there are some Conservative Members who hold that view, but they are a small and diminishing band.
The right hon. Lady likes to claim that she is very practical by nature, but she never learns from experience. That is the trouble with her. She tries to prevent her companions from learning from experience. She does not learn from the experience of the 1920s, the 1930s, the 1940s, the 1950s, or the rest. Far from saying that the proof of the pudding is in the eating, the right hon. Lady says that the proof of the pudding must be looked for in some old professor's cookery book. It is either Friedman's book, Hayek's book or Volcker's book. That is where she looks for her theories instead of examining the facts and what is really happening.
Mr. William Waldegrave: As the right hon. Gentleman is talking about the proofs of puddings and so forth, will he remind us which Labour Government have ever left us with less unemployment than they found?
Mr. Foot: The 1945 Labour Government took office in a period when the then Leader of the Conservative Party, Mr. Winston Churchill—
Mr. John Bruce-Gardyne: Answer the question.
Mr. Foot: —said that the country was bankrupt and that the Labour Government would not be able to run the economy. However, until 1951 that Government sustained a position of well nigh full employment. If Conservative Members are trying to re-write those historical memories, they will never succeed in convincing the British people.
As well as trying to rewrite history, the right hon. Lady is doing her best—this is even more serious—to try to
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persuade the country that what is happening is much less serious than is the reality. She has failed to understand the scale of the crisis and she gives occasionally, as she did again today, a too optimistic account of how we may escape.
The right hon. Lady does not seem to appreciate that output in manufacturing industry has fallen more over the past 12 months than in the great slump of 1929–31. Our industry is producing less now than it was 10 years ago. About 12,000 jobs in manufacturing are being lost every week, perhaps permanently. No other country in the West, with possibly the exception of Belgium, is losing its industry so fast. All that is happening in the sacred name of competition. In the name of competition more British industries are being wiped off the map than ever we have seen before. When we recover or when the recession ends, whenever it happens, those industries will not be there and able to compete. That is the reality of what we face.
I hope that I shall be allowed a moment to turn aside to have a word about the right hon. Member for Oswestry (Mr. Biffen), the Secretary of State for Trade. The right hon. Gentleman has always been the strongest defender of the Government's monetarist policies. That was so before he took over the job of being a one man Monopolies and Mergers Commission. He has a role that is rather peculiar for him. We are glad to know that he has been brought forward again to defend the Government this evening. I have always regarded the right hon. Gentleman's pawky imperturbability as the Government's best platform of defence. Now that he has been withdrawn to another office, I wonder what defence they have left.
I am sure that whatever post the right hon. Gentleman has, and whether he is in the Government or out of it, or half out of it, he will always seek to tell us what he believes to be the truth. In 1980 he told us, as the whole country remembers, and no one better than the right hon. Lady, that there would be three years of unparalleled austerity. He did not exactly win a bouquet from the right hon. Lady for that declaration, but that did not deter him. A few months later he was saying "At any rate my prophecy has not been invalidated". It has not. We do not know where the right hon. Gentleman will be in three years' time, but I should think that in 1983 he will be able to make another speech on that theme and demonstrate how right he has been.
The right hon. Gentleman gave us another piece of advice a little later the same year. I recommend it to anyone who is too easily comforted by the right hon. Lady's assurances, or by those that come intermittently from the Chancellor of the Exchequer about how the recession is bottoming out. In April 1980 the right hon. Gentleman said that he feared that in politics there is all too often a disposition to be optimistic far too soon. The right hon. Gentleman's words were recurring as I listened to the right hon. Lady.
The right hon. Gentleman has spent the past few weeks examining the profitability of The Sunday Times. If he thinks that The Sunday Times is not profitable, I wonder how many other industries in Britain would be condemned on that same method of book-keeping. It would be a wide range of industries that would be knocking at his back door or the back door of the Secretary of State for Industry if the same criteria that he has applied to the "hopeless unprofitability" of The Sunday Times were to be applied to the range of British industry. We hope that the right hon. Gentleman will explain this evening how many

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unprofitable industries he is determined to keep in being through this recession. We promise him that he will get much more support for that programme from the Opposition than from his own followers.
I turn to another phrase. This does not come from the right hon. Gentleman but from someone further inside No. 10, Downing Street.
"The ability of everyone here"—
that is, people in No. 10—
"to look on the bright side never ceases to amaze me."
I thought, on reading it, that this must be some economic report from Professor Walters. It is not at all. It is from Denis himself. It is in Private Eye. I commend it to the House.
The Prime Minister: You can do better than that, Michael.
Mr. Foot: He does better and better each week. I can assure the right hon. Lady that every member of her Cabinet reads it—the ones who are still there, the ones who were thrown out, and the ones who will be thrown out next week. They all read it because they get advance information of how they stand in the popularity stakes. We should not be too respectable about reading it. The whole House reads it, and enjoys it; and occasionally gleams of truth come through to the House of Commons on these matters.
The right hon. Lady is, however, not so optimistic on the unemployment figures as she has been on some of these matters. I do not blame her for not being prepared to say how high unemployment is to go and how long we are to continue with the policies that help to cause it. The right hon. Lady dismissed the document of the TUC. I do not believe that it is possible to dispute what the TUC says about the scale and nature of the unemployment problem that faces us.
I am not in favour of throwing around figures of 3 million or 4 million. The figures that already exist are savage and severe enough. To those figures, on the most conservative estimates, have to be added a great number of others, as shown in the TUC report. There is probably a total of those who do not register, based on past findings and surveys, that add another 500,000 or 600,000. I am not protesting about the compensation schemes. We introduced them. If the Government had not continued those schemes there would be at least another 400,000 or possibly 500,000 to add to the present total. Those sums are running out. The figures are, therefore, very high.
At yesterday's NEDC meeting in which the right hon. Lady participated, there were other figures given, apart from those of the TUC. According to the Financial Times report,
"The 5m unemployed forecast was given by Mr. Michael Shanks, chairman of the Consumer Council.… Neither the Prime Minister nor any other member of the Government team refuted the figure when it was put forward by Mr. Shanks and later repeated by Mr. Murray during his rebuttal of Mrs. Thatcher's summing-up speech".
Perhaps the Secretary of State for Trade can make some comment. There is no doubt that according to those figures, whether or not they are an exaggeration, and what is happening from one end of the country to the other, the unemployment situation is the most serious that we have had to face in this century. It is on that basis that the House of Commons should approach it. The right hon. Lady does
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not. She continues to offer us phoney figures about the situation. She gave more in the House of Commons on Tuesday this week.
One of the Prime Minister's themes is that other countries are suffering similarly to ourselves. We know that she has discovered the world recession since the general election. Even so, it is not the case, as she claimed on Tuesday, that
"The percentage increase on unemployment in Germany, Denmark and Holland between August and December rose faster than in this country in the same period."—[Official Report, 3 February 1981; Vol. 998, c. 143]
In doing so, she was once again seeking to soothe people into imagining that we have not a special problem, piled on top of the severe unemployment problem throughot the rest of the Western world and, indeed, the rest of the world.
The four-month comparison that the Prime Minister used on Tuesday relating to West Germany, the Netherlands and Denmark was worthless since the figures for school leavers come on to the register at different times in different countries. If, however, she is interested, on the seasonally adjusted basis of figures provided by the statistical office of the European Community, unemployment in the four months from August to December 1980 rose faster in Britain, with an increase of 23·6 per cent., than in Denmark, 22 per cent., the Netherlands, 21 per cent., and West Germany, 14·6 per cent.
Unemployment in West Germany rose 26·2 per cent. between January 1980 and January 1981 while in Britain it rose by 67·2 per cent.—two and a half times as fast on a seasonally adjusted basis. Last year the increase in unemployment in the United Kingdom was the highest of any EEC country at 63·3 per cent. In the face of those figures, it is monstrous that the right hon. Lady should treat these matters in the way she does in the House of Commons. The scale of unemployment is far greater than she has been prepared to acknowledge to the House or to the country.
The scale of mass unemployment which now afflicts this country, which the Prime Minister has not the wisdom or the imagination to acknowledge, can corrode and embitter this nation's national life for months and years ahead. It can, in the process, cast away the greatest of the national economic assets that we possess at this period in our history. In the last debate, when we discussed some of these matters, I quoted a remark, which still rings in my mind, by Sir Michael Edwardes about our use of North Sea oil when he said:
"If they can't find a way of living with North Sea oil, I say leave the bloody stuff in the ground".
The right hon. Lady presides over a Government responsible for wasting our greatest resource, North Sea oil. During the period of the Labour Government, we presented to the House of Commons for discussion and debate, and for national debate, proposals on how best our country should use this precious North Sea oil which will not last for ever. We put various choices before the House and the country as to how it should be done. The country and, certainly, the Opposition will continue to press these matters.
One option that we did not include among those that we put to the House and the country—one that Mr. Len Murray says no one thought of including—is the option that the Government have chosen, namely, to use this oil, or at any rate a considerable bulk of it, for paying for mass unemployment. The right hon. Lady derides the statement

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from the TUC and says that it has nothing to do with productivity and contributes nothing to saving the nation from our present ills, but I tell her that what the TUC has published this week on this subject will bear examination in years to come very much better than her speech to the House today and what she said on television on Sunday.
The TUC, on the subject of North Sea oil, says:
"if present policies are continued a tragic waste will have been inflicted on the British economy. Future generations will, and correctly, rebuke Government decision makers of the 1980s, if during a period when the United Kingdom economy did have the resources available to secure its future, those resources were misused in financing investment in other economies and in financing mass unemployment".
That is what they have done. That is the policy for which we demand a change and for which we will bring a change when we have the power.
Mr. Cranky Onslow: Change to what?
Mr. Foot: One good rule for us when we regain power and office will be to look at what has been happening and send out the message "Go thou and do otherwise". Instead of increasing tax and cutting public expenditure the Government should boost spending by cutting taxes and increasing expenditure on public services. Instead on ensuring that the pound is kept at a high level, the Government should bring its value down to such a level that British manufacturers can compete in world markets. Instead of standing by while foreign producers take an increasing share of the British market, the Government should control imports. Instead of withdrawing industrial support in many of the regions, as the Government are doing, they should help industry to modernise and create jobs. Instead of reducing aid to depressed areas, the Government should subsidise the creation of jobs in those areas. Instead of pretending that what they are doing is to help with training to deal with the problem when the recession is over they should pour more money—yes, public expenditure—into ensuring that people are properly trained to meet the recovery when it comes. One example is, that the Government have removed from my constituency the skillcentre established by their predecessors.
Mr. Onslow Mr. Onslow rose—
Mr. Speaker: Order. The right hon. Gentleman has made it clear that he is not giving way.
Mr. Foot: I have given way to numerous interruptions. My remarks come back to the right hon. Lady and whether she will change her policies. I do not believe that any number of Conservative Members rising to their feet, however they may seek to keep their courage up, disproves the charge that we have made increasingly through these debates in the past year that more and more of her followers and associates in her Cabinet revolt against the policy that she is seeking to impose upon them and the country.
The right hon. Lady has already won her niche in history. She is the Prime Minister of mass unemployment. If she claims that those charges should not be made against her, let me recall what she said in May 1977, when she sought to arouse some emotion on this subject. She said in response to a question in an interview
"I think it's terrible if a person who wants to work can't find a job".
There are more than a million more unemployed today than there were then. The right hon. Lady continued:
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"You have no self-respect, you haven't got the respect of your family, if you somehow can't earn yourself a living and them a living too. Sometimes I've heard it said that Conservatives have been associated with unemployment. Well that's absolutely wrong. We'd have been drummed out of office"—
the right hon. Lady said—
"if we'd had this level of unemployment."
That was before the right hon. Lady started on it, when unemployment was a million or more less than it is today.
I say to the right hon. Lady and to my right hon. and hon. Friends and to those throughout the country that our business is to see that she is drummed out of office. In the House and throughout the country she is the Prime Minister of unemployment and we are determined that she shall be removed from office as soon as the nation is given the chance to speak.
5.15 pm
Mr. David Steel: The House will be aware that as well as the debate inside this place there is continuing debate outside about the state of our politics as well as the state of our economy.
The amendment tabled by the official Opposition shows why that is so. There is total paralysis in the official Opposition. I do not deny for a moment that the Leader of the Opposition feels a genuine sense of outrage, as I do, about mass unemployment. I do not withdraw my support from what he says in his amendment on that topic. I also agree with him that the Government should change their policies. However, the Opposition, who have been crying out for a debate on the economy for weeks, have an obligation to put alternatives before the House. One looks in vain for an alternative in the amendment.
If the Leader of the Opposition attempted to put on the Order Paper some of the policies which he outlined in his speech, he would find that one half or the other of his party would profoundly disagree with them and not support him in the Lobbies. That is not a state of opposition that the House can tolerate for long.
One reason why we cannot tolerate the state of paralysis in the official Opposition is that it allows the Prime Minister to get away with saying that there is no alternative. There is no alternative on the Order Paper except that provided by the Liberal amendment.
Mr. Eric S. Heffer: That is absolute rubbish.
Mr. Steel: It is no good the hon. Member for Liverpool, Walton (Mr. Heffer) saying that that is absolute rubbish. Let him read the official Opposition's amendment. There is no alternative set down on which the House can vote tonight. I accept that under the rules of the House there is no opportunity to vote on the alternative that the Liberal Party has proposed. To the extent that the Opposition go in their criticism of unemployment and in their condemnation of Government policies, we shall find ourselves forced to support the Opposition in the Lobbies tonight.
In my short speech I shall put forward some of the alternatives which we have outlined in our amendment and elsewhere.
Mr. Sydney Bidwell: The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) has stated that there would be a division in the Opposition if we had a programme to fight unemployment of the kind

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that my right hon. Friend the Leader of the Opposition has spelt out in his speech. Can he be more specific about what he means by those remarks?
Mr. Skinner: The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) could not carry his own 11.
Mr. Steel: I do not want to get sidetracked into the internal debates of the Labour Party.
Mr. Bob Cryer: Will the right hon. Gentleman tell us why he voted with the Conservatives?
Mr. Steel: As I am being tempted, I shall accept the invitation and take one point mentioned by the Leader of the Opposition. He called for import controls. The names of a number of Labour Members appear in an advertisement in The Guardian today. They would not subscribe to that.
Mr. Cryer: The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) does.
Mr. Skinner: We are not worried about that.
Mr. Steel: It is no part of my programme to support the idea that we can be an isolationist, centrally-controlled economy, ignoring the rest of the world. That is one part of the prevailing philosophy of the Labour Party which is causing deep unease among certain members of the Labour Party.
Mr. Skinner: No wonder the Liberal Party wears a yellow ribbon.
Mr. Steel: It is no good hon. Gentlemen on the Tribune Bench complaining. I was invited by one of their number to give an example and I have given it. I shall return to the state of the economy.
Mr. Skinner: I am talking about all those traitors that the right Member is trying to attract.
Mr. Steel: I am making my speech. The hon. Member for Bolsover (Mr. Skinner) must make his later.
Mr. Skinner: The right hon. Gentleman referred to me.
Mr. Steel: I return to the level of unemployment. To me it is slightly surprising that with our unprecedented level of unemployment there is not even more social tension than we have now. There is a reason. We have now, as we did not have in previous times, a sophisticated system of redundancy payments. People receive capital payments that cushion the effect of unemployment for some time. The transfer from unemployment benefit to supplementary benefit also takes some time. My anxiety about the state of unemployment as we have it today and as we see it growing is that its full effect may not be seen for another six months or a year. The real misery of these crude figures will not be felt for some months to come.
One despairing feature of the Government's policy is that the public see an enormous gap between the promises made by the Government and their performance. When the Chancellor of the Exchequer was leading for the Opposition on 9 November 1978, the day that the minimum lending rate was announced to be l2½ per cent., he used some wise words:
"How are the economic prospects of the construction industry to be improved by a minimum lending rate at this level? How
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are the prospects of industrial investment on Merseyside, in Wales, in Scotland or anywhere else to be improved by it? How are the prospects for employment on Merseyside, in Wales, Scotland, Wales or Northern Ireland to be improved by a minimum lending rate at this level?"—[Official Report, 9 November 1978; Vol 957, c. 1212.]
However, as Chancellor of the Exchequer he presided over a minimum lending rate which was far higher than 12½ per cent. and which is still substantially above it. What he said then is even more true now.
During the general election campaign the right hon. Lady was questioned, as we all were, on the BBC programme "Campaign 79". On 2 May, when pressed by Robin Day about unemployment, she stated:
"Even in the comparatively short run, and I use the word 'comparatively' advisedly, our policies will get more jobs."
The reason that she gave was that the Consevatives intended to give back more money to industry by way of tax benefits to allow expansion. The trouble is that the facts of the nation's life do not fit the Prime Minister's election theories. As we now know, the average tax burden in this country has risen by 10 per cent. during the lifetime of the Government, although, admittedly, it is partly due to increased revenues from oil.
The total effect of Conservative policies—high interest rates and their failure to reduce the tax burden on industry and individuals—has been serious for industry. One quarrel that I have with the Prime Minister is that when she accepts that an industry is in decline she implies that the Government's abrasive policies are cutting into industrial fat or decay. I believe that they are cutting into industrial muscle. In the past four days alone I have received about 2,500 letters from people who voted Conservative, Labour and Liberal at the last election.
Mr. Skinner: Everyone is writing letters.
Mr. Steel: The hon. Gentleman may not get letters, and I am not surprised.
Mr. Skinner: The right hon. Gentleman did not send me one. I did not get one of his letters and neither do I want one. It is a load of claptrap. Send them to claret drinkers. Some of my hon. Friends will get drowned in claret when the right hon. Gentleman joins them. They will have to drink claret whether they like it or not.
Mr. Steel: I like claret.
Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The hon. Member for Bolsover (Mr. Skinner) must not make remarks from a sedentary position. If he wishes to intervene he should stand up and seek to do so.
Mr. Steel: I am always ready to give way to courteous interruptions, but I shall not give way when the hon. Gentleman interrupts constantly, right underneath the microphone that I am using. I hope that, if there is any political realignment, somewhere else will be found for the hon. Member for Bolsover.
Mr. Skinner: I would not be seen dead with the right hon. Gentleman's lot. They are junior Tories.
Mr. Steel: I have received letters from people who supported the Conservative Party at the last election and who have considerable experience in the business. I shall read only one, which I received yeaterday and which typifies what is happening in the country. It states:
"I started business in January 1972 with 4,000 square feet of factory space, two skilled men and an empty order book. I had to be prepared to work at least sixteen hours a day, seven days a week, to get the business on its feet.

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There were many 'headaches', the worst being the three day week. Having overcome this disaster the business began to expand slowly and in late 1979 I was able to take on a further 3,000 square feet of factory area and increase my work force of skilled and semi-skilled men to fifteen.
At the beginning of 1980 I was considering further expansion which could have given a possible increase in my work force of 100 per cent. but as you well know things have gone the opposite way and now I have had to reduce the work force and put the remaining men on a three day week.
I know that the above figures are very small to you but I am convinced that the 'backbone' of British industry is small companies like mine, producing highly skilled component parts.
It has now got to the stage that we in small businesses are working purely for the taxman and the banks and any future expansion has to be shelved indefinitely."
This is the vital paragraph:
"I am still a fairly young man and feel that I have at least another twenty years of hard work to give to my country, but I am afraid this is slowly being eroded. Also I feel that the younger men than myself will not take the risks I took nine years ago."
That is the climate in which the Government are operating. That is why I believe that they are hopelessly misleading themselves in believing that the economic climate that they are creating is healthy for British industry.
It is not only the small business sector that is experiencing great difficulty. In an interview a month or two ago the Director-General of the CBI, who represents big business, stated:
"when the world starts to recover from this recession … the capacity won't be there, and a lot of companies are … closing plants, sometimes closing all their operations, because they just can't carry on. This is a very serious state of affairs."
After comments from small and big business, let us consider some of our elder statesmen. Harold Macmillan in a television interview a few months ago in the immediate aftermath of what he called
"the little triumph of monetary policy"
stated:
"I saw … a slight fall in the money supply last month."
Even that little triumph has now disappeared.
"But how much fall has there been in the employment supply? How much fall in the production of wealth?"
Our criticism is not that the Government are making minor shifts in the balance of society or of our economy. They are making fundamental and long-term changes to our economy, from which it will be extremely difficult to recover.
There is an obligation on all political parties at present to put forward constructive and alternative policies. That is what we have been trying to do. Hon. Members may or may not like our suggestions. I was not in the Chamber for the previous debate on the economy, but I read the speech made by my hon. Friend the Member for Colne Valley (Mr. Wainwright). He chided me for my Presbyterianism in sending the 10-point plan only to a selected 400 hon. Members. One Presbyterian virtue is repentance. I apologise to those who, like the hon. Member for Bolsover, did not have the benefit of receiving a copy.
Mr. Skinner: Do not apologise to me.
Mr. Steel: I apologise for even mentioning the hon. Gentleman.
I am glad to say that such has been the demand for the 10-point plan that I have had to have it reprinted twice. [Interruption.] I am glad that I also left the Opposition Chief Whip off the mailing list. The other place, I understand, will debate the plan next week.
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Hon. Members may disagree with some of the points made, but at least we are trying to put forward a constructive alternative, which is what we are supposed to be doing in this place.
The first point—and I will not weary the House by going over it again—is the reduction of interest rates. If industry is to be able to invest, it is essential that it should be able to borrow money at prices that it can afford. As the Secretary of State for Trade intends to wind up, I shall add that the Department of Trade must look carefully at its practices, because it has failed to give financial guarantees to companies in the export field. There are far too many tales of companies that have been backed by the Governments of America, Germany and France and that have won contracts overseas in competition with our companies. Perhaps those Governments are bending the rules. Perhaps we observe those rules strictly. If so, that is one aspect of the European Community that the Government should expose, and should remain vigilant about.
The Government should look more carefully at persistent complaints to the effect that contracts worth millions of pounds are being lost to other countries, because other Governments are more direct in intervening, supporting and giving guarantees round the world in support of their industries. Our Government do not do that.
Secondly, I turn to the high rate of sterling. If the Government intervened and gained some reduction in the exaggerated value of sterling, they would be wise—at the same time—to enter the European monetary system. That would be the clearest possible signal to world currency markets that the Government are no longer promoting the over-valuation of sterling. Currency dealers would no longer assume that sterling's trend is ever upwards. Membership of the European monetary system would also usefully reduce uncertainty in the currency markets.
The House will be relieved to hear that I do not propose to go through all the 10 points of our programme. However, thirdly—and most importantly—there is scope for increasing public investment in our future infrastructure. The Prime Minister gave some interesting figures on the cost of unemployment benefit. However, we all know that the real cost of unemployment is much higher. In her speech she also said chat there was not enough money to spend on schemes to create more jobs. We are not asking for more schemes to create more artificial jobs. We are asking the Government to look at those sectors of our infrastructure that we can see need investment, such as our railway system. Indeed, the construction industry would benefit from an expanded road programme. An advance could be made in our energy conservation programme by making a start on something like the Severn barrage. Such schemes would involve more employment and more public investment.
The Prime Minister might fairly ask where the money would come from. However, there is a difference between borrowing for future capital requirements and borrowing to pay one's current bills. The Treasury should accept that fundamental difference. One thing is incontestable, namely, that we are credit-worthy and capable of borrowing. If money is put into sensible projects, and if the value of North-Sea oil is ploughed in for our future prosperity, employment will be created in the short run.
Fourthly, we take issue with the Government on a matter that is mentioned in the motion, namely—
"greater realism in wage bargaining"

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I do not deny that the Prime Minister has a fair point. In recent times wage settlements have become more realistic. Naturally, if people find that their companies are under threat of becoming bankrupt, or if those in the public sector realise that massive job cuts will result if they press their wage demands, they will moderate claims. The right hon. Lady has proved that that is so. It is undeniable.
I am worried that this is not a new, long-term form of realism, but some form of incomes policy through fear. Wherever hon. Members may sit in this House, they must look forward to an upturn in the economy and to its expansion. They must look forward to greater job opportunities. What will happen then to the new realism in wage bargaining? The Government have done nothing to alter the climate in which wages are negotiated in the long-term. We cannot get away from the need to search for a climate in which an incomes policy is acceptable both in the public and private sectors. Not only the Government, but political parties are obliged to pursue that obligation.
Finally, and perhaps most importantly, the Government have completely failed to seek a greater spread in industrial partnership. In a mature and democratic country such as ours, we shall not get anywhere until we have created a greater sense of common purpose. This Government are not doing that. Partnership is not just a pious platitude but is at the very core of the approach that we should take to industrial matters.
Mr. Cryer: The right hon. Gentleman keeps going on about what the Government are and are not doing. Did the right hon. Gentleman expect the Government to do all those things when, in the vote of no confidence, he went into the Lobby with the Tories and opposed the Labour Government? Was he either so blind or so stupid that he did not realise that these policies would be carried out? The right hon. Gentleman and his party helped—as he well knew at the time—to put this Tory Government into office.
Mr. Steel: The hon. Gentleman needs a lesson in elementary constitutional affairs. We are simply voting in favour of a general election—[Interruption.] It is not my job to delay elections in order to give the hon. Gentleman another few months. He fought his corner in the general election and he lost. The country was wrong to elect this Government, but we live in a democracy and a Conservative Government were elected. As a result, we are entitled to examine their policies.
I was arguing that a greater sense of partnership was essential. To achieve that, we must alter fundamentally the way in which we organise things. Our institutions are too divisive. Our political, and particularly our electoral, systems exaggerate the divisions. Over the years, each political party—based on its own class interest—has got into office but has not had an overall popular mandate. Each has then pursued its policies, which have then been undone by the next Government.
Our industrial and union structures tend to set confrontation in concrete. That is why the Liberal Party puts the sort of constitutional issues that are frequently ignored in this House on the top of the agenda. In particular, I have noticed that British industry is
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increasingly exploring ways of introducing industrial partnership into Britain, without any major help from the Government.
I read a pamphlet that was published by one of the directors of Standard Telephones and Cables. It described an experiment that had taken place in that big corporation, in a plant in South Wales. After a year of employee participation, the company reported substantial cost savings, a marked reduction in the number of accidents, improved safety measures, less absenteeism, better working methods, a considerable increase in efficiency, and, in general, a better understanding of the business. In addition, the factory became a happier place.
Such examples are rare in British industry. They should be highlighted and seized upon. The Government should encourage them in every way. In that case, the effort was paralleled by successful attempts by the company as a whole to achieve wider share ownership.
Mr. Dan Jones: The leader of the Liberal Party has outlined the factors that we must understand if we are to recover. However, he has missed the most important factor. Where will we get the skilled labour from? Thousands of men aged between 60 and 65 are leaving industry and will not come back. Is the right hon. Gentleman aware that even prior to the advent of this Government we were desperately short of skilled labour? Has the right hon. Gentleman given that any consideration?
Mr. Steel: Yes, I have. I cannot remember whether I sent the hon. Gentleman a copy of my programme. The short answer is that it is point nine of that 10-point programme. Training is a key factor, even in a slump. I agree that if more training is carried out, we shall be better placed when industry recovers.
I have been led astray into many highways and byways. My basic proposition is that neither the Government nor the official Opposition will lead us into the path of partnership and co-operation that is essential for our recovery. Unfortunately, there is no third division yet in this House. As neither the Government nor the official Opposition are capable of embarking on that road, the debate outside this House is just as important today as this debate.
Mr. Deputy Speaker: Before I call the next hon. Member, may I remind the House that a very large number of right hon. and hon. Members wish to take part in the debate. As the House knows, I have no control over the length of speeches, but dare I suggest that 10 minutes or less would be fair?
5.39 pm
Sir John Eden: I listened with particular interest to the last point made by the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), when he referred to a co-partnership scheme introduced by a firm and the success that had attended it. One of the unfairnesses of a debate of this kind is that one inevitably embarks upon generalisations, which tend to mask individual experience.
I shall be no exception, as I wish to make a few comments in a generalised sense about various sectors of the British engineering industry, in which I immediately declare an interest. I recognise, however, that there are many individual cases that could, and probably should, be

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highlighted particularly when talking about the state of the economy, and that point to quite extraordinary degrees of success. I am sure that it is within the capability of all hon. Members to single out examples from their own constituencies where enterprise has triumphed over adversity.
I could retail to the House many cases that are indicative of enterprising management and good communications. I lay stress upon this point, because what the right hon. Gentleman was really talking about in his reference to a co-partnership scheme was good communications. If there could be better communications within each company and plant, some of the difficulties that we are currently experiencing would be put behind us.
As I have said, however, I shall fall into the trap into which everyone falls in a debate of this kind and speak in a more generalised way. I wish to talk about the recent experience of wide sectors of the British engineering industry—of falling profitability, falling investment, and lack of competitiveness. Those three things are not separable. They are very much interlinked. One is a result or a by-product of another.
First, however, I wish to say a word or two—I hope, without presumption on my part—about the first-class speech of my right hon. Friend the Prime Minister. I thought that it set the tone for the debate, although it was not followed by the Opposition. I do not know what happened to the Leader of the Opposition. I recollect that several elections ago a bright spark invented several little figures which were designated "Yesterday's Men". It would be a compliment to the right hon. Gentleman if those figures could be resurrected in his case. He clearly had no positive contribution to make. He had no solution to offer, no alternative plan and no scheme upon which anyone could fasten. He seemed to concentrate upon selected individuals for his own brand of abuse and denigration. That is no alternative or substitute for positive policy.
My right hon. Friend the Prime Minister set the tone for the debate, The main thing that shone through her speech was her determination to rescue the country from the repeated experiences and cycles of past Governments and past periods, when we had gone back over the same dismal pattern, tried many of the same formulas, and had to encounter much the same kind of experience of rising unemployment and rising inflation. That is why I was so encouraged to hear my right hon. Friend emphasise strongly and clearly her determination to continue to fight against inflation.
It is an easy thing to say, but it must require enormous courage on the part of my right hon. Friend and her colleagues in the Government to see that process through at this time. It would be so easy for her, and for them, to turn aside from the course that they have set themselves and for which they were elected, and look to the short term or the softer option. I am thankful that my right hon. Friend is resisting that temptation and intends to hold firm and see the process through, because I agree with her and believe with her that, in the long term, only by following that process right through shall we cure this country of some of the problems that have so frequently beset it in the past.
My right hon. Friend said that at a time like this, when unemployment is so high, selective help should be brought forward, and that at a time of change it was the responsibility of the Government to do that—not, she said,
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through massive increases in public spending but through selective help. I hope that some of that selective help can be directed towards what has come to be termed in shorthand as the infrastructure. I know that many Opposition Members have called for this as well. I believe that we should consider port facilities, cargo-handling facilities, trunk roads and other facilities of that kind, which could benefit from extra attention and provide a means of employment for a large number of people.
The point upon which I wish to concentrate is our lack of competitiveness. Very high labour costs are a major factor in our current lack of competitiveness. The Treasury estimated that probably three-fifths of our lack of competitiveness was due to labour costs and that two-fifths was due to the exchange rate. However that may be, there is no doubt that United Kingdom unit labour costs in manufacturing were rising by many times more than those of our competitors in the period 1978–80. This must have had a very damaging effect. In one company that I know very well, labour costs represent 40 per cent. of all its costs, so if unit labour costs rise, it is not difficult to understand how the product manufactured is losing ground to overseas competitors. Recently, however, there have been many signs of a growing sense of realism regarding pay settlements in the private sector. If this continues, there is a chance that we shall return to a slightly better profitability and perhaps see some encouraging signs of renewed investment. But at the moment that is not apparent.
It is not, however, only the actual money paid in wages or earnings that matters. What lies at the root of productivity is the use made of our manpower and machinery. In the engineering industry today there is an enormous amount of investment, much of it underemployed. We need to use that investment much more effectively and cost-efficiently.
This certainly applies to the investment in labour employed in industry. In recent years, many sectors of the engineering industry have had to carry an excessive manning load. We were able to carry that and were shielded in some ways from it, almost certainly by the low exchange rate. But this will no longer be the case. I believe that for quite a time into the future we shall have to learn to live with sterling at a far higher level than we have known in the past. If that is so, we must use our ingenuity and enterprise to find ways around this problem. We should not indulge in protest marches, screamings and banner wavings, because they will yield nothing of any purpose.
I return to the point that has been emphasised over and over again and that anyone who understands the engineering scene ought to understand. Our problem stems very largely from the low level and slow growth of productivity. That is another way of saying that we need more cost-effective work, and for that there is no excuse.
5.51 pm
Mr. Douglas Jay: What struck me most about the Prime Minister's speech was that in the first few sentences she said that she still believes that we have been suffering from demand inflation since the mid-1970s. That was the basis of her whole economic argument. It was not demand inflation. It was mainly cost inflation all the way through the 1970s, as is shown from the fact that had there been a demand inflation we should have had a period of high profits, high employment and high production.

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That is exactly the opposite of what we have experienced. That fallacy that buzzes on in the Prime Minister's mind seems to vitiate almost all of the rest of her economic arguments.
The practical effect of this Government's policies is to pay more and more people to do nothing rather than to do some work. Every time 1,000 people are thrown out of work by a public or private employer the Government congratulate themselves—the Prime Minister did it again today—on the fact that "overmanning" has been reduced. What really happens, at a time when total unemployment is increasing, is that public money is used in unemployment benefit, redundancy payments or supplementary benefit to keep 1,000 more people idle. If we take into account the Budget revenue lost, we are now spending between £5 billion and £10 billion a year, in effect, to force people to do no work. If the Prime Minister's theory were true, one would reach the ridiculous conclusion that a nation could solve its economic problems by doing less and less work and producing fewer and fewer goods and services.
The present collapse was all perfectly predictable from the start of the Government's policies, and it was clear how it would all end.
In the debate on the Chancellor's Budget in June 1979 I said that
"if one tries to remedy cost-inflation by deflating demand"
—which is what the Government have done and are still doing—
"one inevitably causes unemployment, falling production, and falling productivity and investment".—[Official Report, 18 June 1979; Vol. 968, c. 977.]
The appalling damage that has been done to British industry in the last 20 months proves that somewhat obvious intellectual truth. Yet even now, after 20 months the Treasury Bench still does not seem to have grasped the fact that deflation is a cumulative process, and that it will go on until someone or something stops it. Each time someone is thrown out of work, he reduces his spending, which reduces the demand for something else. The Government then say that since there is no demand for that, production of that also must be cut. The Government's own policies have reduced demand for the products of one industry after another. It would help if the Prime Minister could at least understand that one man's spending is another man's income.
As a result of the deflationary process, the nation's real output of goods and services goes down and, worse still, in the next stage of deflation, productive capacity itself—machinery and factories—is destroyed, or in some cases sold abroad, and it may take years to replace it.
The British economy is probably now producing between 15 and 20 per cent. below its existing physical capacity in terms of equipment and manpower. In terms of national income, that means a loss of at least £20 billion a year—about twice the size of the PSBR. The further irony is that a fall in real output just as surely causes a rise in prices—what the Prime Minister calls "inflation"—as does an increase in money spending. A rise in real output would just as surely restrain a rise in prices as would a check in money spending. The simple inference from that is that we cannot stop inflation by producing less and less.
Mr. Dan Jones: And of course, it adds to the cost of production.
Mr. Jay: In addition, on top of all that, deflation often means lower productivity. It means three-day working weeks and under-use of plant, and it encourages restrictive practices. The deflation of the early 1930s left us with restrictive practices that took 25 of 30 years to get rid of. Of course people will not hurry to finish a job if they think that it means throwing themselves out of work. We are returning to that situation today. And even if, in the end, we were to succeed in checking price inflation by extreme unemployment and depression without any sort of incomes policy, as soon as we relaxed the whole spiral would start over again. The Prime Minister simply does not seem to understand that fact either.
It is the greatest nonsense of all to say that no alternative exists to these crazy policies. If that were true, we would not have had the 25 years of full employment and rising production that we experienced after 1945; and other countries such as Austria or Norway could not have it today. The truth is that almost any alternative would be better than the Government's extreme policies.
In my view, the right remedy—I agree with the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) that we must be positive—is a steady reflation of demand, hand-in-hand with an effective restraint on money costs. That follows from the basic truth that the level of production and employment depends on the ratio of money demand and money costs throughout the whole economy. Indeed, a recession is not a mysterious act of God, as apparently the Prime Minister still imagines, but a man-made unbalance between money demand and money costs. Although the process of recovery should rightly start with a reflation of demand—because enormous surplus capacity is now available in the British economy—it cannot go far without collective restraint on the rise in money costs. All the evidence of the last 18 months proves again that that means a long-term, thorough-going and agreed incomes policy.
Indeed, the 2½ million unemployed that we have now represent the price that we must pay for trying to stop price inflation without an incomes policy. Though the Chancellor is not with us today, I advise Treasury Ministers, first of all, to bring interest rates down rapidly and substantially. That would encourage investment, discourage destocking and assist building and construction, which is now appallingly depressed.
Let us remember that it was the lowering of interest rates in 1932 to 3 or 3½ per cent. that began the recovery that followed. The only excuse for the crippling interest rates of the last 18 months was the Government's now discredited theory about the PSBR, which was always fallacious and failed to distinguish between capital and current expenditure. In practice, that theory has now been shown to be unworkable as well as misguided. Therefore, we should certainly now stimulate capital expenditure, both public and private.
As long as 10 per cent., or more, of our real capacity is unemployed, there is no good reason to be obsessed with M3 and the public sector borrowing requirement. In practice, the best way to get the public sector borrowing requirement down is by bringing down unemployment. It will inevitably have that effect. Lower interest rates will also lower the exchange rates, which I am sure is the other immediate necessity to save British industry—as almost all industrialists have said in the last few months.
It is ludicrous for Ministers to produce the theory that the Government cannot influence the exchange rate. Of

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course they cannot resist powerful long-term forces, but central banks can, and do, smooth out short-term speculative pressures. The Bank of England first created the exchange equalisation account in the autumn of 1931, and it has been influencing the sterling exchange rate ever since. The theory that Governments cannot do anything about it is absurd. If they cannot get the exchange rate down to a reasonable figure by lowering interest rates, they have only to buy further foreign exchange reserves. An excess of foreign exchange reserves has not exactly been our worst problem over the last 25 years.
Provided that interest and exchange rates are brought down, and costs are restrained, production will recover. Therefore, in his Budget this year—it is now only four weeks away—the Chancellor should relax his Budget squeeze. He should raise no new taxes in March, other than a special tax on banking profits—which is obviously necessary—and he should allow public borrowing to increase as long as the increase is mainly for capital expenditure in the public or private sector, including housing and construction in particular. Enormous damage has been done to the British economy in the past 18 months by these misguided and doctrinaire policies. Unless the Chancellor and his colleagues change course quickly, they will turn an economic disaster into a catastrophe.
6.3 pm
Mr. Cranley Onslow: At least the right hon. Member for Battersea, North (Mr. Jay) made an attempt to be constructive in his remarks, even if not all of us would agree with what he identifies as the right recipes for our problems.
The Leader of the Opposition let himself down badly this afternoon. He said that the Labour Party was sincere in its fight against inflation. He then gave us half an hour of rather casual editorial improvisation, in which the only good crack had been lifted from Private Eye. He was trapped—I suppose inadvertently-into indicating the alternative policies that he would back. When he was asked what changes he would make, he gave us 60 seconds of waffle, without a single specific item of change.
I know of the right hon. Gentleman's nausea when he is confronted with a figure, and I can understand that he might have been overwhelmed by the need to give precise numbers, but to say that he thought that he would find it necessary, if he were ever in office, to raise taxation is not enough, unless he is prepared to say by how much. If he is suggesting that subsidies on certain items will be necessary, he should say how much those subsidies will be. Economics of the sort to which we were treated to this afternoon reduce the debate to something of a charade. I hope, that the right hon. Member for Stepney and Poplar (Mr. Shore), who is to reply to the debate for the Opposition, will do a little better in that respect and cost the alternative policies, if any. I do not suppose that he will take more than 60 seconds, either.
It is evident that the Leader of the Opposition places much faith in the TUC, and I was reminded of the article by Mr. Len Murray in The Times on Tuesday, in which he said that he hoped that The Times would long continue in business to publish his views. I agree that his views are interesting. I shall quote one of them to the House. He said in that article:
"The present level of unemployment means a loss of output of £18 billion."
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If that statement is meant to have any relevance, it must rest on the presumption that one has only to call a job "employment" to make it productive. The other common fallacy is that one has only to call spending "investment" in order to make it profitable. Those are familiar features of what passes for economic discussion, but they are fallacies, because the measure of the value of the job is whether it pays for itself and a little more. There is no suggestion in the TUC's proposals, or anywhere else, that leads one to suppose that those jobs will pay for themselves. I doubt very much whether the right hon. Member for Stepney and Poplar will make any reference to that.
Mr. Jack Straw Mr. Jack Straw (Blackburn) rose—
Mr. Onslow: I want to leave the subject of Mr. Len Murray and the Leader of the Opposition, because I think that both of them are a bit off colour. They seem to have been bitten by the hon. Member for Bolsover (Mr. Skinner), and to be suffering from a bad case of economic rabies.
I congratulate the leader of the Liberal Party on having narrowly escaped the same fate. He came back to his favourite panacea of an incomes policy, and he justified it by saying that nothing that had been done by the Government had changed the climate from that in which he had for so long been telling us an incomes policy was essential. If the right hon. Gentleman is not aware that the last 18 months have powerfully changed the attitude of management in public as well as private industry, he must have been sleeping more soundly than I had supposed.
There has been a fundamental change. If the need for an incomes policy arises only when management becomes unable to control its wages policy, I submit that there has been so fundamental a change in the climate that an incomes policy is not only likely to be undesirable and unworkable, but unnecessary.
Mr. John Maxton Mr. John Maxton (Glasgow, Cathcart) rose—
Mr. Onslow: No, I shall not give way. I am trying to be brief, and I hope that hon. Members will be able to make their own speeches as a result of my brevity.
The Governor of the Bank of England deserves some attention from the Opposition. He is on record as saying that he thinks that the worst features of recession are now ending—or words to that effect—that destocking should have been completed by most firms that have real management ability, and that many companies should by now have dealt with the worst of their over-manning problems. In that situation, most companies should be able to identify the level at which the market will bottom out. Some can still see the market growing.
Rolls-Royce and British Aerospace, the high-technology industries, are not suffering from the same sort of recessionary forces as are the old industries that we should perhaps not try to keep in existence. It seems illogical that we should waste ministerial time in a trade-war—happily it has now ended— with Indonesia where, because of the need to give more protection to our textile industry, we ran the grave risk of losing more important and valuable orders in high technology.
The amendment states that the Government's policies are
"inflicting great and lasting damage on the whole economy."
That is the most appalling humbug. Over the last 25 years many firms have not been well managed and many

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employees have ripped off their employers when they have been negotiating wage settlements, and so on. Much of that has been reversed in the last 18 months as a result of management reaction to international conditions, which have not been greatly influenced by Government policies. So far, no one has blamed the Government for the astronomical increases in the price of oil, which dominate our economy.
What has happened over the last 18 months has gone a long way to cure some of the deep-seated ills that have made us so inefficient and unproductive. Unless that had happened, when the time came for interest rates to be cut—I think that it will come fairly soon—British industry would have been in no better shape to respond and compete in world markets than it had been in any other period in the last 25 years.
The change that we face, and the reason why I feel optimistic about the way in which things can go as soon as interest rates are brought down, is that we now have an industry that is much better managed, better manned and better able to compete, and if I am right in that, as I believe I am, I refuse to accept that that can be called great and lasting damage to the whole economy.
6.9 pm
Mr. Russell Kerr: I thank you for calling me now, Mr. Deputy Speaker, not least because it enables me to follow directly the hon. Member for Woking (Mr. Onslow), who is an old war horse with whom I lock horns frequently. However, I should like to reassure him that I have no intention of even trying to follow any of the points that he made, although several of them upset me most grievously.
When we were running up to the last general election, in May 1979, the air was full of promises from the Conservative Party that it would "set the economy free", "release the productive potential of the British people", "put paid to Socialism", and various other things of that sort. In general, the Conservatives promised to usher Britain into a new economic era that would result not only in Britain resuming its rightful place as one of the Western world's leaders, in an economic sense, but also, in a fairly literal sense, in making Britain if not a land fit for heroes, then, more importantly, a land in which initiative and enterprise could triumph and where "merchant adventurers" would come into their own and flourish, to the great benefit of the long-suffering British people who had, so we were told, suffered for years past under the Socialist yoke.
The chosen Messiah for this expedition was an unlikely guru by the name of Milton Friedman, whose way-out economic theories had long since been discarded with contempt by economists of standing and respectability—such as Professor J. K. Galbraith, need I say—but who was able to count among his converts a lady who, for reasons we need not go into here, was destined to lead the British Conservative Party.
The flag under which Professor Friedman, of the notorious Chicago school of economics, chose to sail was called "monetarism". Baldly stated, this was a simplistic theory, whereby all the economic ills from which we have suffered over the years were ascribed to the money supply. According to Friedman and his pals—and in this context that must include Professor Walters, who now earns
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£50,000 a year as the supplier of economic balm for the Prime Minister, who is probably under-paying him, incidentally, for the job that she has given him—if one controls the money supply effectively, one controls the economy, no matter the consequences—whether they be a catastrophic rise in unemployment, or whatever. Currently, we have, as we heard earlier, 2¼ million or more unemployed, but in reality we have well above 3 million people unemployed, including unregistered unemployed and those in Northern Ireland who, for some reason, are not counted in the United Kingdom total. We have by and large the worst unemployment record of any country of the ECC.
The simple fact is that between May 1979, when the present Government came to power, and the end of last year, the United Kingdom had the highest increase in unemployment of any EEC country. I stress that fact. To make the point, about 2,500 individuals have joined the dole queue every working day since the present Tory Government came to power.
Another consequence of the monetarist approach is that the effect on production of this all-too-simple exclusive concentration on money supply has been a major assault on the living standards of the British people—although that does not apply to the very rich, on whose willingness to invest in manufacturing industry the economic health of the nation is said to depend, or so we are told.
Regrettably, the aforementioned very rich do not seem to have got the message. Since the Chancellor of the Exchequer freed us of all exchange controls last year and, as a direct result, saw a massive outflow of United Kingdom investment capital, the exporting of capital, particularly to Europe, has been a major feature of economic life in the United Kingdom—to the great detriment of the United Kingdom economy.
Other features of life under monetarism, which has now, incidentally been utterly discredited as an economic theory, have been its total failure to achieve its monetary targets, leaving the money supply out of control amid continuing attacks on the trade union movement. At the same time, the country has been suffering the rigours of a deflationary monetary policy and the Government still, incredibly, persist in abdicating their responsibility for the levels of output and employment in the economy.
In short, one should be careful of dignifying with the name "monetarism" a policy that is deflationary and deeply reactionary—which may well be why the Leader of the Opposition finds it so appealing.
Tempting though it is to rub the Government's noses into their own muck—and there is no easier task—I shall resist the temptation, because I wish to make a few comments about another aspect of Government economic policy today, namely, the long-term damage that present Tory Government policies are doing to the economic prospects of this country, in terms of both the public and the private sectors of our industry.
As any first-year economics student will confirm, the future health and prosperity of any industry—public or private; essentially it does not make a great deal of difference—depend very much upon the level of investment needed for at least maintaining the stock of capital in the business. Judged by this criterion, one of the most serious failures of the present Government is that their pursuit, on a "head-down, tail-up" basis, of these

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highly restrictionist and deflationary policies, masquerading as monetarist theory, has resulted across the whole spectrum of British industry, in a dramatic shrinking of British industry.
As figures and graphs supplied by the NEDC's committee on finance for industry make very clear, the level of investment is now no longer enough to replace old plant and machinery. The consequences, in terms of our longer-term industrial health, need no emphasis from me. Moreover, the same process of "short-changing our future" does not apply only to plant and machinery maintenance; it applies to other things that will determine our future industrial health, such as technical education, research and development, and even a properly financed Health Service.
Looking at research and development, it is vital to guarantee that British industry uses up-to-date techniques. Long-term trends in research and development look ominous. The real level of United Kingdom spending on research and development in 1978 was barely higher than it was in 1967, and the number of people employed in research and development activities had dropped. Since 1978 was a year of higher economic activity than was 1980, it is certain that the level of research and development will have dropped since then.
The Government's attitude to research and development makes for some difficulties. Public funds pay for over one-quarter of research and development expenditure, but there is a heavy bias towards defence and military research and development, which is increasing as a proportion. This is the reason why other sectors are being starved of research and development funds—sectors that may be more centrally concerned with our future economic health.
Research and development spending has usually been one of the first casualties of a recession. British industry will suffer from the results of this shortfall for the next 10 to 15 years. Similarly, with training and apprenticeships, there was a drop of 10 per cent in 1980, or about 10 per cent. of the annual intake for training purposes.
The National Institute for Economic and Social Research states that a 4 per cent. growth rate every year for six years, after the present Government are thrown from office, will be needed to restore the economic situation to full employment.
Let not the present Conservative Government underestimate the depth of the recession into which their policies have plunged us, and which will take rather more political intelligence to solve than they have so far been able to display. Friedmanite monetarism is certainly no answer to Britain's problems.
6.20 pm
Mr. Julian Amery: The hon. Member for Feltham and Heston (Mr. Kerr) resembles Sancho Panza more than Don Quixote, but if I may say so he has been tilting at windmills. If the Government had succeeded in controlling the money supply and in cutting public expenditure, it could be argued that that was the cause of our present difficulties. However, they have not done so. They have instead pursued policies similar to those pursued by the deputy leader of the Opposition when he was Chancellor of the Exchequer and which the hon. Member supported, however reluctantly.
In response to your appeal for brevity, Mr. Deputy Speaker, I shall confine myself to two points—one
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specific and the other more general. There is general agreement in every quarter that the present situation causes deep concern—in the Opposition, the TUC, the CBI and nowhere more so than in the Government. It needed almost an earthquake to bring my right hon. Friend the Secretary of State for Industry to announce the grants and subsidies that he is making to nationalised industry. We saw his agony and I sympathise with him. It was rather like a vegetarian inspector from the RSPCA finding himself being employed at force-feeding Strasbourg geese no doubt to produce the sort of pate which would have gone down well with the deliberations of the Council for Social Democracy. I do not dispute my right hon. Friend's arguments for making a special case for British Leyland, British Steel or any other company. However, I question the Government's priorities.
At the general election, we said that defence should have first call on our resources. On both sides of the Atlantic, all the experts have told us that the decade before us is the most dangerous since the war. We have been told that the danger will continue until the equilibrium of defence forces is restored between the East and the West.
Somehow, we are able to spend billions on the nourishment of lame ducks. Why cannot that be done for defence contracts? It would give us much needed strength and would give confidence to our allies. I suspect that it would create or save as many jobs as will be saved by the expenditure now contemplated. The defence forces are already a lame duck, but I would say that they are more a deserving duck.
It is worth recalling that in 1938 Mr. Neville Chamberlain, who still believed in detente with Hitler, spent 6 per cent. of our GNP on defence. In 1939, the defence Estimates were put up to 12 per cent. before the occupation of Prague. At the time of the Korean war, Mr. Attlee spent 11 per cent. of the GNP on defence. If there is to be constructive intervention in the economy by the Government, defence or defence contracts should have a prior claim. To put the money into defence and into the building of the equipment that the forces need would give substance to the brave speech made by my right hon. Friend the Prime Minister at the Pilgrims dinner. Her speech is robbed of credibility if it appears that we are trying to confine our response to the challenge of Soviet imperialism within cash limits.
I regret the suggestion that the cuts in the defence programme are attributed to the speedy conclusion of defence contracts. In the context of this debate, I say that as much on economic as on defence grounds. Late deliveries and low productivity have been standard criticisms of British industry. We should encourage deliveries on time and even ahead of time, and that should be rewarded. In my experience of defence supply—I have served in three defence Departments—delays always adds to the cost.
My second point is of a more general character. The Leader of the Opposition rightly said that Conservatism did not begin in 1979. But, equally, I thought that his historical analysis was faulty. When Maynard Keynes advocated reflation in the 1930s, the price level was stable if not falling. When the 13 years of so-called Tory misrule—as Labour Members like to call it—indulged in stop-go, inflation never went above 3 per cent. The sort of polices advocated by the Leader of the Opposition would have produced inflation of over 20 per cent. in a short time. Those policies were more specific than was

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suggested by my hon. Friend the Member for Woking (Mr. Onslow) and perhaps we should nail the right hon. Gentleman down on them.
The situation is not entirely dark. There is a reduction in inflation and a reduction of industrial unrest. There has been a shakeout. The balance of payments is strong and the pound is strong. The banks have helped to the limits of prudence, if not beyond. Therefore, I hope that my right hon. and learned Friend the Chancellor of the Exchequer will not fall for the easy idea of taxing bank profits.
The central argument is not between monetarism and incomes policy. Today the question is whether to reflate. The Opposition, the Liberal Party, the TUC and to some modest extent the CBI seem to advocate a measure of reflation. My right hon. Friend the Prime Minister says that the time had not yet come for that. I would not presume to disagree with her. I do not feel that I have all the elements necessary to form a judgment. I should simply like to say how we should consider the problem. Reflation does not have to wait until we have zero inflation.
But reflation will not help recovery—here I join forces, to some extent, with the leader of the Liberal Party, though I assure him that I am not angling for membership of the Centre party. Reflation will not help recovery unless the new money injected into the system leads to an equivelant production of new goods that people want to buy at home or abroad.
Therefore, we must somehow create the conditions for improved productivity. Those conditions are the readiness on the part of business to invest and the readiness on the part of labour to co-operate with management. Some of that may follow the shakeout. It was the old-fashioned idea that the sort of situation that we have created will produce new energy and the wish to invest on the part of management, and a desire to co-operate on the part of labour. I am not sure about that. I believe that we need a carrot as well as a stick.
I think that the time is coming when the Government should define the conditions in which they would reflate. It is time for the Government to say how they could help if businesses were ready to invest and if the unions were ready to co-operate, whether it be by investment grants or allowances, by tax relief on profit sharing, and other sorts of participation or on support for new technologies.
The country needs to be told of the extraordinary prosperity that could lie ahead if we would only exploit modern technology to the full. It should also be told about the high wages, the shorter hours and the high profits that could be derived from fully exploiting the machine. We should embark on that task of educating the public now.
The British economy is like a giant tanker sailing down the Channel. When it wants to turn about, it must take the decision 30 or 40 miles beforehand, such is the impetus behind it. Our economy is like that. Once we make a decision it takes time for the process to work through. I urge the Government to start now and show some light at the end of the tunnel.
6.30 pm
Mr. Eric S. Heffer: When I come into the Chamber to listen to debates on economic policy I sometimes wonder whether I have come into cloud-cuckoo-land, because the realities for our people, industry
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and economy do not always seem to be reflected in the speeches that I hear, particularly from Conservative Members.
I am also reminded of cloud-cuckoo-land by the economic theories that I hear from Conservative Members. In a powerful speech the Prime Minister emphasised that the central theme of the Government's policy was to get inflation down. That is a commendable proposition. No one can be against getting rising prices down, just as no one can be in favour of sin. However, I must draw the attention of the House to a speech made by Mr. Harold Macmillan in March 1958, when he was Prime Minister, to the Conservative Political Centre. He said:
"those of us who lived through the inter-war years know that there is another problem, just as difficult to solve and certainly no less painful in human terms. It is not only inflation which can threaten the steady expansion of production and the full employment of our resources. Deflation, involving the failure of effective demand, can do the same thing. In the inter-war years we pursued a monetary policy which was unduly deflationary and we had the less excuse for it because we had quite sufficient reserves to take risks with them. Prices fell all right, but they fell too low. And what was the accompanying feature? Everyone in this hall who is more than 45 years of age has actually lived in a period when there were 2¾ million unemployed in this country."
The Government are pursuing precisely the same policies that led to the 2¾ million unemployed in the days about which Macmillan was talking. They did not work then, and they cannot work now, except to put immense burdens on the shoulders of ordinary working people.
In every period of capitalist economic crisis and slump, there are two solutions. One is to put the burden on the shoulders of the people, particularly working people, and the other is to organise the economy in a totally different way, on the basis of using our resources in a planned way. That is the stark choice before us in Britain. Unfortunately, there is no middle way. Those who seek a middle way are also living in cloud-cuckoo-land. We have a choice between solving the crisis in the way that the Government are attempting—at the expense of the people—and solving it on the basis of the alternative economic policies put forward by the Labour Party.
The leader of the Liberal Party has been kind enough to give me a copy of his 10-point plan. I have looked at it quickly, though carefully, and the only parts that are any good are those that are identical to proposals in the Labour manifesto. We can forget the rest, and the package as a whole is no solution to our problems.
The Prime Minister argued powerfully that inflation was coming down, that wage increases were being kept at what she called a better level, that excessive wage demands were no longer being made and that output was rising. But that is precisely what happened in the 1930s. Let me tell the House a story. When I was an apprentice, carpenters and joiners had to hang at least eight to 10 doors a day. I saw elderly joiners running to work with doors on their shoulders when the buzzer went so that they might fulfil their quotas. Productivity was high, and the reason was that outside the gates there were men who were dying for jobs. Productivity always goes up in a slump.
We have 109,000 unemployed on Merseyside—16 per cent. of the working population—and a local doctor has pointed out that when he advises sick workers to stay at home some refuse to do so because they are afraid that they will lose their jobs if they do not go to work. During a slump, wages are kept down. All that the Prime Minister

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has proved is that the capitalist economics that she supports work to the benefit of capitalists and to the detriment of ordinary working people.
The right hon. Lady said that the decline in profits was a terrible thing, but if she had studied economics she would know that the more that technology increases, the more profitability declines. Some Conservative Members are expressing disagreement, but what I have said is true. One cannot sell commodities to machines, and if workers are not earning money it is not possible to sell commodities to them. If we get greater investment and more technology, as we must have, we are bound to have fewer workers. That cannot be avoided.
If we have fewer workers in a capitalist system, in which profitability is the main criterion, we are not able to sell the commodities. There is a circle that cannot be squared. The answer is to organise our society on an entirely different basis. That is what this country is faced with today.
We go over and over the same arguments. We argue the same questions with Governments of both political persuasions. Sometimes the same arguments are used by both Front Benches. Yet the real answer is the alternative that is being pointed out by the Labour Party. It perhaps does not go as far as I would wish in many directions, but it points in the direction of planning our resources in an entirely different way and getting production for use, as opposed to production for profit as happens at present.
Let us take the example of Tate and Lyle at Liverpool. That company has made an overall profit in all its companies in the United Kingdom and Europe. But it has not made a profit in Liverpool and therefore the factory there has to be closed. Is that not a classic example of the capitalist view that if a business does not make profit it has to be closed, and there is no production for use? The sugar produced at Liverpool is vital and necessary, though sugar consumption is going down. That is partly due to the slump itself. Indeed, all commodity sales are going down.
The proposals being put forward by the so-called new Labour Party are not proposals for an East European-type State. That is the sort of slander that we are getting used to, but it does not come well from the Prime Minister. She knows that what we are proposing does not undermine, undercut or in any way diminish our parliamentary democracy. On the contrary, what we are proposing enhances and develops democracy. The right hon. Lady believes that when one is in a tight corner one should not argue the case but should slander one's opponents. That is what is happening now.
The answer does not lie in more enterprise zones. When we come to office we shall reverse the Government's policies. That is the first half of the solution to the problem. The second half is to draw up immediate policies to reverse the drastic cuts in public expenditure that are taking place in local councils and elsewhere, because they are leading to unemployment. It is interesting that the cuts are increasing public expenditure. They cut public expenditure on the one hand, and increase it on the other.
A reversal can be brought about by more public expenditure, particularly in the construction industry. Without public expenditure there will be no construction industry of any real significance. We must study what is termed the infrastructure. I agree with the suggestion in the 10-point plan that involves a programme of public works. That is what is needed. There must be more training and retraining. Also, there must be more support for existing
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Government schemes. Those are ways of dealing with the immediate problem, but they do not solve the overall problem.
Mr. Skinner: I hesitate to intervene but I think that I heard my hon. Friend say that we all agreed with the 10-point plan. If he is talking about the general panaceas that it contains, of course we agree. Perhaps he will explain what he was referring to, and also extend his argument to the public sector. There is a strong argument that at least 70 per cent. of the money spent in the public sector eventually finds its way to the private sector, and therefore assists many of the Government's friends.
Mr. Heffer: My hon. Friend misheard me. I said that I agreed with those parts of the 10-point plan that are in our programme. The points that I mentioned are in our programme, and I therefore agree with them. It appears that the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) pinched them from our programme and put them into his document which seeks to solve the problems of the world.
The real answer to the longer-term problems is to extend the role of the National Enterprise Board, to extend public ownership in many spheres where it does not exist, to have some form—not of total import control, because I would not agree with that—of selective import control and to ensure that exports are put on a planned basis. Much more can be done than is being done at present.
The real and only answer is to organise our economy on Socialist lines, with Socialist planning. I was described by the Secretary of State for Employment as an old-fashioned Socialist. I plead guilty to that. Whether we have old-fashioned Socialism or new-fangled Socialism, as long as it is genuine Socialism we shall solve the problem. Until that happens we shall not be able to solve the economic problems that we are so frequently forced to debate in this Chamber.
6.48 pm
Mr. Stephen Dorrell: I listened with interest to the speech of the hon. Member for Liverpool, Walton (Mr. Heffer), and in particular to what we can now describe as Heffer's law, namely, that the explanation of declining profitability is the pace of industrialisation. Presumably, it means that the highest profits in history are to be found in the Garden of Eden. It is an interesting argument, but not, I suspect, borne out by history.
I was also interested to hear the speeches of other Opposition Members. They seem to have an extraordinary inability to decide which of two conflicting arguments they want to use against the Government. On the one hand, they accuse the Government of pursuing excessively tight and excessively restrictive monetary policies. On the other hand, as politicians, they cannot resist the temptation to use the fact that the Government have failed to achieve their sterling M3 targets to accuse them of having failed in the programme that they set themselves.
The Opposition argue that the Government have failed in their monetary objectives. It would be churlish of me to say that the Government have no economic objectives. One of their main achievements is that in a relatively short period in office they have secured the return of monetary discipline, whatever the sterling M3 indicator may say. If one considers either the monetary indicators or the impact of monetary policy on the real economy, each leads to the

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conclusion that during the past 21 months the monetary position has been very tight. That is what the Government said that they would do when they came to power, and it is an achievement for which they are entitled to claim credit.
The Government are equally entitled to claim credit for the new willingness on the part of British management and trade union leaders to discuss the real issues of competitiveness, inefficiency and overmanning— problems that have faced our industry for many years. Between them they have produced a significant fall in the underlying rate of inflation. That is something that it would be churlish not to welcome.
This evening I want to cast our minds forward and ask the overriding question—where do we go now? Two further questions arise as a result of that query. How shall we make output rise again? If we succeed in raising output, how shall we do that and safeguard our achievements in re-establishing sound money?
One school of thought, which I believe the Secretary of State for Trade supports, is that if one can bring inflation down there will be a spontaneous combustion in the economy and the recovery will be automatic. The argument is that there will be no need for Government interference to promote economic growth. Even that argument requires a degree of analysis.
My right hon. Friend might help the House by suggesting where that recovery will originate. It is not likely to originate in investment. In the next 12 months it is not likely that there will be an upsurge in private sector investment against the background of depressed profits and markets. It is not likely that there will be a recovery in the external sector against the background of an unprecedented decline in our international competitiveness on the back of the well-publicised problems of the exchange rate.
There might be a reduction in the rate of destocking. However it is unlikely that that will go the full circle and become restocking. If destocking declines, all that will happen is that the rate at which the economy is going into recession will decrease. It will not produce a stimulus to start everything moving again.
Similarly, it is unlikely, given the Government's priorities, which in this respect I accept and support, that there will be a stimulus out of public current expenditure. That leaves us with the only other element of demand—consumer demand. The Government's forecast published in November sees that as the major reflationary force on the economy during 1981. The forecast assumes that people with lower disposable incomes will save a smaller proportion of them in order to get the economy moving again.
Against a background of unprecedented uncertainty arising from high rates of unemployment and economic uncertainty about the future, it is a tenuous argument to say that there will be a decline in the savings ratio that is necessary if that is to power the economy out of recession. I accept that that might happen and that nobody can be certain whether it will happen, but at best it is an uncertain prospect. If that analysis is correct and my right hon. Friend accepts it to be correct the belief in spontaneous combustion begins to look a bit sick.
I pose two questions. I ask how output is to rise again and, if it does start to rise, how we can safeguard our
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achievements in reinforcing sound money. Let us assume that I am wrong and that demand begins to recover in 1981. How shall we safeguard the monetary discipline that we have secured? How will the Government manage the recovery?
I shall put one or two anxious questions to the Minister. Our success in controlling the rate of price inflation has, to a large degree, arisen because industrialists have been prepared to accept a decline in their margins. If recovery comes, whether it is artificial or natural, it will make an easier market and the first priority of most industrialists will be to put up prices once again.
There is no doubt that in the last 18 months one of the major elements in securing the co-operation of trade union leaders and management in reducing the rate of wage inflation has been the "backs to the wall" approach. They have to agree, or there will be no jobs for anybody. If the economy recovers, the discipline of the imminent dole queue will be removed. On what basis will wage inflation be controlled when the economic environment is more favourable?
More fundamentally, once the recovery starts to feed through, how will we answer the argument that we meet with increasing regularity, and that we heard so often during the 1960s, that we cannot have a recovery because it will be pre-empted by imports? It is common ground on both sides of the House, in the TUC, and in the CBI, that British industry is uncompetitive. It does not seem to matter much whether the recovery is artificial or natural. Given either scenario, how do we secure the balance of payments? If we fail to do that, shall we not precipitate the devaluation against which we are fighting so hard today?
Mr. Robert Taylor: How does my hon. Friend account for the surplus on our trading account over five successive months, in view of the current high level of the exchange rate?
Mr. Dorrell: Two major factors are involved. One is oil. In a deep recession it is normal for the demand for imports to fall. That is particularly true of the demand for raw materials, which industry uses to make its products. I do not shy away from this, but I have been surprised by the extent to which the balance of payments has held up. All the evidence is that that achievement is unlikely to last on its present scale.
My anxiety is that the recovery, if it comes, is likely to be pre-empted by inflation. The key problem is that our industry is uncompetitive compared with industries elsewhere in the world.
I should like to make one or two comments and suggestions. It is important to learn from our competitors. If we examine what our major competitors are doing during the recession we see that they are encouraging, and using State intervention to encourage, investment in the industries of the future. I am pleased to support the steps that our Government are taking to do that. In particular, I welcome the decision to invest public money in British Leyland and to use public money to attract Datsun to this country. I also welcome the imminent decision to invest in British Steel.
It is not enough to fire-fight and support any industry that is making a loss. That is the worst type of industrial policy. There is no point in handing out money because

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a firm is making a loss. It is more sensible to develop, with industrial organisations, a coherent strategy for developing a sound industrial base.
I give an example with which many Opposition Members will not agree but which is important. I refer to the textile industry. I declare an interest. When I came to the House I was a director and shareholder in a clothing company manufacturing in Britain. I am convinced that there is no future for most of the British textile and clothing industry.
I advocate a coherent programme for re-employing the assets and the people of that industry in an industry that can pay better wages and provide secure jobs for the future. I find it difficult to support a policy that undertakes the negative part of that job and insists that imports come in if they are more competitive but does not provide the prospect of alternative jobs for the people and assets that are made redundant.
The Government have taken the first steps down that road and I welcome them. Simply shelling out money is not enough. We must have a policy and framework under which we undertake investment decisions. It is important to observe the distinction noted by my hon. Friend the Member for Woking (Mr. Onslow) between simply spending and investment. We are after investment rather than spending.
I do not want to bore the House or my right hon. Friend with my views on the exchange rate. My right hon. Friend has heard them before. However, I wish to put four simple points about the importance of securing a measured devaluation of the exchange rate. First, I repeat the argument that I used about the need for industrial investment. Our competitors do it. It is untrue to say that during the 1970s German industry competed on the back of a rapidly rising exchange rate without the Government doing anything about it. The Government consistently intervened to hold down the deutschemark. In no year during the 1970s did the real deutschemark appreciate by more than 5 per cent., yet our currency has appreciated by 20 per cent. in real terms during the past 12 months.
Secondly, I shall use the arguments from our manifesto. We said that we could not expect investment in industry unless we provided profits. Profits are both the means and the incentive to invest. We shall not have a sustained upturn in industrial investment against the current relative background of costs.
Thirdly, there is not necessarily a conflict between monetary policy and exchange rate policy, because there is no reason why the excess of liquidity that would be created by intervention in the foreign exchanges could not be mopped up by one of the means available to the authorities. If it were done on an enormous scale it would create an unacceptable rise in interest rates. But I do not believe that it would be necessary to do it on an enormous scale. On a small scale, the effect would be minimal.
Fourthly, it is better to bring about a devaluation of the exchange rate against the background of the current tight domestic market than to wait for two years until, I hope, the domestic market is freer and the inflationary consequences of a devaluation very much greater. Surely it is better to do it against the background of a domestic monetary position that will minimise the inflationary effects.
I hope that when he replies my right hon. Friend will take time to consider one or other—or preferably both—of my proposals.
7.2 pm
Mr. David Winnick: The hon. Member for Loughborough (Mr. Dorrell) was critical of the Government's economic policy. It is right and proper that a Member of Parliament whose party is in Government should be able to state his views frankly, as did the hon. Gentleman, when he disagrees with certain aspects of his party's policy. We listened with great care to what he had to say.
The Prime Minister's speech offered no hope to the unemployed, to their families, or to the potential unemployed. She argued for the same sterile, bankrupt economic policies which have brought about a tragedy for Britain. They have brought back mass unemployment. Her speech was TINA—there is no alternative. She could have said that, and finished there. She put forward no alternative to what has taken place during the past 18 or 20 months. In effect, all that she said was that the same policies must continue—clearly with the same results.
During the past 18 or 20 months the West Midlands area has been devastated. Unemployment in the region is growing faster than in any other part of the United Kingdom, except lor Northern Ireland. That is hardly surprising, because manufacturing production has dropped by 12 per cent. during the past year. That decline has been the largest decline since the early 1930s. If British Leyland had not continued to be funded and supported by the Government, the West Midlands would have become an industrial wilderness. When we speak about the Government not being in a position to support industry, it is as well to remember that the previous Labour Government rescued British Leyland, and that this Government have rightly decided to continue that policy. We talk about subsidising jobs. Is it not right and proper to do what was done by Governments of both parties in that case?
Mr. John Stokes: I understand what the hon. Gentleman is saying about British Leyland. A number of my constituents are dependent on British Leyland and on its suppliers. We must ask ourselves how £990 million is to be found. Will it be found by taxation, by borrowing or by printing money? While money goes to British Leyland, what will happen to the hundreds and hundreds of small firms that will not receive one penny from the Government?
Mr. Winnick: Fortunately, the Government have made a decision which the hon. Gentleman may, or may not, like. Understandably, that decision has been welcomed in the West Midlands. It is a U-turn of a kind, and it was absolutely necessary. Fear and insecurity stalks the region today. When people set out to work they do not know whether they will be made redundant. If they are made redundant, they do not know what they will do, how they will make ends meet, how they will manage on a reduced income, and how they will tell their families, especially their young children. The main fear that goes through their minds—and the House should not overlook this point—is as to how soon they will find a job. A man in his late forties or early fifties wonders whether he will find himself on the dole queue year after year.
I have a list with me of five constituents, all skilled engineering workers, who have been made redundant during the past three or four months. They are aged 50, 61, 59, 44 and 47. Some of them worked for their firms

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for more than 30 years. They are now on the dole queue. Their chances of finding another job are remote. That is the sort of industrial tragedy that has struck Britain. That is why we are having this debate today. That is why there is so much concern not only on the Labour side of the House, but throughout the country.
I turn to the issue of reduced income. A letter that I received this week from a constituent states:
"My husband … used to bring home £60 a week when working and now we get £35·80 and we still have to pay rent, gas, electric and everything else, and we still have to pay full price for everything on half pay. We can't even afford a bus ride to break the monotony, it would cost … £1. Our only luxuries are a morning and evening newspaper and the television … It is very depressing to get to be 51 years and 50 years with no prospects of getting a job."
That is only one constituent. Many more of those whom I represent in the House are in the same position. Many more are on short-time working. A large number of people, while they are working today, will not be working in a few weeks or a few months.
I sometimes wonder whether Ministers and Conservative Members, if they had to endure what many of our constituents must endure—trying desperately to manage on a small income when the husband is unemployed and with young children to bring up—would continue to be so complacent when endorsing the policies that have returned mass unemployment to Britain and devastated the West Midlands. Even in the 1930s the West Midlands did not suffer the unemployment that was suffered elsewhere. Birmingham and Coventry were the heartland of engineering. Yet the rate of unemployment is now more than 11 per cent. We know what is wrong and what is sick in the country as a whole.
In Walsall, unemployment is almost 13 per cent. Yet when the Government took office it was less than 6 per cent. There are many local school leavers who try desperately to find jobs. They write 40 or 50 letters, and continue to try. But it is understandable that some give up and take the attitude "What is the use"? Perhaps they did not do too well academically and are finding it impossible to be considered seriously for a job. They come to a certain attitude of mind and say "It is no use because there is no hope". They recognise that the dole queue will be their only occupation—not for weeks or months, but for years on end. And the idea that military service can be a solution is farcical.
The Prime Minister was very critical of, and had no time for, the policies put forward by the TUC in its Economic Review. If the people had to make a choice between the policy of expansion put forward by the TUC or the policy of de-industrialisation, continued redundancies and closures, short-time working, and unemployment at a level not seen in Britain since the 1930s, there is no doubt what choice the British people would make.
Neither are people fooled by the idea that money cannot go to investment and to public expenditure. As some of my hon. Friends have already pointed out, what sense is there in spending so much public money on providing the very minimum for the unemployed while at the same time saying that there are no public funds for investment to revitalise industrial life? There is no sense or logic in it. It would become even more foolish as the number of unemployed continued to grow. We have already a figure of 2½ million. There is hardly a single economic trend
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which predicts other than that unemployment will continue to grow. I see no reason for optimism or for anyone to say that the situation is likely to get better in the next six, 12 or 18 months.
I do not expect the Government to accept Socialist or near-Socialist policies. No one suggested that, but there are some measures that the Government should be taking. They should be reducing interest rates. When I go round firms in my area that is the immediate point that they make. There is a need to have a more realistic exchange value for the pound. I do not think there is much disagreement between hon. Members on both sides of the House on that. There is certainly a need for selective import controls. I know there are those who argue differently, I do not want to enter into an ideological dispute about import controls, but I can see no way in which we can revive British industry and have the kind of expansion that is absolutely necessary in order to avoid the policies which we now have unless there is some degree of import control. We are being flooded out constantly by imports from other countries, certainly from the EEC and Japan. We need some minimum protection from the amount of imports from the EEC because of the state of industry here.
The Prime Minister is perhaps the most unpopular person who has held the office since the 1930s. It is difficult to think of any pre-war Prime Minister, except perhaps Neville Chamberlain, but certainly no Prime Minister in the post-war years who has been so loathed as the right hon. Lady. She is loathed up and down the country because more than anyone else in the Cabinet she is held responsible for the policies which we on this side of the House are condemning today. When one speaks to ordinary people in one's constituency and elsewhere, inevitably they come to the same point—it is Thatcher, Thatcher, Thatcher, who is responsible for what has happened in the country. It may be unfair and unjust; it may be that other members of the Cabinet should share that responsibility, as indeed in a sense they do, but the Prime Minister is looked upon in that light because she is the head of the Administration and puts forward constantly in the media arguments for continuing the same sterile policies. She is looked upon as a person so utterly obstinate that she is not willing to change her views under any circumstances and no matter what industrial tragedy strikes the country.
There has to be a substantial change in Government policy. We wonder at times if there will continue to be the same support for the right hon. Lady on the Government Benches as we get nearer the next general election. We shall see. As the months go by and we get nearer to the next general election and as more and more people remember what was said by the former leader of the Conservative Party, the right hon. Member for Sidcup (Mr. Heath), who warned the Conservative Party in a debate in this House on unemployment that they should be careful not to be associated with mass unemployment, I wonder whether the nerves of the majority of hon. Members opposite will continue to hold. We will lose the vote tonight, but in the more important vote, the vote in which many more people will take part, it will be our arguments and our policies which will be endorsed by the country.
7.15 pm
Mr. Anthony Nelson: We always listen with interest to the hon. Member for Walsall, North (Mr. Winnick). Even if we cannot admire the content of his speeches, I am sure that we admire the belief that he has in everything that he says.
Perhaps I might be allowed to make two points in the short time available to me. The first is that I should like the Government's economic policy to be brought back on to the lines of the medium-term economic strategy. The second is that, far from complaining about underspending, I complain of mis-spending. I shall amplify my remarks later.
I well remember the trepidation with which the Government's economic strategy was introduced by the Chancellor of the Exchequer and referred to by my right hon. Friend the Member for Oswestry (Mr. Biffen). As with all plans and strategies, Conservative Ministers are rightly sceptical of the extent to which there can be accurate forecasts or the extent to which Government achievements can be kept to them, but I recognise and support the need for that strategy as a means of fulfilling some of the basic principles and tenets of our manifesto promises.
To achieve what I understood to be the principal objectives of the Conservative Administration it was, and still is, essential to reduce the take of the public sector, to the benefit of the private sector. We all recognise that that policy has been made more difficult by the recession, which has produced particular problems for the rate of growth of the economy as a whole. It is much easier to bring about radical changes in the balance between the public and private sectors in a period of boom than in a period of recession.
There is no way in which we can achieve what I regard as two fundamental objectives of Government policy, namely, reducing taxation and reducing the level of borrowing, unless we redress the imbalance that has grown up as a result of the resources that are consumed by the public sector at the expense of the more productive private sector. Although in the last year we have exceeded Government expenditure targets, I very much hope that the forthcoming Budget speech will include a package of measures that will bring us back on course within the same time frame as the medium-term economic plan.
It is essential to control the imbalance between what the public and private sectors consume because unless we provide more resources for private enterprise, and more incentive for investment, we shall not get the rate of growth of resources that is essential if we are to pay for the improvement in the standard of public services to which I, as a Conservative, hold dear. There is no way in which we can live off fool's gold any more. There is no way in which we can begin to match the policies of a succession of Governments unless there is a real increase in the size of the national cake and a reduction in the proportion of national resources that is consumed by the public sector.
At the same time, I do not believe that it is credible to have a public sector borrowing requirement policy that effectively pre-empts the limited and scarce financial resources that are essential for private investment. It is not credible to budget for a public sector borrowing requirement that is well outside the parameters set by the
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medium-term plan, because the dwindling private sector cannot afford the extra burden of buying more Government debt and the severe impact on interest rates.
I was disappointed that today there was no announcement of a reduction in the minimum lending rate. Following on from what I have said about the mediumterm strategy, I believe that it is compatible to propose that there should be, and should have been today, some reduction in the rate. The level of credit demand in the economy can be taken care of, because we are in a recession. It is not the minimum lending rate that is the main influence over the level of credit and therefore over the growth of the money supply. What we are seeing are the recessionary factors of declining consumer and producer demand exerting their influence on the demand for credit.
We should let the recession take care of the demand for credit, and the Government should be prepared to adopt a slightly more flexible policy in reducing the minimum lending rate. I say that as a firm adherent to the Government's overall policies. I do not believe that they would be substantially affected by such a change.
The second part of my speech relates to mis-spending rather than underspending. There has been a considerable growth in public expenditure under this and previous Administrations. Even if we are successful in reducing the amount of expenditure undertaken by the Government, we must make better efforts and strive to ensure that the quality of that spending is better than it has been in the past.
It seems that this Government, as well as previous ones, have, sadly, concentrated too much on cutting capital expenditure, and not sufficiently on cutting current expenditure. In the nationalised industries, in the great spending Departments of State, and in various other organs of the Government, we have seen a tendency to preserve bureaucracies, while at the same time reducing the front-line services that are available to our constituents, such as patients and pupils.
It is a nettle that we must grasp. We all understand the immense difficulties with which Ministers are faced in coming to terms with the problem. Some of us perhaps appreciate that the demand for Executive control and influence over spending down the line in the public sector are greater than Conservative policy would like, or greater than some Ministers feel able or inclined to undertake, but such control has to be exerted, and intense management efforts within the public sector have to be directed to ensure that as far as possible the necessary cutbacks in public expenditure are made in the bureaucratic elements of it rather than in the services available to our constituents.
I shall cite some examples. In the Health Service it is always the number of nurses and doctors and the equipment up at the front that are cut back—that certainly applies to the hospitals in my constituency—rather than the administrative bureacracies of district, area and regional health authorities. Knowing the amount of work that any of us can do in a day, I do not accept that it is necessary to maintain or even to increase the size of these bureaucracies.
My second example is local government, where billions of pounds are spent every year. Despite the worthy efforts of my right hon. Friend the Secretary of State for the Environment to reduce manpower, and therefore manpower costs, within local government, and despite the

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degree of success that we have enjoyed in recent years, the fact remains that ever since the reorganisation in 1974 Conservative, Labour and Liberal authorities alike have seen a steady and relentless increase in manpower, month by month, as the manpower watch figures have come through. It is not good enough to have a Government policy that states that we must reduce the number of civil servants in central Government by 60,000 or 70,000 over two years, and in some magical way exempt local authorities from their responsibility to make major savings in bureaucratic manpower.
My third example of where money is mis-spent is sadly the nationalised industries. I understand the problems that they face at present. My criticism was brought home to me recently when I visited Corby, one of the towns that has been tragically affected by the recession in the demand for steel. Many hon. Members will know that recently the major British Steel plant at Corby was closed, leading to the redundancy, initially, of thousands of workers. Despite the fact that they received fairly substantial redundancy compensation and that some of them have subsequently found jobs, there have been tremendous difficulties for the community. There is a high level of unemployment—I believe that it is over 23 per cent.—a high level of empty property in the town and a high rate of vandalism.
The problems came home to me when I went around the now redundant British Steel plant at Corby, which in many ways was a museum piece of British industry. It was tragic for me to see—I had not seen a closed steel plant before—rusting and desperately old-fashioned plant. It had been built in the 1930s. Without the bustle of people managing and working in that plant, it was clear that virtually nothing had been spent on repair and reinvestment for decades.
I am one of those who have voted year after year for substantial increases in public expenditure and increases in the borrowing limits for British Steel. I should greatly support and welcome a greater bipartisan approach towards investment in the British steel industry. As I walked round the empty and closed plant I asked myself whether we had been successful in ensuring that the moneys that we had voted in the House were applied for renewal of plant, or whether they had been dissipated in various ways.
At a time when the Government have courageously and rightly decided to back major investment plans in the motor, shipbuilding and steel industries, we must make better efforts to ensure that the money goes where it is intended to be directed, and that it is not dissipated in covering either larger losses or allowed to disappear into coffers elsewhere. It seems that the money that we have directed has not gone for the purposes for which it was intended. If we have the responsibility to vote that money, the Administration have a responsibility to ensure that it goes where it is directed.
My final example of mis-spending rather than overspending or underspending of public moneys is in employment. Thousands of millions of pounds have been spent by the Government and by their predecessors on education and retraining of workers. However, I find that in the jobcentre at Chichester 90 per cent. of those who are registered as unemployed are non-skilled, and that 90 per cent. of the smaller number of vacancies are for skilled labour. Why is it that year after year we spend thousands
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of millions of pounds, and yet we do not have the body of skilled labour that our industrial competitors have in Germany, Japan, and America?
I do not presume to know the answers to these problems, but it would be constructive were we to direct our minds to them. I should like to see an improvement in the quality of public expenditure, but I wish it to be known that I support fully the need to steer the Government's economic policy back on to the mediumterm plan. It is just as important in these debates to advance constructive criticism as to say that consistency is a virtue of Government.
If the Government abandon the basic tenets of the economic policy they set out before the election and which they have embarked on with courage since that time, we shall not deserve to be elected at the next election and there is, in my judgment, no credible alternative. I say to the Government "Continue the good work, but let us ensure that the money is better spent."
7.30 pm
Mr. Gordon Wilson: The object of these debates, I suppose, is not to gratify ourselves by expressing views on economic policy. It is to embrace the hope that some small vestige of what we say is likely to change the way in which the Government's economic policies are working out. Following my intervention in the speech of the Prime Minister on the state of the economy in Scotland, I rapidly wrote out of my thoughts any particular hope that my remarks this evening would change some of the global aspects of Government policy. Nevertheless, it is worth pointing out to Government representatives how much damage is caused by the policies they are now employing. I believe that many Conservative Members are aware of this. We have heard some interesting speeches from the Government Benches.
At the end of the day, the Prime Minister's attitude to her policies is summed up in the phrase "The end justifies the means", the means being the use of unemployment in a rather ruthless fashion to depress demand and to reduce inflation. Our industries, in many cases, are being virtually murdered and destroyed. The question that arises is how many industries will be left in certain areas of the country if, and when, the United Kingdom comes out of this deep depression.
I do not believe that the Government are aware of the extent to which certain economies in the United Kingdom have been deeply affected. Reference has been made to the West Midlands where unemployment has climbed, in relative stages, to very high levels. In places like Scotland where de-industrialisation has been proceeding at a fairly fast speed for at least 10 years, the amount of industry left is less and, therefore, the relative increase in unemployment is less. But the increases in unemployment that are taking place are serious because they add to levels that were historically high.
The Prime Minister recently commended one group of economists for suggesting that the recession might be ending. She commended, especially, Scottish economists, no doubt because of some link back into the realms of time to the ancestors of Friedmanism. Nevertheless, the Scottish Council for Development and Industry's investment survey pointed to a 31 per cent. drop in manufacturing investment which would lead, it said, to the

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loss of about 25,000 jobs in manufacturing industry. It also indicated that there could be 60.000 jobs lost overall in 1981.
The CBI in Scotland, in its latest reports, perhaps slightly less gloomy than the Scottish Council survey, but, nevertheless, containing few rays of hope, pointed out that activity levels had fallen in the last four months. It pointed to 96 per cent. of firms indicating constraints on industrial production due to lack of orders and lack of sales. One part of the report warned that what was happening to industry in Scotland could lead to the more extensive incidence of labour-shedding in Scottish manufacturing. Unemployment in Scotland compared with other countries in Western Europe is extremely high and the outlook is nothing short of gloomy.
Mr. Michael Ancram: The hon. Gentleman has mentioned a series of reports and projections. He mentioned one that had been endorsed by the Prime Minister. Am I not right in thinking that the professor behind that report was Professor Donald MacKay who used to advise the Scottish National Party?
Mr. Wilson: The Scottish National Party has been advised by a number of economists including Dr. David Simpson whose views have helped build up the excellence in economic policy matters for which we are known. The breadth of economic views on which the SNP draws is extensive. I am not sure that Professor MacKay would necessarily like to hear himself adopted as our economic adviser.
I was pointing out that the outlook is gloomy. The debate has shown that investment is important. If full recovery is to be made after the recession ends, the figures for Scotland, in relative terms, are not encouraging. The survey to which I have referred shows that 52 per cent. of firms were planning to reduce spending on buildings and 53 per cent. intended to reduce their investment on plant and machinery. Of the two, the latter figure is especially worrying. A corresponding survey for the United kingdom shows that 49 per cent. of firms intended to reduce spending on buildings and 46 per cent. on plant and machinery. On plant and machinery in Scotland, there will be 7 per cent. less investment than in England. If our economy and our manufacturing industry are to be restored to competitive levels, that investment is essential.
The Government have to examine the whole aspect of regional policy. It has been proved, over a fairly long period, that regional policy can have some beneficial effects and can help the economy that receives the aid. But it is not the whole story. It is not enough to produce a radical turn-round in that area. I am worried that, if the recession continues for a considerable time, the pressure of demand for Government money to restore the local economies, say of the West Midlands, will produce additional spending and additional burdens on Government funding. It will perhaps mean an increase in the number of development and special development areas. That, in turn, will spell greater difficulty for those areas that are already industrial wastelands or suffering special industrial problems. By the extension of the recession, regional policy may become less effective. For that reason alone, it seems desirable that the Government should take action.
I was concerned by the speech of the Leader of the Opposition. It was an amusing speech of the kind he
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normally makes but pretty well devoid of constructive proposals. The right hon. Gentleman promised that more money would be spent. We have heard that before. The Government of whom he was a member cut back industrial investment in Scotland under regional schemes substantially with the abolition of the regional employment premium. The level of aid was never restored under the selective industrial schemes that took its place.
I should like to deal specifically with training and the shortage of skilled manpower. The hon. Member for Chichester (Mr. Nelson) said that there were a large number of vacancies available at the jobcentre in his constituency for skilled industrial workers. In the midst of substantial unemployment amounting to over 280,000, Scotland has the highest number of unfilled vacancies within the United Kingdom at 47·5 per cent. That is what I am told. If it is correct, there is no credit to be taken by anyone.
These are jobs that could and should be filled. It is high time that a cool and dispassionate look was taken by the Government, and also by the trade unions, at the whole system of industrial apprenticeships and the method by which training and re-training are carried out at work. I believe it is possible in Germany for workers who start out in a particular job to train while carrying out that job and, by agreement between employer and trade union, to go on to a list either for promotion or replacement in some other skill.
A rigidity exists under our existing system. We should encourage the idea of training throughout one's life to a higher level of skill or in other skills. It is a great pity that the Government do not sponsor or subsidise large numbers of apprentices, because, as and when the recession eases and industry picks up, there will be a greater demand for skilled manpower which will not be there. As we all know, industrial firms have been short of work and money and, as a result, have been cutting back apprenticeships. There will be a shortage of skills at a critical time of recovery. That in turn will prevent industry from getting off the ground fast before imports are sucked in.
The first priority of any Government should be, to take the example of the engineering industry, to subsidise the first year and perhaps even the second year of an engineering apprentice so that the industry can take on those apprentices now. I am told that it is a year and a half to two years before an apprentice becomes profitable to an employer. It is because of that lack of profitability at the trough and depth of a depression that the apprentices are not taken on.
Mr. John Townend: As the hon. Member for Dundee, East (Mr. Wilson) said, for the first year at least apprentices are uneconomic. Does he agree that one of the reasons is that there has been a concerted effort for several years by unions, among others, to increase the wages of apprentices and to reduce the differential between the apprentice and the skilled man?
In the construction industry, apprentices receive 50 per cent. of the skilled rate in the first year and 90 per cent. in the last year. Does not the hon. Gentleman agree that the CBI and TUC should get together to agree much lower initial rates of pay for apprentices to stop them pricing themselves out of the market?
Mr. Wilson: I said that it behoved the trade unions, industry and the Government to look coolly at the present

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situation. It is obvious that skill differentials have slackened. I am not referring particularly to apprenticeships, but differentials have eased. That is something which, if they are interested in economic recovery, the trade unions should look at. There are competitive pressures, as the hon. Member for Bridlington (Mr. Townend) well knows. I am urging the Government to consider sponsoring industrial apprenticeships in years one and two. Now would be a good time to do it if they cared to, and those apprentices would come in useful when the economic recovery takes place.
However, the Government are cutting back. We have heard of skillcentres being closed and in universities cuts are taking place. Those cuts will not necessarily apply to subjects which are immediately applicable to industry. They could apply equally to arts courses and engineering courses. Wherever a professorial or lecturer post becomes vacant, it will not be filled. This may create difficulties with technological subjects in particular.
Children have lost their motivation. I have a letter from a school council which says that it has difficulty in motivating children at secondary school to work hard because they ask "What is the use? There are no jobs for us when we leave school." That is a more general feeling as youth unemployment grows than has been realised in the past.
The call was made from both sides of the Chamber without party bias for the need to modernise industry. The Scottish Office recently produced a study on electronics carried out by international consultants which showed that Scotland was top or second top as a site for the electronics industry in Europe. Between 1975 and 1979 in California about 50,000 jobs were created in the industry.
Mr. Ian Lloyd: It was much more.
Mr. Wilson: It may well be much more, but that is the figure that I was given so if it is on the modest side that is welcome, as exaggerated claims are sometimes made.
Japan spends about £500 million per year on electronics. The United States spends about £100 million and the Scottish Office, which has produced a report which shows that Scotland is the top or second top site in Europe for the development of the electronics industry, is proposing to spend £1 million over four years. It is quite ludicrous to refuse to provide the funds. But if the opportunity has been isolated and shown to exist, that is a reason for the Government to put the public sector borrowing requirement to one side and invest money to ensure that the opportunity is secure. That would be investment as opposed to expenditure.
I should like the Government to reconsider their whole economic policy. I do not think they have succeeded, despite the efforts of the Prime Minister this afternoon, in convincing the great majority of people that they are on the right course. Too many of their prognoses have not been found to be correct. It is possible that inflation will come down. That has been admitted. But the price to be paid by manufacturing industry in particular is so great that the method is too brutal for the end that it was intended to achieve.
7.46 pm
Mr. Anthony Steen: I am not a macro- or a mini-economist. I will not trouble to make a statement to the House on my views of the current situation. I ask the Front Bench to help me out of a difficulty concerning a problem that we are facing in the North-West and explain to the House the Government's programme in a particular area of activity. The Government have made clear that their policy is not to meddle in the private sector. Business, industries, banks and insurance companies must be allowed to operate unhindered and to take full advantage of free market forces.
The message from the Government is to stop bureaucracy interfering in the private sector and to let business, and not the Government, make the commercial judgments. That view was echoed last night by the Undersecretary of State for Transport in the Adjournment debate raised by the hon. Member for Liverpool, Kirkdale (Mr. Dunn). The hon. Gentleman raised the question of the closure of the Liverpool branch of Roadline, with the loss of 130 jobs. The Minister said:
"Ministers did not intervene in the day-to-day management of the corporation or seek to override the business judgment of the professional management."
He also said:
"There is no question of the Government intervening"—[Official Report, 4 February 1981; Vol 998, c. 382.]
What the Minister said seems simply to restate the Government's policy and stance that grants and subsidies will be phased out, handouts will cease and Government funds will not be allowed to distort the market forces.
However, at another level local authorities and the Government are very much involved in private business. That involvement plays an important part in influencing the commercial judgments of those firms. In many cases they are left only with Hobson's choice—or no choice at all. If we think of grants, subsidies and other forms of Government aid as primary intervention, what I have in mind is secondary intervention. It is especially evident in the large towns and cities, where urban renewal is yet to start.
Let me explain what I mean. The decision by Tate and Lyle to close its Liverpool refinery with a loss of 1,600 jobs was a "commercial" decision by the board, taken without Government intervention. However, the Miniter of Agriculture, Fisheries and Food had already decided to favour beet against cane sugar. That in turn resulted in surplus capacity in the cane refineries. The decision appeared to be a commercial decision, but the Government had given the company no choice.
Let me give another example. Packenham's is a small business in my constituency. It has a turnover of £¼ million per annum and employs essentially a local work force. Three years ago the local authority served a compulsory purchase notice on the factory in order to pull it down. The council offered £13,000 compensation for the half-acre freehold. However, to rent similar factory accommodation costs a minimum of £40,000 per annum. Further, the Government's industrial estates will not lease new factories for purposes other than manufacturing. Packenham's was a service industry, so could not get one of the factories. The company's commercial decision is

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inevitable. It will have to close when the bulldozers move in, which will create more unemployment and further reduce the rate base in the area.
Demolition of small firms appears to be increasingly fashionable. One wonders whether the job of the Minister responsible for small firms is not increasingly becoming that of an undertaker rather than a stimulator. In Liverpool the city council has acquired 443 sites belonging to small firms, but less than one out of every three of those firms has been relocated. The direct effect of such local authority intervention is to force a commercial judgment on small firms, which inevitably results in their business being closed. When the bulldozers move in they cannot afford the new rents being asked. The level of rents is often set by scarcity. Scarcity is caused by insufficient land for building at the right price. However, we have 250,000 acres of derelict vacant land in our principal cities, approximately two-thirds of which is hoarded by local authorities and nationalised industries. With respect, there is no point in having registers. We know where the land is. It merely needs to be auctioned off.
Successive Governments have stated that they have pensioned off the bulldozer. In Vancouver in 1977, at the Habitat conference, the then Secretary of State for the Environment told the world that his Government had pensioned off the bulldozer. However, last year in Leeds alone 1,334 properties were demolished; in Sheffield the number was 1,840, and in Liverpool it was 621, because we had run out of buildings. Demolition has caused the rate base to shrink, which in turn has forced up the rates that have to be paid by those who are left. That in turn aggravates those who live there, and they leave the area.
It is worth mentioning that 21 per cent. of the population of Liverpool left between 1966 and 1976. The percentage in Manchester was nearly as high, and in Glasgow it was even higher. Birmingham and London followed, in that order. Population exodus has a direct relation to the rate base and the rate base has a direct relation to the number of people living in the area, which in turn has a direct relation to the number of houses being demolished.
It is estimated that in the next three years 76 companies will be coming to Liverpool, creating 1,500 jobs. However, 63 companies closed last year, with a loss of 4,538 jobs. For every job created in the next three years, three have been lost.
The Government and local authorities are carrying out policies that have a direct effect on commercial decisions and the decision of people to live and work in our large towns and cities. Public intervention, in the form of grants and subsidies, is decreasing, although special development areas, enterprise zones, the urban aid programme, urban development corporations and partnerships are all forms of grants and subsidies. Intervention is much more subtle. The secondary intervention that I am talking about, which results in commercial decisions having to be made, comes from the public sector having already negotiated its arrangements and leaving only one choice for companies such as Tate and Lyle, Roadline, Packenham's and other small firms.
If the Government really believe in the operation of market forces they will ban the bulldozer, stop green field site development—60,000 acres of good agricultural land are lost every year to urban sprawl—auction off hoarded public land and see that the banks and insurance companies use some of their windfall profits to revitalise
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urban areas—and not only those south of Watford. They must also outlaw red lining, so that the building societies do not continue to refuse to lend money for older houses in inner city areas.
Taxing the windfall profits of banks is merely another form of Government intervention. We need no more interference, but we need many more incentives for private enterprise in order to halt the decline. We must have an upturn in the economy.
7.56 pm
Dr. M. S. Miller: Until I heard the excellent speech of the hon. Member for Loughborough (Mr. Dorrell) I was about to say that an economist who chanced to hear the debate could be forgiven for believing that, with the notable exception of my right hon. Friend the Member for Battersea, North (Mr. Jay), no one had exhibited an expert knowledge of economics. I must now add the hon. Gentleman's name to this short list. His speech showed an impressive grasp of economics and his shrewd questions require careful answers from his Front Bench. However, if I might criticise his speech, it would be to say that economists tend to take a callous approach. They abandon industries without ensuring that alternative industries are established in order to provide employment for those who lose their jobs. The economists may argue that that is not their task. It is, however, our responsibility as Members of Parliament. It is not good enough simply to allow industries to go to the wall.
Lack of knowledge of such an imprecise discipline as economics is not necessarily a handicap. We are dealing with people and not abstractions, and I make no apology for speaking in the debate as a layman on the subject. The Prime Minister's speech was characterised by an unwarranted optimism, as though she were entirely convinced that her policies would work. No one should be that sure. It does no harm and is perhaps salutary and more natural for ordinary human beings to have some doubts about their infallibility.
My right hon. Friend the Leader of the Opposition exposed the nonsense that the right hon. Lady spoke when she claimed that all our policies over the past 25 years have been wrong. I would go even further. What the right hon. Lady wants is for the country to go back to the late nineteenth century, which was a time par excellence of low wages, high profits, unemployment and the virtual enslavement of the worker. It looks as though the right hon. Lady and her Government are heading in that direction. They are doing immense and perhaps irreparable damage on the way.
I once heard an American comedian debunk the Robin Hood myth. He said that the bandit of Sherwood Forest did not rob the rich and give to the poor, but robbed everybody and kept the lot for himself. He said that a good press agent propagated the myth of Robin Hood's kindness. I think that I dare use the pun and say that the public have been similarly hoodwinked. The modern counterparts of that medieval press agent is Saatchi and Saatchi, which made such a good job of selling the Tory Party to the British public before the 1979 election. It sold that party as having the cure for all our ills.
Everyone now recognises that that was a big con job. In the past 20 months the Conservative Government actions have proved to be the reverse of the Robin Hood myth. They have taken from the poor and given to the rich. We have seen tax handouts being given to the richest in

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our society. Not a peep has come from the Government Benches about the fact that top earners have awarded themselves 40 per cent. or even greater salary increases. At the same time, workers have been bludgeoned into accepting wage increases that are well below the rate of inflation.
This debate concerns the economy. There can be no doubt that if our economy is not at disaster level it is approaching it. Output is at its lowest since the 1930s. Unemployment—at about 2½ million—is the highest since the 1930s. About 2½ million people and their families are unable to participate in the benefits of the British economy. When the right hon. Lady appeared on the ITV programme on Sunday she showed her iron will. I watched her very carefully. She gave a very impressive performance. When the possibility of an unemployment rate of 3½ million or 4 million was raised, she did not even bat a carefully shadowed eyelid.
Businesses are folding up every day. The bankruptcy rate is unprecedented since the 1930s. It looks like the Wall Street crash all over again. Conservative Members should appreciate that there is widespread disillusionment, even among those whom the Government were supposed to help. I refer not only to small business men but to big business men. The Government have adamantly refused to render the necessary assistance to some of our industries, such as the textile industry, which are vital to our country.
Contrary to the hon. Member for Loughborough, I believe that we should keep some industries going even though the hon. Gentleman may think that we are throwing good money after bad. I refer to industries such as the textile industry, the shoe industry and the fishing industry. Indeed, the hon. Member for Dundee, East (Mr. Wilson) and those of my hon. Friends who represent Scottish constituencies would confirm that. We need some form of selective import control. Like my right hon. and hon. Friends, I am not in favour of holus-bolus import controls. Nor am I in favour of permanent import controls. I think that I know the arguments for and against such controls. I think that I know the answers. It is a balanced argument, but falls in favour of doing something to protect our industries so that they can survive until the time comes to compete on a normal basis.
I should like to quote from Background Paper No. 82, which is available in the Library. I know that the members of the Cambridge economic group are not necessarily economic wizards, but I agree with at least one of their statements. The paper states:
"attempts at direct stimulaton of investment, by grants, subsidies, tax relief etc. have not been successful because businessmen are more concerned with the prospects of their markets".
Markets are important. If industry can manufacture the goods, it can sell them, but if 2½ million people are unemployed they will not be able to buy them.
The Government have adopted a deplorably doctrinaire attitude in their slavish devotion and adherence to the EEC, but they know that this country is paying through the nose for the doubtful benefits of membership. As long as the CAP takes up 75 per cent. of the total budget Britain must necessarily lose out on the overall market deal. Another aspect of Government policy requires changing.
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As other hon. Members have said, interest rates are too high to allow industrialists to borrow. As a result, there is a strong tendency for business men to go out of business.
The over-valuation of sterling has been mentioned. It has been pointed out that the Germans did not allow their currency to be over-valued by anything like the amount that the British currency has been over-valued in the past year or so. In the meantime, our share of world trade continues to fall and the living standards of the British people are not being maintained. It is no longer a question of improving living standards.
Social services are being cut. Many of the benefits of the Welfare State are being eroded. I shudder to think what would happen if we did not have the bonanza of North Sea oil revenues. The situation would be very much worse. I know the implication of my next remarks. The Government are dangerously close to using unemployment as an instrument of economic policy. They have browbeaten the workers into accepting pitifully low increases in their wages on pain of losing their jobs. That is an inhuman policy, which shows a callous disregard for the needs of the majority of our people.
We do not want confrontations with the work force or with the trade unions. We should seek co-operation with the trade unions, the CBI and all those concerned in the economy. The Government say that their way is the only way. They say that the medicine that is being forced on us is necessary, and for our good. The doctors who prescribe that medicine are not properly qualified. They are quacks. The patient may well be at death's door before those quacks are exposed and a proper antidote is administered.
8.8 pm
Mr. Fred Silvester: The hon. Member for East Kilbride (Dr. Miller) said that industrialists are concerned about their markets. That is true. We have not time to discuss every subject, and hon. Members have ranged widely in their speeches. I shall, therefore, concern myself with that point. The problems of inflation and unemployment have dominated the debate. However, there is one essential ingredient in our discussions, and one alone. It is seen in many documents and in many speeches from all parts of the political spectrum. I refer to the realisation that the wholesome development of the British economy depends on one thing, namely, greater responsiveness to consumer needs and wants. That is the one factor that has done us down in the past and that will do so again.
Between 1968 and 1977, the rate of growth of output per head in the United Kingdom was below that of any other developed country in all but a few sectors. It was roughly half the pace of the rate of growth found in those other countries.
The signs are, as the Government motion indicates, that there is evidence of a greater competitiveness emerging. Let us hope that that is true. But I do not think that anybody in the House believes that we have gone far enough or that we can be confident that when the upturn comes we shall continue to improve to the degree that is necessary. This, to me, more than anything else, remains our central dilemma. The hon. Member for East Kilbride spoke of import controls, but he must forgive me for saying that there is no way in which a country such as ours

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can shield itself from the growing efficiency of others. We must face the fact that that efficiency will increase and spread to wider and wider areas of activity.
I do not believe that we can solve this problem simply by importing other people's solutions. It is not that easy. We cannot accept the trade union structure of Germany, the industrial organisation of Japan or the civil service of France. They have been developed by those cultures, and we cannot transport them here. So it is, I believe, with much of the theoretical discussion that has taken place today. It may help us to keep on a straight path and to retain our sense of direction, but the policies that we propose will work only in the context of the historical and cultural background of this country—the country to which they apply. When we speak of the natural rate of unemployment, expectations or attitudes, we are actually talking about deeply ingrained habits and beliefs which are specific to our country. Therefore, if we seek change, as we must, we must act with the grain.
That is particularly true on the question of competitiveness. My right hon. Friend the Prime Minister, in her splendid speech, made the point clearly, which we all know to be true, that some companies are being successful even at the present time. But it is unfortunate that there is no necessary relationship between the co-operation of the work force and the reward. The textile industry, for example, complains that despite its efforts it has suffered more dramatically than others. On a personal level, the man who is made redundant, and thereby improves the competitive position of his former company, is not the one who directly benefits from the improvement. That is true of the regions. In the North-West, we have 11½2 per cent. unemployment and the rate is similar or greater in other areas. It is therefore not surprising that people are reluctant to embrace change. We are now asking them not only to embrace change but to do so with ever-increasing frequency. I believe, therefore, that we must turn our attention not only to the physical problems but also to the psychological problems at the present time.
I wish briefly to indicate three things which I believe are necessary. First, there is what I would loosely call hope. It is necessary to show what the future could be. I am pleased at the tremendous support that the Government are giving to the unemployed generally, and also the very large commitment to steel, British Leyland and other areas. In view of some of the criticism of that help, I am especially glad that it is being combined with a new vigour in management and marketing. There is no reason to suppose that because we have failed in the past we shall necessarily do so in the future. Indeed, that is something which in our present circumstances we cannot allow ourselves to believe.
These massive investments, however, are in a sense an investment in past glory, in industries which will increasingly be open to more and more difficult competition from abroad. If we try to look forward—and we all know the hazards of that—I think that there will be wide agreement that the opportunities for our work force are greater in service industries, in energy-related industries, in bio-technology, in information technology, in microelectronics applications and in construction and capital work for developing countries, with the natural increase that goes with a higher standard of living.
I was delighted that my right hon. Friend reaffirmed her faith, which I share, that there will be creation of physical wealth from the unknowable wealth of human invention
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which lies abundant in this country. But there are many people—in the North-West, for example, and in other hard-pressed regions—who need to feel that impulse in their own personal lives. I therefore hope that the Government will turn their attention to selective support. I know the arguments against this. We can, and do, make errors. Any Government or civil service will undoubtedly make errors, but by this method we shall be able to offer hope and example.
I have in my hand a copy of a speech made by my hon. Friend the Minister of State, Department of Industry at a conference on business telecommunications in June last year, in which he put forward a 10-point plan for a national strategy for information and technology. The fruits of that may soon be seen. I believe that action of that kind is necessary. It has been mentioned by others in the debate and I hope that it will be taken on board.
Secondly, I believe that there is a need for the Government to be seen to be fighting alongside private industry. It is no accident that there has been increased interest in the French system. As I have said, it is not exportable to us, but it has the commonly noted feature of a close enmeshing of private industry with Government officials. I do not think that it is evidence of backsliding or an abandonment of our central strategy to ask whether there can be some amelioration of some of the sharper points of our policies.
In international trade, we should perhaps ask ourselves whether we should not merely be vigilant against the breach of rules by other countries but also be rather more wily in the application of those rules to ourselves. Perhaps we should ask ourselves whether some possible amelioration could be achieved in our policy on energy pricing. We should perhaps ask whether we have actually organised ourselves to the best extent to get the benefit from EEC funds. Perhaps we should ask, as many hon. Members have asked in this debate, whether we should make a distinction between one kind of public expenditure and another. I know that that is a dangerous road, which can lead to many false conclusions. But there are many things that will have to be tackled at some time—perhaps even the sewers in Manchester—and investment of this kind may be a useful small addition to our activities at this time.
Thirdly—and I say this as a Member of Parliament representing a Manchester constituency—we shall have to watch very carefully the grave danger of division of the country. I hesitate to mention this because I think that it can be overdone, and there has been a great deal of doom and despondancy around the place today. But the longstanding problems of the North of England, Scotland and Wales, are being added to by new problems of the kind that I have described, and the need for adjustment is becoming much more difficult to meet. I therefore believe that we must make some special effort to ensure that the people in the North feel that they are as much a part of the helping hand of the Government as the people in the South.
8.20 pm
Mr. Michael Meacher: The Prime Minister again insisted today that in the face of the biggest slump since the 1930s, and an even bigger manufacturing collapse than in the great depression, the Government would still not reflate the economy. The reason that she gave for rejecting proposals such as those of the TUC were

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that reflating meant printing a lot of money and simply pumping it in, which would lead to hyper-inflation. On that ground she has yet again claimed that there is no alternative to the Government's current policies.
I believe that that view is wholly misguided, that patently there is a viable alternative, and that a steady expansion of the economy can be achieved without an intolerable surge of fresh inflation, which I agree is quite unacceptable. I believe that there is a fundamental flaw in the economic policy that has bedevilled Western economies over the last 30 years. It is that during slumps such as the present one Governments of both parties have concentrated on stimulating the demand for goods, both by tax cuts and increased public expenditure, in order to spend their way out of a recession, while neglecting to ensure that the supply side of the economy was correspondingly increased.
Governments have assumed that the market could deal with the supply side. It has not, and it cannot. Instead, it has produced higher and higher inflation, which has filled the gap, but it has not taken us out of recession. As we all know, the result has been "stagflation". When Governments have hitherto put money into people's pockets in order to increase the demand for goods, the big companies have not correspondingly increased production, investment or the supply of goods—certainly by nothing like the same degree—because in the upturn, which I suggest is the real reason, there is no co-ordinated responsibility for investment decisions. Each firm holds back for extremely good reasons, because at every expansion phase since the war there has been a huge inrush of imports. Growth has been choked off by deflation within 12 to 24 months, and stop-go has rapidly been replaced by go-stop.
A unified agreement to move forward together steadily has never emerged, and the investment drive which all Governments have wanted simply falters and fails. Therefore, we need contractural agreements with leading companies to the effect that if the Government reflate the economy by so much they for their part will guarantee to expand their production and investment by about the same degree.
Such agreements are needed not for any theological reasons, but for plain, down-to-earth, good economic common sense reasons. This is not an unreasonable demand to make. After all, the economic contract has two sides. It is not just about wages, even though one may have thought that from listening to the Prime Minister. If workers are expected to show restraint in the national interest—and I understand the justification for that—management should be expected to play its part in co-operating to raise production and investment where it is needed in the national interest and follow the Government's lead. That is not a lot to ask, when British companies have the worst investment record in Western Europe, and when manufacturing investment is some 25 per cent. down in real terms below the 1970 level.
For a long time, there have been two main objections to the sustained—that is the key word—expansion of the economy which all post-war Governments have sought in vain. One, which the Prime Minister has reiterated constantly, is that it will lead to excessive or even intolerable inflation. As against that, we are suggesting that the key to growth, without undue inflation, lies in
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agreements with lead companies in each of the main industrial sectors which will secure co-ordinated expansion on the supply side to match the Government's expansion on the demand side of the economy. It is that "systematisation" of those negotiated contracts across most of the economy, with customers and suppliers being involved as well as the companies themselves, that enables companies to agree to expand, whereas it is too risky to expand in isolation. It is the role of supply management, in conjunction with demand management, that will enable the Governments—no doubt in the end it will be a Labour Government—to regain control over econimic forces which in recent years have proved devastatingly destructive when left purely to the market to resolve.
If the alternative to Thatcherite monetarism is a policy of balanced growth, I recognise that there is a second, real objection to this policy. It is that on the precedents sustained expansion may well generate an ever-increaing trade gap and an unsupportable balance of payments crisis. Our answer is that if there is no way to achieve sustainable expansion other than by limiting the growth of imports in line with the growth of exports—not a cutback—that is a policy that we should accept, especially when overseas countries would do better than under current policies.
There is already a major control on imports, which, as we all know, is called unemployment. It is because other countries would gain rather than lose from a steady expansion of the British economy that all the glib talk about retaliation is to a large degree misplaced.
The overriding argument for these proposals is that only they—not the Government's current policies or those put forward by any other British political group—will produce a substantial and continuing fall in unemployment without an unacceptable surge in inflation. Because of the guaranteed expansion of domestic markets, only these proposals can be expected to produce a steady rise in manufacturing investment which we all agree is the lifeblood of the country.
Above all, it is a policy of hope. Certainly no Conservative Member can claim that in respect of current Government policies. Not only are they policies of despair; they are policies of destruction and absurdity. Is it not absurd that right at the centre of current Government policy the PSBR has been enormously increased to pay for the hugely swollen requirement of unemployment benefit? A huge PSBR increase leads to further cuts in public expenditure, which leads to higher unemployment, which in turn requires an even bigger increase in the PSBR to pay for it.
It is because I believe that more and more people are coming to realise this nonsense and that the Government are destroying the country in a self-defeating spiral of decline that I am certain that if these policies are not changed this Government will not survive.
7.29 pm
Mr. John Stokes: I followed the last economic speech, but it seemed that the missing element was the customer. Industry and this country want more customers. That will come about through the efforts of industry and commerce, rather than by any sort of planned economy.
We all know that the economy in this country has been in decline for about 100 years. At the turn of the century, we saw countries such as the United States and Germany starting to overtake us. A startling illustration of that was

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at the beginning of the battle of Jutland when Beatty's battlecruisers were blown up one by one. He turned to his chief of staff and said "There is something wrong with our ships, and something wrong with our system. "What was wrong with our ships was that they were not well designed and they did not have very good steel. The German ships were better than ours, the German steel was better, and certainly the German shells were better. I am glad to say that we can now hold our own technically in our Armed Forces. We must hope that our industry will also be at that standard.
The decline in our economy has accelerated in the last 20 years since the end of the boom after the last war. It is no use now blaming those who were responsible in the past. Obviously, management and unions must take much of the blame, but the blame must fall on the attitude of the British people, who seem to want an extensive Welfare State without the wealth-producing base to support it. We must now look to the future. I see several hopeful signs.
I represent a Midlands constituency, where there is very high unemployment and where the firms are going through difficult times. But there is no real depression there—nothing like the depression that we have heard about from the Labour Benches. Management is more on its toes; research, development, design and marketing have been sharpened; overmanning is being dealt with at last, and productivity is improving. There is more realism on the shop floor. In fact, I get fewer complaints from operators on the shop floor than from directors and managers in the offices. Wage settlements are becoming more reasonable, and there is a desire to work hard and to keep one's job. All those are good omens. [Interruption.] I do not know why hon. Gentlemen laugh. Do they not want people to have good jobs? I believe that efficient companies will make large profits next year, and that this time next year we shall see an entirely different industrial scene.
I wholeheartedly support the motion, and I speak not only as a Member of Parliament, but as a person who has been in business for many years, both as a manager and, in recent times, as a part proprietor of my business.
To some extent I understand the bitterness of Labour Members and perhaps of some business men, who, lately, for the first time, have started complaining to me. Nevertheless, I believe that they are mistaken. As I said earlier, industry sorely needs more customers. Customers can be provided only if industry develops and sells products that the public want, both at home and overseas. The large import penetration of the domestic market shows that the demand is there if only British industry can supply it.
I know the difficulties that the high pound is causing, but, after all, in the past the Japanese, Germans and Americans sold their products with a strong currency. When the pound was low, people complained. I believe that the pound will drop a little as interest rates come down, but we must learn to live with a high pound so long as we have oil in the North Sea and so long as we are a stable country in which foreigners like to put their money.
I am puzzled by fuel costs, particularly gas prices, and I hope that the Government can explain what they are doing and, if justified, make reductions in line with Europe.
Other imposts on industry—the national insurance surcharge, which came as a heavy and unexpected blow, and the sick pay scheme—are matters about which small
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shopkeepers complain most. I believe that interest rates will now start to fall. With inflation falling that is quite possible.
I wish to raise two matters that are of immediate concern to my constituency. They are the future of BL and the future of Duport, an independent steel producer with a large works just outside my constituency. Many of my constituents work at BL Longbridge. Many more are employed in firms that supply components to BL. I am bound, therefore, to be concerned about the future of BL, with the livelihood of so many of my constituents at stake.
When I first went to the constituency 13 years ago and I heard that it contained so many workers from BL Longbridge, I was alarmed and depressed, having heard of the reputation that BL then had for strikes and labour troubles. But on getting to know many of these men personally, many of whom are now my supporters, I found them to be perfectly ordinary Englishmen and not at all the monsters that the press and others have made out.
It is true that there were at that time some bad trade union leaders, but in the main I was convinced that the fault lay with management in not giving the leadership or having the good communications which a large factory requires. Since Sir Michael Edwardes arrived at the head of BL there has been a marked improvement in management. A notorious Left-wing trade union leader has gone from Longbridge, and there is an altogether new spirit about the place. Production levels for the new Metro are continuously improving.
It is against that background that we must judge the new tranche of public money for BL. Its new corporate plan depends on other new models coming out in the next two years and selling well. Of course, it has assumed the level of the £ sterling to be somewhat lower than it is now. We must all devoutly hope that the plan will succeed. I certainly back Sir Michael and his team.
As a Member of Parliament, I must look not only at the interests of those of my constituents—all of whom are taxpayers—who work in BL, but also at the interests of others who are employed in companies in the private sector, which is going through a difficult time and has not received a penny piece of Government aid. I have to balance, therefore, these two interests in a very difficult and complex situation.
That brings me to my final point. London Works Steel, a company in the Duport group, is just outside my constituency. This is a private steel company, standing on its own. It is not part of a conglomerate. It is an efficient company, with new investment in plant and machinery and good labour relations. Last year it made a good profit. This year, with the world slump, the fall in the steel market and, above all, BSC selling steel in competition with it at below market prices it is making serious losses. Already the company has made large economies. Half of the staff and one-third of the work force have been dismissed. The firm is working only every other week. Training centres, canteens and so on have been closed. Meanwhile, everything is being done to find new markets at home and abroad.
I understand that discussions have been taking place about a merger with a part of BSC and possibly others. Whatever happens, it is absolutely wrong that this splendid company in the private sector should go under while BSC is supported with hundreds of millions of pounds by taxpayers. At least I would hope that the Government will make a loan to the company to allow it to continue in

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business until there is an upturn in the market and profits are being made again. It seems wholly wrong that nationalised industries should receive such largess from the taxpayer while independent companies, which are often more efficient, receive no subsidies or even loans.
When I was a soldier I was told to reinforce success, not failure. I very much hope that this is a lesson which my right hon. Friend the Secretary of State for Industry, whom I much admire, will take to heart.
8.39 pm
Mr. Robert Kilroy-Silk: I find it rather extraordinary that the Prime Minister should tonight be asking us to approve her economic and industrial policies. I find it even more extraordinary that Conservative Members will go into the Lobby to support her when those economic and industrial policies have led to a situation in which, today, we have a minimum lending rate of 14 per cent., a cripplingly high exchange rate, inflation higher than what it was when the Government came to office, firms closing, bankruptcies taking place throughout the length and breadth of the country, output lower now than it has ever been, and a cripplingly high level of unemployment of 2½ million people.
I cannot conceivably see what there is in the Government's economic and industrial policies on which the House should want to approve or congratulate the Prime Minister. The thin smile that bedecks the Prime Minister's face whenever she appears on television, stage-managed as the Iron Lady, cannot mask the deep and bitter legacy that the mere two years in which she has been in office have bequeathed to the country as a whole, and to the North-West and Merseyside in particular.
Since the Government came into office in May 1979, unemployment in the North-West has increased by 63 per cent. and unemployment in my constituency has increased by 73 per cent. I shall give some of the figures in order to contradict the notions put forward by Conservative Members, particularly by the hon. Member for Halesowen and Stourbridge (Mr. Stokes), who has just left the Chamber. He advanced the notion that there was nothing wrong in his constituency or in the rest of the country.
On Merseyside there are currently 113,000 men and women unemployed, representing a rate of 16 per cent. unemployment. Those 113,000 people are chasing 1,759 vacancies. About 15,000 construction workers are chasing 94 jobs. Nearly 6,000 workers in the food and drink industry are after 45 vacancies. About 6,500 transport workers are chasing 96 jobs.
In Kirkby, in my constituency, 7,000 men and women and young adults are unemployed. They are chasing a total of 22 jobs in all industrial classifications. There are vacancies in only 12 of the 27 industrial classifications. For 365 transport workers there are no vacancies. For 516 workers in distribution there are two vacancies. For 870 construction workers there is one vacancy. Yet Conservative Members have the temerity to ask us to approve the Government's economic and industrial policies.
Those policies have not worked on Merseyside and are not approved there. They are condemned wholeheartedly. Unemployment is 40 per cent. on some of the inner city estates in Liverpool and on the estates in my constituency. There are thousands of young people of 18 and under on
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Merseyside who have never had a job, and who have no prospect of finding employment in the immediate future. A dim and dismal outlook faces them.
Unemployment has become the normal way of life for many thousands of Merseyside people whom we represent. There are enormous and horrendous social consequences of that level of unemployment, with 40 per cent. on the register for well over 18 months. If they represented constituencies such as mine, Conservative Members would see, clearly etched on the faces of the men and women who face the bleak and dismal future portrayed by the Government, a loss of morale, self-respect, self-confidence and dignity. If they saw that sort of despair and desolation, with the destruction of whole communities and livelihoods as a result of the Government's economic dogma, they would know what was the price for real people trying to live ordinary lives.
Mr. Stokes: I apologise to the hon. Member for Ormskirk (Mr. Kilroy-Silk) for leaving the Chamber. Some members of the public had been waiting a long time for tickets and I went out for about 30 seconds and then returned. I was not meaning to be discourteous.
Mr. Kilroy-Silk: I am not interested in the apologies of the hon. Member for Halesowen and Stourbridge. My constituents and I are interested in why he and his colleagues should feel able to go into the Lobby tonight to approve and endorse the Government's industrial and economic policies, which have wrecked the livelihoods and futures of thousands of my constituents and those of my hon. Friends. That is what we want to know and we are receiving no answers from the Government.
My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said that the Prime Minister's speech was impressive. I did not find it impressive. The only thing that impressed me was the absence of concern, care, compassion, or understanding of the realities that lie behind the figures. The right hon. Lady talked in slogans, concepts and technical terms, but she showed no grasp of the way in which unemployment hits hardest at ordinary working people.
The Prime Minister talked of the shame of Britain in 1976, when the pound was at its lowest in relation to the dollar. My constituents felt no shame about that, but they feel a deep sense of shame at being involuntarily unemployed. The Government should also be ashamed of themselves for their callous indifference.
Why are thousands of the constituents of myself and my hon. Friends confronted with such a situation? The answer is that the Prime Minister is wedded to a dogma and is sacrificing our constituents on the altar of her mystical prejudices about the way in which economics should work if they are applied according to the classic textbooks. But that is not what life is about. My constituents want a Government who will think about people's real needs and problems.
As on previous occasions, the Prime Minister showed that she does not understand—indeed, she has no conception of—ordinary working people, the way in which they live their lives, and the needs and problems that they face. She does not feel for them. To her they are merely numbers to be talked about and added up. She exhibited today the same sort of callous, uncaring indifference and dogmatic arrogance to the plight of the unemployed that she has displayed in the House and elsewhere so often before.

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The Prime Minister's attitude was typified by her response to the unemployed people of South Wales. All that she suggested was that they should leave their homes and find work elsewhere. Where are the 129 unemployed building industry workers in Ormskirk to find work, when they are chasing one vacancy? Should they go to Kirkby, where there are 3,000 unemployed construction workers and no vacancies? Should they go further still, to Merseyside, where there are 15,000 unemployed construction workers chasing 94 vacancies? The North-West generally has a similar level of unemployment among construction workers, and the United Kingdom average is 10 per cent. unemployment. Wherever they go, even if they become the industrial gipsies that the Prime Minister demands they become, they will not find employment. The Prime Minister and the Government have destroyed employment opportunities.
Why should the unemployed have to leave their homes and uproot themselves from their neighbourhoods and families and their children's schools because the Prime Minister and the Government do not care enough to take work to where it is needed—the North, Scotland, Wales and the North-West? The Prime Minister has no right to sacrifice thousands of my constituents and those of my hon. Friends on the prejudice of her economic dogma. She has no right to endanger their livelihoods and to destroy their futures and blight the prospects of generations of young people.
The Prime Minister should remember that some of my right hon. and hon. Friends are wrong. The current situation is not like the 1930s. As my hon. Friend the Member for Bolsover (Mr. Skinner) would point out, people today know, even if they did not know in the 1930s, that there is an alternative. It does not have to be like this; there is a way out. The Government take no cognisance of their needs and do not seem to care for their plight. That will have enormous consequences for the social fabric and political institutions of this country.
Surely the members of the Cabinet, many of whom are decent, civilised and reasonable individuals, accept the absurdity of a situation in which 2½ million people are unemployed, at great cost to the country as a whole. Surely they also accept the immorality of the waste of human skills and resources when there are many needs in this country and overseas that could be met if those skills and resources were matched to the needs. Surely they acknowledge that the system cannot be right, that it is crazy, irrational and inefficient that so many people are treated as scapegoats in the name of an economic policy. Surely they realise that even a harlot does not go on for ever at any price. Perhaps, eventually, some of them will prevent the Prime Minister from riding roughshod over them, as she does at present, with her glossy, glassy, thin air of superiority and arrogance.
There is an alternative. When the Prime Minister says that she knows of no alternative to what the Government are now doing, she shows an embarrassing lack of economic understanding. The alternative happens to be called the alternative economic strategy, based on just as fundamental an appraisal of the economic situation as the monetarist policy that we are now bitterly experiencing. It is based on just as coherent a set of assumptions and just as firm an intellectual foundation as the monetarist policy. We need a strategy, not for cumulative decline, but for opportunities for cumulative expansion. We need a strategy for planned public expenditure in order to increase
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employment and output and raise living standards. That can be done by the adoption of an alternative economic strategy.
I accept that that alternative economic strategy is based on many unverifiable assumptions. I accept, too, that there are many risks and dangers in the pursuit of that strategy, just as there are in the pursuit of the present Government's strategy. But risky, adventurous and venturesome as the alternative strategy is, it differs from the present policy in that it is firmly rooted in ethical principles that exhibit a concern for ordinary men and women and their future, with a firm commitment to the pursuit and sustaining of full employment because of the dignity and self-respect that it brings.
The Opposition and the country are now learning that this Government will not produce the alternative economic strategy to provide the country with an efficient, planned and just economy involving the distribution of the rewards and the resources within the economy. Unfortunately, we shall have two or three more long years of despair, degradation and a potential dismantling of the social and political fabric of our community before a Labour Government will have the opportunity to introduce that policy. Unfortunately, only a Labour Government will be able to introduce that policy. Perhaps the next Labour Government will have the will, the conviction and the courage to begin the task.
8.53 pm
Mr. John Townend: There is a certain sickening hypocrisy about the Opposition's attack on the Government's economic policy. I am 100 per cent. behind the Government's economic strategy, but not because I am a monetarist. As an accountant, I believe that the country in general, and the Government in particular, should start to live within their means, and that we should again have sound money.
The legitimate criticism of the Government is not that their strategy is wrong but that the strategy has not been applied strictly and strongly enough. The criticism made by the Oppositon that this is a hard-nosed monetarist Government intent on slashing public expenditure does not stand up to examination and is not true. The growth of money supply will not be within the target set by the Treasury. Public expenditure has not been reduced to the level that we had hoped. As a result, the public sector borrowing requirement is much higher than was planned, and the Government have had to maintain interest rates at a far higher level than is satisfactory for industry, with adverse effects on employment.
Far from laughing, the anti-monetarists on the Opposition Benches should congratulate the Government on their high level of public spending and on their high level of support for State industries. There are two reasons for the Government's failure to reduce public expenditure to the level that was expected. The first reason is the cost of the Clegg Commission and the Pay Research Unit. In their first 18 months the Government failed to control public sector pay
Let us not forget that the problem was inherited. The Labour Government created the Clegg Commission. We inherited it and picked up the bill. Perhaps we were unwise at the last election to say that we would accept its recommendations. Perhaps after the election we should have broken that undertaking. However, this is an

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honourable Government. They should be congratulated on keeping to their undertakings even when they are uncomfortable. The Government are now dealing with the problem. They have abolished the Clegg Commission, put pay research into cold storage, and imposed a 6 per cent. cash limit in pay.
The second reason why we have to been able to bring public expenditure down to the level required is the State industries. They cost no less than £3 billion a year. The problem we inherited has been more intractable than the Government expected. The situation is becoming worse and that is perturbing. We are spending another £1 billion on steel and another £900,000 in the next two years on British Leyland. The £3 billion is a net figure.
The worst that has happened to steel and shipbuilding is nationalisation. It is a pity that the gang of 13 Social Democrats who now say that there should be no more nationalisation did not realise their error earlier. The nationalised industries are taking far too many of our resources. They take 70 per cent. of North Sea oil revenues. They pre-empt valuable resources which should go to private manufacturing industry.
If the public sector did not have to support the nationalisd industries, the national insurance surcharge could be reduced by 80 per cent. If we had not had to pay £1½6 billion for the Clegg Commission awards the national insurance surcharge could have been abolished and a further £1 billion would have been left over for capital investment or reducing public borrowing. Hon. Members have talked about investment. As many resources are involved in the aspects that I have mentioned as industry could invest. In view of the intractable problems in the nationalised industries, it is not surprising that the right hon. Member for Ebbw Vale (Mr. Foot) is now making it clear that he will lead the Labour Party on a further orgy of nationalisation.
I turn to the question of unemployment. It is arrant nonsense to blame the Government for the tragic level of unemployment. Many factors are involved, including the world recession and oil prices. If Governments are to blame—and nobody is free from blame—all Government over the last 20 years are to blame. No Government are more to blame than the last Labour Government who left the Conservative Government the highest level of unemployment since 1935.
A far greater responsibility lies with industry—both unions and management. The unions carry the greater share of responsibility. They have had too much power and that, on too many occasions, has been abused. That has resulted in too many strikes, too many restrictive practices, overmanning and a refusal to accept new technology. That has resulted in the closure of many firms. Management has also been responsible because too often it has been weak. Unfortunately, management had no alternative because, when the right hon. Member for Ebbw Vale was Secretary of State for Employment, he tipped the balance in industry far too much towards the trade unions. It is also not true to state that the major reason for unemployment is lack of investment. In far too many areas investment has not been used properly and economically. A classic example of that is The Times, where news machinery has been lying idle for years. The newspaper is now on the verge of closure.
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This week, in my area, Reckitt and Colman tried to instal a new packaging machine for a new product to be exported to the French market. The unions called their operatives out on strike. The steel industry has not lacked investment. Indeed, there has been over-investment. The problem was the failure of the unions to accept international manning levels, followed by a crippling 13-week strike that needlessly destroyed many thousands of jobs. We are now faced with a seamen's strike. Every week that that strike continues more seamen join the dole queue. [HON. MEMBERS: "Sit down".] I was informed that I could speak until 9.5 pm.
Surely Opposition Members will not try to blame the Government for unemployment in the motor industry. British Leyland, under successive Governments, has received £1.3 billion in aid. It is not the fault of the Government if the people of Britain—especially supporters of the Opposition— have been buying Japanese cars. Fleet owners have been buying British cars. It is not the fault of the Government that millions of pounds of production have been lost through stoppages and restrictive practices.
I wish to make three brief points about unemployment. First, the Opposition ignore the black economy, yet it is estimated that up to 250,000 people registered as unemployed are in some form of work. Secondly, thousands of foreign workers in the South—East are working in restaurants and the catering industry, partly because many of our people are not prepared to accept jobs with anti-social hours. The education authorities must bear some blame for that because many of them recommend school leavers not to take such jobs.
Thirdly, the right hon. Member for Ebbw Vale mentioned the level of unemployment in West Germany. There is a great difference between the way that we treat our immigrant workers and the way that they are treated in Germany, where many from Turkey and other countries work on a contract system. If there is a downturn in the German economy, and rising unemployment, they are sent home. Is the right hon. Gentleman advocating that we take similar action?
I urge the Government to stick to their strategy, to continue their battle against inflation and, above all, to redouble their efforts to reduce public expenditure. We must gain control of the problems in the nationalised industries. Cash limits are not sufficient if nationalised industries have monopoly powers and can pass on excessive wages to the public.
Although I am opposed to protection, we should consider non-tariff barriers à la Francais. We must play according to the rules played by everyone else, whether it be Japan or France. If the Opposition seriously want to create more jobs, will they please turn their efforts away from criticising the Government and tell their friends in the shipping industry to go back to work? Will they tell their colleagues in the unions to co-operate with management to the maximum extent to reduce cost, increase efficiency, and cut down restrictive practices. In that way we can become more competitive. If management and unions join together along those lines, the public and the customer, both in Britain and abroad, will once again buy British goods. That is the only way to solve the problem on unemployment. If we do that, we shall once more be on the road to prosperity.
9.5 pm
Mr. Peter Shore: We sought through the amendment we tabled to focus the debate on the great damage that has been done to our people, to our industries and to the whole prospect of our national future. The many contributions that have come from both sides of the House have focused properly on the subject matter of the Opposition's amendment rather than on the quite extraordinary complacent motion tabled by the Government. Indeed, it is such a prize example of insensitivity—I might almost say intellectual impertinence—that we ought to have it printed and distributed all over the country as evidence to the total inability of the Government to face either the human or the real world consequences of what they are doing.
I well understand that the Prime Minister had other matters to attend to and returned to the House only a moment or so ago. I may say to her that she would be utterly misled if she were to think that the speech of the hon. Member for Bridlington (Mr. Townend) was in any sense representative of the speeches that we have had from both sides of the House. The hon. Gentleman made an interesting speech, as the right hon. Lady will have heard. He was the only one to urge the Prime Minister to continue along her path of folly and, if anything, to go even faster. For the rest, there were major reservations, and rightly so. The worm of doubt, to which I shall return later, has entered into the very centre of the doctrines that the right hon. Lady is seeking to support.
We need not argue about the facts of the matter that is before us today. They speak for themselves and cry out for redress. After 21 months of Conservative rule unemployment has reached the staggering total of over 2½4 million. There are many more on short-time or part-time working who simply fail to register. One in 10 of our fellow countrymen is today registered as being without a job. In the great regions of the country, where much of our manufacturing industry is concentrated, the figures are even worse: 1 in 8 in the North and in Wales, more than 1 in 9 in Scotland and the North-West, and nearly that number in the West Midlands as well.
The prospects for young people leaving schools and colleges are particularly grim. I do not think they will be heartened or encouraged by the latest scheme that the Secretary of State for Employment is putting forward to bring them into some relationship with the Armed Forces. The job prospects for older workers, women and members of the immigrant community are also grim. This terrible increase in unemployment has not been accompanied by any increase in productivity by those still at work or by any increase in total output. The old doctrine of the shakeout clearly does not apply—indeed, far from it. We are experiencing a calamitous and virtually unprecedented fall in our national income and output.
There is only one fact of our situation that is still in disagreement, and that is the actual revenue and expenditure cost of the total of unemployed. I must point out to the Prime Minister that I am still, as I think the House is, totally unenlightened by the figures that she gave. If she is seeking to total the costs of 2½4 million unemployed as being about £2½4 billion of expenditure, it is working out at about £1,000 per head. That cannot be so. In the answer to a question in another place on 12 November 1980, two figures were given. The total cost—that is the combined revenue loss and the total cost
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of benefit—for a married man, with two children, on an average wage was over £6,000. For a single man on average wage the figure was over £5,000. Thus, if all 2 million people—
Mr. Kilroy-Silk: Two and a half million.
Mr. Shore: Well, 2½ million, but I take the full employment level to be something of the order of 400,000 for the purposes of my arithmetic.
Let us assume for the purpose of my argument that 2 million are unemployed and that they are all single men on average wages. If my arithmetic is not too bad, the cost must be about £10,000 million a year. I shall be the last to contradict the Minister of Agriculture, Fisheries and Food—I do not see the right hon. Gentleman in his place—who referred to £7,000 million as the real cost of unemployment when there was a lower level of unemployment some months ago. The right hon. Gentleman's figure would seem broadly to tally with mine.
The waste of resources, apart from the waste of human beings, is an important factor in Government decisions on resource allocation and financial expenditure. The entire cost of unemployment is so high that it might act against the Government's increasing some of the aid that they are providing on a modest scale to industry and some of the work creation and support policies of which the Secretary of State for Employment has spoken. These are important issues, and I hope that we shall be able to get them clear before the end of the debate.
The House had been trying to concentrate on why this disaster has occurred. It is quite something to have increased unemployment by over 1 million in the past year. There is no other country of comparable industrial development that has experienced such a shock and penalty during the same period.
I do not want to go back over old ground. In a sense, it is boring constantly to throw statistics at each other, especially when they are so carefully refined and selected. However, in 1974–75 Britain and the whole Western world faced the full impact of the Arab oil price explosion, without a drop of indigenous oil. We were not alone in finding for the first two years after that impact that we were unable to maintain full employment at the level that had prevailed before the price explosion. Every other country in the Western world had roughly the same proportionate increase in unemployment. However, on this occasion we are dealing with something new and special. There has been a great increase in unemployment. The exceptional increase in unemployment in Britain has followed the adoption of the policies introduced by the Prime Minister and her Ministers.
I am glad to say that on this occasion the right hon. Lady had little to say about unemployment being due to a world recession. Only a minor key was struck in her speech on that issue. We offer our view of the cause of the present unemployment. We believe that it has been confirmed by the Prime Minister's speech. In our view the cause is Government policy more than anything else, namely, the dogmas and nostrums that they have imposed upon themselves and the country and the actions that they have taken to reduce all the forces in the economy that could sustain output and employment.
The Government have crippled industry with unprecedentedly high interest rates. The foreign exchange

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rate is, in effect, a large subsidy to competitive imports, and at the same time a large tax on our exports. They have radically reduced the real level of public expenditure, but the cut has been substantially disguised by the inevitable increase in social security payments that they have had to make to those whose jobs have been destroyed.
The Government's medium-term financial strategy is the central pillar. It embodies the commitment to an annual and decreasing target for the money supply and a corresponding target for the fall in the public sector borrowing requirement. These measures seem to be designed to prevent the Government from reacting to the real needs of the economy and to the changes of circumstance which from year to year are inevitable.
In common with others, I have increasingly wondered what is the use and purpose of publishing such medium-term figures. My conclusion is that their main purpose is to discipline the Cabinet. I am reminded of the Odyssey and that famous episode when Ulysses and his followers approached the island where the sirens dwelt. As the House will remember, the crew were ordered to stuff their ears with wax and cotton so that they could not hear the siren voices. Ulysses himself was strapped to the mast so that he would not be able to jump overboard in response to the music that he heard. All the voices of sense in Britain today are demanding and urging the Government to change course, but we have a deaf Cabinet and a self-strapped Prime Minister, and apparently nothing can be done. What do the Government say about the defence of their own policy?
Mr. Waldegrave: The right hon. Gentleman might like to complete the story, which was that Ulysses' strategy saved the ship from the rocks.
Mr. Shore: Very good. My point, as the hon. Gentleman will understand, is that it is useful to listen to what the country and most of its representative bodies are saying. It is an absolute folly for the Government to impale themselves upon public declarations of policy, long in advance of the events that they have to face and that have led them into the trap from which they now find it so difficult to escape.
How does the Prime Minister justify the measures that she has taken? We heard her yet again today. The argument was not new. We have heard it on many occasions. Her basic argument is that there has to be a massive cutback in demand and a massive increase in unemployment if we are to get a decrease in inflation. If there is to be any demand, it will not come from anyone in this country. The only hope is that it will come from exports.
The Government's fundamental error, as my right hon. Friend the Member for Battersea, North (Mr. Jay) never fails to point out, is that in their concern about inflation they have confused two issues. There is a distinction between demand inflation and cost inflation. There is no evidence of demand inflation at all. How can there be such evidence when nearly 90 per cent. of British industry is working below capacity. There is, and has been for years, a problem of cost inflation with which all hon. Members are familiar. It is that problem to which we have to address ourselves if we are serious about defeating inflation, if we are serious about keeping ourselves as competitive as we should be with other countries, and, at the same time,
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bringing into the whole area of discussion necessary and agreed measures to restrain incomes and prices. That is the important point of difference.
I must say to the Prime Minister that simply to assert these apparent simple truths and to reinforce what she says, which was to me an almost Orwellian re-write of prewar and post-war history, is unconvincing. We are seriously told that the whole experience from 1955 to the oil shock of late 1973 and, indeed, the earlier period from the end of the war, was a period of progressive deterioration and decline, in which Governments had found it almost impossible to maintain reasonable price stability with reasonable levels of employment. Really, it is not so. It is not so within the memory and experience of at least three-quarters of hon. Members.
There is no period of which we have a record in which the standard of living, growth of output and levels of unemployment have been more favourable than in the period from 1945 to 1970. I do not believe that even the experience of 1970 to 1974, pre-oil—given the extraordinary incompetence of the then Conservative Government—need have undermined our belief and our confidence that the maintenance of full employment with reasonable growth and reasonable price stability had been lost.
What is real and undeniable is the combined inflationary and deflationery effect of the cartelisation of oil prices from the end of 1973 to the present time. At the same time there has been a counter-attack by the monetarists on the whole post-war doctrines of State intervention and full employment.
I shall tell the Government why their strategy will not work. The first and most obvious fallacy is their belief that even if inflation is brought down to single figures it can be kept there. The hon. Member for Loughborough (Mr. Dorrell) made an excellent speech. I, too, believe, that the fall in inflation that we have so far had has been brought about by an increase in unemployment and by the pressures on company profitability. The moment that these pressures ease and the economy begins to expand, there is every likelihood, in the absence of a reasonable agreement with the parties involved on both sides of the industry, that collective bargaining will again press hard upon costs and that the process of inflation will start again.
The second reason why such a policy is almost certainly unworkable is the belief, which those who advocate it undoubtedly share, that there is a natural and spontaneous capacity for growth up to the full employment level, or near it, in an unregulated but inflation-free private economy.
That is the old laissez-faire, classical doctrine of the market working and optimising opportunities. It is not working, did not work in the 1930s and will not work in the 1980s. There will not be a return to full employment unless there is a serious effort by Governments to stimulate demand in their own countries and internationally, unless they join with others in a major and concerted effort to achieve continuing expansion in world trade and world output.
A third reason why the Government are running into major difficulty is the anger and resentment in industry and management which sooner or later will explode. Last year we saw a record number of liquidations, and this year, taking account of the virtual collapse of profitability in 1980 and the still worse prospects for 1981, there will be further spate of major industrial disasters. Precisely the

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same pressures that forced the Government to change course last year on British Steel and British Leyland will this year operate upon them in many great companies in the private sector. Companies such as Massey-Ferguson and ICL are too important to be allowed to die. Whatever their devotion to money supply targets may dictate, we shall see increasing efforts made through the banking system and encouraged by the Government—and ultimately underwritten by the Government—to avert this kind of disaster.
That brings me to the exchange rate and exchange rate policies which are of the utmost importance as well as being a matter of considerable puzzlement. We heard the right hon. Lady today reply to an intervention from the hon. Member for Horncastle (Mr. Tapsell). I do not know whether he was enlightened at the end of it but I was not and I should like to get things a little clearer. We all know that the Government's monetarist thinking does not permit them to have an explicit exchange rate policy. As the Chancellor of the Exchequer put it on 29 October 1980, among some ribaldry as I recall it,
"the present level of the pound sterling is not an objective of policy".—[Official Report, 29 October 1980; Vol. 991, c. 502.]
The Financial Secretary to the Treasury made clear during Question Time on 6 November that to attempt to peg the exchange rate
"would have disrupted our monetary policy".—[Official Report, 6 November 1980; Vol. 991, c. 1455.]
Since monetary policy is sacred, the exchange rate, however crippling its effects on British industry, must not be tampered with. All attempts to persuade the Government that interest rates here were the one main factor in maintaining an over-valued pound were just brushed aside.
What, now, is the position? Last week the Prime Minister on television said that
"the exchange rate would have to be taken into account in any future decision about the MLR".
I cannot check on today's Hansard, but I believe that she said something similar in her replies this afternoon. If it means anything at all, it surely must mean that interest rates may be brought down if the exchange rate continues to be too high.
The CBI yesterday published its Budget representations. I assume that those were on the agenda at the NEDC that the Prime Minister attended yesterday morning. I draw her attention to page 15 of the CBI report, which states:
"the Government should announce clearly that it regards the current level of sterling as excessively high and will attempt to reduce it."
If that passage is not enough, I also quote from page 5, where it says:
"the Government should implement a package of measures to reduce the exchange rate; an explicit declaration that they understand the need for a lower rate and will seek to achieve it. Further reductions in interest rates and intervention in foreign exchange markets compatible with appropriately firm monetary conditions."
What are the Government's reactions to those suggestions? Do they understand that a strong pound, based on a strong and competitive industry, is something that we all welcome? However, a pound whose exchange value rests upon usurious interest rates in London and upon the new phenomenon of North Sea oil is an entirely different matter. I hope that the Secretary of State for Trade will address himself to that point in his reply.
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I do not want to exaggerate the importance of the hints at a modification of policy. A glimmer of common sense on the exchange rate policy, some little action on interest rates, some action to save major companies late in the day from total collapse will at best only slow the precipitate rate of industrial decline.
Indeed, even to stabilise the present situation will require a major fundamental change in Government policy. The House will have read both the CBI's representations and the TUC's economic review—its "Plan for Growth". What is remarkable about both those documents is the expectation that, even if the Government were to adopt all their suggestions, the effect would be only to arrest the deterioration rather than to reverse the decline.
Of the CBI package, including the acceptance of a PSBR of some £12 billion to £12½ billion in 1981–82, the authors claim that
"unemployment would still rise though rather more slowly than on existing policies; investment would still fall in 1981."
The best that the CBI can say is that
"business would be better placed to start increasing investment in 1982."
As for the TUC, its proposals represent a 3 per cent. stimulus to the economy and the acceptance of increased expenditure of over £4 billion. Even so, as the TUC puts it:
"the enormity of the task facing us is such that this stimulus will only prevent unemployment from rising still further in 1981."
Our difficulties are growing, and growing rapidly.
Unemployment apart, two trends are particularly worrying: the sharp contraction in industrial investment and the falling off of our export trade. On investment, the figures are grim and we have not only the prospect of a substantial decline—indeed, the fact of a substantial decline—in investment in manufacturing industry—and without investment in manufacturing industry how can we get the competitiveness that we need?—but the wellreported sales and auctions of first-rate British machinery, which is going to other countries where it can be used to compete effectively against Britain in markets abroad and in our own country, through imports. Even the United States finds modern though secondhand British equipment worth purchasing.
The second worrying trend is in exports. The volume fell in the last quarter of 1980 by about 2½ per cent. As for next year, again I quote the CBI:
"United Kingdom exports are expected to decline quite sharply."
Surely we can all agree that it is imperative, if we are to safeguard our future, that we halt the process of selfdestruction and embark on a major re-equipment and reinvestment programme to make our industry truly competitive.
The Opposition and the trade unions have argued for a great extension to help to bring that about. It is an absurdity and a tragedy that the wealth that we are now receiving from the North Sea and the great savings of our people at work, accumulated through pension funds and insurance companies, should flow not into British industry, but across the frontiers of this country. Our exchange controls have gone and that money helps to finance the firms and jobs abroad that will compete with us still more vigorously in the future.
There is nothing eccentric in the idea that we should use our additional savings and wealth to strengthen manufacturing industry—rather than to weaken it. That

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was the message conveyed in a most interesting address made a fortnight ago by the chairman of Shell UK, Mr. Raisman. He ended his speech by saying:
"The success of Germany's use of Marshall Aid, which it set aside for industrial investment, is a good pointer for the potential efficiency of such a plan."
Beyond this, the immediate priorities—we all have it in mind that the Chancellor of the Exchequer is finishing the construction of his Budget—is to take action next month that will operate on both the costs of British industry and on the lack of demand in the economy. There are many ways in which the burden of costs can be mitigated. Last time we debated economic affairs, I mentioned the importance of diminishing the burden of the national insurance surcharge and of taking account of the extra fuel costs incurred, particularly by bulk users of energy in Britain. I note that the former suggestion, and proposals to alleviate duties on the heavy oil that is used in industry—but not in transport—have been put forward in the CBI's submission to the Chancellor of the Exchequer. I hope that the right hon. and learned Gentleman will consider them.
I turn to the crucial question of interest rates. If we are to take the Government's argument seriously about the true and underlying level of inflation and if, as the right hon. Lady suggests, inflation is running at about 7 per cent., what possible justification can there be for maintaining the MLR at its present level? Every one percentage fall in the borrowing rate as it affects industry means a saving in costs of about £350 million a year. Our message for the Government tonight is "get interest rates down".
Finally, I turn to the lack of domestic demand. I am sure that the most important way that demand can be revived in Britain, with the least risky effects on the export-import balance—which we must always bear in mind as our major concern—and on inflation, is to promote a substantial programme for increasing investment in both publicly owned industries, in all types of infrastructure and in housing programmes. It is time—perhaps that time has already passed—that the Government looked again at the structure of public expenditure and at the composition of the public sector borrowing requirement. It is time that they began to draw a serious distinction between that part of the public sector borrowing requirement that is simply attributed to current expenditure and that important part that is spent on investment and that is of benefit to both public and private industry.
I see no logical reason for deliberately curtailing useful worthwhile investments in the public sector just because of some overall constraint—in the form of cash limits—imposed by the Government. Today, we have heard a further part of the Government's campaign, which I described a few weeks ago as "operation optimism". Today, we have heard a further instalment in that campaign. It will have convinced no one. The debate has revealed that there are, on the other side of the House, right hon. and hon. Members who know—as we do—that the Government are on a disaster course. Those who share that view—there are quite a number here tonight—have a duty to register their deep disquiet in the only way that this Government will understand. We shall vote in favour of
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our amendment because it rightly focuses on the main problems that face the British people and the British economy today.
9.34 pm
The Secretary of State for Trade (Mr. John Biffen): The right hon. Member for Stepney and Poplar (Mr. Shore) has spoken in the concluding stages of this serious debate with all the skill and fluency which is the hallmark of his contributions. I hope to concentrate my own remarks upon what I think has been the major cause of disquiet, namely, the current levels of unemployment. May I say at the outset, however, that there was just one point in the right hon. Gentleman's speech where he was less surefooted. It was on classical literature rather than contemporary economics. Clearly, the right hon. Gentleman has not fully understood the significance of the sirens.. I think that it is very important that he should. The House should be under no illusion. The siren voices that will increasingly be heard during the coming weeks and months will be the siren voices of social democracy. It will be they who, from their banking citadels in the City—from Morgan Grenfell and from Guinness Mahon, but using a Limehouse accommodation address—will be trying to persuade the public, this House and above all the political constituencies that there are easy and relatively painless solutions to what we know to be inherently intractable problems.
I repeat what I said about unemployment levels being central to much of the disquiet expressed in the debate, not merely for what it has meant in terms of output and the wider industrial challenges, but also, as was emphasised by my hon. Friend the Member for Manchester, Withington (Mr. Silvester) and the hon. Member for Ormskirk (Mr. Kilroy-Silk), for the regional difficulties that arise from this situation.
Clearly, it is a situation of very considerable adversity. As the Leader of the Opposition was kind enough to put around my neck the halter of some kind of apostle of gloom, I should like none the less to invite the House to consider not only our present difficulties but at least some signs of improvement that can be set in the scales. I am always encouraged by the cheerful remarks that come from the Opposition Benches on my role as—[Hon. Members: "Cassandra."] I prefer to call it austere realism. But I was slightly discouraged that the analysis of my contribution was set alongside the contribution of "Denis" to "Dear Bill" in Private Eye. I thought that that put into context not only my own modest contribution but, much more significantly, the actual content of the speech of the Leader of the Opposition, which owed more to style than it did to content. But in this sorrowful world, we are happy even to have style.
I wish to put five points to the House—modestly, I hope, and without exaggeration. First, pay settlements are more in touch with reality. Evidence from the CBI Databank suggests that current round private sector settlements have dropped from an average of more than 16 per cent. in July to about 10 per cent. in October and into single figures in November and December.
Secondly, industry's prices, as shown by the wholesale prices index, have risen by very little in the recent past, and indeed by only between 3 per cent. and 4 per cent. in the last six months.
Thirdly, industrial relations have improved— [Interruption]. Yes, they have. If Labour Members really

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believe in the crude superstition that industrial relations today are governed by fear, they are living in their own cocooned world and not in the world of industry and commerce as experienced by my hon. Friends. The figure for stoppages in 1980 was the lowest in the post-war period.
Fourthly, there have been reductions in the minimum lending rate. Currently, the yield on Treasury bills and the movement of the three-month inter-bank rate provide some encouragement. In her "Weekend World" interview, my right hon. Friend the Prime Minister said that we were
"particularly eager to move as soon as we can"
in this respect.
Mr. Dick Douglas: Have the courage to do that.
Mr. Biffen: The hon. Gentleman, whose constituency I forget because he was turfed out by a Scottish nationalist and came back to the House subsequently, advises us to have courage. We shall, but we shall have responsibility as well. Any movement taken on MLR will be a factor of responsibility. As my hon. Friend the Member for Woking (Mr. Onslow) said in his interesting contribution, industry is in a particular position to take advantage of any reduction in interest rates.
Mr. Joel Barnett: The right hon. Gentleman will recall that the hon. Member for Horncastle (Mr. Tapsell) asked a question of the Prime Minister to which he got an obscure answer. It concerned the relationship between MLR and the exchange rate. The right hon. Lady was asked a specific question, but the answer was far from clear. She was asked whether the policy has changed. Will the right hon. Gentleman care to answer it now?
Mr. Biffen: I shall come to the exchange rate. The policy has not changed—[HON. MEMBERS: "Answer".] I have answered.
I now move to the general international background against which we are operating. On the evidence of the Governor of the Bank of England in his speech earlier this week, he believes that:
"It seems likely in the absence of any major shocks to the system that the worst of the recession is behind us; and that at some point later this year the world economy will start to grow again."
The hon. Member for Sheffield, Heeley (Mr. Hooley) laughs. That is no laughing matter. The measured confidence of the Governor of the Bank of England is a perfectly legitimate point to make. I say that because it must be set alongside the many other factors on which we must base our conclusion when we come to the vote.
No one doubts that matters are difficult, nor would he doubt that the path of unemployment will continue to cause great anxiety in this House. However, there are factors which give cause for measured optimism about the point at which the recession will bottom out.— [Interruption.] Opposition Members find that hilarious. But in the country at large it is precisely a message of measured consideration, rather than political vilification, which is required. The whole of this debate was all too often conducted in terms of political vilification by Opposition Members.
Mr. Frank Hooley Mr. Frank Hooley (Sheffield, Heeley) rose—
Mr. Biffen: I hope that the hon. Gentleman will forgive me if I do not give way.
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Two major points have been made in the debate. The first was that the Government's spending, revenue and borrowing policies have led to our present unemployment levels. That point was made particularly by the hon. Member for Feltham and Heston (Mr. Kerr). There was also a discussion about exchange rates. I should like to say a word about both.
With regard to the Government's spending, revenue and borrowing policies, the truth is much nearer the point argued by my hon. Friends the Members for Chichester (Mr. Nelson) and Bridlington (Mr. Townend). It simply is nonsense and a travesty to suggest that the Treasury has pursued its policies with some zealous ideology which is impervious to compromise and tragically unworldly. I know that for Opposition Members myth is much more entertaining than reality, but the truth is that from the outset the Government's monetary and fiscal policy was always modest and gradualist. [HON. MEMBERS: "Oh".] Oh yes it was, and the figures will vindicate that observation. It involved a social as well as an economic judgment.
The very fact that the Government planned to reduce aggregate public spending programmes by somewhat less than 5 per cent. over the lifetime of the Parliament—less than 1 per cent. per annum—is a measure of that modesty. The reality is that even those gradualist programmes have been consciously modified to take account of the recession.
That was the argument that was made persuasively by my right hon. Friend the Financial Secretary to the Treasury in his recent speech in Zurich. While I do not deny that the Government's monetary and fiscal policies may have had some modest short-term transitional impact—[Interruption.] I shall not be deterred from placing on record what I know is true, and what I know from those jeers that many Opposition Members think is true. Anyone who examines the record on spending and borrowing cannot believe that a policy that is deliberately measured to take account of recession and its outturn can in any sense explain the unemployment figures that have dominated this debate.
Mr. Shore: I ask the right hon. Gentleman to help us with the costs of unemployment. It is an extremely important matter and it has been the subject of several exchanges in the House. I hope that he will now be able to tell us the modest, no doubt, cost of the extra unemployment of 1 million on the public sector borrowing requirement.
Mr. Biffen: Those points were dealt with authoritatively and fully by my right hon. Friend the Prime Minister in exchanges. The fact that they are too disagreeable to the right hon. Gentleman does not mean that they are any the less valid.
If we are concerned with unemployment—the debate is predominantly about unemployment—we must look elsewhere, to our general competitive situation and the sharp impact upon it of a rising exchange rate.
My right hon. Friend the Prime Minister has referred to the United Kingdom's basic lack of competitiveness. Many have observed that United Kingdom productivity compares badly with that of our competitors. That point was made in this debate by my right hon. Friend the Member for Bournemouth, West (Sir J. Eden). Normally, that poor domestic cost performance would be mirrored by

493
a declining exchange rate. That was our experience for most of the last decade. Our lack of competitiveness showed itself in a relatively low standard of living. However, the reversal in the trend of the exchange rate has exposed our latent industrial weakness. No one can doubt that phenomenon, that change. For six years in succession, from 1971 to 1977, the exchange rate fell—in one year, 1976, by more than 15 per cent. As a number of hon. Members have observed, today the exchange rate has appreciated by over a quarter since 1979. That explains more than any other single factor the transformation that has taken place in the economy and the impact that it has had on levels of employment.
Mr. Douglas: What about oil?
Mr. Biffen: I shall come to that point—
Mr. Douglas Mr. Douglas rose—
Mr. Biffen: No, I shall make my speech—
Mr. Speaker: Order. It is clear that the Minister is not giving way.
Mr. Douglas Mr. Douglas rose—
Mr. Biffen: The right hon. Member for Stepney and Poplar—
Mr. Douglas Mr. Douglas rose—
Mr. Speaker: Order, the hon. Gentleman must remain in his seat when the Minister is not giving way.
Mr. Biffen: The right hon. Member for Stepney and Poplar said that this was a matter of the utmost importance, and I wish to deal with it as such. I hope that the hon. Member for Dunfermline (Mr. Douglas) will not think that I am discourteous in not giving way, but I wish to deal with that argument.
First, if we try to analyse the strength of sterling, undoubtedly the factors are multitudinous. Three factors struck me as being important. The first is oil. My right hon. and learned Friend the Chancellor of the Exchequer said in Paris that the upward pressure on sterling had been created largely by the existence of North Sea oil. I think that there is general agreement with that analysis.
Secondly, there is the question of the minimum lending rate, which is a difficult factor to quantify. It was referred to by my right hon. Friend the Prime Minister, and no doubt there will be widespread appreciation of any fall in MLR by the business community because of the effect that it will have on our exchange rate.
Thirdly, there is the question of overseas investor confidence. It is intangible, but let us not disparage that factor. It is a vote of confidence, not necessarily in the political arrangements of this country—[AN HON. MEMBER: "YOU can say that again."] There are some undermining political arrangements that I can think of. I believe that in many instances this is a judgment upon the skills of our work force, our management and our record of social stability.
The real key to the debate is what should be our response to this factor which is having its impact on employment. First, we must accept that the exchange rate is the consequence of very powerful market forces. They are the ultimate arbiters. No one could give better witness to that than the right hon. Member for Leeds, East (Mr.
494
Healey), who tried to control the exchange rate in the autumn of 1977 and found that it simply was not a task that could be sensibly engaged in.
I believe, first, that we have to create as free a market as possible in sterling. That is why we abolished exchange controls. Of course, we hear this evening that the Labour Party still harbours a resentment against that decision. Among the TUC's latest proposals is one for a Foreign Investment Review Agency. All that would contribute to a strengthening of the exchange rate rather than its amelioration.
Secondly, there is the commitment that we have to secure reductions in MLR consistent with appropriate spending, revenue and borrowing policies. The right hon. Member for Stepney and Poplar again pressed for a lower MLR, but I must say that it is against a background in which he has been calling for substantial increases in public spending and against the backcloth of a TUC document, "Plan for Growth", which argued for budgetary action in the next few months totalling £6·2 billion. One cannot conceive of public expenditure increases on that scale and credibly call for reductions in the MLR.
Mr. Tapsell: Does my right hon. Friend recall that exactly that argument was used for postponing the reduction in MLR from 16 per cent. to 14 per cent., and that not only was it possible to do that without creating a buyers' strike in the gilt market, which was feared, but in fact the Government have succeeded, with more success than ever before, in funding billions of pounds of sterling debt since they cut it, and they would be even more successful in funding it if they cut MLR again?
Mr. Biffen: I am always happy to place my hon. Friend's judgment as to how one can fund debt among that of the many others who seek to advise the Government. All I am saying is that we shall choose a policy which we deem to be responsible in the circumstances. Our task will be made that much easier according to the size of the debt that has to be marketed.
I turn to the question of import controls. Here again our policy has been one of trying to keep import controls to a minimum and of using them only for highly sensitive items, such as steel and footwear. We are now operating in a political climate in which there are increasing demands for widespread import controls, which could only have as a consequence a further hardening of the exchange rate. I say that in the context of this afternoon's debate, in which not only did the Leader of the Opposition say—I think that he was quoting from the TUC document—that the Government should control imports, but his hon. Friend the Member for Walsall, North (Mr. Winnick) talked in terms of the country being "flooded out" in certain areas.
I say—and I absolve the right hon. Member for Stepney and Poplar from this because he is basically a devotee of the open trade system—that Opposition Members will find themselves increasingly held in thrall to the right hon. Member for Bristol, South-East (Mr. Benn) now that he has come to sit among them on the Opposition Front Bench. He knows what he wants. He knows that a planned economy requires planned trade. The logic and compelling arguments that he will use will eventually—dare I use the word "siren" to the right hon. Member for Stepney and Poplar?—prove the siren call of the far Left which hon. Members will find it increasingly difficult to resist.

495
Finally—and this touches upon the whole range of our domestic policies that have been the centre of debate over the last eighteen months to two years—the present Administration are pledged to pursue tax and competition policies that will enable our industry and commerce to adjust as speedily as possible to the new market conditions created by an oil-related exchange rate. I accept at once the point made by the leader of the Liberal Party that in this we must fashion a tax structure which pays full regard to risk and enterprise.
However, it should be made clear that the vote tonight will be between the policies that we are seeking to pursue and the alternative, which is a hankering after a return to the regulation of all the economic factors in the economy.
It has been fascinating to see the gentle rehabilitation of the idea of State control of pay. Inevitably it was advanced by the right hon. Member for Battersea, North (Mr. Jay), who can argue that he has always been a devotee of State regulation of pay throughout the economy. I am certain that on the Labour Benches it would not be secured without a corresponding control over prices and dividends.
Mr. Geoffrey Robinson: We are discussing a serious issue—the problem of incomes policy. What is the Government's statement that public sector pay increases should be limited to 6 per cent. if it is not an incomes policy?
Mr. Bitten: The Government are entitled to take a view on the pay of their own employees. If Labour Members cannot draw a distinction between the Government seeking to secure a view on the pay of their own employees and having ambitions to control and regulate everyone else, we can be left only with the conclusion that they want to use the acceptance of even a modest State sector as the means whereby they will secure embracing control over the free sector as well. That has been the pattern of many experiencess in this respect in post-war Britain.
Labour Members have made it clear that when they have to respond to a high exchange rate, which more than anything else holds the explanation or our present levels of unemployment, they have an instinctive recourse to control, the extension of Government, the enhancement of planning and the reinforcement of public spending. Although there may be arguments in the whole church of Labour Members opposite about who is the better believer they will be united on this: it is the pretext for the reinforcement of the techniques and philosophy of Socialism.
For us, the message is the opposite—I make no apology for putting that in those terms. If one has an exchange rate which represents the world telling us something about ourselves, we have to react to that, rather than try to discipline and control that exchange rate. We have to see that we accept all the challenges of industrial and commercial change. We fashion our social policies accordingly.
Mr. Shore: Is the right hon. Gentleman aware of the full import of what he is saying? He is saying, in relation to the future of this country, that regardless of what happens to the level of the exchange rate, on no account is the rate to be changed and that those who seek to bring it under control are guilty of all the illiberal things which haunt the right hon. Gentleman's imagination.
Mr. Biffen: By the nature of his intervention the right hon. Gentleman demonstrates at heart what a pathetic, defeatist view he has about the economy. The reaction of the Treasury Bench is that the United Kingdom economy can react to these circumstances. The free enterprise system, in partnership with the public sectors of the economy, can see that we respond, so that Britain can live with a powerful exchange rate, no less than other countries. Of course that is a challenge which necessitates the philosophy of change. We know from the rhetoric of the debate that the only change that is congenial to the Labour Party is a retreat to the 1930s. For us, the change is the challenge of the 1980s, and we shall be vindicated in that view.
Question put, That the amendment be made:—
The House divided:Ayes 240, Noes 309.

Division No. 63]

[10.00 pm

AYES

Abse, Leo

Douglas-Mann,Bruce

Adams,Allen

Dubs,Alfred

Allaun,Frank

Duffy, A. E. P.

Alton,David

Dunn, James A.

Anderson,Donald

Dunnett,Jack

Archer, Rt Hon Peter

Dunwoody, Hon MrsG.

Armstrong, RtHon Ernest

Eastham,Ken

Ashley, Rt Hon Jack

Edwards, R. (W'hampt'nSE)

Ashton,Joe

Ellis, R. (NED'bysh're)

Atkinson, N.(H'gey,)

Ellis,Tom(Wrexham)

Bagier,GordonA.T.

English,Michael

Barnett,Guy(Greenwich)

Ennals, RtHonDavid

Barnett, RtHonJoel (H'wd)

Evans, loan(Aberdare)

Beith,A. J.

Evans,John(Newton)

Benn, RtHonA. Wedgwood

Ewing,Harry

Bennett,Andrew(St'kp'tN)

Field,Frank

Bidwell,Sydney

Flannery,Martin

Booth, RtHonAlbert

Fletcher,Raymond(llkeston)

Boothroyd,MissBetty

Fletcher,Ted(Darlington)

Bradley,Tom

Foot, RtHon Michael

Bray, DrJeremy

Ford,Ben

Brown, Hugh D. (Provan)

Forrester,John

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

Foster, Derek

Brown,Ron(E'burgh,Leith)

FouIkes, George

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

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

Buchan,Norman

Freeson,RtHon Reginald

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

Freud,Clement

Campbell,Ian

Garrett,John (NorwichS)

Campbell-Savours,Dale

Garrett, W. E.(Wallsend)

Canavan,Dennis

George,Bruce

Cant, R. B.

Gilbert, RtHon DrJohn

Carmichael,Neil

Ginsburg,David

Carter-Jones,Lewis

Golding,John

Cartwright,John

Gourlay,Harry

Clark, DrDavid (S Shields)

Graham, Ted

Cocks, Rt Hon M. (B'stolS)

Grant,George(Morpeth)

Cohen,Stanley

Grant, John (IslingtonC)

Coleman, Donald

Hamilton,James(Bothwell)

Conlan,Bernard

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

Cook, Robin F.

Hardy, Peter

Cowans, Harry

Harrison, Rt Hon Walter

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

Hart, RtHonDame Judith

Craigen, J. M.

Haynes, Frank

Crowther, J. S.

Healey, Rt Hon Denis

Cryer,Bob

Heffer, Eric S.

Cunliffe,Lawrence

Hogg,N.(EDunb't'nshire)

Cunningham,G.(IslingtonS)

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

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

HomeRobertson,John

Davidson,Arthur

Homewood,William

Davies, Rt Hon Denzil (L'lli)

Hooley,Frank

Davies, Ifor(Gower)

Horam,John

Davis, Clinton (HackneyC)

Howell, Rt Hon D.

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

Howells,Geraint

Deakins,Eric

Huckfield,Les

Dewar,Donald

Hudson Davies, Gwilym E.

Dixon,Donald

Hughes, Mark(Durham)

Dormand,Jack

Hughes, Robert(Aberdeen N)

Douglas,Dick

Hughes,Roy(Newport)

497

Jay, Rt Hon Douglas

Prescott,John

John,Brynmor

Race, Reg

Johnson, James (Hull West)

Richardson,Jo

Johnson, Walter (DerbyS)

Roberts,Allan(Bootle)

Jones, Rt Hon Alec (Rh 'dda)

Roberts, Ernest (Hackney N)

Jones, Barry (EastFlint)

Roberts,Gwilym(Cannock)

Jones, Dan (Burnley)

Robertson,George

Kaufman, Rt Hon Gerald

Rodgers, Rt Hon William

Kerr, Russell

Rooker, J.W.

Kilroy-Silk,Robert

Roper,John

Lambie,David

Rowlands,Ted

Lamborn,Harry

Ryman,John

Lamond,James

Sandelson, Neville

Leadbitter,Ted

Sheerman, Barry

Leighton,Ronald

Sheldon, Rt Hon R.

Lestor, Miss Joan

Shore, Rt Hon Peter

Lewis, Arthur (N'hamNW)

Short, MrsRenée

Lewis, Ron (Carlisle)

Silkin, Rt Hon J. (Deptford)

Litherland,Robert

Silkin, Rt Hon S. C. (Dulwich)

Lofthouse,Geoffrey

Silverman,Julius

Lyon,Alexander(York)

Skinner,Dennis

Lyons, Edward(Bradf'dW)

Smith, Rt Hon J. (N Lanark)

McCartney,Hugh

Snape, Peter

McDonald,DrOonagh

Soley,Clive

McElhone,Frank

Spearing,Nigel

McGuire,Michael(lnce)

Stallard, A. W.

McKay,Allen(Penistone)

Steel, Rt Hon David

Maclennan,Robert

Stoddart,David

McNally,Thomas

Stott,Roger

McNamara,Kevin

Strang, Gavin

McWilliam,John

Straw,Jack

Magee, Bryan

Summerskill,HonDrShirley

Marks,Kenneth

Taylor, Mrs Ann (Bolton W)

Marshall, D(G'gowS'ton)

Thomas,Jeffrey(Abertillery)

Marshall,DrEdmund(Goole)

Thomas, Mike (NewcastleE)

Marshall, Jim (LeicesterS)

Thomas, DrR. (Carmarthen)

Martin,M(G'gowS'burn)

Thorne, Stan (PrestonSouth)

Mason, Rt Hon Roy

Tilley,John

Maxton,John

Tinn,James

Maynard,MissJoan

Torney,Tom

Meacher,Michael

Urwin, RtHonTom

Mellish, RtHonRobert

Varley, Rt Hon Eric G.

Mikardo,lan

Wainwright,E.(DearneV)

Millan,RtHonBruce

Walker, Rt Hon H.(D'caster)

Miller, Dr M. S. (EKilbride)

Watkins,David

Mitchell,Austin (Grimsby)

Weetch, Ken

Mitchell, R. C. (Soton Itchen)

Wellbeloved,James

Morris, Rt Hon A. (W'shawe)

Welsh,Michael

Morris, Rt Hon C. (O'shaw)

White, Frank R.

Morris, Rt Hon J.(Aberavon)

White, J.(G'gowPollok)

Morton,George

Whitehead, Phillip

Moyle,Rt Hon Roland

Whitlock,William

Mulley,RtHon Frederick

Wigley,Dafydd

Newens, Stanley

Willey, Rt Hon Frederick

Oakes, Rt Hon Gordon

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

Ogden,Eric

Wilson, Gordon (DundeeE)

O'Halloran,Michael

Wilson, William (C'trySE)

O'Neill,Martin

Winnick,David

Owen, Rt Hon Dr David

Woodall,Alec

Park,George

Young, David (BoltonE)

Parker,John

Pavitt,Laurie

Tellers for the Ayes:

Pendry,Tom

Mr. Geoffrey Robinson and

Powell,Raymond(Ogmore)

Mr. Joseph Dean

NOES

Adley,Robert

Bendall,Vivian

Aitken,Jonathan

Bennett, SirFrederic (T'bay)

Alison,Michael

Benyon,Thomas(A 'don)

Amery, Rt Hon Julian

Best, Keith

Ancram, Michael

Bevan,DavidGilroy

Arnold,Tom

Biffen, Rt Hon John

Atkins, Rt Hon H.(S'thorne)

Biggs-Davison,John

Atkins, Robert(PrestonN)

Blackburn,John

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

Bonsor,SirNicholas

Baker,Kenneth(St.M'bone)

Boscawen,HonRobert

Baker, Nicholas (NDorset)

Bowden,Andrew

Banks,Robert

Boyson,DrRhodes

Beaumont-Dark,Anthony

Braine,SirBernard

Bell,SirRonald

Bright,Graham

498

Brinton,Tim

Grist, Ian

Brittan,Leon

Grylls,Michael

Brooke, Hon Peter

Gummer,JohnSelwyn

Brotherton,Michael

Hamilton, Hon A.

Brown, M.(BriggandScun)

Hamilton, Michael(Salisbury)

Browne,John(Winchester)

Hampson, DrKeith

Bruce-Gardyne,John

Hannam,John

Bryan, Sir Paul

Haselhurst,Alan

Buchanan-Smith,Alick

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(LutonWest)

Heseltine,RtHonMichael

Carlisle,Kenneth(Lincoln)

Hicks,Robert

Carlisle, RtHon M.(R'c'n)

Higgins, Rt Hon Terence L.

Chalker, Mrs. Lynda

Hill, James

Chapman,Sydney

Holland, Philip(Carlton)

Churchill,W.S.

Hooson,Tom

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

Hordern,Peter

Clarke,Kenneth(Rushcliffe)

Howe, RtHon Sir Geoffrey

Clegg, SirWalter

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

Cockeram,Eric

Howell, Ralph (NNorfolk)

Colvin,Michael

Hunt, David (Wirral)

Cope,John

Hunt,John(Ravensbourne)

Cormack,Patrick

Hurd,HonDouglas

Corrie,John

lrving,Charles(Cheltenham)

Costain,SirAlbert

Jenkin, RtHon Patrick

Cranborne,Viscount

Jessel,Toby

Critchley,Julian

JohnsonSmith,Geoffrey

Crouch,David

Jopling,RtHonMichael

Dean, Paul (North Somerset)

Joseph, RtHon Sir Keith

Dorrell,Stephen

Kaberry,SirDonald

Douglas-Hamilton,LordJ.

Kellett-Bowman,MrsElaine

Dover, Denshore

Kimball, Marcus

duCann, RtHon Edward

King, RtHonTom

Dunn,Robert(Dartford)

Knight, MrsJill

Durant,Tony

Knox, David

Dykes, Hugh

Lamont,Norman

Eden, RtHon Sir John

Lang, Ian

Edwards,RtHonN.(P'broke)

Langford-Holt,SirJohn

Eggar,Tim

Latham,Michael

Elliott, SirWilliam

Lawrence,Ivan

Emery, Peter

Lawson, RtHon Nigel

Eyre,Reginald

Lee, John

Fairbairn,Nicholas

Lennox-Boyd,HonMark

Fairgrieve,Russell

Lester Jim (Beeston)

Faith, MrsSheila

Lewis,Kenneth(Rutland)

Farr,John

Lloyd, Ian (Havant& W'loo)

Fell,Anthony

Lloyd, Peter(Fareham)

Fenner, Mrs Peggy

Loveridge,John

Finsberg,Geoffrey

Luce,Richard

Fisher, SirNigel

Lyell,Nicholas

Fletcher,A.(Ed'nb'ghN)

Macfarlane,Neil

Fletcher-Cooke,SirCharles

MacGregor,John

Fookes, Miss Janet

MacKay,John(Argyll)

Forman,Nigel

Macmillan,RtHonM.

Fowler, RtHon Norman

McNair-Wilson,M.(N'bury)

Fox, Marcus

McNair-Wilson, P. (NewF'st)

Fraser, Rt Hon Sir Hugh

McQuarrie,Albert

Fraser, Peter (SouthAngus)

Madel, David

Fry, Peter

Major,John

Galbraith, HonT. G. D.

Marland,Paul

Gardiner,George(Reigate)

Marten, Neil(Banbury)

Gardner, Edward (SFylde)

Mather,Carol

Garel-Jones,Tristan

Maude, RtHon Sir Angus

Glyn, DrAlan

Mawby, Ray

Goodhart,Philip

Mawhinney,DrBrian

Goodlad,Alastair

Maxwell-Hyslop, Robin

Gorst,John

Mayhew, Patrick

Gow, Ian

Mellor,David

Gower,SirRaymond

Meyer, Sir Anthony

Grant, Anthony (HarrowC)

Miller,Hal(B'grove)

Gray, Hamish

Mills,lain(Meriden)

Greenway, Harry

Mills, Peter (West Devon)

Grieve, Percy

Miscampbell,Norman

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

Mitchell,David(Basingstoke)

Griffiths,Peter Portsm'thN)

Moate,Roger

499

Molyneaux,James

Sims, Roger

Monro,Hector

Skeet, T. H. H.

Montgomery,Fergus

Smith,Dudley

Moore,John

Speed, Keith

Morgan,Geraint

Speller,Tony

Morris, M. (N'hamptonS)

Spence,John

Morrison, Hon C. (Devizes)

Spicer, Jim (WestDorset)

Morrison, Hon P. (Chester)

Spicer, Michael (SWorcs)

Mulley,RtHon Frederick

Sproat,lan

Murphy,Christopher

Squire,Robin

Myles, David

Stainton, Keith

Neale,Gerrard

Stanbrook,lvor

Needham, Richard

Stanley,John

Nelson,Anthony

Steen,Anthony

Newton,Tony

Stevens, Martin

Normanton,Tom

Stewart, Ian (Hitchin)

Nott, Rt Hon John

Stewart,A.(ERenfrewshire)

Onslow,Cranley

Stokes,John

Oppenheim, Rt Hon Mrs S.

StradlingThomas,J.

Osbom,John

Tapsell, Peter

Page, John (Harrow, West)

Taylor, Robert(CroydonNW)

Page, Rt Hon Sir G. (Crosby)

Taylor, Teddy (S'end E)

Page, Richard (SW Herts)

Tebbit, Norman

Parkinson,Cecil

Thatcher, Rt Hon Mrs M.

Parris, Matthew

Thompson,Donald

Patten,Christopher(Bath)

Thorne,Neil(llfordSouth)

Patten,John (Oxford)

Thornton,Malcolm

Pattie,Geoffrey

Townend,John(Bridlington)

Pawsey, James

Townsend, Cyril D,(B'heath)

Percival,Sirlan

Trippier,David

Pink, R.Bonner

Trotter,Neville

Pollock,Alexander

van Straubenzee, W. R.

Porter,Barry

Vaughan,DrGerard

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

Viggers,Peter

Prentice, Rt Hon Reg

Waddington,David

Price,SirDavid (Eastleigh)

Wakeham,John

Prior, Rt Hon James

Waldegrave,HonWilliam

Proctor, K. Harvey

Walker, Rt Hon P.(W'cester)

Pym, Rt Hon Francis

Walker, B. (Perth)

Raison,Timothy

Walker-Smith, Rt Hon Sir D.

Rathbone,Tim

Wall,Patrick

Rees, Peter (Dover and Deal)

Waller, Gary

Rees-Davies, W. R.

Walters,Dennis

Renton,Tim

Ward,John

Rhodes James, Robert

Warren,Kenneth

RhysWilliams,SirBrandon

Watson,John

Ridley, HonNicholas

Wells, John(Maidstone)

Rifkind, Malcolm

Wells,Bowen

Rippon, Rt Hon Geoffrey

Wheeler,John

Roberts, M. (Cardiff NW)

Whitelaw, RtHonWilliam

Roberts, Wyn (Conway)

Whitney,Raymond

Ross,Wm. (Londonderry)

Wickenden, Keith

Rossi, Hugh

Wiggin,Jerry

Rost, Peter

Wilkinson,John

Sainsbury,HonTimothy

Williams, D.(Montgomery)

St. John-Stevas, Rt Hon N.

Wolfson,Mark

Shaw, Giles (Pudsey)

Young,SirGeorge(Acton)

Shaw,Michael(Scarborough)

Younger, RtHonGeorge

Shelton, William (Streatham)

Shepherd,Colin(Hereford)

Tellers for the Noes:

Shepherd, Richard

Mr. Spencer Le Marchant and

Shersby,Michael

Mr. Anthony Berry.

Silvester, Fred

Question accordingly negatived.
Main Question put and ageed to.
Resolved,
That this house approves the economic and industrial policies of the Governmant; welcomes the continuing fall in the rate of inflation, greater realism in wage bargaining, and increasing awareness in industry of the need to be competitive; and recognises that lower inflation, higher output, an expanding private sector and better industrial relations provide the only secure basis for more jobs.

PETITIONS

  Self-Employed and Small Businesses
  10.13 pm
  Mr. David Gilroy Bevan: With your permission, Mr. Speaker, I wish to present a petition on behalf of the Birmingham branch of the National Federation of Self Employed and Small Businesses Limited, which is complaining about the effect of Cmnd. 7864 and the new strategy. It is signed by 83 people, many of whom live in my constituency.
  The prayer reads as follows:
  Wherefore your petitioners pray that your honourable House rejects the proposals outlined in "Income During Initial Sickness: A New Strategy".
  I want to thank Dr. Bernard Jilby, who helped to organise the petition. It has great merit, and I agree with it.
  To lie upon the Table.
  10.16 pm
  Mr. Andrew Bowden: With your permission, Mr. Speaker, I wish to present a petition signed by 57 members of the Brighton and district branch of the National Federation of Self Employed and Small Businesses Limited. It is an impressive petition, which has been beautifully prepared. I want to pay a special tribute to Mrs. Pat Constable. The petition states:
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.
  The Humble Petition of members of the Brighton and District Branch of the National Federation of Self Employed and Small Businesses Limited.
  Sheweth, That the proposals outlined in "Income During Initial Sickness: A New Strategy", Cmnd 7864 will cause considerable damage to employment prospects in small businesses.
  Wherefore your Petitioners pray that your Honourable House rejects the proposals outlined in "Income During Initial Sickness: A New Strategy".
  And your Petitioners; as in duty bound, will ever pray, etc.
  To lie upon the Table.

  Faversham Cottage Hospital
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Newton.]
  10.18 pm
  Mr. Roger Moate: In raising the issue of the Faversham cottage hospital, I am asking the Undersecretary and his right hon. and hon. Friends for their help and support. I do not expect, nor seek, conclusive answers tonight. However, I want to place on record my concern, and that of the people of Faversham, about the present position. I hope that the Government will help to bring matters to a happy conclusion in the coming months.
  I do not think that I am exaggerating when I say that the Faversham cottage hospital is in many ways an ideal institution. It is a 20-bed general practitioner community hospital in the heart of Faversham. It is ideally situated adjacent to the new health centre, and is admirably served by the general practitioners who, in addition, provide a limited casualty service. Faversham is a town with a real community spirit in the full meaning of the word. The hospital reflects that community spirit. It is a well-used hospital. There may be some disagreement about occupancy rates, but the average for last year was nearly 70 per cent., which is quite high—for December it was 72 per cent., for November 92 per cent., for October 94 per cent. and for September 84 per cent. Those are high figures. It is exactly the sort of hospital that the Minister has publicly and enthusiastically supported. It is what I call a real community hospital.
  Last year I was informed by the doctors that they had learnt of proposals by the Canterbury and Thanet district health authority to take half of the GP beds and use them for geriatric patients who would have been displaced by major changes occurring in other parts of the district—perhaps including the closure of Herne hospital.
  Faversham also has Bensted House hospital with 42 geriatric beds. That is an old institution, and we have long recognised that at some time there will be a need for major new geriatric facilities in the area. I regret that that seems a remote prospect at present. If 10 beds in the cottage hospital were used for long-stay geriatric patients displaced from elsewhere, the patients may not be Faversham people. Most of us recognise that it is generally desirable for elderly people to remain in their own communities whenever possible.
  I do not want to attribute blame nor to criticise, but there does not seem to have been proper discussion about these questions, either with the local doctors or with the public. When these rumours were abounding, we were in the process of trying to arrange for a meeting of some kind to take place in order to try to allay the fears. Suddenly we learnt that the Kent area health authority had rather precipitated matters by demanding contingency plans for cuts in spending, so what we thought was just a long-term option became a plan adopted by the area.
  In a short speech I can do no more than summarise inadequately the lengthy and complex background to these developments so, if my hon. Friend will allow me, I will write to him on any further points I have. However, let me put the key points. First, I question the need for such contingency plans. The area will not know until the new financial year what its position will be. It seems unduly pessimistic to assume that there are going to be
  502
  unreasonable wage settlements beyond the cash limits or an under-funding of inflation. I regret what I will call unnecessary alarmism in projecting cuts of this kind.
  Second, it seems wrong that the plan to change the nature of Faversham cottage hospital, which I have described as a successful intitution, should be taken not on medical grounds but as a spin-off of other changes elsewhere which themselves have been based upon an arbitrary and hypothetical financial calculation.
  Third, if it were to happen—I want to emphasise this—it would deprive Faversham of an important medical facility. Perhaps I might quote one or two extracts from a letter I received from one doctor. He says:
  "there are no replacements for the beds which the Area proposes to close at Faversham. Where are the sick people to go instead? At present the beds at Faversham Hospital are constantly full of people sick enough to need hospital treatment, yet the Area has no plans for anywhere else for them to go.
  Nor is the rate at which people fall sick and need hospital care likely to decline in Faversham. The elderly population, which makes greatest use of acute short stay hospital beds everywhere, is on the increase in Faversham."
  He concluded:
  "what is to happen to the sick people who would have filled them and needed them?
  Fourth, I am obviously not qualified to judge what size a geriatric unit should be, but it seems to me a total misuse of resources to use a small hospital of this kind for an eight bed geriatric unit with all the attendant specialist requirements. I would have thought that all logic points to the need for geriatric hospitals, certainly on a larger scale than this.
  Fifth, I would like the Minister to advise me tonight or at a later stage of the precise statutory position with regard to consultation and to a change of this kind. I would like him to give me, if he can, an absolute assurance that this change would represent a change of use of such an order that the Secretary of State would expect there to be full consultation, and that he would have the right to call in such a plan and would in these circumstances veto it. Perhaps I might quote a letter I received from the Minister of State dated 3 April 1980 in reply to questions of this very kind which I raised. Regarding closures and changes he then said:
  "The instructions have always covered all closures or changes of use which amount to 'a substantial variation in provision', and this could well be less than a complete hospital. In all such cases if an Area Health Authority wishes to proceed with a closure without the agreement of the Community Health Council, it must submit its proposals through the Regional Health Authority for approval by the Secretary of State."
  I would submit that this is such a major change of use that it should come within that category, and therefore would need ultimately to be decided by the Secretary of State. Could I emphasise again that certainly there have not yet been any consultations about these plans.
  Sixth, what would be most unsatisfactory is the possibility, perhaps rather the probability, that these cuts that have been talked about will not be needed. Even if that happens and the area perhaps suggests that we need not worry, nevertheless the threat of losing those 10 beds at a later stage will remain like an axe poised over our heads ready to fall at any time in future, perhaps with the Secretary of State declining to intervene because the proposal remained very much of a hypothetical nature. I urge my hon. Friend to bear in mind that very real worry and to help us on that score if he can.
  When my hon. Friend examines this issue with great sympathy, as I know he will, I ask him to take into account

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  the apparent unreality of some of the bases of decisionmaking. We are told that the district is over-bedded in theory and has too many GP beds. However, these beds are fully used. Where will the patients go? Many of the patients using the beds are elderly. Presumably they would not be classed as geriatric patients, although they are elderly, because they come under general practitioners and are not under consultant geriatricians. Surely we can be more intelligently flexible about these vital human matters than the definitions seem to allow.
  I recognise the immense difficulties faced by the district and the area and by all those who have to try to manage our hospital services with limited resources. There are immense strains on them, especially on those in an area such as Canterbury and Thanet, which in theory is overbedded and faces acute difficulties.
  I have tried to avoid criticism, but I and others could make severe criticism of how the matter has developed. We need a constructive and public discussion of these matters with the maximum of public consultation, public contribution and understanding. We need also the help and understanding of the Government in backing success—namely, in helping us to keep the Faversham cottage hospital as a 20-bed general practitioner community hospital.
  10.27 pm
  The Under-Secretary of State for Health and Social Security (Sir George Young): I congratulate my hon. Friend the Member for Faversham (Mr. Moate) on securing this debate about the future of Faversham cottage hospital. I know that he has taken a close interest in the provision of health services in Kent and has been most assiduous in seeking to protect and advance the interests of his constituents. I am grateful to him for putting his case so plausibly and for giving me the opportunity to comment on the proposal for a partial change of use of the hospital. I hope to be able to give him the reassurances that he seeks about proper consultation.
  I am pleased to see in his place my hon. Friend the Member for Canterbury (Mr. Crouch), whose interest in the Health Service in Kent is well recognised.
  The first point that I should like to make is that no decision has yet been taken, nor indeed is any final decision imminent. I shall refer later to the various stages that must be gone through before any substantial change in Health Service provision can be made. However, I should mention now that although the general responsibility for determining the closure or change of use of health buildings rests with the appropriate area health authority, if local agreement cannot be reached—in particular, if the community health council objects—the final stage in the process could involve a decision by Ministers.
  I give my hon. Friend the Member for Faversham the assurance that he seeks—namely, that the proposals that he has outlined fall within the procedure which can end with a decision made by Ministers. It would not be right for me to pre-empt such a decision or, indeed, any decision of the health authorities. I hope that nothing that I say tonight will prejudge that.
  I endorse the tribute that my hon. Friend paid to the staff at Faversham hospital. If it did end up on a Minister's desk, we would certainly examine the premise on which the case rests and on which my hon. Friend cast some doubt.
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  I should also stress that Ministers are well aware of the feelings of local people towards Faversham cottage hospital, which I understand was built as long ago as 1887. My hon. Friend referred to the hospital's 20 beds now allocated to general practitioner medicine. I understand that the hospital also has its own casualty department where some minor operative procedures are carried out, and its own physiotherapy department with consultant outpatient appointments.
  The completion in July 1979 of a health centre, which forms an integral unit with the hospital, is a particularly interesting and encouraging development. The whole complex provides, in addition to in-patient beds, casualty facilities, and out-patient clinics, community dental services, family planning, speech therapy, and accommodation for district nurses, health visitors, and midwives. It is clear that the dedication of the staff is greatly appreciated.
  I understand the concern that is felt about the possibility of a change of the use of some of the beds at the hospital. People get used to small hospitals close to where they live, and when they hear of any proposals to rationalise services, involving a change of use of the local unit, they naturally object to what they see as the possible withdrawal of a service they value. They see the hospital as their hospital. They have visited patients there, of they have been patients themselves. It is convenient. They often know some of the staff. We have made it quite clear that we fully recognise the value of small hospitals. Last May we issued a consultation paper on the future pattern of hospital provision in England. In it, we argued for less emphasis on the centralisation of services in very large hospitals and for the retention of a wider range of local facilities.
  However, we see a need for flexibility of approach to deal with differing local circumstances. Area health authorities need to ensure that their resources are deployed to the best possible advantage of the community as a whole. Demographic and treatment needs are changing and institutions should respond to these changes.
  As my hon. Friend knows well, there are, unfortunately, for historical reasons, and because of marked movements in population in recent years, significant inbalances in health services provision both between the health regions and within individual regions and, in some cases, within health areas. These differences can be clearly seen in the Thames South-East region and in Kent. Indeed, the need to secure a fairer distribution of the financial resources available to the NHS within the Thames South-East region has been debated in the HOuse on several occasions. Both my hon. Friends have taken part.
  We have continued the principle adopted by previous Governments of pursuing a policy of redistribution of resources to achieve a fairer distribution across the country. The South-East Thames regional health authority, in common with other regional health authorities, has adopted similar criteria in allocating resources to those that we have applied nationally. The Kent area health authority's policy has the specific aim of bringing all its six districts up to a common level of achievement in terms of their RAWP targets by 1988.
  Because of the imbalances in health services provision within Kent, the effect of the area health authority's policy is that the Canterbury and Thanet health district in which the hospital finds itself can expect little if any revenue

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  growth in 1981–82 and the financial years immediately beyond. This reflects, for example, the need to inject resources into the Medway health district—in which my hon. Friend also has an interest —whose case for improved health services provision my hon. Friend has, rightly, vigorously pressed in the past.
  We come to the possible 2 per cent. revenue cut to which my hon. Friend referred. In common with other health districts in Kent, the Canterbury and Thanet health district was asked last September by the area health authority to prepare contingency plans for a possible 2 per cent. revenue cut in 1981–82. This was purely a precaution against cash limits not proving sufficent to cope with pay and price increases. Health authorities have a statutory duty not to exceed their cash limits and I cannot, therefore, do other than express admiration for the foresight and prudence this demonstrates. However, I cannot share the pessimism which led to the choice of 2 per cent. Cash limits for 1981–82 are not yet quite ready to be announced, but I refer the House to the statement made by my right hon. and learned Friend the Chancellor of the Exchequer on 24 November where he said:
  "Expenditure in other parts of the public services will be subject to broadly the same financial disciplines"
  as those announced by the rates support grant.
  "The rate support grant limit will allow for a 6 per cent. annual increase in earnings from due settlement dates in the current pay round. It will provide for an increase in prices other than pay of 11 per cent. between the average levels for 1980-81 and 1981–82."—[Official Report, 24 November 1980; Vol. 994, c. 315.]
  This is a realistic approach which need not give rise to a squeeze at all, let alone one of 2 per cent. Much of course will depend on the outcome of pay negotiations and it would be wrong for me to speculate on the outcome of these since they are the responsibility of the appropriate Whitley councils.
  In response to the area health authority's request, the district management teams have considered several options designed to release revenue moneys in ways that would not be inconsistent with the longer-term plans for health services in the district. Two of the options were discussed by the area health authority at its meeting on 20 January and one of these was supported in principle for planning purposes. Both options envisaged a series of adjustments affecting a number of hospitals, including the closure of Herne hospital, located in an old workhouse institution, the provision of replacement facilities for the elderly patients in other hospitals and a reduction in GP medicine beds at Faversham cottage hospital from 20 to 10 and the redesignation of eight of those beds for elderly patients.
  I understand that it has been proposed in the district's plans for some time that Herne hospital should eventually close. It has also been recognised that the district has in some specialities more beds than recommended in the regional health authority's guidelines. This is the case so far as general practitioner beds are concerned. I note that my hon, Friend challenges that. Currently, 114 general practitioner medicine beds are being provided, all of which are in the western half of this bi-polar district. Until recently the regional health authority's guidelines suggested a reduction to about 55 beds. However, these guidelines have just been reviewed and the latest guidelines suggest a reduction, in stages, to 67 beds. The
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  precise figures are, I understand, still being discussed between the regional and area health authorities, but the figures that I have mentioned indicate that a reduction of some 50 to 60 general practitioner medicine beds is thought to be appropriate.
  It is not possible to say what, if any, elements of the present plans for adjusting provision in the Canterbury and Thanet health district the area health authority will eventually seek to implement, or when. The authority will certainly wish to take into account the financial allocation that it receives for the coming financial year, and this has still to be determined by the regional health authority. We hope to be able to announce regional health authorities' volume allocations for 1981–82 in the very near future.
  As I said earlier, the final cash limits, which include provision to cover inflation during the year, are not quite ready for announcement. I do not, therefore, believe that I should discuss them in detail before I am in a position to make this announcement. However, I have no reason to believe that their operation will require the Kent area health authority to invoke the contingency plans which it has prudently prepared and which have given rise to this Adjournment debate.
  This year there has not been as much scope for the redistribution of resources between the health regions as we should have liked. We decided that the better off regional health authorities should, notwithstanding that they were already relatively well funded, receive an increase of 0·3 per cent. to assist them in the process of redistribution of resources within their regions. With the limited amount of funds available, that decision meant that we could not give more than 0·6 per cent. to the most deprived regions which have many areas and districts very considerably below their RAWP target allocations. The South-East Thames regional allocation was increased by 0·31 per cent, and, in line with the regional health authority's policy of allocating its growth money to the Kent and East Sussex areas, the former received an increase on 0.67 per cent., some £1·02 million.
  In 1978–79 Kent area health authority received growth moneys totalling £3·65 million, an uplift of 3·34 per cent., and in 1979–80 growth moneys, totalling £3.12 million, an uplift of 2·8 per cent. In these two years, the regional health authority received 0·72 and 1·12 per cent. growth. Kent area health authority has, therefore, in each of the last three financial years recived development additions not less than twice those for the region as a whole.
  None the less, I know that many people have hoped for greater progress in securing a more equitable distribution of resources within the region. However, as my hon. Friend the Member for Canterbury knows, there are very real practical difficulties for the regional health authority in redressing the imbalances in provision. It is not only a question of financial constraints, and it its bound to take time to achieve a reasonable measure of equalisation of provision.
  Perhaps I could turn now to the process to be gone through if no agreement can be reached on the proposals. I have drawn hon. Members' attention to these during previous Adjournment debates, but I feel that their importance cannot be overstressed. The appropriate area health authority is required to prepare a consultative document covering such matters as the reasons for its proposals, the financial background, the implications for staff, the relationship between the closure or change of use and other developments and plans and, of course, the

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  effect on patients who might be affected by the proposal, particularly in relation to transport facilities. That would have to answer the question posed by my hon. Friend the Member for Faversham about what would happen to the GP patients currently being treated in Faversham hospital.
  Comments on the proposals in the consultative document are invited within three months from such bodies as the local community health council, the associated local authorities, joint staff consultative committees and other staff organisations, family practitioner committees and local advisory committees. Hon. Members whose constituents would be affected would also be informed of the proposals.
  If the community health council which is given the opportunity to study the comments of the other bodies consulted and the area health authority's views on those comments objects to the proposals, it is entitled to submit to the authority a constructive and detailed counter proposal, paying full regard to the factors, including restraints on resources, which led the authority to make its original proposal. If the authority is unable to accept the counter proposal the matter is referred to the regional health authority. If it, too, is unable to agree with the
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  community health council and wishes the closure or change of use to proceed, the case is then referred to Ministers for decision.
  I have made it clear that, if proposals are referred to us, Ministers will not agree to any change of use unless it can be clearly demonstrated to be in the best interests of local health services and the communities they serve. But we are, as I have explained, a long way from that point as far as Faversham hospital is concerned. It is by no means certain yet that the area health authority will seek to implement the changes embodied in the health district's plans. Representatives of the district management team have, I understand, offered to discuss the situation with my hon. Friend and representatives of the town council, and I very much hope that they will do so.
  I hope that I have been able to allay some of my hon. Friend's fears. All concerned will, I know, give full consideration to the points that have been raised here tonight.
  Question put and agreed to.
  Adjourned accordingly at twenty minutes to Eleven o'clock.

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Preamble
The House met at half-past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Salisbury):
The CHAIRMAN OF COMMITTEES on the Woolsack.

British Airways: Efficiency
Baroness Trumpington: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps they expect British Airways to take to improve its international competitiveness and efficiency.
The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne): My Lords, the Government expect the board of British Airways to improve efficiency in the use of capital and labour resources to match the level of its most efficient competitors and to attain a level of profitability consistent with the financial target that we have set for the airline.
Baroness Trumpington: My Lords, in thanking the noble Lord for his reply, may I ask whether he would agree that, despite the technical excellence of British Airways, the airline is consistently below average in the world airline efficiency charts, owing to gross overmanning and heavy unionisation?
Lord Trefgarne: My Lords, I think that my noble friend overstates the position slightly. Certainly there is room for improvement in British Airways, but in recent years there has been just that. I can give my noble friend sonic figures. For example, in 1979–80 output per employee was 7 per cent. better than the 1978–79 level, which in turn was 10 per cent. better than the 1977–78 level. I could give my noble friend further figures along the same lines, but that might unduly weary the House.
Baroness Trumpington: My Lords, I thank the noble Lord for the figures he has quoted. Is he aware that according to a recent study comparing 12 different major European and American airlines, plus Japan Airlines, British Airways' revenue earned per employee is the lowest and that it is also at the bottom of the table when comparing passengers carried per employee?
Lord Trefgarne: My Lords, I cannot pretend that all is necessarily perfect with British Airways; indeed it is not. There is still room for improvement, as I have said, but in looking at the surveys that are made one must consider carefully whether those who carry out the surveys are comparing like with like.
Lord Clifford of Chudleigh: My Lords, is it not a fact that on the formation of British Airways a certain gentleman was asked to join the board of the airline, but said that he would not do so unless it agreed to
1276
take action regarding certain overmanning and the top-heavy situation? He then went on to join the board of British Caledonian. Surely from that we can learn a lesson for the running of British Airways.
Lord Trefgarne: My Lords, I do not know who the gentleman is to whom the noble Lord refers, but perhaps a better course would have been for him to join British Airways and try to put it right.
Lord Davies of Leek: My Lords, is the noble Lord aware that some of us would like to know on what authority the question of overmanning is analysed? If the overmanning is analysed for the purpose of seeking cuts, will the noble Lord let it be known to the captains and other staff of British Airways that some of us who use the airline have a feeling of confidence and of being in safe hands when we are taken to various parts of the world? No good is done to the system by attacking it or by trying to cut and pare its cost.
Lord Trefgarne: My Lords, I agree with the noble Lord to a very great extent. In technical terms British Airways is in my opinion the best in the world. On the other hand, with regard to the question of overmanning, which several noble Lords and noble Baronesses have raised, the British Airways management is itself on record as saying that there is room for improvement, and that is what it is striving to achieve.
Lord Boyd-Carpenter: My Lords, is it not a fact that the punctuality record of British Airways has greatly improved in the last year or two? Will my noble friend also confirm that the outgoing chairman, Sir Ross Stainton, has been tackling the overmanning problem with courage and determination.
Lord Trefgarne: My Lords, with regard to the latter point, my noble friend is quite right. Certainly Sir Ross Stainton, who has recently retired as chairman of British Airways, had a most distinguished record with the airline, in particular in recent years when he was chairman, and he has undoubtedly achieved considerable reduction in the manning levels to which my noble friend referred.
Lord Beswick: My Lords, may I say what a delight it is to hear a Minister at that Box supporting a public corporation?
Lord Orr-Ewing: My Lords, before we have a debate on this issue on 18th February, will my noble friend study the charts which appeared in Flight International of 3rd January? I reliase that any one criterion is not a perfect reflection, but Flight International contained eight charts and British Airways was not shown up very well by any of the eight different criteria. Is it not rather sad that following the amalgamation of the British Overseas Airways Corporation and British European Airways, from which it was hoped there would be considerable economies, the total number of personnel in British Airways in 1979 reached an all-time peak of 59,000? That is not the kind of economy which this Parliament was looking for.
Lord Trefgarne: My Lords, I have already referred to the decline in manning levels in British Airways in the last year or so. In fact, the peak to which my noble friend referred was reached some years earlier than he suggested, and figures have been significantly below that level in recent years. I have already studied the charts to which my noble friend referred, but I shall ensure that I refresh my memory on them before the debate which we are to have on, I think, 18th February. On the question of punctuality raised by my noble friend Lord Boyd-Carpenter a few moments ago, I would say that I believe that my noble friend Lord Kimberley has put down a Question on that precise point, and it is to be answered the week after next.
Lord Brockway: My Lords, is the Minister aware that many of us who travel on British Airways are deeply impressed by the efficiency of the service and the friendliness of the staff? Is it not a matter of patriotism that we should be giving support to our own airline and seeking constructively to bring about continual improvement?
Lord Trefgarne: Yes, indeed, my Lords; but of course only a small percentage of British Airways passengers are British people, and for the others patriotism may go in a different direction.
Lord Balfour of Inchrye: My Lords, is it not a fact that though much yet needs to be done in British Airways, nevertheless credit is due to those who have been working in the corporation? As regards punctuality, is it not a fact that 70 per cent. of British Airways' departures on long-haul leave on time, compared with, I think, 56 per cent. of Pan American's and 65 per cent. of TWA's? So the competitive state of British Airways is not as desperate as certain individuals wish to suggest.
Lord Trefgarne: My Lords, of course we in the Government have to judge British Airways not only by its competitiveness and efficiency, which we do, but also by its financial results which, like those of other airlines, are at present not as good as they might be. However, we are to have a debate on this matter in a week or so, and perhaps it would now be appropriate to move on.

NHS: Contingency Plans
3.9 p.m.
Lord Wells-Pestell: 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 true that they have issued a confidential circular through the DHSS warning of the possible use of servicemen in the event of strikes by health service workers.
The Minister of State, Department of Education and Science (Baroness Young): My Lords, plans to maintain
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essential, life-saving services in the National Health Service are of long standing and are reviewed from time to time. The recent unauthorised disclosure to the press of material concerned the latest review of certain plans, details of which must, of course, remain confidential.
Lord Wells-Pestell: My Lords, is the noble Baroness correct when she says that plans—implying those to which I make reference—are of long standing? Is it not true that quite recently the Department of Health and Social Security issued three plans—a plan known as Plan Lionel, a Plan Concord, and a Plan Bittern—dealing with the use of service personnel in the event of difficulties? May I also ask the noble Baroness what has happened to the code of practice which the last Government introduced and got agreed; and does this mean that the Government have decided, in the event of a dispute, to abandon consultation and replace it with confrontation?
Baroness Young: My Lords, the noble Lord, Lord Wells-Pestell, is not entirely accurate in what he says, for the timing of the recent review of contingency planning is in fact entirely fortuitous. Work on it started as long ago as 1979, following upon the industrial action in the early part of that year, and the planning is continuing. It would not be proper for me to comment on the details, but this is not a new situation.
Lord Wells-Pestell: But, my Lords, the noble Baroness will agree that it is a new situation in the sense that the documents to which I am referring have come into being since the Government came into power in May 1979?
Baroness Young: My Lords, the letter to which the noble Lord refers is, of course, new, but the contingency planning has been going on since the former Administration, of which he was a member, was in office, and in principle there is nothing new in what is happening now.
Lord Wells-Pestell: My Lords, may I ask the noble Baroness, as she has implied that there has in fact been a leak of a confidential circular, whether the circular goes on to say:
"The security of these documents is paramount. You are in possession of military plans which are highly sensitive. Any disclosure of information contained in these plans would be extremely damaging to the Government's industrial relations policy".
Baroness Young: My Lords, I am not prepared to comment on what might or might not be in a confidential letter, but may I say categorically that the use of servicemen is a serious matter, and their deployment must remain under ministerial control. Only in the event that health authorities could not maintain essential services through any other means, and when all other means of settling an industrial dispute had been tried and had failed, would troops be used as a final resort; and f might remind the noble Lord that, very unfortunately, they had to be used in the winter of 1979, as he will recall.

National Savings and Housing Finance
3.13 p.m.
The Earl of Kinnoull: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, if insufficient people are persuaded to invest in "granny bonds", more traditional sources of Government borrowing, that do not compete in a market serving housing finance, will be readopted.
The Minister of State, Treasury (Lord Cockfield): My Lords, up to 31st January subscriptions to the new "granny bonds" amounted to £600 million. The target for increased National Savings for this financial year was £1,500 million, but this covers other measures as well as "granny bonds", and there are, of course, still two months to go. Sales of gilt-edged securities will continue to be the major source of finance for the Government's borrowing requirement, but in present circumstances an additional contribution from National Savings is also needed.
The Earl of Kinnoull: My Lords, while thanking my noble friend for that reply, and without suggesting that my noble friend either qualifies for "granny bonds" or has a stake in them, may I ask him whether, despite the encouraging influx of monies into the building society movement in recent months, he is aware that the movement is very anxious about "granny bonds" and the incursion into the housing finance market? As the Government target for "granny bonds" is, I believe, £3 billion for 1980–81, as against £4·5 billion for the building society movement, will he keep the matter under review?
Lord Cockfield: My Lords, I am of course aware of the anxieties to which my noble friend refers. Nevertheless, the position is as he indicates, that the flow of funds into the building societies has been at a record level, and is continuing. This indicates that the building societies have met the situation successfully, and they are to be congratulated on so doing.

The Royal Dockyards
3.15 p.m.
Baroness Vickers: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action they are taking about the future of the Royal Dockyards.
Viscount Long: My Lords, the study into the problems facing the Royal Dockyards which was carried out last year under the chairmanship of the Parliamentary Under-Secretary of State for Defence for the Royal Navy made recommendations on a framework
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for the future. Those recommendations are still under consideration.
Baroness Vickers: My Lords, while I thank my noble friend for that reply, may I ask him whether it is not time some action was taken in view of the fact that these recommendations have been in the hands of the Minister for some time and were published in August 1980? I think the dockyards have been neglected, and I raised many of these points in the last defence debate. I hope that, in view of what I have said, my noble friend will see that some action is taken soon. No Government have taken a real interest in the dockyards since 1955.
Viscount Long: My Lords, I know that my noble friend has taken a great interest in the Royal Dockyards for many years, but if I may say so the Consultative Document on the Royal Dockyards is a comprehensive and penetrating analysis of the situation, and its recommendations have far-reaching implications. Subsidiary, in-depth studies have been necessary to prepare the way for final decisions to be taken on the recommendations. Some of the recommendations, which are in Chapter 14 of the Consultative Document, embrace, among other things, the workload of the dockyards, their manpower, their management structure, their methods of accounting and their arrangements for pay and productivity payments. The implications of the recommended changes in all these areas must be considered.
Lord Shinwell: My Lords, may we have an assurance from the noble Viscount that before any fundamental change is brought about both Houses of Parliament will be offered an opportunity to express an opinion—in particular, if any question of disposal of Government assets to private enterprise is under review? Furthermore, will he understand that, whatever may be thought in political circles about the transfer of nationalised assets to private ownership, when it comes to the disposal of Government equipment associated with defence the Government will meet with opposition of such a formidable character that they will not last very long afterwards?
Viscount Long: My Lords, I am most grateful to the noble Lord, Lord Shinwell, but, if I may say so, that is not what was in the document. What the document contained were suggestions to improve the situation in the Royal Dockyards. If I may go one stage further, there is certainly no doubt that the Royal Navy will continue to need the capacity provided by the four dockyards.

Dinner
Lord Denham: My Lords, it may be for the convenience of your Lordships if I announce that dinner will be available at the usual time this evening. I think I should possibly add that it is not intended to adjourn the House for dinner.

Energy Conservation Bill [H.L.]
3.18 p.m.
Report received.
Lord Beaumont of Whitley Lord Beaumont of Whitley moved Amendment No. 1:
Page 1, line 15, at end insert—
"( ) such electrical appliances for cooking, food preparation, refrigeration, ironing, lighting, clothes' drying, washing, air-conditioning or other domestic appliances as the Secretary of State may by order specify;").
The noble Lord said: My Lords, this amendment, which stands in the names of the noble Lord, Lord Strabolgi, the noble Viscount, Lord Hanworth, and myself, touches on a question which we raised at Committee stage. We have brought it back now and, with it, Amendment No. 2, which I am sure it would be for the convenience of your Lordships' House that we discuss together, for two reasons. The first reason is that we think we have improved the drafting of the amendment, and the second is that, having studied them, we are not entirely happy with the arguments produced by the noble Earl the Minister, and we are inviting him to consider the matter again.
The Bill as it stands seeks to improve the energy efficiency of a very limited number of appliances, water and space-heaters, by allowing the Secretary of State to issue type-approvals; and a much larger range of electrical appliances which are used domestically are excluded from the Bill, even though they are major users of energy. This amendment is intended to correct this. At the Committee stage the noble Earl the Minister gave, as we see it, four grounds for not accepting the amendment. These are what I should like to examine this afternoon. The first ground (in column 275) was that by restricting type approval to space and water heaters significant improvements could be realised in energy efficiency. That we accept. What we do not accept is that that actually is, or will prove to be, the major part of the problem in the future. I should like to say a few words about that.
The range of appliances other than those dealt with in this Bill includes significant energy consumers. According to the International Institute of Environment and Development—the IIED, and to save time I will refer to it in that way in future—in 1975 38 per cent. of the United Kingdom domestic electrical consumption was due to such use. More significantly, most peak loads on the electricity generating system (which are crucial in determining the level of provision of power station generating capacity and therefore the immense amount of capital expenditure which is needed in this matter) arise from the use of such appliances.
If the Bill is seeking to realise significant improvements in energy efficiency we must look at what is likely to happen in the future as much as at what happens now. It looks as though the trends in increasing ownership of domestic appliances are already clear. In many cases the growth sectors are those where the appliances are heavy users of energy. For example, the Electricity Council Handbook of Statistics for 1980 reveals that between 1972 and 1978 the proportion of domestic customers owning home freezers rose from 2 per cent. to over 25 per cent. Domestic ownership of heated tumble dryers rose
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from just under 3 per cent. to 13 per cent. of households over the same period. These trends can be more or less expected to continue to a certain extent; they will certainly not immediately go into reverse. If the Bill as it stands has the effect of realising significant improvements in energy efficiency of water and space heaters—and we hope that it does—which is intended by the Government, and if the growth in ownership of domestic electrical appliances continues in the direction pointed to by the statistics I have used, the proportion of electricity consumption in the home by popular appliances other than water and space heaters is bound to rise well above 38 per cent. and will probably account for the majority of electricity used. That is going to be the area in which significant improvement in energy efficiency can be realised. This will have a very large effect, and we suggest that it should be embarked on now.
The Government also claimed (in column 275)
that type approvals for domestic appliances such as those covered by this amendment would interfere with the effect of market forces in raising energy efficiency and that the cost of operating type approvals inevitably would be passed on to the consumer. It is true that customers are beginning to become more aware of the operating costs of various domestic appliances and this will he reflected in the purchases they make. However, a recent Consumers' Association survey has shown that prospective purchasers of domestic electrical appliances at the moment pay equal, if not more, attention to a number of other considerations such as the size of the appliances, design features and initial purchase price. Unlike the analogy with a car, which is sometimes used, where miles per gallon is an easily recognised measure of energy efficiency, and hence an important element in choosing what car one would buy, domestic appliances have no readily understood means of comparison. The total cost of ownership of a car, taking into account running costs as well as the initial purchase price, can fairly well be calculated by the consumer. The same does not hold true necessarily for the purchaser of a tumble dryer, dish-washing machine or similar appliance. The total cost of ownership, buying, running, maintaining and repairing is a concept still not widely used in terms of purchasing an appliance.
I should be interested to know how many Members of this House have done sums of that kind when buying appliances. I would expect there to be very few. Therefore, there is no strong initiative on manufacturers to improve the energy efficiency of appliances. There is some incentive but not a strong one. It is conceivable that a slightly higher initial purchase price for an appliance incorporating improved energy efficiency features would be more than compensated by the cheaper operating costs, even in a relatively short time; but there is a lot of evidence to suggest that a higher initial price might have much more effect than any consideration, even if it were known, of the running price. There is strong support for this amendment among consumer bodies such as the Consumers' Association and the Electricity Consumers' Council where discussions on this question of comparative purchasing have been held between them and the Department of Energy.
Thirdly, the Government claimed that type approval would be cost effective for water and space heaters and, by implication, not cost effective for the broader range of domestic appliances. This argument reflects the thinking of the domestic appliance industry that efficiency standards for most appliances are already set at a high level with little or no room for improvement. There is not enough information coming from the industry to enable one to deploy a strong case challenging this. Nevertheless, what evidence we have would seem to show that this is not so. The studies undertaken in Denmark reported by the IIED show that engineering re-design could cut energy consumption of a typical electric cooker from 950 kilowatt hours to 440 kilowatt hours per year—an efficiency improvement of more than 50 per cent. This could be achieved by attention to such features as better controls and timers, faster-responding hot plates, tighter seals on oven doors and better insulation of ovens.
Also, authoritative recent US studies show that energy use of the larger electrical appliances such as refrigerators and freezers could he reduced by 50 per cent. with little or no extra cost to the consumer by such devices as improved seals round the doors and latches, better heat pumps, internal recycling of heat, particularly in clothes dryers, more thermal insulation and better heat exchangers. To realise these and other savings, manufacturers need the same encouragement as the Bill provides for the manufacture of space and water heaters. The purpose of this amendment is to focus the industry's attention on energy efficiency as a manufacturing criterion at least as important as the more traditional price and design criteria.
Fourthly, the Government claimed (in column 274) that it is not possible for type approvals of domestic appliances to keep pace with technical progress and other research and development innovation or, if it is possible, it is very difficult. We submit that this argument is fallacious. Standards can be easily changed as and when technical advances arc made. The extension of type approvals to domestic appliances included in this amendment would encourage that technical progress. It has been found useful in other industries, in the building industry, for example, to lay down minimum standards in the form of building regulations. It cannot be suggested seriously that building regulations have inhibited improvements in house design and construction. The regulations themselves are frequently altered to take account of new methods and of new products—improved thermal insulation standards being a prime example.
There is in what I have said very considerable reason for the Government to look again at the answers that they gave to us on Committee stage. It is extremely important that we try to limit the amount of energy that is used. This is for every kind of reason, whether purely conservationist or in terms of balance of payments.
I would remind noble Lords that improvements in the balance of payments can still be made even when as in energy we are producing a very large amount of energy ourselves. For every kind of reason, which I think is accepted on all sides of the House, we should try and limit our energy usage. I suggest that this is a very obvious way in which the Government, without
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much trouble, without more parliamentary time, could significantly increase their record in this area. I suggest to the Government that they accept this amendment. I beg to move.
3.31 p.m.
Lord Strabolgi: My Lords, I should like to support the amendment of the noble Lord, Lord Beaumont of Whitley, to which I have added my name. The noble Lord has made a very good case with which I fully agree and has fully justified the fact that this amendment has been put down again. It should give the Government more opportunity to justify the exclusion of electrical appliances, and domestic appliances in particular.
The Bill as it now stands gives the Secretary of State powers to require space and water heaters, which use energy in any form including solar radiation and electricity, as well as gas appliances for cooking, refrigeration, lighting or washing, to conform to energy efficiency standards. It has not included electrical appliances. We are not convinced by Lord Gowrie's arguments in Committee and we wish to have another chance to hear why the Government have left out this important area from the Bill. They like to call the Bill—and the noble Earl told us in Committee that this was not for cosmetic reasons, but for compelling reasons—an energy conservation Bill. How one can conserve energy without attempting to conserve energy through the important area of electrical appliances is something that perhaps the noble Earl will tell us when he comes to reply.
Apart from the obvious argument that the Bill proposes to include gas appliances, as I have said, these are also subject to the same market forces as electrical appliances; it is these market forces that must be examined if the Government's case is to be convincing. The total cost of ownership (buying, running, maintaining and repairing of the product) is a concept which is still not widely used in buying decisions. Therefore—and this is the view of many outside bodies including the Consumers' Association—there is no strong incentive on manufacturers to improve the energy efficiency of appliances. I am sure that they can be improved.
As the noble Lord, Lord Beaumont of Whitley, has said, the IIED has cited Danish work which shows that through good design energy consumption can be cut by almost half. There have also been recent United States studies which show that energy use in the larger electrical appliances, such as freezers, refrigerators, tumble dryers and dishwashers, could be reduced by 50 per cent. for little or no extra cost to the consumer by such devices as improved seals round doors and latches, better heat pumps, internal recycling of heat, et cetera, and more thermal insulation and better heat exchangers.
Therefore, it is our case that it is likely that the energy efficiency of electrical appliances will be increased more rapidly with rather than without energy efficiency standards, especially if those standards are changed when technical advances are made. This is one area where the Government must consider very seriously that they cannot rely entirely on market forces, however much they may believe in them in many other spheres. Therefore, I support the amendment.
Lord Somers: My Lords, I should also like to support this amendment. Living in a suburban area, as I do, I have come to realise to what an enormous extent the average person relies upon electricity for their day to day lives. Apart from those that are mentioned in the amendment, there are electric hedge cutters, electric car washers and polishers, power drills (of which I must confess ownership) and many others. Electricity is used for anything in order to save making a little effort yourself. Of course, electric mowers also use a considerable amount of energy. Therefore, I think that an amendment certainly similar to the one proposed, if not exactly the same, is by all means necessary.
Viscount Hanworth: My Lords, I am at a loss to understand why, considering that this only gives an enabling provision, the Minister should have been against it. I do not think that he has succeeded in making any satisfactory case as to why electrical appliances are different from gas.
I have carried out some studies on energy consumption. I did an analysis of a number of Which? reports and I also looked into some of those from the Continent. There is in many cases a 100 per cent. difference between the least energy consuming example and the worst. In nearly all cases there was something like 50 per cent. difference between the best and the average. There was no actual cost correlation. In other words, the appliance that used least energy was not any more expensive. The Minister, I believe, has talked about market forces. We have to remember in the first place that the consumers do not have the information when making their choice. In one case, with deep freezers, the outside casing of the deep freeze was used to dissipate the heat instead of having the radiator located behind it. This of course greatly lowers the efficiency of the deep freeze. That was done because it improved its looks.
I want to be fair: there is some endeavour now among manufacturers to improve efficiency. But it has not gone anything like far enough. If this amendment is accepted, I do not suggest that the Minister should start straight away laying down criteria; but he certainly ought to be able to do so if it proves necessary, because the manufacturers do not continue with energy-saving designs.
To take a simple example of the television set, which is not included in this list, there is very often a two-to-one difference in the consumption of energy and because some people use the television a lot this adds a considerable cost in the year. Much the same applies to refrigerators. One might say that those appliances do not have a high current consumption; but they are in practically every home and when one looks at the situation overall it represents quite a significant amount of our national demand for energy. So it is most important that the manufacturers should be encouraged to do their best to improve the energy in the ways that they can. I therefore very strongly support this amendment and I suggest that it might be pressed to a Division.
3.40 p.m.
The Minister of State, Department of Employment (The Earl of Gowrie): My Lords, of course I accept much
1286
of what the noble Lord, Lord Beaumont of Whitley, said in moving the amendment, and also much of what has been said by other noble Lords who have supported him. I certainly agree it is very likely that domestic electrical appliances will continue to consume an increasing proportion of electricity used in the home, and that therefore the consumer is intimately involved in the improvement of energy use. The Government care a great deal about that. We want to make it clear to manufacturers and others that we think a high priority should be given to practical cost-effective improvements in the energy efficiency of every kind of appliance, including of course the domestic electrical appliances with which the amendment is concerned.
But all that said, I think there are a number of points intimately connected with the Bill which some speakers have overlooked. I would remind the House that this Bill is not just about setting standards: it is about applying standards, with which we would all agree, through a system of type-approval. Type-approval, by definition, does not come free. There is a cost to the manufacturer who has to pay fees to the type-approval body and these costs will, generally speaking, be passed on to the consumer. I do not particularly quarrel with that because, of course, it is the consumer who ultimately reaps the benefit of the system. We believe it is right to have powers to require the appliance covered by the Bill to be type-approved in this way.
As I said on Second Reading, it is possible to identify respects in which the performance of various kinds of boilers and other heating appliances can be improved and also type-approved. In short, we believe that the benefits of this kind of system will greatly outweigh any costs to manufacturer and consumer and hence these appliances covered by the Bill. So any difference between us really comes down to this question: can the same thing be said of the domestic electrical appliances which the noble Lord's amendment wishes to add to the Bill? I have to say to the House that I am not convinced that this case has been made out, and in the time remaining to me I should like to address myself to that issue.
Most electrical appliances already convert electrical energy to heat or mechanical energy with a very high degree of efficiency. That is not the only aspect which is relevant to energy efficiency, because the controls on appliances and insulation of things like ovens and refrigerators are also important; but I think it represents a major difference between electrical appliances and those which use other fuels. My advice is that there are even problems about how standards of energy efficiency for domestic electrical appliances might be devised. International standards bodies have been working in this field for 15 years and so far have failed to come up with acceptably accurate standards by which the energy consumption of domestic electrical appliances, except in the case of ovens, can be measured for legislative purposes.
The noble Lord, Lord Beaumont of Whitley, mentioned the report of the International Institute for Environment and Development. I am happy to pay tribute to that as an admirable body. Indeed, my honourable friend in the Government who is responsible for energy conservation has appeared on the same platform as one of the authors of the report, Mr. Gerald Leach. The report has been discussed

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and widely studied by the Government: it contains much valuable work. Some appliances—and here television sets come to mind—now use very much less energy than was used by typical sets of only five or six years ago. The base year for that report's comment on electrical appliances was 1975. The report said, for instance, that each colour television set used 500 Kw hours a year. In 1975, with some of the larger sets which were then on the market, that level of consumption could have been reached with only four to six hours' viewing each evening. But with the modern colour sets of a similar screen size, a viewer could not use 500 Kw hours costing about £20 in a whole year, let alone in five or six hours, unless he had his television set on for up to 15 hours a day every day of the year. So in any case technology is moving, in our contention, in the direction of energy conservation.
Of course we recognise there is evidence from other countries that the efficiency of appliances can be significandy improved, although when we have looked into the details of improvements suggested we have generally found that the appliances criticised in other countries were much bigger or had more energy-using or energy-wasting features than the domestic appliances typically on sale in this country. Therefore only some of the more minor and expensive recommendations were relevant to appliances generally on sale here.
As I said, we accept that the number of domestic electrical appliances in use in homes is likely to grow, and we believe that some improvement in efficiency is likely to grow, and we believe that some improvement in efficiency is likely to prove practical and cost-effective. We would very much like to see such improvements but we do not think it is right to take powers in the Bill to impose efficiency standards by law in those areas in a market, whatever noble Lords may think of it, which is already imposing the efficiency standards rather more rapidly than any legislation that can be devised.
There is another point, which addresses itself particularly to the points made by the noble Lord, Lord Strabolgi, in supporting the noble Lord, Lord Beaumont. There is another difference between domestic electrical appliances and those covered in the Bill. I would refer your Lordships to my remarks at the Committee stage about this difference. Many of the appliances covered by the Bill are not sold direct to the customer. By definition therefore they are not subject very easily to the interplay of competitive market forces. They are sold through builders, through central heating installers and so on. The final user of the appliances—that is to say the person who pays the fuel bills—often has little say over which appliances are installed. If you happen to live in a flat you do not necessarily have much say over what kind of central heating system has been installed in the basement of the building in which your flat is.
This is clearly, I think, a difference with the situation where domestic electrical appliances are concerned because the latter are bought direct by the final user. There are very many competing products to choose from. The customer can go to bodies which produce reports like those of the Consumers' Association—and if your Lordships think that is rather a "la-di-da" thing to do, many people are now aware of the Consumers'
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Association and do make use of it—I would say that modern advertising, using the instance of the Mini-Metro during the last stage, often makes the energy efficiency point to the customer very efficiently and well.
I think it is absurd to suggest that manufacturers do not now use claims of improved energy efficiency as good selling points. Therefore it would seem to us that in this case market forces do seem to operate for such appliances in the direction of improved energy efficiency. As I said, perhaps slightly teasingly at the last stage, "market forces" has become something of a political "buzz word" and I recognise that the noble Lord, Lord Strabolgi, must respond to this "buzz"; but I must say I am rather shocked and distressed to see the noble Lord, Lord Beaumont of Whitley, with all the classical Liberal attachment to freedom of markets, in such company.
As to the point made by the noble Viscount, Lord Hanworth, on enabling powers, we should be slightly disciplined about scattering enabling powers through the legislative landscape like confetti. All Governments have been guilty of this in recent years. But, of course, the general argument that I finally want to come back to goes deeper than this. Including domestic electrical appliances in the Bill would take us a very long way beyond Community obligations, which it is one purpose—not the main purpose—of the Bill to fulfil. Indeed, it is possible that there would be a conflict between requiring type approval for domestic electrical appliances and our other obligations under the low voltage directive.
The proposals which are now incorporated in Part I of the Bill have been very widely consulted on and discussed. We have taken into account the views and comments of 170 different organisations. The great majority of those who responded, which included a majority of organisations representing our own domestic manufacturers, agreed with our general approach. We were, therefore, able to bring this Bill before Parliament in the knowledge that it commanded wide support among those whom it was likely to affect.
But if we were now to extend the scope of the Bill, as the amendment would have us do, to cover domestic electrical appliances, I believe that we should be in a very different position. We should be acting without consultation and we should be in a less defensible position still, since the main association which represents manufacturers of domestic electrical appliances made it clear to us that they were very strongly opposed to an extension of the Bill and they believed that such an extension would be detrimental to their members' commercial interests, not only in this country but in overseas markets.
So we should consider very carefully before moving away from the broad agreement among those affected, upon which this Bill has hitherto been based, on which a lot of work has been done, and where we feel that we have got the balance of competing interests about right—not least, the interest of energy conservation.
3.53 p.m.
Lord Beaumont of Whitley: My Lords, the noble Earl has produced a number of heavy arguments, some of which are very much the same as he produced before. But that is not surprising, because, presumably,

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he thought they were good then and he thinks they are good now. I must say that I am far from convinced. Of course, type approval costs money and there is no difference between us as to who should pay for it. It is the manufacturers and, presumably, in some form or another the cost would then be passed on to the customer. I do not think that the customer would particularly mind that if it meant that he was spending less on his energy consumption. Nor do I think, given the kind of appliances and the very large numbers that we are talking about, that the amount of money concerned would be more than infinitesimal.
The noble Earl also said that electrical appliances are already efficient. That is true, certainly compared to a number of other fuels and a number of other kinds of machinery. But very few of them are so efficient that they cannot be made more so. The difference between the energy efficiency of machines of the same kind which are equally successful in the market seems to show not only that there is not a very great deal of market pressure here, but also that there is very considerable room for improvement.
We accept, as the noble Earl the Minister said, that some improvement is already occurring, but I do not think we would accept that it is occurring—I think this is what he said—much more rapidly than any regulation could effect. We do not think that is true. We think, on the whole, that in the past it has been slow in happening, and, although we agree that it is happening now, we do not think it is happening fast enough.
Energy efficiency—until energy becomes a very great deal more expensive than it is now, which it may well do—does not appear to be a major consideration in customers' choices. The reason for this, which I attempted to point out in my opening speech and shall not repeat again, is the multiplicity of sales points of one kind or another in these appliances, and the difficulty of finding an easily understandable formula, which people can use and quantify as against costs. This amendment, if passed, would have a considerable effect.
The noble Earl twitted me for speaking from these Benches on the freedom of markets. The noble Earl knows perfectly well that in real life there is no such thing as a free market and one has to take into consideration all kinds of things, including the lack of freedom of the market, the reasons which militate against people making a choice on a particular matter and the public interest, and, in the question of energy conservation in 1981, there is a public interest which goes far beyond the private interests that we are talking about.
We are not trying to force anything. The noble Earl the Minister said that permissive clauses were scattered like confetti. I think that where there is a very great deal to be said for permissive clauses—not for compulsory clauses—there is no harm in scattering them about quite a lot because, as we all know, there are difficulties in finding time in your Lordships' House, or in Parliament generally, for Bills of one kind or another. We do not want to take two bites at this cherry. To give the Secretary of State these powers for electricity, when we have given them for gas, is not something about which he has very much to complain.
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I accept the fact that there will have to be consultation before all these standards are set, but I do not see why the general principle cannot now be accepted, whether or not the makers of the electrical installations have been consulted. I do not believe for a moment that it will be detrimental in overseas markets. If we set these standards, it will help our overseas exports a very great deal. I see no reason at all not to pass this purely permissive amendment and, unless my colleagues object, I feel inclined to divide the House on it.
3.59 p.m.
On Question, Whether the said amendment (No.1) shall be agreed to?
Their Lordships divided: Contents, 83; Not-Contents, 88.

CONTENTS

Airedale, L.

Ilchester, E.

Ampthill, L.

Jacobson, L.

Ardwick, L.

Jacques, L.

Ashby, L.

Kaldor, L.

Avebury, L.

Kennet, L.

Aylestone, L.

Kilmarnock, L.

Balogh, L.

Leatherland, L.

Banks, L.

Leonard, L.

Beaumont of Whitley, L. [Teller.]

Listowel, E.

Llewelyn-Davies of Hastoe, B.

Bernstein, L.

Lloyd of Hampstead, L.

Beswick, L.

Lloyd of Kilgerran, L.

Birk, B.

Lovell-Davis, L.

Blease, L.

McNair, L.

Boston of Faversham, L.

Meston, L.

Briginshaw, L.

Mishcon, L.

Brockway, L.

Oram, L.

Brooks of Tremorfa, L.

Pargiter, L.

Burton of Coventry, B.

Peart, L.

Byers, L.

Rathcreedan, L.

Collison, L.

Ritchie-Calder, L.

Darling of Hillsborough, L.

Rochester, L.

David, B. [Teller.]

Ross of Marnock, L.

Davies of Leek, L.

Rugby, L.

de Clifford, L.

St. John of Bletso, L.

Denington, B.

Seear, B.

Donaldson of Kingsbridge, L.

Sefton of Garston, L.

Elwyn-Jones, L.

Segal, L.

Evans of Hungershall, L.

Shinwell, L.

Gladwyn, L.

Sligo, M.

Gore-Booth, L.

Somers, L.

Goronwy-Roberts, L.

Stamp, L.

Gosford, E.

Stone, L.

Gregson, L.

Strabolgi, L.

Grey, E.

Strauss, L.

Hale, L.

Tanlaw, L.

Hall, V.

Underhill, L.

Hampton, L.

Wells-Pestell, L.

Hanworth, V.

Wigg, L.

Henderson, L.

Winstanley, L.

Hughes, L.

Winterbottom, L.

Hylton-Foster, B.

Wootton of Abinger, B.

NOT-CONTENTS

Abercorn, D.

Cottesloe, L.

Airey of Abingdon, B.

Crathorne, L.

Alexander of Tunis, E.

Cromartie, E.

Avon, E.

Cullen of Ashbourne, L.

Balfour of Inchrye, L.

Daventry, V.

Bessborough, E.

de Freyne, L.

Boyd-Carpenter, L.

Denham, L. [Teller.]

Brentford, V.

Derwent, L.

Brookeborough, V.

Drumalbyn, L.

Caccia, L.

Duncan-Sandys, L.

Campbell of Croy, L.

Ebbisham, L.

Cathcart, E.

Effingham, E.

Clitheroe, L.

Elliot of Harwood, B.

Clwyd, L.

Faithfull, B.

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Falkland, V.

Mottistone, L.

Fraser of Kilmorack, L.

Mowbray and Stourton, L.

Freyberg, L.

Northchurch, B.

Gainford, L.

Nugent of Guildford, L.

Gisborough, L.

Onslow, E.

Glasgow, E.

Polwarth, L.

Gormanston, V.

Porritt, L.

Gowrie, E.

Renton, L.

Hailsham of Saint Marylebone, L.

Ridley, V.

Robbins, L.

Halsbury, E.

Rochdale, V.

Harvington, L.

Rodney, L.

Home of the Hirsel, L.

St. Davids, V.

Hornsby-Smith, B.

Sandys, L. [Teller.]

Inglewood, L.

Selborne, E.

Ironside, L.

Selkirk, E.

Jessel, L.

Sempill, Ly.

Killearn, L.

Skelmersdale, L.

Kinnaird, L.

Spens, L.

Kinnoull, E.

Strathclyde, L.

Long, V.

Strathcona and Mount Royal, L.

Lucas of Chilworth, L.

Lyell, L.

Strathspey, L.

McAlpine of Moffat, L.

Sudeley, L.

McFadzean, L.

Swinfen, L.

Malmesbury, E.

Teviot, L.

Mancroft, L.

Ullswater, V.

Mansfield, E.

Vernon, L.

Marley, L.

Vickers, B.

Melville, V.

Vivian, L.

Milverton, L.

Wise L.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendment No. 2 not moved.]
Clause 15 [Grants for purposes of energy conservation advice schemes]:
4.6 p.m.
Lord Tanlaw Lord Tanlaw moved Amendment No. 3:
Page 15, line 35, after ("other") insert—
("( ) may defray the whole cost to the owner of any private dwelling place for re-siting gas or electricity meters for the purpose of inspection from outside the premises;").
The noble Lord said: My Lords, this is a very simple amendment. I have no intention of repeating the arguments raised both at the Second Reading and at the Committee stage of the Bill. The clarification by the noble Earl the Minister during the Committee stage has given me a better understanding of the Bill, so I have transferred the amendment to what I hope is to be a more appropriate section of the Bill; namely, that part of the Bill which entitles owners to various grants of one kind or another in the form of advice and assistance. The reason I have done this is that the meters for both gas and electricity are covered by the local and individual gas and electricity boards. This amendment merely ensures that proper action can be taken nationally, which covers all the boards concerned.
Furthermore, since the Committee stage of the Bill I have received the impression of general support for this principle outside Parliament, coupled with further information regarding the concern felt by old people, working couples and those who live alone about entry into premises of gas and electricity meter readers. It was only a few days after the original amendment was withdrawn that noble Lords may recall a news item describing the cold-blooded murder of a jeweller in Whitechapel carried out by two men dressed as Post Office engineers. This kind of horror story
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adds to the justifiable fears of householders that the criminal fraternity are making increased use of this kind of pretext to gain entry for serious crimes of all categories, including murder.
Again emphasising the security aspect of the amendment, it has also been brought to my attention that the practice of leaving cards on the flap of the letter box or on the window sill by gas and electricity board representatives when they cannot obtain entry into premises merely announces to criminal elements that the house remains unoccupied during working hours. All these problems and complaints can be overcome by this very simple addition, I submit, that the amendment makes to the Bill.
Furthermore, where gas and electricity boards have already sited meters outside premises—this is no new concept from the boards themselves; they do it all the time—it appears to have been done on a purely random basis or at the convenience of the local board concerned rather than at the convenience of the householder. The intention of the amendment and my persistence in submitting it to the House is that it should act as an incentive to both the gas and the electricity boards to ensure that in all new dwelling-houses and flats, meters can be read without having to gain access to the premises.
This is fundamentally a design and planning matter, coupled with sheer common sense. No builder or developer, either in the private or the public sector, can design a house or flat until agreement has been reached with either the gas or electricity board as to where the service outlets are to be situated; and it is at that very early stage that it should be possible—and indeed desirable—that the gas or electricity board ensures that the design of the house or flat makes allowance for the meters to be read without the necessity of gaining entry to the premises.
Secondly, this amendment will only be used by those householders who are worried, either because they are very old, because they are living alone or have the inconvenience of the related problems that I have mentioned. Therefore this amendment is intended merely to ensure that they can have the display of those meters read from outside the premises.
Thirdly, while it is accepted that price rises to the consumer in all the energy sectors are part of the Government's policy of conservation, these rises in price and corresponding increases in the profits of British Gas or of the local electricity board would be more acceptable to the general public if there was some corresponding improvement in the service to the consumer. There are not many ways in which the service can be improved in terms of the quality of the energy supplied, but more often than not the impression I get is that the consumer's rights, requests and interests are put second to those of overall Government policy, or the policy of the local generating or gas board. I consider it is now time that the individual consumer's views on such matters should be listened to and acted upon by Her Majesty's Government in such a way that, in whatsoever part of the country they may live, the effect of this amendment can be felt. The amendment before us can ensure that meters can be re-sited at the owner's request regardless of the local board's policy or inclination. In the case of some local boards it is part of their policy already.
Finally, the noble Earl may say that this amendment does not belong in this Bill at all, which is entitled an Energy Conservation Bill. I should have to disagree most strongly with that view, if it is put forward, because we are supporting this Bill as a step towards an energy efficient society. I believe it is detrimental to that principle to have the energy services of a household monitored in an inefficient manner, and the relatively small cost of the design and re-siting of the meter displays should be more than amply covered by the extra cost saved through superfluous visits, correspondence, and delayed payments of accounts that result from a lack of access to the meter. Therefore, I have every hope that the noble Earl will consider this amendment sympathetically. I await his reply with great interest. I beg to move.
Lord Winstanley: My Lords, before the noble Earl replies, I wonder whether I might add one brief point in support of the arguments already advanced on this amendment by my noble friend Lord Tanlaw. My noble friend has reminded the House of the alarming increase in muggings, attacks, robberies and other kinds of maltreatment of elderly people and others living alone by bogus callers of one kind or another, and some of those bogus callers who have gained entry to the homes of elderly people have in fact done so disguised as meter readers.
Some time ago, I played a part in persuading the electricity boards to introduce what is known as the "password scheme" for the visually handicapped; in other words, for the blind; for people who are unable to study callers' credentials and decide whether they are genuine; people who cannot benefit from a door chain so that they can scrutinise a caller before letting him in. The blind are in a particularly vulnerable position. Therefore, the electricity boards introduced a password scheme, under which visually handicapped people could choose their own password which was kept entirely secret and unless the would-be meter reader gave that password the blind person did not let the meter reader in. Some time after that the gas boards were persuaded to introduce a similar scheme.
At the moment, particularly in the North-West, in Greater Manchester and in Merseyside, where there has recently been a great increase in the number of these attacks, muggings and so on by bogus callers, we are now having pressure from other bodies representing the disabled and the elderly for the electricity boards and the gas boards to extend the password scheme to other categories of people and not merely restrict it to the blind. It may be that would be a good thing, but how much cheaper and how much more economical in terms of money and manpower it would be merely to site the meters outside. Surely, if we can do anything to reduce the number of people who have a statutory right, for one purpose or another, to enter the homes of elderly people living alone, we should seize the opportunity.
Lord Strabolgi: My Lords, I should like briefly to support all that has been said and also to give another reason why, in my view, this amendment should be carefully considered. It is that if the meter reader cannot get into the home, for reasons which have been
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described so well by noble Lords on the Liberal Benches, then a "guesstimate" is sent in to the consumer, which sometimes bears very little relation to the actual consumption of energy and can be better described as a "wild surmise".
What happens? The consumer gets a bill—I have had this happen myself—which is sometimes 10 or 15 times more than the normal amount for that period of the year; he takes a little time to consider it and then within three weeks receives a red notice threatening to cut him off. Three weeks is really far too short a time to deal with a bill. Very often it takes a week by second-class post for it to reach the consumer. People cannot deal with everything the same day; they very often deal with their bills over the weekend, so probably it takes a week to answer it. They cannot afford first-class post any longer for this kind of thing so they use second-class post. Therefore payment takes another week to reach the board. Then the computer starts getting threatening. The cheque reaches the electricity or gas authority the day after the computer has got to work and a threatening letter with a red notice is sent off, which is a great shock to elderly people.
Therefore, I consider there is a case for leaving it much longer than the boards leave it at the moment. No store, Harrods or any other large store, would start to send threatening letters for at least a month or six weeks, and there is no case for sending these threatening notices in such a short period of time. So I hope the noble Earl will look into this aspect as well.
The Earl of Gowrie: My Lords, to take the latter point very quickly, I certainly would not want—of course, none of us would want—people to be alarmed by threatening letters, and certainly one should not pay attention to threatening letters sent by computers. I was once billed by a computer for £150 for the service of IBM equipment which I did not happen to own. I wrote a letter protesting and I received a bill back from the computer for £0·00. So something can happen! I will look at the latter point. I do not think it is directly connected with the siting of meters, because of course it would be possible for threatening letters or red flag letters to arrive for non-payment whether one's meter was sited inside or outside the premises. However, I will certainly draw attention to the noble Lord's remarks about the speed at which letters go out. I cannot give the answer to that.
Going back to the amendment moved by the noble Lord, Lord Tanlaw, I would remind the House that the amendment really is about money. It would have the effect of enabling the Secretary of State to pay grants to cover the cost of re-siting gas or electricity meters outside private dwellings. In a very coherent and sensible manner the noble Lord made his case, and that implied that the costs were pretty negligible in return for the service which the public would receive as a result. I shall come back to that in a moment.
I, of course, accept that there are good reasons for consumers wanting to have their electricity or gas meters re-sited outside the premises. I absolutely agree with that. External meters avoid the need for estimated readings when the reader is unable to gain access, thereby causing the problem mentioned by the noble Lord, Lord Strabolgi. We do not want to place unnecessary obstacles in the way of re-siting meters.

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Following the discussion of this issue during the Committee stage the Department of Energy drew the attention of the Gas Corporation and the Electricity Council to the views expressed here. But we believe that this question of the siting of meters is best left to the boards and the Gas Corporation to handle as they think fit, taking into account commercial considerations and the interests and wishes of their customers.
I would argue that this is not a matter on which it is necessary or desirable to have legislation. Nor is it a matter for Government subsidies, since it would not be the Government, or through the Government the taxpayer, but the individual consumer, and conceivably the electricity and gas authorities, who would benefit by re-siting. I can think of many improvements in life, large and small, which could be made by Government expenditure following some central legislative requirement, but priorities have to be considered.
Also, I think it would not be fair to say that the gas and electricity boards are unresponsive to consumer demand. If we turn our minds back to the debate in your Lordships' House yesterday, I was somewhat castigated, and so were some of my noble friends, for taking the view—which I do not think we take, but which the Opposition represented us as taking—that in some way the public sector is altogether unresponsive to the needs of its consumers. I do not take that view, and I think noble Lords who felt that we took that view should not take that view now. I think the gas and electricity boards can be very responsive to the wishes of their customers. I think there is quite a lot of movement on this point, in that the electricity and gas authorities are willing, where they are requested to do so, to consider re-siting where they can do it, and they are also trying to site most meters externally on any new buildings. We certainly welcome that.
The question is—this is where I come back to the amendment of the noble Lord, Lord Tanlaw—one of cost. The advice I have is that if this cost were to be met by the Government, which appears to be the intention behind the amendment, it would be a major, and in my view unjustifiable, use of taxpayers' money. I am advised that the total cost of re-siting gas meters alone—this is gas alone and not electricity meters, which are also covered by the amendment—has been estimated by the British Gas Corporation to be of the order of £500 million. That is a lot of money. As an Employment Minister who is engaged in administering sums of that order for youth employment and other schemes, I can think of many more urgent uses for that money if I could only get hold of it.
Lord Byers: My Lords, is not that the estimate for every single meter in the country?
The Earl of Gowrie: Yes, my Lords, that would obviously be a maximum figure. But the noble Lord's amendment would lay us open to defraying costs of this kind whenever that was demanded. As I say, the gas and electricity authorities are responsive to their customers' requests and where they can do it they will do it. I think it would be very dangerous, as well as possibly marginally unconstitutional, to write a money provision of this kind into a Bill which might be
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interpreted as being a new right, to have one's meter, come hell or high water, re-sited on demand. I think that would be not only wrong—I think it goes further than the noble Lord himself would wish—but also would be an unjustifiable use of taxpayers' money. I therefore hope that, in the light of these comments, the noble Lord will feel able to withdraw the amendment.
Lord Tanlaw: My Lords, while thanking the noble Earl very much for his expression of the Government view, I am a little surprised, to take one of his major points first, that he used the full figure of £500 million to prove the point. The point of this amendment, as I am sure the noble Earl appreciates, is that it would be at the request of the owner when this is required; I do not think every single householder wishes to have his meters moved. Secondly, it is the special category of householder, the elderly, the lonely and so on, who would require this.
On the question of money, the noble Earl will recall that under the thermal insulation Bill the grant given by the Government was not fully taken up by the public. I am not at all sure that the grants available for advice through the Department of Energy will be fully taken up by the public. After all, the information available is about the equivalent of what you can receive from any normal double glazing company as a free estimate before you purchase. Would the Government consider that, if grants are not fully taken up under this Bill, these sums of money perhaps could be made available to, if you like, subsidise local gas and electricity boards for special cases, where either harassment or criminal elements have created severe worries in certain districts?
The noble Earl mentioned, as it were in passing, that most new houses and buildings would be given outside meters. It would be helpful if this was definite, not necessarily a directive. I think it is the feeling of the House that as a matter of common sense the service meters should be designed to be sited externally by the architects and the builders, be they in the public or private sector, and the individual authorities should co-operate in seeing that this is built into the plans. Half the problem of this £500 million the noble Earl mentioned arises because nobody has thought about this in the original design for the house for the last 50 or 60 years. I think this amendment has at least focused attention on a small minor point, one that has created a disproportionate amount of worry and inconvenience. Perhaps something will be done to clarify this.
There is a final point. Perhaps the noble Earl could say, or perhaps the Gas Board could say, what is the cost to the gas and electricity boards of second calls and failures to get agreement on a bill because of inability to gain access. I am going to add up the totals too. If you add up over the last 20 or 30 years the cost of all those extra calls, and all those postcards going in the post, you are beginning to get quite close to the figure given as a maximum for re-siting meters. I can argue and use maximum figures in the same way as the noble Earl. Perhaps we can look at this again.
If the noble Earl is giving the assurance that this has been fully discussed and taken up with the electricity and gas boards, let us hope this is a matter that will

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not have to be raised again from these Benches or in this House as a matter of general concern to the public; and that members of the public approaching their gas or electricity boards will be treated with patience and courtesy and with some generosity when it comes to those in lower income groups, in that a small adjustment can be made to solve their problem. In view of what the noble Earl has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.30 p.m.
Lord Strathcona and Mount Royal Lord Strathcona and Mount Royal moved Amendment No. 4:
After Clause 15, insert the following new clause:
("Use of water power for electricity generation, etc.
.—(1) In the exercise of their functions under the Water Resources Act 1963 and the other enactments relating to water and water-supply and the control and disposition of water-resources, water authorities shall have regard to the national importance of facilitating, so far as is reasonably consistent with the need to satisfy primary demands on those resources, the use of water as an alternative or supplementary source of power.
(2) A charging scheme made by a water authority under section 31 of the Water Act 1973 may provide for charges to be paid by persons obtaining power from machinery installed in water in the authority's area; but such charges shall only be made in the cases (if any) where the authority is obliged to incur expenditure directed to maintaining the flow of water to the machinery or otherwise in connection with the machinery or any use to which it is put.").
The noble Lord said: My Lords, I beg to move Amendment No. 4. The noble Lord the Minister was good enough to give a very sympathetic response at the Committee stage when I moved an amendment on similar lines. He spoke then of solving the problem that we are addressing by administrative action, and he also mentioned the need not to discriminate in favour of particular classes of user. So, the amendment that we have put down now has been revised in the light of his comments and after further discussion with the departments concerned.
I pointed out previously the need of water power users and potential users to be emancipated from the threat under which they presently feel themselves, of demands for excessive charges since the Water Act 1973 became law some seven or eight years ago. That, of course, is particularly true in the case of potential users who are contemplating substantial capital expenditure in the hope of recouping that expenditure by having lower costs in future years.
As I said during the Committee stage, the users feel that experience has shown that they need unequivocal legislative guarantees against this possibility to encourage them to engage in these sort of schemes which I think everybody agrees are a desirable contribution to energy saving by virtue of widespread, small power generation schemes. So, I hope that the Government will feel able to give these users some kind of a guarantee in some form or other, even if the exact form that we have put forward in the amendment is not acceptable as it stands. I beg to move.
Lord Swinfen: My Lords, before the Minister replies, I should like to say that it is always being pointed out to us that there is liable, by the end of this century, to be a very serious shortfall in the energy supplies to
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this country. I think that every encouragement should be given to small, individual producers of energy in any form whatever—whether it be hydro-energy, solar power, wind or whatever. So far as I can see, every difficulty is being put in their way not just on the part of the water authorities, but on the part of planners and many other people as well.
We must bear in mind that with improving technology not only will present methods of producing hydro-power be improved, but the time may well come when small units could supply not just a farm but a complete village and there is the possibility in the foreseeable future that they could be adding power to the national electrical networks instead of only meeting an individual's requirement.
Lord Lloyd of Kilgerran: My Lords, I should like to support very strongly what the noble Lord, Lord Swinfen, has said. He said that every encouragement should be given particularly to small producers who can use water power in this way. I approach this matter somewhat in a spirit of nostalgia, because I remember going, as a boy, to a small farm in Wales where an uncle of mine was using the waters of a stream to produce electricity for his cowshed. He was considered in that local area—the depths of West Wales—to be something of a witch doctor in being able to produce light out of water with a little bit of iron in between. Therefore, I, too, should like briefly to support the amendment moved by the noble Lord, Lord Strathcona and Mount Royal.
The Earl of Gowrie: My Lords, I am most grateful to my noble friend Lord Strathcona for giving the House an opportunity to consider this matter again. When we discussed the issue during the Committee stage, I explained that the Government believed that a defensible case can be made for making only a minimal charge for abstraction for hydro-power, instead of charging on a volume-related basis. So there is absolute common ground between my noble friend and myself on that matter. I also went on to explain that, in our view, the right way to proceed is by way of discussion with the water authorities, and that the Department of the Environment was looking carefully at the possible use of the powers of the Secretary of State for the Environment under Section 60(3) of the Water Resources Act 1963, as I thought that those powers might provide a means of alleviating the charges made to the hydro-power users.
Since then we have considered the matter carefully and in more depth, as well as having had discussions with the National Water Council and with representatives of three of the main water authorities. As a result of those discussions, we have concluded that it would, in fact, not be satisfactory to make use of the powers of direction in the 1963 Act.
Instead, therefore, we intend to proceed by using this very Energy Conservation Bill to amend Section 60 of the Water Resources Act 1963. Section 60 of that Act empowers the water authority to make an agreement waiving or abating charges for the abstraction of water. Subsection (2) sets out the matters which the water authorities shall have regard to in making such waivers or agreements. What we intend to do, therefore, is to add a new item to the list in subsection

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(2) which will require water authorities to take into account the extent to which, in the interests of energy conservation, they should abate their charges for hydro-power abstractions, to prevent the charges from inhibiting abstractions of this kind. That is to meet not only my noble friend's point, but the point which I want to bring to the attention of the noble Lord, Lord Swinfen—namely, that of course we do not want to inhibit abstractions for turbo-generation: indeed, we want to encourage it wherever possible.
I think that the way in which we are seeking to do that has an additional advantage. Subsection (4) of the 1963 Act provides that if someone applies to a water authority for an agreement exempting him from charges or an agreement reducing his charges, and if the water authority refuses, or proposes terms for an agreement which he, the applicant, objects to, then the applicant or the water authority may refer the matter in dispute to the Secretary of State. Amending Section 60 of the 1963 Act in the way which we should like to would, therefore, give a small-scale hydro-power user an important new argument for a reduction of charge which, in the event of a disagreement between himself and the water authority—and I think that would be unlikely—he could take to the Secretary of State for decision. I think that such a Government amendment would go a very long way towards meeting the entirely legitimate grievances of water power users in England and Wales.
It is not a simple matter of abolishing all charges for all water power users in all circumstances, though undoubtedly there will be cases where water power users will be able to get charges waived completely. Indeed, the amendment of my noble friend would itself not abolish all charges in all circumstances; and I think that this reflects a broad agreement in this House and elsewhere that it would not be reasonable to do so. Perhaps I could give an example of why it would not be reasonable.
Our researches since this matter was raised during the Committee stage have revealed that the Central Electricity Generating Board is paying over £140,000 in the current year to the Welsh Water Authority for hydro-power abstractions. As far as we are aware, the CEGB does not challenge the need to pay these charges, which are a reflection of the very considerable burden which the board imposes on the Welsh Water Authority and the resources of the area. Therefore, I do not think that it is necessarily always reasonable to abolish any charge.
But what is reasonable and what we intend to do by an amendment of our own is to require water authorities to take into account the need to prevent charges from inhibiting the use of hydro-power. The charges, if any, will not therefore be such as to make the use of hydro-power uneconomic. It seems to me that that is the nub of the problem and the Government's amendment will go straight to it.
Therefore, we plan to move such an amendment on Third Reading. Perhaps I may apologise in advance because I shall not, in the nature of things, be able to table this amendment before Monday. The Government do this because they agree with the general intention of the amendment of my noble friend. But in technical and legal terms, it does not seem to us that
1300
subsection (2) of my noble friend's amendment is altogether satisfactory. It is not clear whether—and, if so, in what sense—it overrides the existing provisions of Section 30 of the Water Act 1973. Section 30 is drafted with considerable care and balance. For instance, it contains an important provision which requires the water authorities not to give undue preference to one category of user as against another, and we could be caught in that difficulty in taking the needs of the hydro-power user into account.
As I explained during the Committee stage, the Government believe that it would not be right to tamper with this principle, or to appear to be tampering with it, without very careful consideration and justification. So it seems to the Government that there are many fewer legal and practical difficulties in leaving the 1973 Act alone, and in amending the power to reduce or waive charges in the 1963 Act instead, in the way in which the Government propose. In the light of what we have said, and in the light of our acknowledgment of the very useful action which my noble friend Lord Strathcona has suggested—and we are very grateful to him for his work here—I hope that he will feel able to withdraw his present amendment.
4.44 p.m.
Lord Campbell of Croy: My Lords, I joined my noble friend Lord Strathcona during the Committee stage and I am very glad to hear my noble friend the Minister say that the Government intend to table an amendment while the Bill is in this House. It sounds as though the amendment will go a considerable way in the direction which my noble friend Lord Strathcona seeks. However, in the intervention which I made on Committee I asked my noble friend Lord Gowrie whether he would look at the position in Scotland. When speaking just now he said that these changes were to take place for England and Wales. If the House will give him permission to speak again, perhaps he would confirm that the amendment which he proposes will be restricted to England and Wales.
During the Committee stage my noble friend Lord Strathcona had down a consequential amendment, which was not to extend the changes to Scotland. The reason I raised this matter at the earlier stage was that it seemed to me that the position in this area was already satisfactory in Scotland. Hydro-power is generated in Scotland from private sources. For many years one large company from at least two sites has generated electricity, and over the years it has no doubt made sense that any surplus electricity should go into the grid. Furthermore, as I understand it, Scottish legislation does not discourage small generators from using hydro-power or indeed other sources.
The legislation and practice is different in Scotland and, indeed, both generation and distribution of electricity in Scotland comes under the Secretary of State for Scotland and not the Secretary of State for Energy or, indeed, the Secretary of State for the Environment. As he has not mentioned it today, I would ask my noble friend whether he looked into the situation in Scotland, as I suggested, and whether he thinks that the situation there is already satisfactory and that, therefore, changes are not needed, because that was the sense in which I spoke on the last occasion.
The Earl of Gowrie: My Lords, briefly, I should like to answer the point raised by my noble friend Lord Campbell of Croy. I did not mention it because, as is so often the case in so many matters, they order things better in Scotland and apparently, as my noble friend suggests, it is not necessary to provide licensing in this way. That is my advice. If my noble friend cares to look into it, and as long as he is satisfied that Scotland would not be affected in this way, I think that we could leave it at that.
Lord Strabolgi: My Lords, before the noble Lord, Lord Strathcona, replies, as I took part in the debate on the noble Lord's amendment in Committee and supported it—indeed, I still support him although I did not speak today—may I say how grateful we are to the noble Earl, Lord Gowrie, for going into this matter, and congratulate the noble Lord, Lord Strathcona, on securing this amendment from the Government. We shall look forward to seeing it on Third Reading.
Lord Strathcona and Mount Royal: My Lords, I am grateful to the noble Lord, Lord Strabolgi, for his support. I am, of course, particularly grateful to my noble friend for what he has said. There is no way in which we could refuse his offer of examining the amendment which the Government intend to table for Third Reading. From what he has said, I think we have every reason to believe that it will be satisfactory in covering the point that we seek to make. I confess to a very slight sense of nervousness when the Government talk about abating charges. This is a fairly good Government approach to a problem such as this, saying, "Provided you recognise our right to be unreasonable, we are prepared to say that we will, after all, be reasonable"; whereas we are seeking to ensure that someone contemplating installing a hydro-electricity plant can go to the local authority and be sure that he will not get clobbered after he has spent his money in the hope of collecting economies later. I am sure that my noble friend and I are as one on this purpose. However, I think that he will understand my slight nervousness when I hear him talking about agreements to abate charges.
I do not think that the water power users have been claiming that they should be absolved from all charges—not at all. Clearly, they accept that some kind of small charge may be legitimate. But they also believe that the onus should be upon the water authority to demonstrate that either it is losing something or is having to go to some expense to provide an amenity for which it can legitimately be expected to charge.
Finally, may I pull my noble friend's leg slightly and say that it is curious that when Mr. Marcus Fox wrote his letter from the Department of the Environment to the water authorities back in December, he was then talking about total charges of £20,000, which I mentioned during the Committee stage. Is it not remarkable that in the interval somebody has discovered another charge of no less than an extra £120,000, which of course rather alters the argument when we were saying that the water authorities do not stand to lose very much. It is a slightly unfair point to make. I do not think it is particularly relevant. I am sure
1302
that the noble Earl wants to do what we want to do, and we look forward very much to satisfying ourselves that the terminology he is going to produce will be another victory for good sense for the House of Lords. With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 27 [Application to Northern Ireland]:
The Earl of Gowrie The Earl of Gowrie moved Amendment No. 5:
Page 22, line 42, at end insert—
("( ) the reference in section 15 to the Treasury shall be read as a reference to the Department of Finance for Northern Ireland;").
The noble Earl said: My Lords, after this triumph of common sense we now come to a technical amendment. Clauses 15 and Clause 27 as currently drafted would enable the Department of Commerce for Northern Ireland to make grants with the approval of the Treasury for the purposes of energy conservation advice schemes. The reference to the Treasury in the Bill is not appropriate. Under the arrangements for devolved administration in Northern Ireland the Department of Commerce obtains financial approval for the expenditure of money from the Department of Finance for Northern Ireland rather than from the Treasury. Hence my amendment. I beg to move.
On Question, amendment agreed to.

Deep Sea Mining (Temporary Provisions) Bill [H.L.]
4.52 p.m.
The Earl of Gowrie: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(The Earl of Gowrie.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE LORD DERWENT in the Chair.]
Clause 1 agreed to.
Clause 2 [Exploration and exploitation licences]:
Lord Lloyd of Kilgerran Lord Lloyd of Kilgerran moved Amendment No. 1:
Page 3, line 38, leave out ("and").
The noble Lord said: I beg to move Amendment No. 1 and also, with the leave of the Committee, to speak to substantive Amendments Nos. 2 and 3. Amendment No. 1 is really consequential upon my Amendment No. 2. In Clause 2 of this Bill the Secretary of State can insert such conditions and terms as he thinks fit for persons who wish to apply to be granted exploration and exploitation licences under this Bill. In my submission, it is necessary for the Secretary of State to ensure the safety of personnel to be associated directly and indirectly with these exploration matters and matters ancillary to exploration and exploitation in deep sea mining.

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My main reason for putting forward this amendment is that industry is entering upon a new era in recent years. It is an era of extracting oil and other things from the sea-bed and from underneath the sea-bed. It is an area which involves the new underwater technology. Little is known these days of the effects of strenuous movements of personnel whether inside diving bells or outside under the sea. When I say that little is known of the effects of such activities upon human beings I am fully aware of the excellent work that is being done, for instance, in the London hospital under the professor of offshore mining there. I am fully aware of the excellent work done by Professor Cameron of the same hospital, particularly in his association with the training of swimmers and divers at the high standards required for Olympic competition. I am also conscious of the great work that my friend the surgeon Rear-Admiral Sir John Rawling has done in this field in the Navy and is doing now, having just retired from the Navy.
In fact, both the latter gentleman I have mentioned are members of the academic board of an institute in relation to sports medicine of which I have the honour to be chairman, which has set up in Cambridge a postgraduate fellowship at New Hall for the purpose of studying in the new field the difficulties arising from soft tissue injuries and methods of preventing them. Therefore, there is in my experience not enough information available at the present time on the effects on personnel associated with underwater operations.
At this stage I express my gratitude to the noble Earl the Minister for his long explanatory letter to me on 27th January where he pointed out that this Bill is concerned with deep sea mining, and in the operations to pick up these nodules in the seas, in the Pacific seas, the machinery is to be operated at a depth of 4,000 to 5,000 metres. I fully realise that human beings will not be expected possibly to get to that depth in activities without proper protection.
But there may be ancillary arrangements associated with such operations, and it seems to me incumbent on the Ministry to ensure that those companies to which the licences are to be granted have direct responsibility in looking after the personnel and being satisfied that there is adequate research available to those persons who require to use the services of divers, whether in diving bells or outside these bells. At the present time there is a danger that companies which use divers hire them from other firms which train divers. It may be that there is not adequate communications between the firms which supply the divers and the firms which require the services of these divers for a particular and specific purpose, but I do not want at this stage to pursue that kind of matter.
Your Lordships will see that my amendment includes the words:
"… to ensure the safety and relief from impairment of the physical and mental condition of personnel engaged in any of the licensed operations or ancillary operations".
The words I have used are taken substantially from Clause 15(4) where there is a definition of personal injury, which is said in subsection (4)
"… includes any disease, any impairment of a person's physical or mental condition …".
It is quite true that no doubt the noble Earl will say
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that the words of Clause 15 are adequate, because in Clause 15 there is a reference to safety and certain Acts known as Fatal Accidents Acts, and he may say that that is adequate to protect the personnel.
In my view, that is not sufficient. When a licence is being granted the Secretary of State should satisfy himself that the conditions and the knowledge of the persons requiring to operate this licence are adequate to test and to ensure the safety in the widest sense of the persons operating under water. He may also say that my amendments do not belong to this Bill. In my submission again, to repeat myself, where a Secretary of State is granting licences for an operation under water involving personnel, in the public interest the safety of the personnel in the widest terms should be ensured before grant of a licence is given. I beg to move.
Lord Kennett: Unless there are arguments from the Government of which we have not thought, we on these Benches would tend to support the amendment.
The Earl of Gowrie: The noble Lord, Lord Lloyd of Kilgerran, has drawn our attention to an enormously important aspect of deep sea mining operations dealt with in the Bill. Safety provisions are included in a number of places in the Bill, notably in the powers to make regulations and revoke or vary licences. The noble Lord has now proposed, and he is supported by the official Opposition, that we should include an additional specific reference to safety in the list of possible terms and conditions of licences in Clause 2. The power to do that is already covered by the general power to include such terms and conditions as the Secretary of State thinks fit.
It may, however, be beneficial to have a specific reference to safety as the noble Lord proposes and therefore I should like to consider the matter further. At first look it seems to me that the term "safety" is general enough to cover any physical or mental danger that personnel might have to face, but I will consider carefully what the noble Lord said. I should like to look at the precedents in this field, especially the interpretation of "safety", and consider what precise wording might be appropriate, or whether we have the wording about right now. With that undertaking, I hope the noble Lord will not press the amendment at this time.
Lord Lloyd of Kilgerran: I am obliged to the noble Earl. When, with the leave of the Committee, I spoke to Amendment No. 2, I would have spoken to No. 12 as well, but on the Marshalled List I have the noble Earl, Lord Gowrie, down to more that amendment. I do not know whether the noble Earl wishes to clarify the position on that now. In any event, having regard to what he said, I beg leave to withdraw Amendment No. 1.
Amendment, by leave, withdrawn.
[Amendment No. 2 not moved.]
Clause 2 agreed to.
Clauses 3, 4 and 5 agreed to.
Clause 6 [Variation and revocation of licences]:
[Amendment No. 3 not moved.]
Clause 6 agreed to.
Clauses 7 and 8 agreed to.
Clause 9 [The Deep Sea Mining Levy]:
5.3 p.m.
Lord Kennet Lord Kennet moved Amendment No. 4:
Page 6, line 16, leave out ("3·75 per cent.") and insert ("a percentage").
The noble Lord said: With the leave of the Committee, I will speak at the same time to the three amendments to Clause 9 which stand in my name. Because few noble Lords are present I shall be brief in recapitulating what this is all about. There is in existence a draft United Nations convention governing these matters which has been produced by the United Nations Conference on the Law of the Sea, UNCLOS III for short. That convention sets up an international body which is to levy a tax on the gathering of metallic nodules from the bottom of the sea. It sets suggested approximate levels for this tax. The convention cannot come into effect for many years yet and, in the interim, certain Governments—namely, of the United States, Germany, and in third place our own—are introducing national legislation which will levy a tax on the gathering of metallic nodules, will pay it into the national Exchequer and, when the time comes, will hand over the proceeds to the United Nations fund or agency.
The level proposed in the Bill is about half the level proposed by the United Nations draft text. The poor and destitute of the world protest at this and say, "How can you pass national legislation about what has been declared to be the heritage and property of all mankind and, above all, how can you presume to set a levy on the operations to exploit that heritage which is only half what the United Nations has called for and which cannot come into effect yet?" We therefore propose with these amendments to delete the level of the tax proposed by the Government, to allow the Government second thoughts so they may come back to Parliament later (possibly quite a lot later, even years later, because there will not be any money flowing for two or three years at the very earliest) and propose a different level, which would then be subject to approval by Parliament.
Thus, the effect of this series of amendments would be that the Bill should go through but, instead of speaking of two exact levels—3.75 per cent. in one case and 0.75 per cent. according to another calculation—it should simply say "a percentage", and the Government should then determine what that percentage is and present it to Parliament very much at their leisure. This suggestion is made in the hope that when they look round the world a bit they will decide to put it rather higher than it is now. I beg to move.
Lord Lloyd of Kilgerran: Unless there are views held by the Government about which I have not thought, I support the amendment. It seems inappropriate, to say the least, that into a Bill of this kind a levy should be introduced which is half that proposed by the United Nations. The attitudes on this, particularly on the part of developing countries, is quite understandable in the circumstances and I therefore support the amendment.
Lord Ritchie-Calder: I, too, support the amendment because we are pre-empting the future, something we should not be doing.
The Earl of Gowrie: I fear I must be rather fiercer towards this series of amendments than I have been, not only on this Bill but on the previous one we debated. I have had a good run for a Government Minister in the way of concessions—it has lasted for about an hour—and I suppose all good things must come to an end. Seriously, however, these amendments would create considerable financial uncertainty for potential licensees if the percentage levy arrangements were left as flexible as the noble Lord, Lord Kennet, and others who support him would like.
The scientific percentages included in Clause 9(1)(a) and (b) reflect the percentages included in the deep sea mining laws of other countries, and since United Kingdom licensees will have to compete with companies operating under those other laws, we do not wish them to suffer from substantially different terms or to face greater uncertainty than others. These amendments would increase that uncertainty. I agree that the interests of developing countries must be safeguarded, and that is the motive behind the levy existing at all; but these amendments would expose us to pressure from developing countries to impose higher rates under our legislation than currently envisaged, and we would have to resist any increased rate in order to protect our competitive position and our potential national licensees.
I cannot see that such an exchange would be to our advantage compared with a fixed provision, and certainly it would be against our national interest. It is appropriate that companies should be required to pay lower levies during the interim period than under the convention which will offer more favourable operating conditions in terms of long-term security. These amendments would have a number of actual and potential adverse effects for the companies as well as for the general national interest, and I must therefore ask the Committee to reject them.
Lord Kennet: The argument that we have to keep the levy low because the Americans have pitched it low is strong and one can only say how regrettable it is that the Americans have pitched it low. Mark the effects that will flow from that. If they say 3·75 and 0·75, Germany cannot say anything higher, because it would put German-led consortia at a disadvantage compared with American-led consortia; and we cannot say anything higher because it would put British-led consortia at a disadvantage compared with both American and German-led consortia. At Second Reading the Minister told us that two other countries—I think they were Belgium and France—were preparing legislation, and they will, of course, have to accept the same levels in order not to put Belgian and French-led consortia at a disadvantage compared with American, German, and British-led consortia, and so on down the line.
If one accepts that argument, it is an open and shut defence, or justification, of the fact that the powerful and developed nations are going to get all they can at half the rate before the poor nations get their whack. I do not think that that is justifiable, and I am not yet convinced that the Government have seriously enough weighed that argument on the one hand against the world political and economic argument on the other hand, that the developed countries are scoffing the

1307
wealth while the going is good. Obviously it is not practicable at five o'clock on a Thursday to divide the Committee on this issue. I do not think that there are enough noble Lords present on either side of the Chamber for that to be a realistic procedure—
The Earl of Gowrie: Would the noble Lord like to adjourn while he consults his Whips?
Lord Kennet: I am receiving conflicting messages. Upon reflection, if the noble Earl is able to say to me that he will consider the matter again between now and Report, that would seem to me the best answer. Then, on Report, we could have a perhaps slightly fuller debate on the matter with more noble Lords present. If, on the other hand, he says, "No, there is not a hope; we are going to follow the Americans and Germans, and damn the third and fourth worlds", perhaps it would be wise to divide even at this stage.
5.12 p.m.
Lord Campbell of Croy: While my noble friend is considering that point, I should like to take up something that the noble Lord, Lord Kennet, has said. My understanding is—and I should be grateful if my noble friend Lord Gowrie can confirm it—that, like the Americans, the Germans in their legislation have already adopted the 0·75 figure. I am not sure whether they have put in the alternative option which the Americans have put in and which is in this Bill as well, hut they have certainly adopted the same level.
The argument which is contained in the amendments, and which the noble Lord, Lord Kennet put very concisely, is quite clear—that the only objective in changing the system (as the amendments would) to a system of orders introduced into Parliament by a Minister, is to ensure that the percentage should be higher than the figures here. That is really the point that the noble Lord has made, quite clearly. He thinks that the effect on the less developed world at the United Nations' Conference on the Law of the Sea will be an unfortunate one. The American legislation went through last June—some time ago—and the German legislation has gone through. I feel that it would put the British industry at a considerable disadvantage if we were then to adopt a higher percentage for the reasons that my noble friend has given.
Perhaps we should have moved first and done something different. My guess is that the British Government have been talking to the Governments of those countries with companies which have the expertise and are getting together in coscortia to carry out this very difficult operation. After all, the world needs these minerals, and will need them even more later this century.
My noble friend Lord Erroll of Hale, speaking at Second Reading as the chairman of one of the three British companies which have embarked on this new industry, pointed out that it would be some years before they could be in a position to bring the nodules to the surface and then to make use of and exploit the minerals. I shall not repeat some of the points that were made on Second Reading, including those in my own speech, but I would point out that the United Nations' conference has a considerable number of
1308
years in which to reach agreement and to bring into effect the new international regime for the ocean floor. In the meantime, the companies from the industrial countries which can do this work need to prepare and be encouraged to get started.
I would ask the noble Lord, Lord Kennet, and those who have supported his amendment, to consider the adverse position in which would be placed British companies which are ready to engage at present in the undertaking if we were to be out of line and to expect a much higher percentage to be contributed at this stage. Once United Nations' agreement has been reached, then of course all the countries involved will be contributing at the rate which has been internationally decided.
Lord Kennet: I should like to say a few words before the Minister contributes his last word. Would not the noble Lord, Lord Campbell of Croy, agree that the fact that the American legislation—which was passed last June, as he correctly said—named the low figures, has already had a very deleterious effect on the attitude of the third world countries to the draft convention, and that this is evidenced in the declaration of the legal position of the Group of 77, which simply says that they will not recognise any such legislation as we have before us now? It has already had that effect. They deny the validity of the American, German, British, et cetera national laws and will continue to do so until the United Nations' convention itself comes into effect. That point was mentioned at Second Reading, and I should like to hear what the Government think about it.
The Earl of Gowrie: I am most grateful to my noble friend Lord Campbell of Croy, who pointed out to the Committee—which I had failed to do, though I did so at the earlier stage—that this is something of an interim measure, to try to get the show off the ground and that of course we would have to come into line with whatever is agreed from the United Nations' Conference on the Law of the Sea.
I would say to the noble Lord, Lord Kennet, that I really do not accept that this is a simple matter of the devil take the hindermost where the developing nations are concerned. After all, there is no need in international law, or in any other kind of law, for the various developed nations to introduce legislation of this kind. They are introducing legislation of this kind as an earnest of their goodwill, as well as an earnest that they recognise the interests of the developing nations and the fact that resources beyond natural or national boundaries are to some extent a common wealth. That is a relatively new concept. It is one that I would certainly applaud, and it should not be subject to too much in the way of attack.
The other point that I would make—it is perhaps a more general economic point—is that in my respectful contention it is an absolute myth that the interests of the developed and the developing nations are diametrically opposed. One of the great difficulties in which we are placed on this planet is that that concept has a firm political hold. If the developed world does not continue to use its industrial and technical know-how to develop, if it remains in recession or slump, the chances of development of the less-advanced nations, in industrial and technical terms, will not be

1309
served.
It seems to me that this kind of legislation is a genuine move by a national Government to take into account international interests, which in fact they are not in any way obliged to take into account. Therefore, I want to contest the noble Lord's view. He very fairly said, "Well, I understand the competitive point, but the fact is we are all going hell for leather and the devil take the hindermost in the case of the developing nations". That is not something that I, nor indeed the Government, accept. Therefore I ask the noble Lord to withdraw the amendment. If he feels unable to do so, I would advise the Committee to resist it.
Lord Kennet: The argument that it is a mistake to believe that the political interests of the developed and developing worlds are contrary is one which we fully accept. Of course they are not contrary; they are complimentary, and they must work together and serve each other. But it seems to me that that argument would tend towards supporting the passing of the amendment and not having an artificially low rate of levy on national legislation in the meantime. It is not an argument for antagonising the third world, which is what this Bill is going to do, and what the American legislation has already done. I listened hopefully to hear whether the Minister was going to say that he would give it another thought or talk to anyone else about it, but he was quite categorical that he was not. That being so, I think I will ask my noble friends to join with me in opposing what is proposed by the Government and in passing this amendment if we can.
5.21 p.m.
On Question, Whether the said amendment (No.4) shall be agreed to?
Their Lordships divided: Contents, 46; Not-Contents, 71.

CONTENTS

Aylestone, L.

Irving of Dartford, L.

Banks, L.

Jacques, L.

Beaumont of Whitley, L.

Jeger, B.

Birk, B.

Kennet, L.

Boston of Faversham, L.

Kilmarnock, L.

Briginshaw, L.

Llewelyn-Davies of Hastoe, B [Teller.]

Brooks of Tremorfa, L.

Bruce of Donington, L.

Lloyd of Kilgerran, L.

Collison, L.

Oram, L.

Crowther-Hunt, L.

Plant, L.

David, B. [Teller.]

Ritchie-Calder, L.

Donaldson of Kingsbridge, L.

Ross of Marnock, L.

Elwyn-Jones, L.

Seear, B.

Gaitskell, B.

Sefton of Garston, L.

Goronwy-Roberts, L.

Segal, L.

Gosford, E.

Shinwell, L.

Greenwood of Rossendale, L.

Stone, L.

Gregson, L.

Tanlaw, L.

Hale, L.

Underhill, L.

Hampton, L.

Whaddon, L.

Hanworth, V.

White, B.

Henderson, L.

Wigoder, L.

Houghton of Sowerby, L.

Winstanley, L.

Hunt, L.

NOT-CONTENTS

Abercorn, D.

Avon, E.

Airey of Abingdon, B.

Boardman, L.

Allen of Abbeydale, L.

Caccia, L.

Ampthill, L.

Campbell of Croy, L.

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Cathcart, E.

Mersey, V.

Craigavon, L.

Milverton, L.

Cross, V.

Montgomery of Alamein, V.

Cullen of Ashbourne, L.

Mottistone, L.

Daventry, V.

Napier and Ettrick, L.

de Clifford, L.

Nathan, L.

Denham, L. [Teller.]

Northchurch, B.

Derwent, L.

Nugent of Guildford, L.

Elliot of Harwood, B.

O'Hagan, L.

Faithfull, B.

Orr-Ewing, L.

Falkland, V.

Polwarth, L.

Fraser of Kilmorack, L.

Renton, L.

Freyberg, L.

Ridley, V.

Gainford, L.

Rochdale, V.

Gisborough, L.

St. Aldwyn, E.

Glasgow, E.

St. Davids, V.

Gormanston, V.

Sandford, L.

Gowrie, E.

Sandys, L. [Teller.]

Hailsham of Saint Marylebone, L.

Selborne, E.

Selkirk, E.

Henley, L.

Skelmersdale, L.

Hornsby-Smith, B.

Somers, L.

Hylton-Foster, B.

Spens, L.

Ilchester, E.

Stanley of Alderley, L.

Kimberley, E.

Strathclyde, L.

Kinnaird, L.

Strathspey, L.

Long, V.

Sudeley, L.

Lucas of Chilworth, L.

Swansea, L.

Lyell, L.

Swinfen, L.

McFadzean, L.

Trefgarne, L.

Mancroft, L.

Vickers, B.

Marley, L.

Vivian, L.

Resolved in the negative, and amendment disagreed to accordingly.
[Amendments Nos. 5 and 6 not moved.]
Clause 9 agreed to.
Clauses 10 to 12 agreed to.
Clause 13 [Disclosure of information]:
5.28 p.m.
Lord Kennet Lord Kennet moved Amendment No. 7:
Page 9, line 13, leave out ("to imprisonment for a term not exceeding two years or").
The noble Lord said: With the leave of the Committee I will address my remarks to the four amendments on this clause together. This clause is the one about penalties for people who divulge information obtained under the operation of this Bill when it comes into effect. I suppose it is directed mainly at Government inspectors, though it may be anybody according to the way the Bill is drafted. The objection to it in our mind is that it makes the inspector, or whoever it is who has obtained information, liable to a prison sentence if he is convicted of wrongly publishing this information—and this will be information, naturally, about something done wrong by one of the mining consortia—whereas if the mining consortia are convicted of an offence under the Act, as it will then be, they are not liable to imprisonment.
I find it something which sticks in the gullet that we should be enacting an Act of Parliament which says to great companies, "You must behave in such and such a way; if you do not, you will be tried and if you are convicted you will be subject to a fine and will not be imprisoned", whereas on the other hand it says to a little inspector, or someone else, "What you find out about these great companies under this Bill you must not divulge without authority, and if you do divulge it without authority you will be tried

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and, if convicted, you may be sent to prison". That seems a gross imbalance. When I raised this point on Second Reading the Minister's only defence, if I remember aright, was, "Oh, well, it is a Home Office rule". I think that is a rotten reason for writing it into the Bill. It may be a Home Office rule, but it seems to me that if it is it is about time Parliament upset it in a particular case, and this seems as good a case as any other. I beg to move.
Lord Lloyd of Kilgerran: I wonder whether it might be helpful to the Government if I were to make a few observations on a matter which, I believe, is under consideration by the Law Commission at the present time in an area of law which is well known to some; that is, the law relating to confidential information. There is quite a jurisdiction now in regard to the kinds of action which can be taken against people who disclose information which is confidential. I have experience of that only in the cases where the information is of a technical nature; that is, of scientific and technological nature or where the confidential information constitutes know-how. I wonder whether the Government wish to be quite so severe in an Act of this kind—which cannot come into force for years—as would appear from the somewhat stern terms of Clause 14. Therefore, I would support the general theme put forward by the noble Lord, Lord Kennet, in his amendment.
The Earl of Gowrie: I do not quite accept, as the House would not expect me to accept, that my reasoning was simply because that is the way things had been done always and, anyway, no one wants to upset the Home Office. Although he is supporting the noble Lord, Lord Kennet, the answer was made for me by the noble Lord, Lord Lloyd of Kilgerran. It is that information is a sensitive and complex affair. It is not simply a matter of open government or of being a nice extrovert fellow. A great deal of commercial and competitive possibilities and success may depend on what information is disclosed or not disclosed, or when it is disclosed or not disclosed. Therefore, what I had in mind was that penalties for disclosure of information and the rest in this Bill were common to several Acts of Parliament. I am thinking of the Companies Act 1967 and the Iron and Steel Act 1975. I think that the noble Lord, Lord Kennet, was a Minister during the passing of the first Act. I think there has been quite a common tradition here.
Nevertheless, while I want to underline that some of the information that applicants and licensees will be required to divulge under this Bill is extremely sensitive and could therefore be exploited, and must therefore be adequately safeguarded, and while I think it is defensible, therefore, to include the same penalties as are to be found in the Companies Act, I take the point that the provision for imprisonment is rather more drastic than the other penalties which exist in the Bill, and I am therefore prepared to consider how to bring the various penalties into line. But I must warn the Committee that I think there could be disclosure of highly confidential information here for, let us say, personal gain in certain circumstances, and I am not altogether convinced that the kinds of
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activities with which this Bill deals are so different from the kinds of activities covered by provisions in other legislation followed by successive Governments—and I would need a bit of convincing on this. But I will consider it and take it away, and with that assurance perhaps the noble Lord will withdraw his amendment.
Lord Kennet: I think it both wise and charming of the Minister to revert to his usual ways on this one. Will he remember, while he is thinking about it and talking about it to his colleagues, that the prisons are bursting at the seams, and will he resist all temptation to rectify the balance by making the directors of the companies liable to imprisonment so that both parties can spend the rest of their lives burrowing holes through the physical fabric of the "prison estate," as the Home Secretary calls it, and may get off with a fine if they do wrong? With that, I beg leave to withdraw the amendment.
Amendment, by leave, withdraw.
[Amendment Nos. 8,9 and 10 moved.]
Clause 13 agreed to.
Clause 14 [Supplementary provisions relating to offences]:
The Earl of Cowrie The Earl of Cowrie moved Amendment No. 11:
Page 9, line 35, leave out first ("or") and insert ("and").
The noble Lord said: This is a minor drafting point. As it stands, Clause 14(3) refers to "a citizen of the United Kingdom or Colonies". The correct reference to a "citizen of the United Kingdom and Colonies" as in Clause 1. I beg to move.
On Question, amendment agreed to.
Clause 14, as amended, agreed to.
Clause 15 [Civil liability for breach of statutory duty]:
On Question, Whether Clause 15 shall stand part of the Bill?
Lord Lloyd of Kilgerran: Having regard to the observations of the Minister on my Amendments Nos. 1, 2 and 3, he said that he would consider whether conditions should be set down by the Secretary of State in granting exploration or exploitation licences to applicants; he said also that he would look into the question of the definition of "safety" and also the definition of "personal injury". It may be helpful to the Minister if I say that this is the clause which appears to give some difficulty, because in subsection (4) it defines "personal injury" to include "any impairment of a person's physical or mental condition…". In subsection (1) of the same clause it refers to the Fatal Accidents Acts and also uses the words "personal injury".
Those who practise in the field relating to industrial actions know how difficult it is to operate some of these Acts. Many of the actions are now sent to tribunals to be dealt with. My intention in my previous amendments, which the noble Lord the Minister said that he would consider, was to obviate the problems which

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may arise as a result of personal injury to personnel operating in the field of underwater technology, which is a new field in which industry is operating at the present time.
The Earl of Gowrie: If the noble Lord will forgive me, I was not clear about what amendment he was talking to. Is it an amendment to the schedule? I think it was my mistake; but I was not clear what he wanted from me.
The Deputy Chairman of Committees (Baroness Wootton of Abinger): The noble Lord was speaking to the Motion that Clause 15 shall stand part of the Bill.
Lord Lloyd of Kilgarren: I was speaking to Clause 15 standing part of the Bill. I said earlier, in withdrawing my amendment, having regard to what the noble Earl has said, that in the Marshalled List there is an amendment which I put down to the schedule but which does not have my name above it. I think it is a minor and unnecessary point to belabour. In view of what the Minister has said, I shall not be moving the amendment to the schedule. At this stage I do not require anything further from the Minister.
The Earl of Gowrie: I have the rather rattled look of a servant of the House who did not know what his masters were requiring him to do. If it is the case that the noble Lord is simply referring us back to some of the points made on the debate in his original amendments, then the guarantees that I gave then would hold now.
Lord Lloyd of Kilgerran: I am very much obliged to the noble Earl. That is all I was commenting about.
Lord Campbell of Croy: Before the noble Lord decides whether he is going, to speak to or not move the amendment he has referred to, which is No. 12, it would be of assistance to Members of the Committee if it could be clarified whether this is a printing mistake. I imagined when I first saw it on a list—not the Marshalled List—that it was one of Lord Lloyd's amendments because it seemed to go with Amendments Nos. 1, 2 and 3. When it appeared on the Marshalled List below the name of my noble friend Lord Gowrie, after Amendment No. 11, I was thinking he was coming forward to meet the noble Lord's point and had put the amendment down on the same day. These amendments appear with an asterisk and therefore were put down yesterday and appeared only today. I presume Amendment No.12 was tabled by the noble Lord, Lord Lloyd of Kilgerran, as a supplementary amendment to his Amendments Nos. 1, 2 and 3. It will be helpful if that could be made clear.
Lord Lloyd of Kilgerran: If I may speak again, I am very much obliged to the noble Lord, Lord Campbell. There is a misprint in the Marshalled List as published today. I put down an amendment in the terms of Amendment No. 12, and I apologise—if it is necessary to do so—that my amendments came in late. I had notified the Minister of my intention to raise these matters. He has written to me fully about it. There
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is a misprint on this Marshalled List and Amendment No. 12 should have been printed in my name.
The Earl of Gowrie: I have to cover myself in that I am advised to resist Amendment No. 12. I do not know whether the noble Lord feels unhappy about that.
Lord Lloyd of Kilgerran: I am a little surprised that while we are still, as I understand it, talking on whether Clause 15 shall stand part of the Bill the Minister should be kind enough to advise me in advance that he will resist Amendment No. 12. Having regard to the undertakings and the assurances that he gave earlier, I do not propose to press this matter at this stage but will wait until a later time in order to raise it.
Lord Campbell of Croy: Before we leave this matter, and as the noble Lord is not going to move Amendment No. 12, but has clarified the position, I should like to thank him. He does not need to apologise to the Committee because his amendments were very clear. The confusion has been caused by the Marshalled List being printed incorrectly. We thought it was a Government amendment. My noble friend Lord Gowrie has indicated that he will look at this question generally and at whether there is need for an amendment in the schedule as well as any other changes that he may bring forward which we can consider at a later stage.
Clause 15 agreed to.
Remaining clauses agreed to.
[Amendment No. 12 not moved.]
Schedule agreed to.
House resumed: Bill reported with an amendment.

Town and Country Planning (Minerals) Bill [H.L.]
5.45 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Lord Bellwin.)
On Question, Motion agreed to.
House in Committee accordingly.
[The BARONESS WOOTTON OF ABINGER in the Chair.]
Clause 1 [Meaning of "development"]:
Lord Mottistone Lord Mottistone moved Amendment No. 1:
Page 1, line 13, at end insert ("other than in connection with a current operation for the winning and working of minerals").
The noble Lord said: I should like to take with this amendment, Amendment No. 6. This will repeatedly come up in the Bill as the Scottish part gets brought into line with the English and Welsh, as I am sure your Lordships are aware. This particular clause, as drafted, seems to require specific planning permission

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before material, even from stockpiles, can be used. The movement of any material that happened to be piled within a quarry would require specific permission to be moved. This definition will of course apply retrospectively, and my proposed amendment would allow material to be moved around within a working quarry but as soon as extraction was finished then permission would be needed. In the vast majority of cases this must be the proper answer. I beg to move.
Lord Bellwin: At the beginning of this Committee stage I think I should say that I shall be resisting many of Lord Mottistone's amendments. I owe him a brief word of explanation. I fully share his desire, that of the CBI, and other interested bodies, to get this technical and specialised Bill right in detail. I am indeed grateful for the time and effort which they have given to help us to achieve this. However, by the time the Bill was introduced these discussions had been going on for a considerable time. As I am sure my noble friend knows, many of their comments have already been incorporated in the Bill. Of course, there is inevitably still room for improvement. I have put down a number of Government amendments, most of which arise out of our continuing consultations.
There are other places where there may be room for debate about the balance which we have struck between the needs of the minerals industry and environmental considerations. I am bound to say that I believe that the balance in the Bill is a fair one. There are some amendments which I think are not necessary and I hope that we shall be able to show that. There are some amendments which are harmful to the Bill and I shall be bound to ask the Committee to reject them. I know that my noble friend understands this and the spirit in which I say it.
Coming to this specific amendment, I accept at once that the provisions of Clause 1 are wider than we should like. Stevens recommended that we should bring under control the working of waste heaps but not stockpiles. For the past 12 months we have been seeking a definition which seeks to distinguish between them. Frankly, no one has found one. We have been told that any waste heap is a potential stockpile.
This is why we have gone for this very wide provision with the intention of covering specific cases such as raw materials at industrial premises in the General Development Order. While we are still ready to consider a better approach if one can be found, I cannot advise your Lordships to accept this particular amendment. Mineral working is a long-term activity, as we are often reminded, and there are plenty of tips which are related to a current working such as coalmining or china working, which have nevertheless been restored and become naturally revegetated. It is precisely those cases where we consider there should be some control over reworking. In view of that, I wonder whether my noble friend will feel able not to press this amendment.
Lord Gisborough: I should like to support my noble friend over this. Where it is a question of shifting over these temporary piles, it seems common sense that a company should be allowed to do that without planning permission, particularly in view of the fact that there
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will be this very high cost of applying for planning permission each time it is needed. I wonder whether this could be linked to the fact that there is no vegetation. There is a difference between a pile which has vegetation and has become camouflaged and one which is without vegetation, so that it therefore makes no odds whether it is moved or not.
Lord Bellwin: I do not know that there is much that I can add to what I have already said. I indicated that I had some sympathy with the objective of the amendment, because the provision is a very wide one, but I think that in the circumstances I would want to stick with the position as I have already outlined it.
Lord Mottistone: I am grateful to my noble friend Lord Bellwin, not only for his remarks now but for the great help he has given to me during the past three or four weeks and which he gave earlier to the Confederation of British Industry, who have been advising me. On this specific amendment, I take a certain amount of heart from the fact that my noble friend agrees there is room for finding some better phraseology. We are not altogether happy about a GDO coverage, in the same way as one is not happy about regulations. One wants to see something in the Bill itself which is a bit clearer to cover the point which I think we are all agreed is a reasonable one. Perhaps I might take this away and see if we cannot find a form of wording which would satisfy your Lordships on Report. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.52 p.m.
Lord Gisborough Lord Gisborough moved Amendment No. 2:
Page 1 line 13, at end insert ("other than the removal of a mineral-working deposit for the purposes of the improvement of agricultural land or for the construction or maintenance of farm access roads within the boundaries of the adjacent land owned by the owner of the mineral working site").
The noble Lord said: The proposed new subsection to be added to Section 22 of the Town and Country Planning Act 1971 will oblige anyone moving the whole or part of a mineral working deposit to obtain planning permission, as has been mentioned already, before any removal takes place. The amendment propose seeks to exempt from planning permission such acts of removal as are done for limited purposes such as, for example, improving agricultural land or by making level or repairing farm roads on adjacent land. I do not think that removal of small parts of an unvegetated spoil heap can be unreasonable.
I think that what will happen in practice is that where there is a heap of gravel of similar material which may have been left over from previous workings, farmers will go and dig in there for a few cubic yards to fill in potholes, and so on, rather than spend a hundred pounds on planning permission. Also there are cases where farmers might dig into a river bed for a few cubic yards of repair material which is to be used. The damage, if any, to the river bed will be repaired by the river itself at the next flood, or perhaps even before. I wonder whether this could be considered, if not now then at a later stage, linked with a blanket condition which would insist that if farmers did this they would have to leave a clean profile, or whatever

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other condition might be thought reasonable. I think it is asking a lot to expect farmers not to take material from local heaps.
Removal of these heaps is often very desirable and in fact grants are available from the Government for doing so. Every encouragement should be given for it. However, it may be necessary to limit the taking of shale, if you like, from shale tips to perhaps not less than 6 ft. depth or not more than a third of it. One could put in any form of condition that one thought would be suitable, but I think some form of general condition, subject to certain conditions, should be allowed so that farmers could move material from tips on their own land.
Baroness Elliot of Harwood: I should like to support my noble friend Lord Gisborough in his amendment. There is all the difference in the world between developments which are on a commercial basis or which involve other interests and other people and the farmer or landowner being allowed to move a small proportion of gravel, or whatever it may be, for the sole purpose of mending a hole in the road or doing some other improvement which is important to him but which has no significance for a planning authority.
I am not suggesting for a moment that anybody should not have to get planning authority for something which affects a fairly large area or which in any way affects the public, but this amendment is simply concerned with the private convenience of a farmer or landowner. I myself have an amendment down (No. 5) which applies to Scotland and which has the same effect. I think there is quite a considerable difference between planning permission for something which is (a) possibly commercial or (b) a very big enterprise, and doing something which is quite small which you can do on your own or with your own men and which has no significance from the planning point of view.
For instance, if you dig up some gravel from a river or burn in order to fill up a pothole in the road, that has no significance at all and, as the noble Lord, Lord Gisborough, says, it would probably be filled in by the next flood. If you want to mend a hill road so that a tractor can go across it because there may be some damp or boggy places which need tilling in, that has nothing to do with planning permission. It is simply a practical thing; and I hope very much that the Government will look at this and recognise the quite considerable difference between a commercial enterprise concerned with digging on mineral workings of any kind and a matter which concerns nobody except the farmer or the landowner and which affects his work.
Lord Bellwin: As I said in opening the Second Reading debate, I fully recognise that Clause 1 encompasses rather more than is necessary. However, as I said then, I think the best way of narrowing this down is through amendments to the General Development Order. There is already a class of permitted development in the GDO which deals with the winning and working of minerals for the purposes of agriculture, and, if my noble friends would agree, I think the neatest way of covering the point raised in this amendment would be by amending this class of the GDO. I have already given an assurance, which I gladly repeat, that this clause will not be brought into operstion
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before the General Development Order has been amended. I hope this assurance will assuage any fears my noble friends might have.
Baroness Birk: May I just say that I should like to support the Minister in what he has just said. It seems to me that the best way is to amend the GDO: I would certainly support that.
Lord Gisborough: With that assurance, and as I understand—I hope correctly—that the point will be met, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6 p.m.
Viscount Ridley Viscount Ridley moved Amendment No. 3:
Page 1, line 13, at end insert—
("(b) a deposit of domestic, industrial or commercial waste

(c) a deposit of iron or steel slag

(d) pulverised fuel ash

(e) a disused road or railway embankment.").

The noble Viscount said: Before I speak to this amendment, I wonder whether I may apologise to the Committee for the fact that I was unavoidably unable to come to the Second Reading debate. But I have seen the report and enjoyed reading it. Surprisingly, it seems that the whole subject is less controversial than the budgerigars and so on, with which we have been so much concerned in the last few days.
I believe that this amendment is very similar to Amendment No. 4, which is in the name of the noble Baroness, Lady Birk. I am not sure whether we are trying to get the same thing, but I think we are. We are still talking about the definition of "development" in this context. The Bill makes extraction of minerals from waste heaps into development, but it seems that deposits of iron or steel slag and pulverised fuel ash will still be excluded.
Although the DoE stated in a circular in 1978 that this did not seem to be cause for concern, a lot of counties—and I speak for the Association of County Councils—are experiencing problems with the reworking of these deposits, and quite a number feel that these deposits should be treated in the same way as mineral waste under the new Bill. Indeed, I think that Section 16 of the Local Government Act 1972 recognises that these materials may be regarded as minerals for this purpose. It seems to me, and to many other people, logical that the removal of materials from these places should be brought within the scope of Clause 1.
There have also been quite a number of representations from county councils about the confusion which seems to exist regarding the legal situation in respect of the extraction of materials from disused road and railway embankments. Although it would seem that these types of operation are, in practice, no different from normal mineral workings, and their impact on the environment and the traffic which they generate are the same, there are doubts as to whether they are within the scope of mineral extraction at the moment. My amendment seeks to place them there and to remove any possible doubt, and I hope that in those terms it will be acceptable to the Government. I beg to move.
Baroness Birk: I wonder whether it would be helpful to the Committee if I spoke to my amendment now, because, as the noble Viscount said, our two amendments are rather similar and are trying to achieve the same end by different means. I think we are at one in feeling that there needs to be an extension of the definition of "minerals" and the Association of County Councils and the AMA have made representations about this. Together they represent all the mineral planning authorities in England and Wales and they wish to see the definition extended.
The difference between the two amendments is that the amendment moved by the noble Viscount includes disused road and railway embankments. I am not too sure about that. I think we are getting away from the area of minerals, and more into the area of waste, so this needs thinking about. On the other hand, whereas ours is a rather "chatty" paragraph, which includes materials, the noble Viscount's amendment lists them and that may be a more precise method. I hope the Government will agree to have further discussions on these points. That will be quite acceptable to me, as long as the Minister is able to give us some indication of the Government's general attitude to the proposal. In other words, perhaps the Minister could say, "Yes, the Government agree in principle that there should be an extension of the definition", because I do not think it will be possible in the Committee this evening to draft something suitable.
Lord Gisborough: I should like to support the second amendment, but to oppose the first, simply on the basis of the disused road and railway embankment. On farms and so on, there arc many old roads and railways which were put there for old mining works. Very often they need digging out, in order that a field can be ploughed right to the edge, and it is rather silly for that to be subject to planning permission. Also, there is the peculiar situation that nobody wants to see a new embankment put across the countryside, but if there is already an embankment there and you want to remove it, nobody wants that to be done away with because everyone likes it and has known it for years. It is an absurd conservation situation. If you have an embankment which nobody wants, then the sooner somebody pulls it down the better, and it should not need planning permission to do so.
Lord Bellwin: I shall have to get used at this early stage to finding myself in agreement with the noble Baroness, Lady Birk. It is quite a novel experience for me and it makes a difference. May I say at once that I am glad to be able to tell my noble friend, and, indeed, the noble Baroness, that I accept in principle the extension of planning, control to the removal of material from some of the matters listed in my noble friend's amendment, although I wonder whether—and this is a point to which my noble friend Lord Gisborough referred—the reference to disused road embankments is really necessary, since I should have thought that the very few cases which exist would hence become part of the land.
However, I do not think it would be right to extend this to the removal of material from tips of domestic, industrial and commercial waste. Where such material is covered over with soil or subsoil, it is already subject
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to planning control since it is once again land. On the other hand, this amendment would bring under planning control, for example, the removal of old cars from unsightly areas—surely something which town and country planning is trying to encourage, rather than prevent. In addition, I do not think the amendment is quite right, particularly in relation to its position in the Bill.
I, too, am dealing with both amendments together, and may I say to the noble Baroness, Lady Birk, that, again, I accept in principle this extension of planning control to the removal of material from some types of deposits, including those listed in her amendment. If my noble friend would agree to withdraw his amendment and the noble Baroness would agree not to move her amendment, I will certainly bring forward on Report an amendment to deal with this matter, which is perhaps more narrowly drawn. In doing so, as I have said, we will certainly take into account the point which has been made by my noble friend Lord Gisborough, and will try to cover that as well.
Lord Mottistone: I must confess that I am absolutely horrified to hear my noble friend on the Front Bench say that he is in agreement with the noble Baroness, Lady Birk, because I think that both amendments go much too far in the way of narrowing down the definitions. I hope very much that, when my noble friend puts together some alternative, he does not narrow it down to the point where it identifies each and every item that is covered in both amendments. I also hope very much that freedom in this direction is maintained, and the sense of my earlier amendment, which I withdrew, is one which I would recommend to my noble friend as being much more in the direction in which this total clause should move.
Lord Bellwin: I had better get used at once to the feeling that the table tennis ball must have of being in between the parties. I am sure that this will not take me too long. I hear what my noble friend says and I am aware of his general concern and of his position in these matters.
Viscount Ridley: I quite frequently find that I am in agreement with the noble Baroness, Lady Birk, and I look forward to being in agreement with her once or twice more before we are through. But in view of my noble friend's undertaking to look at this matter, I shall be happy to withdraw the amendment. But I would say that it is not a frivolous amendment, as this matter is causing serious concern to some county councils. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
Clause 1 agreed to.
Clause 18 [Meaning of "development"]:
6.10 p.m.
Baroness Elliot of Harwood Baroness Elliot of Harwood moved Amendment No. 5:
Page 22, line 16, at end insert ("except minerals extracted by an occupier from a mineral working deposit on his land and used for the purposes of his occupation of that land.").
The noble Baroness said: The same principle applies to this amendment as to those which have been withdrawn but this one applies to Scotland. I should like to be assured by the Minister that if he makes a variation based upon the amendments which have been withdrawn he will ensure that Clause 18, which contains that part of the Bill which I wish to amend, includes the same words so that there is no interference by planning authorities with work on private farmland. All we are asking is that we should be allowed to use the material that we have on our own land for our own purposes, when there is no question of it being a commercial enterprise. I am asking that whatever is arranged shall cover also that part of the Bill which deals with Scotland. I beg to move.
Lord Gisborough: I support this amendment for one additional reason. In Scotland there are vast distances, with farms way out in the outback—either on the hills or on the West coast. The practical effect will be that farmers will certainly dig up nearby rather than try to get planning permission from somebody 100 miles away in Inverness.
Lord Bellwin: The Government are in sympathy with the intention of the amendment. We are conscious that this clause is wide. This is necessary because of the difficulties involved in drafting the clause so as to distinguish between things we want to bring under control—for example, the reworking of large waste heaps—and those which we do not, such as the movement of stockpiles around a quarry site, or the use by farmers of minerals on their own land for their own purposes.
My noble friend has illustrated our difficulties. The amendment which she has moved would go further than the Government's policy intention. It appears to exempt from planning control any working of minerals taken from a mineral waste heap and used anywhere on the land occupied by the person who extracts them. While we have no intention of bringing purely agricultural uses under planning control, the amendment as drafted would allow a landowner to quarry minerals from a waste heap on his land for roadmaking or for building anywhere else on his land. This quarrying could in itself have an adverse environmental impact. We do not think that it should be exempt from planning control.
Following the enactment of the Bill, we intend to amend the general development orders to extend the existing permitted development rights of farmers to win and work minerals to include the removal of material from deposits and to take account of the needs of mineral operators to move stockpiles and waste within their sites. In the light of this assurance which I am happy to give, I hope that my noble friend will feel prepared to withdraw her amendment.
Baroness Elliot of Harwood: I thank the Minister for his reply. I am very much reassured. He spoke about the use of minerals for roadmaking. I was thinking about roads over the hills and the use of these minerals to fill up bog holes so that tractors can get across the hills instead of disappearing into the mud. My amendment has nothing to do with making roads to be used by the public. One would of course need planning permission for that. When the clause is
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redrafted I hope that will be made clear. I am concerned about the private use of private material. It has got nothing at all to do with the public. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 6 and 7 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 8:
Page 22, line 28, at end insert—
("; and
"an interest in land" includes an interest in minerals").
The noble Lord said: I am advised that most Scottish Acts of Parliament specifically include an interest in minerals in the definition of an interest in land. The purpose of the amendment is to bring the town and country planning legislation into line with that general practice. I beg to move.
Lord Bellwin: We have considered the point raised by my noble friend's amendment, but in our view we think that it is unnecessary. It is considered that in Scottish law any interest in minerals is an interest in the land containing the minerals. For that reason, the Bill contains no Scottish equivalents to Clauses 11 and 13 which set out in the compensation context that an interest in minerals shall be treated in the same way as an interest in land. We feel that the amendment is unnecessary. I hope that my noble friend will accept this.
Lord Mottistone: At this stage, I accept the points which my noble friend has made and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.17 p.m.
Lord Boardman Lord Boardman moved Amendment No. 9:
Page 22, line 28, at end insert—
("(3) Subsection (3) of section 38 of the Town and Country Planning (Scotland) Act 1972 (limit of duration of planning permission) shall be amended by the insertion at the end of the paragraph (d) of the following words:
"or
(e) to any planning permission granted for development consisting of the winning and working of minerals.".").
The noble Lord said: I beg to move this amendment and at the same time, as I did at Second Reading, to declare an interest as the chairman of a large minerals company concerned with quarrying. It may also be convenient to consider Amendment No. 12, which is exactly the same except that it applies to the non-Scottish part of the United Kingdom. Indeed, my noble friend Lord Mottistone has put down Amendments Nos. 11 and 15 which are in similar but probably rather better drafted form than the amendment which I move.
My amendment goes to the heart of the Bill, in so far as it is a fundamental part of the package contained in the Stevens Report. My noble friend will have considered carefully the Stevens Report. I am sure that he will have read with interest Chapter 7, in which the reasoning is impeccable as to why there is need for long-term planning and why no limit should be placed upon the time of starting the extraction of minerals, provided that the planning authority are

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satisfied that the working has a defined place in the operator's programme or, if it has not, that it takes into account the needs of the operator. It was because of the strong recommendation by the Stevens Committee, that these time limits should not be imposed and indeed should be removed, that all those concerned with the mining and quarrying industry have given support to the Bill and have accepted provision for a review and for reduced compensation.
The need for the long-term planning of the development of minerals is considerable. I shall not repeat what I said, perhaps all too briefly, in the Second Reading debate. It is a very long process; first, one has to find the minerals, then get planning permission and then acquire the minerals. In many cases, this is coupled with extremely costly work on roads, railways, buildings, kilns and all the other plant and equipment which is needed to develop minerals. If I may give my noble friend an illustration, I am not speaking so much of the run-of-the-mill minerals, such as sand and gravel and the like, important though they are. I am thinking of the more sophisticated minerals which are so important to our industrial base.
May I give my noble friend as an example the mineral bentonite, which is an essential material for oil drilling, but which to many of us is more commonly known as fuller's earth, from the days when as children we had it put on our chests. It is a very scarce yet very important mineral in this country. It would be quite impossible—irresponsible is perhaps the right word—for a mineral operator who was mining, quarrying and processing bentonite, to wait until he was down to the last five years of his reserves before he secured fresh supplies. There are delays in finding such minerals—indeed, they are difficult to find—in the obtaining of the planning permission and acquisition. Then at a later stage the planning permission may be refused after going through the appeals procedure; he can then find that he has not the minerals which he needs and on which so much of our industry depends.
I really wonder whether the Government have fully understood the complexities of what is involved in this type of mineral operation. Indeed, the Stevens Committee report made it clear that there was a lack of mineral expertise within the planning authorities, and therefore it is a matter of concern within the industry that the planning applications would not take account of these very important factors. I hope my noble friend will not oppose this amendment, but if he does oppose it that he will not use the arguments which have been deployed by many in discussions with his department, that it would create countervailing pressures from the environmental lobby. As the Stevens Committee report made clear, there are net gains to the environmental lobby by having long-term planning.
Another argument which is used against this removal of the time limit is that it would make a special case of mineral development, but I am sure my noble friend recognises that mineral development and mineral planning is of a very different character from other planning permissions. It is, as the Stevens Report said, both an operation and the use of land. Of course, it may be suggested that if operators do not like the limitation of time they can always apply to the Minister
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for consent. I am sure my noble friend recognises the further uncertainty, delay and cost which that would cause. I hope my noble friend will be able to accept this amendment or at any rate to give an assurance that something on these lines will be considered. It is designed to give the industry the quid in the quid pro quo to which I referred earlier in the acceptance of the Stevens Report; the acceptance of certain obligations and reduced compensation in return for the benefits of long-term planning. I beg to move.
Lord Mottistone: Perhaps it would be for the convenience of the Committee, as was suggested by my noble friend Lord Boardman, if we dealt with my Amendments Nos. 11 and 15 at the same time. They are in all but extreme detail exactly the same as his amendment. I would not seek to add to what my noble friend Lord Boardman has just told the Committee because it seemed to me to put the case very well indeed. Furthermore, on Second Reading (at col. 412) I made a point on this same issue as being one of the fundamental things which I took as an example to put to the House at that stage.
Perhaps I may suggest to the Committee and to my noble friend that the problem about this Bill, and indeed several of the amendments which have been tabled by noble Lords, is that whereas in general terms I think we would all agree that the Stevens Committee struck a remarkable balance of interests, some of the features of this Bill and some of the amendments which we shall come to later on, unbalance Stevens and where that happens I do not say that changes to the Stevens Report's recommendations should not be made but that it is necessary, if they are made, for them to be balanced by other changes to match them.
In this particular case I would suggest that is much more in keeping with what might be called the Stevens overall proposal to accept the amendment either of the noble Lord, Lord Boardman, or my own, whichever my noble friend the Minister prefers. This would allow a mineral planning permission to be started at any time unless an actual starting time was specified by the planning authority when it was granted. I suggest to your Lordships that that is a very reasonable approach but the important thing is that it takes account of the fact that mining is a very long-term operation and that being nagged at in between does not help, either economically or in the sense of getting the best out of the land when one is seeking to exploit it. So I very much support the amendment proposed by my noble friend Lord Boardman, and I commend my own to the Minister if he prefers that way of tackling the problem.
Baroness Birk: I very much hope that the Government will resist this series of amendments. I am rather amused when the noble Lord, Lord Mottistone, brings in Stevens in aid because he has a number of amendments running through this Bill which are way out from Stevens and are so different that one would think it was an entirely different Bill.
The point here is that under our general planning legislation if a detailed planning permission is not taken up within five years it lapses. There is no reason—it works perfectly well in other areas—why applications

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cannot be made for the renewal of such permissions, and current procedures allow and in fact encourage local authorities to plan ahead systematically. But this is without what I would submit would be a total confusion that would follow if planning permissions lasted for ever, with no certainty that they would be taken up.
The two noble Lords opposite who have just spoken in support of their amendments wish to exempt minerals permissions from this proposal and that proposal is something which both the ACC and the AMA—the local authority associations which are responsible for the mineral authorities which will deal with this—strongly object to. I believe it would undermine long-term mineral planning, it would generate uncertainty in the community at large, and it would cause grave problems and individual mineral operators would be unsure as to jut what competing developments would take place in an area where they intended to sell their material.
I take the point made by the noble Lord, Lord Boardman, and with his knowledge and experience of the industry I can understand why he feels as he does, but if everything else goes ahead it is in the interests of an area for the productivity to continue, so it is in their interests to extend the planning permissions.
To accept this amendment would seem to me to be a retrograde step in the whole of our planning organisation. It was for that reason, guessing that such moves would be made, that at Second Reading, at col. 505, I said:
"If they are not resisted then, as the number of planning permissions for mineral extraction build up, any hope of orderly development and everything that goes with it will disappear. The basis of long-term mineral planning will be totally undermined … and we shall be left with an increasingly random set of permissions to extract minerals, which may be valuable capital assets for the operators but which will become a series of time bombs in the environment which could explode at any time and with devastating effect".—[Official Report, 22/1/81; col. 505.]
I believe it is the purpose of this Bill—and on the whole it achieves it very well—to try to get the balance right between the very real and important industrial needs of the operators and the environmental needs. In this area this is exactly what the Bill will do, but I think that to do away with the five-year planning permission would be an unfortunate step; not only would it be bad environmentally but also in the long run I do not think it would work out satisfactorily even for the operators.
Viscount Ridley: As I promised, I am again finding myself entirely on the side of the noble Baroness, Lady Birk. I am quite sure she is right, and she has said everything very much better than I could. This does seem to me to be wrecking the whole planning process and making the very thing my noble friend Lord Boardman wants, proper future planning of mineral extraction, that much more difficult. If you have a lot of untaken-up planning permissions it is impossible to plan for the future. I hope very much the Government will resist this series of amendments.
Lord Lloyd of Kilgerran: May I join the increasing number of noble Lords who are agreeing with the noble Baroness, Lady Birk, this evening and say that we on these Benches support her. I must apologise that
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I was not present at the Second Reading, and I am only here by proxy of Lord Beaumont of Whitley who was unable to attend the Committee longer. May I say that on this occasion I must agree with the noble Baroness.
Lord Nugent of Guildford: I should like to say a word on these amendments. I very much sympathise with the needs of industry, and it would be a mistake to think that local authorities do not understand the needs of industry. Certainly in the South-Eastern region, where we work very closely with the extractive industry, we understand the needs very well and I think they understand the needs of the local authorities very well. I should say to my noble friends that local opinion is very sensitive now about opening any new pit for the getting of aggregates, which I am speaking about particularly here. In the South-East there are very few areas left which have not been worked.
As I said at Second Reading, almost all of them are now under good farmland, some of them under exceptionally beautiful land alongside the river and so on. Public opinion needs great deal of persuading that this should be opened up at all. It really is very difficult for local authorities to give these consents, and their only prospect of being able to carry local opinion with them at all is that the restoration is going of be really satisfactory—this is the absolute guts of the whole problem—and that the timing of it is going to be as acceptable as possible. Whenever it comes it is going to be unpleasant.
The noble Baroness, Lady Birk, is right; if you have a large number of consents over an area waiting to be developed at any time, they really are like environmental time bombs. It is not in the interests of the industry to think that they can have complete flexibility, because public opinion becomes so hostile that areas which are rich in aggregates simply will not be worked because of the strength of public opinion objecting. This really is the position in the South-East now, and it is going to get worse as we proceed over the next couple of decades in order to meet the needs of the construction industry.
This is a very nice balance. While I sympathise with my noble friends in putting the needs of industry, I think they are well understood now by local authorities and the balance in this Bill is just about right. As the point has been well made, a five-year condition, which is normal, can always be renewed if there is a good enough case, and if there is not a good enough case then it should not be renewed. I am sure my noble friend would be right to stand firm on this and trust the local authorities to be reasonable. I am sure they will be.
Lord Gisborough: I would like to support my noble friend Lord Boardman, for another reason which I think should be considered, that a company might well get planning permission for five years and then a political turn either way could result in a political refusal of planning permission, perhaps from public pressure. It would be very difficult for industry to know just where it stood.
Lord Mottistone: There is just one point I might suggest, in view of what has been said. I appreciate

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very much particularly what my noble friend Lord Nugent has said, because he speaks with such wisdom and experience. It is just possible that in the place of a five-year limit industry might consider, within the confines of a specific long-term permission, conditions made after full consultation with the authorities concerned, conditions as to the phasing of particular developments. A working programme sequence would provide a more equitable and practicable solution than the present arbitrary time limit system. That might be a way to get over this hurdle. I put that to my noble friend as a possible way out.
Lord Nugent of Guildford: Before my noble friend replies, may I put this point to the noble Lord, Lord Mottistone, who obviously understands the needs of the industry well. Again I am speaking about aggregates. The normal practice, as he knows, is for the industry to acquire areas of gravel-bearing land wherever they can get it, to give themselves a "bank", as it were, for the future. They have a rough plan in their minds of how they might work these in the future, long before they have got consents. Is that not sufficient for them to work on, along with the kind of assurances given that authorities will renew consents where they ought to be renewed? Everybody knows that at the end of the day this material has got to be got in order to build the houses, roads or anything else you want. The industry has got a very strong argument in the end, that we all want this stuff, although we do not want it taken from the places we like. Is not that the right way for the industry to continue dealing with it, by acquiring areas of land where they know there is gravel and phasing that accordingly.
Lord Mottistone: It being a Committee stage, perhaps I could take the point made by my noble friend Lord Nugent. It is precisely the point he has just made that I made at Second Reading in order to justify the very amendment we are seeking to put forward. It is because in the end the minerals have to be worked, and in the end the local authority knows this is going to happen, that it is not so necessary to have relatively narrow time limits for checking up on the process. This is really the nub of my argument. I hope my noble friend will see that he has actually supported me, though perhaps he did not want to.
Lord Boardman: Before my noble friend replies, may I add two further points? I should not like my noble friend Lord Nugent to think I was being critical of planning staffs and their ability. The Stevens Committee commented very strongly on the lack of experience of mining and quarrying activities within the planning authorities, and it is understandable that it should be so. The noble Baroness who put forward the arguments against the amendment did so, I think, more in the context of minerals which are plentiful and minerals which you can work shortly after getting permission. All these arguments were considered very fully by the Stevens Committee. I am sure that, if the Committee would bear with me while I read Chapter 7 of the report of the Stevens Committee, there would be no one left in this Committee to oppose the amendment. The arguments there are very formidable; I believe they are impeccable. They
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refer to the specific difficulties of not being able to have long-term planning for the development of particular types of minerals which are essential to our industrial base. I hope that my noble friend, without my having to read Chapter 7, will take account of the points formidably made there and be able to give some sympathetic response to the amendment which I have moved.
Lord Bellwin: As I suspected, a, Solomon-like posture is clearly called for on this issue, and I suspect on many others before we are finished with this Bill. Quite clearly, there are important points of view on both sides. When experts like my noble friend Lord Boardman and others speak on the interests of the industry their considerable experience must be listened to very carefully. At the same time, they would be the first to acknowledge that the concerns of those who are interested in the environmental aspects also are very important. I think it is very gratifying in many ways that the Government have finally come forward with a Bill which is trying to strike a balance, to grasp the nettle, and to take on board these differences and try to get somewhere.
It is so easy to sit back and say: "If you put this forward the industry would not like it and if you put the industry's point of view forward the environmentalists would have so much to say. Therefore, let us take the middle line of masterly inactivity and do nothing". That would be the easy way out and we are trying not to do that. I readily accept what my noble friend Lord Boardman has said. This clause is one of the most important clauses in the Bill, because for the first time mineral planning authorities will be under a statutory duty to undertake periodic reviews of mineral working in their areas.
Let me stress for a moment why we think that this is necessary. As has been said, mineral working is a long-term activity. It is often undertaken on the basis of a planning permission granted many years ago. Planning permissions granted years ago may have conditions upon them which are no longer regarded as adequate. Indeed, our grandchildren may not regard the conditions being placed upon minerals permissions today as adequate at sometime in the future. I should think that my grandchildren would certainly not so consider them. Circumstances and environmental standards change and with such a long-term activity as minerals working it is important that it is reviewed from time to time.
My noble friend Lord Boardman said that the concept of a review is unacceptable to the industry unless, in return, something is done to recognise its long-term needs. As I said on Second Reading, the implementation of Stevens should be looked at as a package which will bring benefits to the industry to balance the additional environmental constraints envisaged by the Bill. However, I cannot accept that the particular quid pro quo which my noble friend is seeking is the right answer. We believe that the right way to meet the long-term needs of the industry is through the development plan system and not by enabling the industry to obtain permissions now for implementation at some indeterminate time in the future. We are developing guidelines for sand and gravel to provide precisely the long-term planning

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needed by this section of the industry, and similar work is now under way in relation to industrial sand and chalk. At the same time, we have been considering how development plans can best be used to provide positive long-term guidance and we hope, shortly, to be issuing an advice note on that.
We are also revising the Memorandum on the Control of Mineral Working—the Green Book—to provide an up-to-date best practice manual which gives a framework for the developing relationship between the industry and local authorities. That will stress the long-term nature of the industry's operations. I, therefore, consider that we are keeping our side of the bargain on the Stevens package and I think that the industry should recognise that when we consider Clause 3 and the amendments that we have before us in connection with it.
Two other points have been made on this clause generally, both on Second Reading and in other places. I hope that your Lordships will think it relevant that I should refer to them now. Doubt has been raised about the need to extend Section 51 to cover cases where mineral working is being carried out without a specific grant of planning permission. I have explained our position as regards this and if noble Lords wish to press the point, it might best be done when we come to discuss Clause 8.
Secondly, I have said that we shall consider points about how far back the review should go. So the whole of Clause 3 places a duty on mineral planning authorities periodically to review mineral workings in their area and then to consider whether or not to make one of the four types of order referred to in the Bill. The Government believe that it should be possible for these authorities to be able to do that by utilising the staff already working in county planning departments and that the frequency of reviews will depend to some extent on the number of staff available. Therefore, this duty will not impose an additional financial burden on the ratepayer and taxpayer, but at the same time it will mean that the environmental effects of mineral working will be carefully watched. I think that the periodic review of mineral working, together with the new powers provided elsewhere in the Bill, will herald a new era in which the creation of the dereliction which is such a vivid illustration of our past insensitivity towards the environment can be avoided.
I could try to pick up more of the points that were made previously in the main by my noble friends, although in most cases they supported the points which the noble Baroness, Lady Birk, had mentioned. However, I think that we would still come back at the end of the discussion to the following conclusion. If the Bill is looked at in isolation, then there is justification, without question, for the industry's view on this. It is only when one looks at the package as a whole that I think one can see mitigation of its concerns. I am hoping that my noble friends who are so anxious about this matter will feel that their cause for concern may not be quite as great as perhaps they had originally feared. Certainly I take the view as my noble friend Lord Nugent of Guildford said—and I am grateful to him for his observations on this point—that the local authorities are concerned about what industry's needs are in this as in any other connection. They have to be concerned. They cannot be in isolation. I am
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confident that they are concerned and indeed I feel in the light of my own experience that they will be more concerned about this aspect in the future than they may ever have been in the past. So with those observations, I hope that my noble friends may feel slightly less apprehensive than they have done hitherto and that perhaps they will not press the amendment.
Lord Boardman: My Lords, I am grateful to my noble friend for that full answer. I shall certainly happily wait to see the full package as it develops during the course of this Committee stage and beyond. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 agreed to.
6.47 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 10:
After Clause 18, insert the following new clause:
("Long-term planning
. It shall be the duty of every mineral planning authority to make such provision as may be appropriate to provide for the long-term needs for the minerals in its area.").
The noble Lord said: I recognise—as indeed my noble friend Lord Nugent of Guildford said in relation to the last amendment—that many local authorities are fully aware of their problems and can be relied upon to do their part of the duties that the Bill is imposing upon them—and indeed those that they have at the moment—without any further prompting. However, there are some authorities—and I am sure your Lordships will agree that this is always the case—who are perhaps not quite as aware of the problems of mineral operators as would be most helpful in order to make this Bill, and indeed town and country planning as a whole, work as effectively as it should. It is with that underlying feeling that I am proposing this amendment, which is a small reminder-type of clause to add to the Bill, to make sure that a proper appreciation is given of the long-term needs for minerals in the area.
Perhaps I may give your Lordships four reasons why it is necessary. First, it could provide financial security for the very heavy investment which industry frequenty has to make at the start of a project and which is only recouped over an extended period of development. The second reason is to avoid the minerals-bearing strata being sterilised by other developments. That is a very important problem. I hope that my noble friend Lord Nugent will forgive me for continually referring to his excellent contribution, but he made the point that it could be that minerals will not be developed in the best interests of the country, let alone anybody else, because of action taken that is to prevent that happening, or indeed other developments taking place which prevent it from happening. That is a second very good reason for underpinning the need for a long-term look at the problem.
The third reason is to integrate properly and progressively the project into its environment and to minimise any adverse effects. I am sure that all noble Lords, including the noble Baroness, will welcome that reason, because it is very much in accord with the general recommendations of the Stevens Report and indeed with what has been said by most noble Lords this evening. Fourthly, this will allow the development

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to proceed in line with an ever-fluctuating demand. I suggest that these are all good reasons for giving legal recognition to the need for long-term planning of minerals. I beg to move.
Lord Boardman: Briefly, I should like to support my noble friend on this amendment. I referred to the long-term needs when I spoke to the previous amendment, and I shall not repeat the arguments. Enormous capital investment has to go in to dealing with the processing of more sophisticated metals. Some noble Lords may have knowledge of the smaller sand and gravel, and readimixed plants. In many cases we are talking of what is vital to this country. It can cost £20 million, £30 million or £40 million to erect processing plant to deal with many of these sophisticated metals. Therefore, it is important that those who are planning such projects should be able to do so on the basis of long-term planning permissions. I support the four reasons which my noble friend has given as to why this would not only be in the interests of the industry but in the interests of the environment as well. I strongly support this amendment.
Lord Bellwin: As the amendment stands, I am afraid that I cannot accept it. Where, for example, is the provision referred to to be made? In the development plan? Are planning authorities to cater only for their own needs and not for wider requirements? This latter point would go against so much of the good which has happened in recent years in the regional co-operation between the industry, local authorities and central Government. As drafted, the amendment is also defective in its reference to mineral planning authorities, as these are not defined in the Scottish part of the Bill. But even if these points were corrected, I wonder whether this amendment is really necessary. Do planning authorities need to have this additional duty placed on them when they already have a duty to make proper planning provision for their area—including housing, employment and mineral working?
Having said that, I think there is a point here which we ought to look at more closely. I am willing to consider this matter once again. I think that the points made have a certain relevance, and I am particularly concerned with the point made by my noble friend Lord Boardman. Certainly, as it stands, the amendment would not do, and I am sure that my noble friend Lord Mottistone accepts that. But the subject is one which perhaps at least we ought to consider again. If my noble friend would withdraw the amendment, I would give him the assurance that we would do that.
Lord Mottistone: I am indeed grateful to my noble friend the Minister for those remarks. Perhaps I could apologise to your Lordships for not saying that I wish to take Amendment No. 14 in conjunction with this, which is the Scottish amendment. I apologise for having left "minerals" in Amendment No. 14; I tried hard to get them out and in some cases I succeeded, but I failed in this amendment. With the very splendid assurances of my noble friend, I am happy to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone had given notice of his intention to move Amendment No. 11:
After Clause 18, insert the following new clause:
("Time limit on commencement of development
. The following shall be added to section 39(3) of the 1972 Act (limit of duration of planning permission):—
"(e) to any planning permission in respect of development consisting of the winning and working of minerals".").
The noble Lord said: I have already spoken to this amendment. I listened with great care to what my noble friend the Minister had to say in reply to Amendment No. 9. I shall read his remarks with care and possibly give thought to tabling an amendment on Report, which would be adjusted to take care of what has been said. In those circumstances, I shall not move this amendment.
[Amendment No. 12 not moved.]
Clause 2 agreed to.
6.55 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 13:
After Clause 2, insert the following new clause:
("County Planning Matters
. The following sub-paragraph shall be inserted after sub-paragraph (cd) of paragraph 32 of Schedule 16 to the Local Government Act 1972—
"(ce) the erection of any building, plant or machinery which it is proposed to use for the manufacture of bricks or clay roofing or floor tiles.".").
The noble Lord said: This amendment reopens a subject which we fought long and hard in the Local Government, Planning and Land Act. I shall not weary your Lordships with a long speech at this stage. I would ask my noble friend the Minister to read again what I said during the Report stage of that Act at column 261 on 28th October, where the argument was put very fully.
The fact of the matter is that the Government were very understanding about the needs of various types of mining activity, in transferring them to a county responsibility. But they dug their heels in over bricks. As I say, the arguments are very neatly balanced and, indeed, my noble friend said so in his reply to me at column 264. Of course, the industry has given immense thought to this matter since the debate to which I have referred and this amendment is brought forward with every possible consideration of what was said before. We believe that the fine balance should fall gently in the direction that I now suggest.
Perhaps I could sum it up by saying that where a brickworks is connected in any way to its minerals—by a pipeline, a conveyor or private road—it is now, in accordance with the Local Government, Planning and Land Act, a county measure. However, where a brickworks is not so connected—for example, where the clay is brought into the works and is separated by some minor public highway—technically it would probably be a district matter. It is this point which we wish to have put right in the same way as it has been altered for other minerals. It is this point which we believe is justifiable in this case because there are not very many brickworks to which it will apply. I beg to move.
Viscount Ridley: This may be the only occasion when I find myself able to support my noble friend Lord Mottistone. Therefore, I have great pleasure in taking

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the opportinity to do so. I am sure that what he proposes is logical; it tidies up the 1980 Act, and I am all for trying to get it agreed to. I hope that the Government will approve.
Baroness Birk: I do not have anything against the amendment in principle, but I thought that it was covered by the existing development system anyhow, and, therefore, while worthy, was not necessary.
Lord Bellwin: This re-opens a debate that we had before, and I hope that it comes as no surprise to my noble friend Lord Mottistone that, in fact, I cannot accept the amendment. I suspect that it does not come as a surprise to him because he will recall the extent to which we debated this at the time and how the Government went to such great lengths in this part of the Local Government, Planning and Land Act to draw a balance yet again between the functions of the counties and those of the districts. That was another "no-win" situation, if I may so call it, where we could not satisfy everyone; we were bound to be wrong somewhere.
At the end of the day I know that the districts felt rather let down when they had expected so much, because of all the alterations that took place the only one in fact was planning, albeit the important one that it is. On the other hand, the counties felt very anxious and, to some extent, aggrieved that this aspect of local planning was going out of their hands in the way it was. So they, too, were not happy. Yet the Government had to strike a balance. I think that we struck the right balance then. I think that the point on brickworks was well talked through; it was ably presented, as always, by my noble friend Lord Mottistone.
I do not think that he would thank me if I were to read column 264 of the debate that took place at that time. I am tempted to do so because the case, if I may immodestly say so, was put very clearly. I really could not do any better if I were to have another shot at it now, so I will not. I will only say that I understand the point he makes. I even more understand the support he received from my noble friend Lord Ridley. I always respect his views, but in turn I know that he understands why we cannot proceed to accept this amendment on this occasion.
Lord Sandford: I should like to rise and console the noble Baroness, if it is a consolation, that if she has now lost the support of my noble friend Lord Ridley and my noble friend Lord Mottistone, she has now gained mine.
Lord Mottistone: I am really rather sad. Perhaps it is too short a time since last October. A sign, I always think, of a great Minister is one who is prepared to adjust his attitude, particularly when, as he himself said, the matter is so finely balanced. However, I appreciate that he has not. We shall consider this at a later stage of the Bill and keep our eyes sharply open for other Bills in the future into which one can insert amendments of this sort without upsetting anyone at all. At this stage, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 14 and 15 not moved.]
Clause 3 [Periodical reviews of mineral workings]:
Lord Mottistone Lord Mottistone had given notice of his intention to move Amendment No. 16:
Page 2, line 35, after ("of") insert ("all").
The noble Lord said: This amendment is satisfactorarily covered by the Government's Amendment No. 17. Therefore, I shall not move it.
[Amendment No. 16 not moved.]
7.2 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 17:
Page 2, line 35, leave out ("sites") and insert ("every site").
The noble Lord said: This amendment seeks to make clear the Government's intention that a mineral planning authority should periodically review all sites in their area. Fears have been expressed that the current drafting of the clause could lead to a mineral planning authority concentrating on sites belonging to one operator while failing to review others. This is not the purpose of the clause, and this amendment makes that clear. I beg to move.
On Question, amendment agreed to.
Lord Sandford Lord Sandford moved Amendment No. 18:
Page 2, line 40, at end insert—
("(iii) for which planning consent has been granted").
The noble Lord said: I beg to move Amendment No. 18. Before I start to speak to that, perhaps I could say that I too welcome Amendment No. 17 and because that has now been moved I shall not have to move Amendment No. 19. The Stevens Report in Chapter 8 recommended a review, but the review they recommended was a review of the conditions attaching to all the planning permissions in an area governing mineral working sites. They made it clear in paragraph 8.6 that that review did not apply to those items covered by Section 45 of the main Act relating to the permanent features of the mineral working site.
Stevens also recommended that each and every permission, and the conditions attaching to that, pertaining to each site should be subject to review, and that point has been safeguarded by Amendment No. 17. But he did not limit the idea of a review to the conditions pertaining to the permissions on sites on which work had already started. The review he envisaged covered all permissions that had been granted whether work had started or not. This is a probing amendment to see why it is that in drafting the Bill the Government seem to have departed from what Stevens recommended in this particular respect. I beg to move.
Lord Bellwin: There may be cases where mineral working is being carried out without an express grant of planning permission, including cases where working began before the onset of planning control. It is clearly necessary in our view to review these workings so that the possibility of imposing up-to-date environmental or restoration conditions can be considered. I accept that in some, but not all, of these cases enforcement action could provide an alternative procedure,

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but we think that even in these cases the review procedure envisaged in the Bill is to be preferred.
I am not sure that at this stage there is more that I can add to that. I shall certainly discuss the points made by my noble friend Lord Sandford and look carefully at what he has said, but at the moment I cannot accept the amendment and would have to leave it at that. However, I shall look carefully in case there may be another view when we have considered it again.
Lord Sandford: I thank my noble friend. I appreciate that one of the reasons for referring to sites and not to permissions under which the sites are being worked is in order to catch those sites on which minerals are being worked without permission. I appreciate that point. But in adopting the wording they have used the Government failed to capture the permissions which have been given and on which work has not yet started. Those permissions will normally, unless something else is specified, last for five years before they lapse.
It is possible that there is provision in the 1971 Act for the mineral planning authorities to allow a period of 10 years to elapse, for instance—and this is recommended by Stevens in some cases—before the permission need be taken up. Surely in any review that is being undertaken of all the permissions outstanding, and all the sites being worked, it ought to be possible for the mineral planning authority to review a permission on which work has not yet started. That is the point on which I want elucidation.
Viscount Ridley: I think that my noble friend Lord Sandford made a good case. I hope that this could be looked at again before we leave it.
Lord Bellwin: I said that I think that we ought to consider what my noble friend has said, and that I gladly undertake to do.
Lord Sandford: I am most grateful. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 19 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 20:
Page 2, line 41, leave out ("site") and insert ("planning permissions").
The noble Lord said: This is not dissimilar from my noble friend Lord Sandford's amendments. One of the things which puzzled us is how the noble Lord the Minister expects reviews to resolve the discrepancies between sites and the areas covered by planning permissions. The object of this amendment is really probing, to see whether my noble friend can explain this to us.
Lord Bellwin: I would just say here that there are two reasons why we are unhappy about this amendment. First, we believe that there are some mineral operations which are being carried out without an expressed grant of planning permission because, for example, they predate planning control. If it is necessary to update
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a planning permission granted in 1949 it is equally necessary to impose up-to-date conditions on working which began in 1946, before the onset of planning controls. We shall return to this point on Clause 8. Secondly, there are many sites covered by several permissions, and these should clearly be reviewed as one site. A review of each permission separately, as the amendment implies, would be highly undesirable, not least from the point of view of the operator.
We believe we need to apply Section 51 to mineral workings to cover cases where there is no permission which can be modified under Section 45, but we will be discussing that when we come to Clause 8. In the meantime, I hope that gives my noble friend Lord Mottistone an indication of how we view this point, and if he would care to bring it forward in another way we should be glad to look at it.
Lord Mottistone: I am grateful to the Minister for that explanation. We will look at the matter further. At this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.11 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 21:
Page 2, line 42, leave out ("51").
The noble Lord said: This too relates to Clause 8 in the sense that it is consequential on various amendments proposed to that clause. Section 51 empowers planning authorities to require the discontinuance of use or alteration or removal of buildings or works. The Local Government, Planning and Land Act sensibly made a county matter the planning of works integrated with mineral workings. But it does not follow that once planning permission has been given by a planning authority for such buildings or works, the operator should be deprived of the compensation properly payable when a Section 51 order is made. It is with that in mind that we seek to leave out "51" from the clause.
Lord Bellwin: There is little I can add to what I said on the previous amendment; the situation is the same and we do not want to accept this amendment for the reasons I gave. However, we wish to see whether my noble friend can come at this in another way, in which case we should be glad to look at it.
Lord Mottistone: I am grateful to my noble friend and we shall give great thought to this. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Birk Baroness Birk moved Amendment No. 22:
Page 3, line 2, leave out from ("means") to end of line 4 and insert ("any period specified by the mineral planning authority being a period of not less than the five years preceding the date of the beginning of the review.").
The noble Baroness said: It is already common practice for local authorities to conduct informal reviews of mineral workings and this clause now makes such reviews a statutory duty at periodic intervals, and happily will now lend statutory authority to the existing informal review procedures where they have been conducted in the past. Clearly it would be wrong

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if any such duty should require a local authority to look at its abandoned neolithic flint mines or disused Roman quarries unless it particularly wished to do so. Local authorities should therefore be able to specify the historical period about which they will look at workings which have become non-operational.
The amendment would enable local authorities to consider in their reviews workings that finished, say, eight or 13 years ago, but which remain important because they contain substantial unworked material. My feeling is that that is the implication of the Bill; but, with respect, that is not clearly enough spelled out, as it would be if the amendment were made. Conditions will obviously vary from one area to another, but if only a five-year period were specified that would result in the sort of inflexibility which the Bill sets out to avoid.
Lord Bellwin: Briefly, I am sympathetic to the point made by the noble Baroness. Perhaps she will leave the point with us so that we may consider whether the amendment achieves the object in the best way. We will certainly want to take it up along these lines.
Baroness Birk: I am obliged to the Minister and, on that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 3, as amended, shall stand part of the Bill?
Lord Boardman: This clause is part of the package to which I referred when we were discussing an earlier amendment, as one of the heavy obligations which the industry are required, and have been prepared, to accept if they receive the compensating provisions to which reference was previously made. My noble friend has been good enough to say that at the end of the day we should be satisfied that such imbalance as appears at this stage will have been restored, and I am happy to wait to be so satisfied.
Clause 3, as amended, agreed to.
Clause 19 [Periodical Reviews of mineral workings]:
[Amendment No. 23 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 24:
Page 22, line 35, leave out ("sites") and insert ("every site").
The noble Lord said: This amendment makes it clear that the duty of planning authorities to review mineral workings shall extend to all sites in their area. This is the Scottish equivalent of Government Amendment No. 17.
On Question, amendment agreed to.
[Amendments Nos. 25, 26 and 27 not moved.]
Clause 19, as amended, agreed to.
Clause 4 [Notification of applications for planning permission]:
Lord Mottistone Lord Mottistone moved Amendment No. 28:
Page 3, leave out lines 19 to 34.
The noble Lord said: The lines we seek to delete seem to import quite unnecessary complication, including authority for yet another line of ministerial orders. It seems to us that the areas where the owners of excluded minerals should be notified of a mineral planning application will be limited and will basically be known by the planning authority. Furthermore, these are areas where they not only should be notified but they should be consulted by the mineral planning authority on the consequences of the excluded minerals of the application proposal. In these circumstances, it seems preferable that the owners of the excluded minerals should become statutory consultees in the areas that would require notification and that the need to notify which the Bill proposes could therefore be removed.
Lord Bellwin: I am aware that the industry considers that the procedure outlined in lines 21 to 34 is an unnecessary complication, but it is considered essential that some means of consulting owners of excluded minerals should be provided. Having said that, we have some sympathy with the industry's view that the procedure outlined is complicated and we are looking to see whether a simpler procedure can be devised. I therefore tell my noble friend that we want to consider the matter further with that in mind, but I think it essential that owners of excluded minerals should be notified of minerals applications which could directly affect their interests. However, I gladly undertake to take the matter away and consider it.
Baroness Birk: Does the Minister by that reply mean that the provision itself will not be lost, since I believe that the core of it is absolutely essential? If he is talking of perhaps redrafting it, I should go along with that, but not if it means eroding the whole provision.
Lord Bellwin: I am saying that the point made here is sufficient for us to consider the wording as we have it at the moment. While doing that we shall look to see whether we are satisfied as we were when we originally drafted the provision. I think that we probably are still satisfied, but I should want to look at the point.
Lord Mottistone: With that reassurance, for which I am most grateful, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 agreed to.
7.21 p.m.
Lord Sandford Lord Sandford moved Amendment No. 29:
After Clause 4, insert the following new clause:
(" Restoration condition to planning permission
. The following subsections shall be inserted after subsection (3) of section 30 of that Act:—
"(4) Where planning permission for development consisting of the winning and working of minerals is granted subject to a restoration condition, before imposing such a condition, the mineral planning authority shall consult as to its terms:

(a) the Minister, where they propose that the use specified in the condition shall be a use for agriculture; and

(b) the Forestry Commission, where they propose that the use so specified shall be a use for forestry.

(5) The mineral planning authority shall also, from time to time as they consider expedient, and at least every year, consult the Minister or the Commission, as to whether adequate steps are being taken to comply with a restoration condition.".").
The noble Lord said: I beg to move Amendment No. 29. This, too, is a probing amendment in order to gain some elucidation on two points. I have no intention of pressing the amendment at this or any other stage. First, Stevens, at Chapter 9, says quite categorically that a restoration condition must be attached to every planning permission for mineral working, and whenever possible that restoration must provide for progressive restoration.
One might have supposed that in reviewing the whole area of mineral working he would find that there were certain types of working where restoration was not suitable or apt, but that is not the case. He has looked at all forms of mineral working—such as china clay, bricks, sand and gravel; everything under the sun—and says quite categorically in respect of every single one of them that a restoration condition must be attached to every planning permission. I do not see that reflected in this piece of legislation, and I should like to know, first, where it is if it is not here. Alternatively, is it intended to insert it somewhere else?
The amendment is important in order to reflect the recommendations of Stevens, and it is also important because the application of aftercare conditions, to which Clause 5 applies—and this is why I have put down my probing amendment at this point—is entirely contingent on the restoration condition being there. If a restoration condition is not applied to a permission for mineral working, then because of the wording of Clause 5, the aftercare conditions cannot be superimposed; they can only be tacked on to a restoration condition.
So we have the odd situation where aftercare conditions and the duty to impose them are contained in Clause 5 of the Bill, but the prerequisite for the application of aftercare conditions is not provided for anywhere so far as I can see. That is the main point on which I wanted elucidation. Compared with it, the details of the amendment are not tremendously important. I shall speak on the question of amenity planting when we reach Clause 5. I beg to move.
Lord Bellwin: This proposal goes well beyond anything arising directly out of Stevens. There is a good deal of logic in the proposition that where MAFF or the Forestry Commission is being consulted on the terms of an aftercare condition, it should also be consulted on the terms of the restoration condition and on how well it has been complied with. However, there are a number of other considerations. I should have thought that the industry would be likely to oppose this, given its reaction to consultation on aftercare conditions, and its opposition is likely to be even stronger since this consultation would take place regardless of whether or not it was sensible to impose an aftercare condition. However, I should like to have an opportunity to examine the full implications of this proposal in the light of what my noble friend has said, and therefore I say forthwith that I shall gladly take it away to consider.
Baroness Birk: When the Minister takes away the amendment to consider it will he bear in mind the fact that throughout the debates on the local government Bill many of us, including perhaps the noble Lord, Lord Sandford, remarked on how everything was going to the centre, whereas local authorities themselves ought to have more responsibility. I understand very well the motivation behind the amendment, but again it is all a question of coming back to the centre. I am greatly in favour of watchdogs, but I think that in this case the noble Lord is perhaps overdoing the barking. I should have thought that the way the matter is left at the moment there is absolutely no reason why, if necessary, the mineral authority should not consult the Forestry Commission or the relevant Ministry, either the Department of the Environment, or the Ministry of Agriculture, Fisheries and Food. When I think of the amount of paper work and the number of officials which would be involved, I wince to think that consultation should take place every year. If the Government can find such resources, let them put them into housing or something similar that is more necessary than this.
Viscount Ridley: The noble Baroness has again got it absolutely right. This seems to me to be a recipe for enormous bureaucracy and time-wasting. Subsection (5), proposing consultation every year, reminds me rather of painting the Forth Bridge. It would be a job for life. One knows how long it takes to get an answer from any Ministry, and the next year would soon come round. I hope that my noble friend on the Front Bench will not bring back this proposal in any form at all. I believe that mineral authorities and planning authorities are perfectly capable. They already have a tremendous body of expert opinion and knowledge, as well as experience of how these things should be done. Certainly all the counties that I have had anything to do with have known much more about it than has the Ministry of Agriculture, and certainly much more than the Forestry Commission is ever likely to know. They have all had great experience of reclaiming derelict land and mineral relics. I would oppose very strongly any proposal of this kind, if only on the grounds of the increased public expenditure which would be bound to result from it.
Lord Mottistone: I, too, should like to add my voice of opposition. It is a pleasure to be able to speak on the same front as the noble Baroness, Lady Birk, for the first time today—and probably the last. As my noble friend the Minister is well aware, this proposal is anathema to industry. In particular, subsection (5), if enacted in any form, would amount to an incredible imposition on industry, and as my noble friend Lord Ridley said, I suppose that it would also be a terrible imposition on the local authority, too. I observe that my noble friend Lord Sandford said that this is a probing amendment. I hope that it now disappears into the mists of the past and no one ever considers it again.
Lord Sandford: It is very nice to have been able to unite the noble Baroness with her two erstwhile friends. As I said, this is a probing amendment and the main purpose of it is to ascertain from my noble friend where the duty to impose a restoration condition resides,

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since that was something which Stevens prescribed quite categorically. Such a condition does not seem to be in the Bill, or anywhere else, and without it, it would not seem possible to me to attach the aftercare conditions. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 30 not moved.]
Clause 20 agreed to.
Clause 5 [Imposition of aftercare conditions on planning permission]:
7.30 p.m.
Lord Gisborough Lord Gisborough moved Amendment No. 31:
Page 4, line 5, at end insert ("or where restoration is to be carried out in stages").
The noble Lord said: I have enormous confidence in all mining companies, but at the same time there is no doubt that every industry has its "wide boys". It is certainly possible—in fact, it does happen—that workings are undertaken and then either the restoration is evaded in spirit or what can easily happen is that the firm can go bankrupt and leave the workings in a terrible state, with no possibility of putting it right. Furthermore, this is an extremely dangerous situation for the owner of the land, who may then have to restore the land himself at his own cost, with nothing coming in with which to do it.
One of the answers is the performance bond, but this, I think, is too expensive for industry and is not practical. I think the prudent owner will insist on restoration by stages, so that, during stage 2, stage 1 is retored, and stage 3 cannot start until stage 1 is satisfactorily restored to its final state. This, I think, ensures that restoration is done most economically for the mining company and most safely as respects both planning and the surface owner's peace of mind. Whether my amendment helps the situation in the words which I have used I am not sure, but I believe that some amendment to encourage restoration by stages would be most useful. I beg to move.
Lord Mottistone: I should very much like briefly to support my noble friend Lord Gisborough in the principle of his amendment. I am sure that restoration in stages is a thing which needs to be considered, and some of my later amendments in fact embody the same general theme.
Baroness Birk: What I am concerned about is that I do not quite know what "stages" means. Does it mean as the outer parts are done or does it mean that, for instance, as the drains, or whatever it is, are put in the whole operation stops until the end of that stage? I think we must have a functional definition and understanding of what the word "stages" means, because obviously is not clear from the amendment.
Lord Gisborough: I wonder whether I could explain this. As an example, perhaps a mining company might be allowed five acres to start with, where they might open-cast. Then they would have a second five acres, perhaps, and while they were open-casting that they would replace all the topsoil back on to the first five acres, and until the first five acres were completely
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finished with topsoil and whatever was required they would not be allowed to go into the third stage. Really, it is just the same, I think, as the efficient form of double digging—putting manure in and then putting a load of topsoil on the first deep dig.
Lord Bellwin: Let me say at once that I entirely accept that the drafting of the Bill needs to be extended to cover progressive restoration. I shall be moving an amendment later to deal with these points, and I hope that with that assurance my noble friend will feel able to withdraw his amendment.
Lord Gisborough: I thank the Minister for that, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 32 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 33:
Page 4, line 10, leave out from ("that") to ("and") in line 13 and insert ("after operations for the winning and working of minerals have been completed, the site shall be restored by the use of any or all of the following, namely, subsoil, topsoil and soil-making material;").
The noble Lord said: This amendment provides for an improved definition of "restoration condition". It makes clearer that such a condition can cover the deposition of any one of sub-soil, top-soil or soil-making material on land once mineral working has been completed. This takes account of the fact that restoration to forestry can in certain circumstances be successful on sub-soil. The amendment also removes any misunderstanding that the word "replaced" in the existing definition may cause. Sub-soil, top-soil, et cetera, may not always be still available on a site to be replaced, and the amended definition makes clear that fill material can be brought in. I beg to move.
Viscount Ridley: I do not want to waste time, but I wondered what "soil-making material" means. I have never heard of anything of that kind before, and I should very much like to know where to get some.
Lord Bellwin: I shall be very glad indeed to write to my noble friend and give him what I am sure will be a lengthy and comprehensive definition.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Lord Segal): I have to point out to the Committee that if Amendment No. 34 is agreed to I cannot call Amendment No. 35.
Lord Bellwin Lord Bellwin moved Amendment No. 34:
Page 4, line 15, leave out from ("that") to ("to") in line 18 and insert ("such steps shall be taken, during such period as may be specified for each step, as may be necessary to bring land").
The noble Lord said: This amendment seeks to provide an improved definition of an aftercare condition which makes clearer our intention that a mineral planning authority should specify, in an aftercare condition, the actual steps which must be taken and the time within which each step must be taken. The existing wording is ambiguous in that it could be

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interpreted to mean that the planning authority need specify only that necessary steps should be taken to bring the land to the required standard for agriculture or forestry, without saying what are these steps. I hope your Lordships will agree that this makes it clearer, and I beg to move.
On Question, amendment agreed to.
[Amendment No. 35 not moved.]
Baroness Birk Baroness Birk moved Amendment No. 636:
Page 4, line 22, at end insert—
("; or
(c) use for amenity purposes.")
The noble Bafroness said: I think that later on we are going to discuss Clause 5 on an amendment to be moved by the noble Lord, Lord Mottistone, so at this point I will restrict myself to the particular amendment on the Marshalled List. The after-care provisions, which I welcome very much indeed, at the moment cover only agriculture and forestry, which I think is rather a pity because it is rather narrow. The amendment would extend it to cover amenity or amenity purposes—and I notice, looking through the amendments, that in some cases I have one description and in some places the other, but no doubt all that can be straightened out when the Government, as I hope they will, manage to sort it out—and it would seem a great pity if this Bill were left quite as restricted as it is at the moment.
What I think we are concerned with is this—that is, the two noble Lords who have joined their names to mine on this amendment as well as others by whom I have heard it raised; and the noble Lord, Lord Hunt, who said that, unfortunately, he could not stay, also said that he would greatly support an extension of this which would include recreational purposes. What I should like to include is land which is planted for amenity purposes. I am not thinking of putting on to the operator the imposition of creating, say, a surface for a golf course—I am not considering anything like that which in any case will be covered through Section 52 agreements—but I think we ought to have some sort of category covering land which is planted with, for instance, trees as windbreaks, or with shrubs or bulbs (and flowers and bulbs do not really come under the Forestry Commission), to improve the look of the area. In that way this whole exercise of after-care will have, as I am quite sure it is intended to have, an effect on the quality of the life of the whole community; so that the look of the area is improved, and then it is necessary for the land to be subject to after-care for several years to make sure that the scheme is viable.
There are other ways in which I think it could be used if we apply some imagination. At little expense—and, very often, at no expense—one could increase the spread of such recreational amenities; for example, quarries for climbing where there is limestone or sandstone. It is in this area that the noble Lord, Lord Hunt, is concerned. Mineshafts can be used by cavers. All these would be there already and one would not have to do much about them. Then some of the large mineral sites have become water-filled and could be used for water sports. Other sites could be used for motor-cycle training and for tests and trials. I am
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not suggesting we can come up with an answer tonight because I know it is difficult; and I appreciate that definition. But I would ask the Minister to look at it. Perhaps we could put in the Bill a phrase like "for amenity purposes" and then have it more clearly defined in one of the schedules.
I am conscious of the fact that this has taken many years. The last Bill dealing with this subject in this manner was in 1947 and probably we are not going to get another Bill like this within the next decade or two. I think that all the way through this Bill, and particularly in this area, we have to be conscious that we have to be a little ahead of the field and, even though financial resources are very restricted at the moment, I should like to feel that in the Bill, and particularly in this area which is a good example, there is the provision, incentive and encouragement for this very important after-care condition (which I think is magnificent and essential) to be used to the best of our ability and that of the local government areas.
What I am asking the Minister tonight is whether he would accept that this is something which is important and that there should be a way found of getting it in the Bill. I do not think it is beyond the expertise of the draftsmen to find a way to work this out, as long as we all know what we want. I hope that the Committee, whatever view they take on the other aspects of the Bill, will support what I am asking for in this clause. I beg to move.
Lord Sandford: The noble Baroness and I are once again together. I hope a number of other noble Lords will join us in supporting this amendment. I have not much more to add to what she said. I think, as a first step, we want the addition of these words. The same amendment will have to be made to the Scottish section if the principle is agreed, and there will have to be a few other changes. But the main additional point is that it is realistic to think of land restored after mineral working to be used for agriculture or for forestry as defined in the Bill; that is to say, for growing commercial crops, trees or grain, provided that the restoration condition included the stockpiling of the subsoil and the topsoil and that the topsoil and the subsoil have been properly put back again. Alas! this condition has not in many cases been fulfilled and in some cases even in the future it may not be able to be fulfilled as completely as we should like.
In those circumstances, the use for forestry and agriculture is ruled out; and one is then obliged to look to the land for amenity purposes and to see what could be done to improve the landscape and to make the land available for recreation. That use, which is often forced upon us, is not covered by subsection (2)(a) or (2)(b) in the Bill as drafted. For that reason alone, we need to have included some such phrase as "use for amenity purposes". In the case of agriculture, it is appropriate to consult the Minitry of Agriculture about the after-care (as it was to consult about restoration) and in the case of forestry, it is appropriate to consult the Forestry Commission. In the case of amenity purposes, it would be appropriate for the district council to be consulted.
I should like my noble friend to consider that aspect;

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but I shall not move my Amendment No. 50 in view of the withering attacks that I suffered on my earlier amendment. But I should like my noble friend to take the general point that the district council is interested when it comes to recreation and amenity purposes. The point I should like to make now is that I support the noble Baroness in asking for the insertion of "use for amenity purposes" in parallel with agriculture and forestry.
Lord Gisborough: Would it be convenient to talk on Amendment No. 57 which comes later but which is dealing with virtually the same thing? That amendment reads:
"Nothing in this Act shall have the effect of restraining a mineral planning authority from granting planning permission with restoration conditions for purposes other than agriculture and forestry".
That could be debated later.
I agree that there may be occasions when it would be convenient to have, say, motorcycle trials or an aquatic country park in a gravel pit, and so on. I think it is not unreasonable to ask a mining company to restore to some other use (even to a golf course) provided the mining company are in agreement with it and that they do not consider it a substantially greater cost than restoring it to agriculture. The overall cost to them of restoring to levels which are suitable for a golf course is probably no greater than the cost of levelling flat for agriculture. If a condition of after-care is made for public use as a park, it must be with the full agreement of the surface owner and the developer, and not against the wishes of those people who have to live in the area afterwards.
Viscount Ridley: I should like to add a word of support for this amendment. I feel that it would he valuable and in some cases could save the developer of minerals a lot of money. I have experience of the open cast coal situation. I realise that that is not covered in this Bill; it has its own legislation. On one occasion, in order to improve the landscape after coal workings, it was proposed to construct a lake as a part of a country park and to produce recreation facilities with boats. Unfortunately, the lake developed a leak which still continues, so nothing came of it; but the idea is sound. It could be that mineral workings in other parts of the country could be encouraged to revert to recreational use by something of this kind. I would support the amendment.
Lord Bellwin: While it is reasonable to expect an operator to bring land back to the standard required for agriculture or forestry, we think that the amendment, as it is in front of us, is too wide in that it could lead to requirements for other purposes. I know this is not the intention of the noble Baroness; she said as much. Nevertheless, it could be interpreted in this way. While speaking, may I say that I am covering points which come in Amendments Nos. 43, 44 and 93; and my noble friend Lord Gisborough referred to Amendment No. 57.
We accept that there might be a particular problem in relation to community tree planting which arises from the definition of forest used in Schedule 1; the definition is rather narrow. Without making much
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ado of it—because there seems to be a unanimity of viewpoint on this—certainly the Government recognize the position. I say without hestiation that, while this amendment is too wide to be acceptable, we should like to see whether we can come up with one which would be acceptable. We shall read very carefully what has been said.
Baroness Birk: In withdrawing the amendment, I should like to thank the Minister. I am sure that he will take into consideration that this is the first amendment where there has been all-round agreement from everybody who has spoken. I know that it will be difficult but I hope that an imaginative result will be forthcoming, otherwise a very great opportunity will be missed.
Amendment, by leave, withdrawn.
7.51 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 37:
Page 4, line 22, at end insert—
("(2A) The steps that may be specified in an aftercare condition may consist of planting, cultivating, fertilising, watering, draining or otherwise treating the land.").
The noble Lord said: This amendment is consequential on Government Amendment No. 34 and defines the actual steps which may be specified in an aftercare condition. These steps were originally set out in subsection (2) but in this new draft they form a separate subsection. I beg to move.
Lord Mottistone: My noble friend, having pleased me by moving Amendment No. 34 (which stopped my moving Amendment No. 35) which by itself is not too objectionable, then re-introduces the closely worded definition I would have sought to exclude in my Amendment No. 35. That type of detail is not necessary and may cause more trouble to mineral operators than is reasonable. Operators accept reasonable restoration conditions, and these may include an obligation to plant suitable cover and restore land to reasonable agricultural or factory use. However, these detailed provisions are admittedly covered by the word "may" which gives a certain amount of option and could give rise to people believing that each and every stage of this will have to be followed. It is probably wiser to leave the amendment to that provided for by Amendment No. 34 without specifying the detail.
In some respects we are going very far ahead. The noble Baroness said that we need to lead the field. I have always been worried about people who lead the field. Often in the hunting field it is unpopular for one to do that unless one is the master. To be serious, there is a danger that we may get carried away in committing ourselves further than is reasonable.
The noble Baroness said that she did not think that there would be another Bill of this kind for another 20 years or something like that. She might be right. We are amending Acts of 1972, which is only eight or nine years ago, at the moment. The noble Baroness knows better than I do that the officials in departments keep tabs on Bills to see how they are working. I would have thought that there are some areas where we do not want to go too far ahead and be too specific. It would be better to say to ourselves "Let us describe it in broad principle step by step. Do not let us spell

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out the steps. Let us see what experience reveals". Maybe in five or 10 years' time somebody can move an amendment to this comprehensive Act (as it will then be) and tighten up any areas where experience shows this to be necessary, and loosen elsewhere. But do not overdo it now. Do not imagine that because we are so splendid in this Chamber we know all the answers and can write the whole Bill and get it perfect at this stage.
I would not wish to take the Committee—small as it is—to a Division; but I sound a note of distaste for my noble friend's Amendment No. 37 and, in advance, for his Amendment No. 38. I shall give serious thought to seeing whether I can offer at the next stage something a little less precise and detailed.
Viscount Ridley: Almost all experience in this matter—and I speak from considerable knowledge—shows that it is not enough to re-seed an area or plant it with grass or trees. You have to look after the area afterwards and see that it is maintained. That can be onerous, expensive and time-consuming. There is no point in having after-care arrangements unless some follow-up period and operation are indicated.
I am dubious about the point where it says that steps may be specified for watering land. If we get a year like 1976 that will be an expensive commitment, with mineral owners going about with watering cans. I hope and believe that we shall never have another drought quite so bad, nor another year quite so wet as last year. The Government are on the right lines in this part of the Bill and I support my noble friend's amendment.
Lord Bellwin: I am surprised that my noble friend Lord Mottistone is so concerned. I thought that it would be extremely helpful to everyone to know what types of operation we have in mind. I hear his concern; I cannot do anything about it. I shall watch for anything he comes forward with, but for the moment I shall still move the amendment.
Baroness Birk: The amendment I am moving next is to increase the period from five years to 10 years, and five years is firmly written in subsection (2)(c). In most cases five years would be an adequate period for ensuring that land has been effectively restored. Provision should be left for longer periods to cover particularly difficult restoration schemes. I hope that the Minister will take that into account. If he is going to look at this aspect altogether, then I will not move Amendment No. 39.
So far as the general substance is concerned, the noble Lord, Lord Mottistone, when he comes to this legislation is a very conservative Conservative. He says that officials keep tabs on an Act and it can be amended. But life is not like that. There is no room in a legislative programme. We have too much legislation anyhow from both Governments. I am not blaming just this Government.
Where we can look ahead—and I was not thinking of leading the field in the hunting sense; I do not hunt and I am rather against it—and where we can be forward-looking, it is our duty to do so in any legislation. We do have that duty. It is quite wrong that
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through not looking ahead something has to be amended or needs amendment but in fact is not amended for a number of years. So I would make no apology, and I go on urging the Minister to look ahead with a certain amount of vision.
Lord Bellwin: I cannot add a great deal. I note carefully what the noble Baroness has said, and indeed I note what my noble friend Lord Mottistone has said, but I can really add nothing to my earlier remarks.
On Question, amendment agreed to.
The Deputy Chairman of Committees: I have to notify the Committee that if Amendment No. 38 is agreed to I cannot call Amendments Nos. 39, 40, 41 and 42.
8.1 p.m.
Lord Bellwin Lord Bellwin moved amendment No. 38:
Page 4, line 23, leave out subsections (3) to (5) and insert—
("(2B) An aftercare condition may not require any step to be taken after the expiry of the aftercare period.
(2C) In subsection (2B) of this section "the aftercare period" means a period of five years from compliance with the restoration condition or such other maximum period after compliance with that condition as may be prescribed; and in respect of any part of a site, the aftercare period shall commence on compliance with the restoration condition in respect of that part.").
The noble Lord said: This amendment seeks to make clear that although a mineral planning authority must specify in an after-care condition the time in which certain steps must be taken, they cannot require anything to be done after the expiry of the after-care period. It is intended that this total after-care period should be five years from compliance with a restoration condition or such other period as may be prescribed. "Prescribed" in this case has the meaning assigned to it by Section 290 of the Town and Country Planning Act 1971 and means prescribed in regulations by the Secretary of State. The definition of after-care period in the amendment is an improvement on the existing wording in that it allows for a period of after-care on each part of a site in turn following progressive restoration. I beg to move.
Baroness Birk: I have to apologise to the Committee because I made a mistake over the increase from five to 10 in connection with Amendment No. 37. I should have been making that point in connection with Amendment No. 38. It would be very nice if the Minister would say "Yes" now and accept the 10 years: otherwise I would ask him to consider the extra flexibility, that where it is necessary the period should be increased. I am not for one moment suggesting that it should always be 10 years but, as I said when speaking to the wrong amendment, it may be necessary for provision to be made for longer periods to cover particularly difficult restoration schemes. I am sorry to have confused the noble Lord, but perhaps he could answer me on that point.
Lord Mottistone: In the event of this amendment being agreed to, and it will be, my Amendments Nos. 40 and 41 will fall. I should like to make two points. One is that I would certainly strongly oppose Amendment No. 39, because Amendment No. 40 seeks

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to limit this to five years anyway. In view of the fact that there has not been time to study Amendment No. 38, I will give attention to it and it could be that we shall come back at another stage with amendments along the lines of Amendments Nos. 40, 41 and 42. Obviously it is too early to comment further at this stage.
Lord Bellwin: I recognise, and indeed I have recognised all the time, that there is some doubt among agriculturists about whether five years' after-care will prove to be sufficient. That is why we have taken care to amend the period if the need should arise. Once again, the Government are trying to strike a fair balance here. At present we think that the five-year period proposed by Stevens is the right one, and I hope that the noble Baroness will understand the thinking behind this.
Baroness Birk: I will not press this at the moment, but I will read what has been said and think about it again and perhaps come back at a later stage.
On Question, amendment agreed to.
[Amendments Nos. 39 to 44 not moved.]
The Chairman of Committees (Lord Aberdare): I have to point out that if Amendment No. 45 is agreed to I cannot call Amendment No. 46.
Lord Mottistone Lord Mottistone moved Amendment No. 45:
Page 5, leave out lines 1 to 12.
The noble Lord said: To be blunt, this subsection—because the amendment seeks to leave out subsection (8)—is inoperably vague. There are two features, and in connection with the first perhaps I might ask my noble friend to consider—perhaps he has already done so—making it more understandable and also making it so that it is operable. In lines 2 and 3 the phrase
"…had previously been used for that purpose…"
could relate back to time without limit. What record is there of the land's condition when it was last used for agriculture? The clause as drafted would give carte blanche to a planning authority, under pressure from the agricultural authorities, to require a mineral operator to take quite uneconomic measures to improve land. Therefore I feel it would be only reasonable to remove this subsection at this time. Perhaps my noble friend may have some better ideas by the time we come to the next stage of the Bill. I beg to move.
Lord Bellwin: In commenting upon this amendment I should like also to comment on the points referred to in Amendments Nos. 94 and 117, and simply say that the Government consider it is essential to restore agricultural land once mineral working has ceased. However, my noble friend's points are valid. I am conscious of the practical difficulties arising from the current drafting and I gladly give him an assurance that we will study how this might be improved.
Lord Mottistone: With that very hopeful reassurance, I have pleasure in asking leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.8 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 46:
Page 5, line 11, leave out ("possible") and insert ("is reasonably practicable").
The noble Lord said: The point of this amendment is two-fold. It is really to make sure that, when called upon to take action, it is practicable to do so. A very eminent friend of mine when I was in the Navy once said to me: "You know, everything is possible. Never write a paper or a document—now we say an Act of Parliament—which says 'If something is possible', because everything is possible". The key factor is whether it is practicable.
That is really what lies behind this amendment, but the other feature to it is that in saying "practicable" one takes into account the economic situation. As I said at Second Reading, it is the economics that need to be remembered, particularly in this sort of general area where in so many cases there is so much at stake in the way of capital investment. So I would beg my noble friend to consider that "practicable" would be a more appropriate word in every respect to be used in this subsection. I beg to move.
Baroness Birk: I was very intrigued by the noble Lord's attempt to change this, so I have got from the large Oxford Dictionary the definitions of the words "possible" and "practicable". I think, with respect, he is rather bending this a little bit and adding "reasonable". I will not read the whole thing, because there are columns of it, but merely—
"Possible—That may be (i.e. is capable of being); that may or can exist, be done, or happen (in general, or in given or assumed conditions or circumstances); that is in one's power, that one can do, exert, use …"
"Practicable—Capable of being put into practice, carried out in action, effected, accomplished, or done; feasible".
If one wants to bring something about and it is possible, then one would also, I think, make it practicable. If it is "practicable", then it could be "possible". What the noble Lord has done is to impose a restraint by putting the word "reasonably" in front. But by doing that he makes the whole subsection far less precise than the Government have done. If this amendment is accepted, there will be a great deal of doubt cast on the meaning of the words and, as often happens, there will he a lawyers' feast about the meaning of "reasonably".
I hope that the Bill will be left as it is, because "possible" is a simple word. If something is possible, then that implies that, in the context of the Bill, it is practicable, and if something is possible it must also be possible economically. I know that the word "reasonably" goes into a lot of statutes, but look at the trouble it causes. It is a word which is questioned and brought into doubt. "Reasonably" is not the right word and, on the evidence that I have here I prefer the Bill to be left as it is.
Lord Boardman: Without wishing to take issue with the noble Baroness on the definitions in the dictionary, I think that my noble friend has made a very valid and practical—as opposed to practicable—point on this clause, because one can visualise restoration being

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possible, but at quite enormous and uneconomic expense. I think that my noble friend is trying to bring a sense of reasonableness and reality into the situation, and I hope that my noble friend Lord Bellwin will accept that.
Lord Bellwin: I hope all this reads better than it sounds. It is very difficult to follow. There is a principle behind this amendment and we shall want to consider it again. If we think, as we do at the moment, that there is merit in these points, we shall have to consider how best to meet them and will want to do so in consultation with colleagues. We shall probably take up the point in considering the redrafting of subsection (8).
Lord Mottistone: With that hopeful and helpful remark, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.13 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 47:
Page 5, line 21, at end insert—
("; and
(c) the person in whose name the application for planning permission has been made").
The noble Lord said: In this amendment, we seek to give an opportunity for the person in whose name an application has been made to be involved. Section 29 of the Town and Country Planning Act 1971 empowers a planning authority to impose on a planning permission such conditions as they think fit. They must act reasonably and in good faith, but no specific requirement is laid down for consultation. Natural justice seems to require that, if the Ministry of Agriculture, Fisheries and Food and the Forestry Commission are to be consulted before conditions are imposed, so should the operator who has to foot the bill. I beg to move.
Lord Bellwin: This amendment has implications for planning control generally. It would, for the first time, impose a statutory duty on a planning authority to consult an applicant on the terms of a condition which they intend to impose in the grant of a planning permission. Many authorities already do this on a voluntary basis in mineral cases. But, in any case, the applicant, when submitting the application, is generally well aware of the issues likely to be covered in conditions. An applicant who regards any conditions imposed as unreasonable has the right of appeal to the Secretary of State under Section 36 of the Town and Country Planning Act 1971. The Secretary of State has the power to discharge the condition or to impose such other conditions as he thinks reasonable. If we were to accept this amendment, it would require—that is the operative word—authorities to consult applicants before imposing an after-care condition on a planning permission for a mineral working, and that is farther than we would want to go.
Lord Mottistone: There is a kind of reassurance about the right of appeal in my noble friend's reply, and perhaps this is as far as I can take the matter at the moment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Gisborough Lord Gisborough moved Amendment No. 48:
Page 5, line 21, at end insert ("; and
(c) the surface owner of the land").
The noble Lord said: This is a rather similar amendment, except that it applies not to the applicant for the planning permission, who may be the mining interest, but to the surface owner. I am asking that as well as consultation with the Ministry of Agriculture and the Forestry Commission, as appropriate, the planning authority should consult the surface owner. He is more concerned with the result of the land at the end than anybody else. He is much more concerned than the general public, because he has to live with the result, whereas the general public see the land only once in a while. Furthermore, the surface owner has the job of looking after the land after it has had after-care, and therefore is very much concerned with what the after-care conditions are to be.
If he is prudent, he may well have restoration conditions with the operator, which could be quite as strict as the planning authority's conditions, and it will help him enormously, and it will also help the planning authority, if the conditions which each of them applies to the operator are the same. It will then be much easier to have those conditions complied with. Furthermore, the operative word is "consult", and there would be no appeal if the planning authority did not agree with the owner or vice versa. I beg to move.
Lord Bellwin: This amendment, too, has important implications for planning generally. Planning authorities are not at present required to consult owners of land, as I said on the previous amendment, on the terms of conditions on planning permissions. However, by virtue of Section 27 of the 1971 Act, all owners are notified of applications for planning permission in respect of their land and can make representations to the local planning authority. This seems to me to give good opportunity for them to make their views known on the terms of any conditions which are likely to be imposed if planning permission is granted.
The purpose of the requirement to consult the Ministry of Agriculture or the Forestry Commission is not to provide a general opportunity for debate about conditions, but rather to ensure that the mineral planning authorities have the best professional advice in drafting the conditions, in a field where they do not necessarily have the appropriate expertise. I hope my noble friend will feel that, as owners of land are already notified of planning applications, it is not necessary to place this additional duty on the mineral planning authorities.
Lord Gisborough: May I just make one other point which arises from that and has to do with the advice? There will be many occasions when an owner is aware of things which a planning authority may not know; for example, underground streams, geological faults and so on. It may he greatly to the advantage of the planning authority to dove-tail with the owner.
Lord Bellwin: I entirely take that point, but the fact that the owner is notified of an application and has the

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opportunity to make representations to the authority, should cover it. If, however, my noble friend feels that there are reasons why that is not so, I should be glad to hear of them.
Lord Gisborough: This is quite an important point. I should like to withdraw it for the moment but I may bring it back at Report.
Amendment, by leave, withdrawn.
[Amendment No. 49 not moved.]
Lord Sandford Lord Sandford had given notice of his intention to move Amendment No. 50:
Page 5, line 23, after ("expedient") insert ("and at least every year").
The noble Lord said: I am still quaking from the attack made upon me under Amendment No. 29! Therefore, I do not move this amendment.
Lord Bellwin Lord Bellwin moved Amendment No. 51:
Page 5, line 30, leave out from ("authority") to end of line 31 and insert (", if they are satisfied that the condition has been complied with, shall issue a certificate to that effect.").
The noble Lord said: This amendment places a requirement on mineral planning authorities rather than giving them a power to issue a certificate on request if they are satisfied that an after-care condition has been complied with. It makes it clear that if an authority is satisfied that the after-care condition has been complied with, it must issue a certificate where requested to do so by somebody with an interest in the land. I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone had given notice of his intention to move Amendment No. 52:
Page 5, line 31, at end insert ("and such certificate shall be conclusive evidence to that effect for all purposes").
The noble Lord said: In view of Amendment No. 51, for which I am indeed grateful, I do not move this amendment.
Lord Bellwin Lord Bellwin moved Amendment No. 53:
Page 5, line 35, leave out ("on") and insert ("in, on or under").
The noble Lord said: I beg to move this amendment which seeks to remove an inconsistency in the drafting of the Bill so that the reference is to mineral working in, on or under the land. This will make it clear that the provision also refers to underground mining and brings the provision into line with the rest of the Bill. I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone had given notice of his intention to move Amendment No. 54
Page 5, line 36, leave out ("a mining lease") and insert ("an agreement").
The noble Lord said: This amendment is in part covered by that of my noble friend and I shall speak to his amendment. At this stage I shall not move mine.
Lord Bellwin Lord Bellwin moved Amendment No. 55:
Page 5, line 36, leave out from ("a") to end of line 38 and insert ("contract made between him and the person who last carried out such operations, to recover from that person any expenses reasonably incurred").
The noble Lord said: This amendment provides for a wider category of agreements which can be adopted by an operator and a person complying with an aftercare condition. A mining lease is the only contract currently provided for. After further discussion with the industry, this is considered to be too narrow. I beg to move.
Lord Mottistone: This amendment does not strike us as being quite what we hoped the Minister would be providing at this stage to meet the point which we tried to make under Amendment No. 54. We shall have a look at it and we may come back to it at a later stage.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 56:
Page 5, line 39, at end insert—
("(12A) Nothing in this section shall have the effect of bringing agricultural operations under planning control.
(12B) Where a planning permission is granted or modified to include a condition which would not be lawful but for the provisions of this section but the condition fails to comply with the provisions for an after-care condition, that condition shall be of no effect and the permission shall continue as though that condition had never been imposed.").
The noble Lord said: These amendments, (12A) and (12B), are totally separate points and I should have had them under separate amendment numbers. I apologise to the Committee for not having done so. As they are under one amendment number I shall speak to them both, but separately.
With regard to (12A), industries complain that over the last 10 years the Ministry of Agriculture, Fisheries and Food have progressively raised their demands for restoration conditions and that some are now quite unreasonable. This contrasts with the absence of statutory control over agricultural operations other than to control nuisance, such as from weeds. We believe that the restoration wedge must be driven in no further. To sum up, it is thought to be totally inappropriate to specify detailed agricultural operations which must be specified many years in advance of the actual restoration.
I turn now to (12B). This is a legal point. I am advised that the law as to ultra vires conditions is uncertain, in the sense that where a condition is ultra vires one of two results can occur: either the permission can continue in effect with the condition removed or the whole permission can be found to be ineffective. This amendment is intended to make it clear that so far as after-care conditions are concerned, if an ultra vires condition is imposed the permission nevertheless continues in effect without it. I shall be interested to hear what my noble friend the Minister has to say on the second one and, indeed, on the first. I beg to move.
Lord Bellwin: If I may refer first to (12A), I feel that the amendment is somewhat ambiguous. There is no question that we are seeking to bring agriculture under planning control. All that the Bill does is to provide for certain restoration operations of an agricultural

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nature in certain circumstances to be required as a condition of planning permission in the interests of mitigating the long-term effects of mineral working on the land.
With regard to the new (12B), if a condition imposed in the grant of planning permission is found by the courts to be invalid and the condition goes to the very root of the permission, it is possible that the court could find it unseverable and the whole would fall. It is considered that an after-care condition is severable from the permission and its invalidity would not bring down the planning permission. Thus it will be seen that the amendment as drafted is ambiguous. For this reason we could not accept it. With that clarification, I hope that my noble friend will feel able to withdraw his amendment, at least until he has had an opportunity to consider it again.
Lord Mottistone: I shall read with great care what my noble friend has said and consider whether to return to the charge at a later stage. At this stage, however, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
8.27 p.m.
Lord Gisborough Lord Gisborough had given notice of his intention to move Amendment No. 57:
Page 5, line 39, at end insert—
("( ) Nothing in this Act shall have the effect of restraining a mineral planning authority from granting planning permission with restoration conditions for purposes other than agriculture and forestry.").
The noble Lord said: This amendment was covered in the series of amendments about amenity use. Therefore, I do not move it.
On Question, Whether Clause 5, as amended, shall stand part of the Bill?
Lord Mottistone: This clause is objectionable, in that it introduces for the first time an extension of planning control to agricultural operations. Industry accepts planning conditions designed to minimise the damage to land. There is no objection to the principle of the Bill. But the proposed after-care conditions would introduce for the first time control by a planning authority of the agricultural operations themselves. I know that my noble friend the Minister has just said that this is not the intention of the clause but, as we read it now, that is what it looks like.
We sum it up by saying that it unbalances the Stevens' recommendations with which industry on the whole are in agreement. We should therefore like the Government to consider the whole of the clause, apart from the hits which we have been discussing, to see whether they think that it provides the right balance.
Lord Lloyd of Kilgerran: I have some sympathy with that part of Amendment No. 56, moved by the noble Lord, Lord Mottistone, which is notified in the Marshalled List as (12A). The clause as it now stands seems to indicate that the Government, without meaning to, may be entering into the field, which is objectionable to industry, that use for agriculture and for forestry shall become subject to planning control.
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I may be wrong in that assumption, but I support the submission made by the noble Lord, Lord Mottistone, that this clause should be reviewed, particularly in the light of that part of the amendment which he withdrew, (12A), which says:
"Nothing in this section shall have the effect of bringing agricultural operations under planning control".
Baroness Birk: I would disagree completely with what the last two noble Lords have said. I do not think for one moment that this clause or any part of the Bill brings agriculture into planning. I am getting more and more despondent about the way in which the noble Lord, Lord Mottistone, and some of his noble friends are dealing with this Bill. The amendments which have been moved to Clause 5 have set out to erode what is an extremely important part—in fact one of the lynchpins—of the Bill and now what he is trying to do is to leave out the whole clause. I should like to express very strong support for the after-care provisions in the Bill. I know that the emphasis on effective restoration is strongly supported by mineral planning authorities, particularly the Association of Metropolitan Authorities, and it is unfortunate that the noble Lord, supported by—or supporting, whichever way one wants to look at it—the CBI, is really attempting, as I must say, with great respect, to wreck the Bill. That opposition would not only run contrary to the mineral authorities but it would run counter to the views of the minerals industry.
A report prepared by the restoration sub-group of the South-East Regional Aggregates Group, of which the Sand and Gravel Association were full members, stated:
"There is considerable concern over the quality of past restoration of land to agriculture. In many cases land has not been restored to its former quality and this has resulted in a decline in production and land formerly used for arable protection being returned, at best to grassland and often to rough grazing. This has come about for a number of reasons:
First of all, lack of after-care. The successful restoration of the land to an agricultural use is not only dependent on the satisfactory after treatment of the excavated site but requires a period of after-care and land management to achieve and maintain the agricultural quality of the land. … Much of the National Coal Board's success in restoring agricultural land has been due to the attention paid to after-care. This involves the rehabilitation of the land by careful management of cultivations, fertilising, cropping, control of grazing and the design and installation of a permanent under drainage system. … We believe that the imposition of after-care conditions on permissions for the extraction of sand and gravel will assist considerably in improving the quality of restoration to agriculture and therefore welcome the recommendation of the Stevens Committee and the proposed legislation by Government to provide powers for local authorities to attach conditions to allow for a period of after-care not exceeding five years of land to be restored to agriculture or horticulture".
I do not apologise for subjecting your Lordships to that rather long quotation because I think this is extremely important, and also it is important that we should not be—if I may mix my metaphors—led astray by the red herring which the noble Lord, Lord Mottistone, is pulling across the trail and in which he is being supported by the noble Lord, Lord Lloyd of Kilgerran. This is absolutely untrue. This is not what this Bill is doing. I very much hope—and I have a certain amount of confidence—that the Government will not be shaken off their course but will stick to Clause 5 on after-care, and that the only thing they

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will do as a result of some of the comments that have been made, is to strengthen or improve it. That will be to the benefit of the Bill. But they should not be led astray by the siren voices that we are hearing tonight.
Lord Lloyd of Kilgerran: As a matter of personal explanation, may I say that I was only concerning myself with one small point out of the many points submitted by the noble Lord, Lord Mottistone. I was encouraged to make that observation in view of the remarks of the Minister, who said that of course the Government had no intention of introducing planning into agricultural operations, and I merely asked why that should not be made quite clear in this clause.
Lord Bellwin: I do not think I have listened to siren voices in the past and I am not likely to be doing so at this stage, from whatever direction they may come. The fact is that we consider that this clause is another of the most important clauses in the Bill. The Stevens Committee recommended that county planning authorities should be empowered to require a period of five years after-care when mineral working has ceased and the land has been restored. This recommendation is accepted by the Government. If land which is to be restored to agriculture or forestry is to achieve its full potential we believe it is essential that local authorities should be able to impose conditions of this nature. I do not believe that it is enough to rely on voluntary agreements with good operators to meet this need.
It has been suggested that the clause represents an extension of planning control to agricultural operations, but I just do not believe that it can be read in that way. I accept that even with the amendments made this evening the clause still needs clarifying in one or two places, but I have indicated our readiness to consider these points and I hope that they will meet any remaining fears about what is intended.
There are two other points which I should perhaps pick up. First, as to the period of after-care, we are satisfied with five years at present, but we are still learning about restoration and if a longer period eventually proves to be essential I am sure that the industry would wish to co-operate. Secondly, with regard to the involvement of the Ministry of Agriculture and the Forestry Commission, they have a great deal of technical help to offer and I believe this should be welcomed. They are no more innately hostile to mineral working than mineral operators are innately hostile to the needs of agriculture. I ask your Lordships to accept that this important clause should stand part of the Bill.
Clause 5 agreed to.
Clause 21 [Imposition of after-care conditions on planning permission]:
8.38 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 58:
Page 24, line 10, leave out from ("that") to ("and") in line 14 and insert ("after operations for the winning and working of minerals have been completed, the site shall be restored by the use of any or all of the following, namely, subsoil, topsoil and soil-making material;").
The noble Lord said: This amendment is the Scottish equivalent of Government Amendment No. 33. I beg to move.
On Question, amendment agreed to.
The Chairman of Committees: I have to point out that, if amendment No. 59 is agreed to, I cannot call Amendment No. 60.
Lord Bellwin Lord Bellwin moved Amendment No. 59:
Page 24, line 16, leave out from ("that") to ("to") in line 20 and insert ("such steps shall be taken, during such period as may be specified for each step, as may be necessary to bring land").
The noble Lord said: This allows for the progressive restoration of land, subject to an after-care condition. It is the Scottish equivalent of Government Amendment No. 34. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 60 and 61 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 62:
Page 24, line 24, at end insert—
("(2A) The steps that may be specified in an after-care condition may consist of planting, cultivating, fertilising, watering, draining or otherwise treating the land.").
The noble Lord said: This is a drafting amendment. It is the Scottish equivalent of Government Amendment No. 37. I beg to move.
On Question, amendment agreed to.
The Chairman of Committees: If Amendment No. 63 is agreed to, I cannot call Amendments Nos. 64, 65, 66 or 67.
Lord Bellwin Lord Bellwin moved Amendment No. 63:
Page 24, line 25, leave out subsections (3) to (5) and insert—
("(2B) An after-care condition may not require any step to be taken after the expiry of the after-care period.
(2C) In subsection (2B) of this section "the after-care period" means a period of five years from compliance with the restoration condition or such other maximum period after compliance with that condition as may be prescribed; and in respect of any part of a site, the after-care period shall commence on compliance with the restoration condition in respect of that part.").
The noble Lord said: This is a drafting amendment. It is the Scottish equivalent of Government Amendment No. 38. I beg to move.
On Question, Amendment agreed to.
[Amendments Nos. 68 to 71 not moved.]
The Chairman of Committees: If Amendment No. 72 is agreed to I cannot call Amendments Nos. 73 and 74.
Lord Mottistone Lord Mottistone moved Amendment No. 72:
Page 25, leave out lines 13 to 16 and insert—
("(9) Before imposing an after-care condition the Planning Authority shall consult as to its terms—

(a) The Secretary of State where they propose that the use specified in the condition shall be a use for agriculture; and

(b) the Forestry Commission where they propose that the use so specified shall be a use for forestry.").

The noble Lord said: I should like to take with this amendment, Amendments Nos. 75 and 76. The Explanatory Memorandum suggests that there is no particular need in Scotland to put in a statutory

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requirement that the Department of Agriculture should be consulted because they are consulted as a matter of practice. However, in the experience of industry and operators in Scotland this is not always so, and it is not easy to see any reasonable or logical explanation why the same statutory duty should not be implied in Scotland as is being proposed for England. I beg to move.
Lord Bellwin: I have to say that planning authorities in Scotland already consult the Department of Agriculture and Fisheries for Scotland informally on planning case work affecting agricultural land, including restoration following mineral working, under well-established administrative arrangements. It would be anomalous to introduce a statutory requirement in relation only to minerals after-care conditions. There is no such anomaly in the provision for statutory consultation in England and Wales, since there is an existing statutory requirement, not paralleled in Scotland, for local planning authorities South of the border to consult the Ministry of Agriculture, Fisheries and Food about proposed development affecting agricultural land in certain cases. The Bill is consistent in that it recognises the different arrangements which are already in force on both sides of the border. I listened to what my noble friend said on this and he recognised this point. I wonder if, on reflection, he would feel that with this explanation he would wish not to press this amendment.
Lord Mottistone: I think the burden of my argument is that, whatever the machinery—and I appreciate it is all one because it is all in one Ministry—it does not always work. Perhaps the message could go from this House to those in Scotland who have to deal with these matters to take care that in the future they do get together. In hopes that this message will go out north of the border, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 73 to 76 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 77:
Page 25, line 23, leave out from ("authority") to end of line 25 and insert (", if they are satisfied that the condition has been complied with, shall issue a certificate to that effect.").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 51. I beg to move.
On Question, amendment agreed to.
[Amendment No. 78 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 79:
Page 25, line 29, leave out ("on") and insert ("in, on or under").
The noble Lord said: This is the Scottish equivalent of my noble friend's earlier amendment to Clause 5. Again, I think Government Amendment No. 81 provides a better solution to the problem.
On Question, amendment agreed to.
[Amendment No. 80 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 81:
Page 25, line 30, leave out from ("a") to ("by") in line 33 and insert ("contract made between him and the person who last
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carried out such operations, to recover expenses reasonably incurred").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 55. I beg to move.
On Question, amendment agreed to.
[Amendment No. 82 not moved.]
Clause 21, as amended, agreed to.
Clause 6 [Duration of planning permission]:
The Chairman of Committees: I have to point out that if Amendment No. 83 is agreed I cannot call Amendment No. 84.
8.46 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 83:
Page 7, leave out lines 4 to 14.
The noble Lord said: The subsection which this amendment seeks to delete is retrospective legislation. I think your Lordships on all sides of the Committee will agree that retrospective legislation is something that we do not like here and that it needs to be avoided where possible. The subsection effectively reduces, without compensation, the assets of any operator expecting to continue operations for more than 60 years, and though that will be a relatively rare case it is something to which I made reference at Second Reading, in column 512; I think it is necessary at the least for the Government to give very careful consideration to whether it is what one might call a fair piece of legislation, a reasonable piece of legislation. If they do not go along with me and remove the subsection altogether, perhaps they could see their way to amending it in order to remove the retrospective element within it. I beg to move.
Lord Bellwin: I entirely accept that this provision is retrospective, but in the circumstances I do not consider that unreasonable. In the interests of proper planning minerals permissions cannot have an indefinite life or final restoration may never be achieved. There has been pressure for a much shorter period and we have had to try to strike a balance. I consider that 60 years is fairer to mineral operators. It is one of these parts of this Bill where one tries to strike a balance in what is the right period of time. I think this is a fair period, and that is why we are inclined to stick to the point on this issue.
Baroness Birk: I think probably it would be convenient to the Committee if in discussing this amendment moved by the noble Lord, Lord Mottistone, I also spoke to my amendment which follows, to reduce 60 years to 30 years. The Minister has dealt with the question of retrospection, but nowadays planning permission for mineral working specifies the time by which such working must stop. It was not so in the past. This is why some existing sites where no such conditions were imposed may have operated for many decades. One cannot go on indefinitely without the local authority having any control whatever unless it is forced also to pay massive compensation. This clause tackles this problem by providing that in these circumstances the workings will from the passing of the Bill, have a future life of 60 years.

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Once again I find this going back, trying to have a completely eternal life for this situation, is I am afraid symptomatic of the CBI's whole approach to this whole Bill. It has been difficult enough for many communities to live with such workings for as long as they have. Then to be told that there is no end in sight I think is totally unreasonable and unacceptable. I think it is unfortunate that the clause as it is drafted gives such workings a further automatic life of 60 years, and this is why I have an amendment down to cut 60 years to 30 years.
Thirty years can be quite a long time to live with existing workings. Sixty years is a lifetime; say these workings have been there 30 or 40 years already, this brings it up to a century. Obviously there may be some occasions where after 30 years substantial deposits remain, and, while this will not often be the case operators would still be able to make fresh applications for planning permissions. These would undoubtedly be considered responsibly by local authorities, because again the industry is needed in the area and the money that is being stimulated by the industry is needed in the economy.
In any case, the Secretary of State, through the planning appeals system and the call-in procedures, would be able to determine the final outcome of any such application. Although what the Minister has just said does not make me jump with joy about the answer that I shall probably receive to my proposal of trying to reduce the period to 30 years—and I take it from what he said that he is standing quite firm—I hope he will not go beyond 60 years and certainly would not consider having no limit at all.
Lord Boardman: Looking at the amendment of the noble Baroness which has not yet been moved but which would cut the period to 30 years, I should like to make the point which I tried to make earlier about the need for long-term planning and the vast investment that is involved. Indeed, 30 years may seem a long time ahead, but as it erodes and as further investment is required year after year, it will become a very difficult problem for those who try to operate it. I hope that my noble friend will not be enticed by the blandishments from across the table.
Viscount Ridley: I am sure that 60 years is right. I think it is an appalling suggestion that there should be the removal of even this, although in an ideal world it might be desirable to reduce it to 30 years. I do not think that it is tolerable. I hope that we can settle on 60 years. It seems a very adequate protection for the mineral operators and nothing stops them applying for another 60 years if that is what they want.
Lord Bellwin: I, too, should like to say that we must not lose sight of the fact that the operators, the industry, are playing a role here which is really extremely important. The intentions of the Bill, which are essentially following the way of the environmentalists—and rightly so—is one matter; but it would be quite wrong for us not to take up the point that my noble friend Lord Nugent made earlier in the proceedings when he stressed that the industry is performing a service which is absolutely vital to us. In all our deliberations we must not overlook that at all—I
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certainly do not do so.
Amendment No. 84 is another of the amendments where I hold a middle position between my noble friend Lord Mottistone and the noble Baroness, Lady Birk. I believe that some limit needs to be imposed on the life of existing mineral workings, but 30 years is too short a period. I recognise that some people who live near mineral workings are concerned about their environmental effects and would like to see the working brought to an end as quickly as possible. As against that, the nation has a need for minerals and mineral working is often a long-term operation. I certainly consider that it would be unreasonable to impose a 30-year time limit on existing workings and that the 60 years recommended by Stevens, and included in the Bill, is about right. It does not, perhaps, entirely please my noble friend Lord Mottistone; it certainly is not pleasing—for opposite reasons—to the noble Baroness, but I think, as a balance, that it is about right and that is what we would like to stick to.
Lord Mottistone: I am delighted to hear my noble friend point out the great importance to the country of this industry. The noble Baroness, Lady Birk, in drawing attention to her amendment which would reduce the period to 30 years, reminds me again of the Second Reading debate in which I found myself saying to her that her interests as regards industry were not as strong as she spoke of them, because everything good that she says about industry she completely negates by the proposals she then makes, like reducing the period to 30 years.
I see my noble friend's difficulty in striking the balance. I hope that we shall not find too much further movement away from the true understanding of the long-term needs of the mining industry as we progress with the Bill and at this stage I beg leave to withdraw Amendment No. 83.
Amendment, by leave, withdrawn.
Baroness Birk Baroness Birk had given notice of her intention to move Amendment No. 84:
Page 7, line 13, leave out ("sixty") and insert ("thirty").
The noble Baroness said: In view of what the Minister has said I shall not pursue this amendment. However, I should like to say that I only wish that the concern of the noble Lord, Lord Mottistone, for the environment was as great as my concern for industry.
Clause 6 agreed to.
[Amendments Nos. 85 and 86 not moved.]
Clause 22 agreed to.
Clause 7 [Orders revoking or modifying planning permission):
Lord Bellwin Lord Bellwin moved Amendment No. 87:
Page 7, line 28, leave out subsection (7).
The noble Lord said: This amendment seeks to delete subsection (7) of Section 45 in this clause. This subsection is now unnecessary as a result of Amendment No. 38 which I moved earlier, which has redrafted Clause 5 so that the after-care period is appropriately defined for Section 45 orders as well as for new permissions.

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My next amendment will apply these new provisions of Clause 5 to orders made under Section 45 by virtue of this clause. I beg to move.
On Question, amendment agreed to.
8.55 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 88:
Page 7, line 31, leave out ("(3) and (4) and (6)") and insert ("(2B)").
The noble Lord said: I beg to move Amendment No. 88. As with the previous amendment, this one is purely consequential on earlier amendments which I have moved—in this case Nos. 37 and 38. It merely applies the relevant provisions of Clause 5 to orders made under Section 45 by virtue of Clause 7 in this Bill.
On Question, amendment agreed to.
Clause 7, as amended, agreed to.
Clause 23 [Orders modifying planning permission]:
Lord Bellwin Lord Bellwin moved Amendment No. 89:
Page 27, line 10, leave out subsection (7).
The noble Lord said: I beg to move Amendment No. 89. This is a drafting amendment. It is the Scottish equivalent of Government Amendment No. 87.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 90:
Page 27, line 13, leave out ("(3) and (4) and (6)") and insert ("(2B)").
The noble Lord said: I beg to move Amendment No. 90. This, too, is a drafting amendment. It is the Scottish equivalent of Government Amendment No. 88.
On Question, amendment agreed to.
Clause 23, as amended, agreed to.
Clause 8 [Discontinuance of use]:
Lord Bellwin Lord Bellwin moved Amendment No. 91:
Page 8, leave out lines 31 to 33.
The noble Lord said: I beg to move Amendment No. 91. This amendment seeks to delete subsection (1F) of Section 51 in this clause. This subsection is now unnecessary as a result of Amendment No. 38 which I moved earlier and which has provided a redraft of Clause 5 so that the after-care provision is appropriately defined for Section 51 orders as well as for new permissions. My next amendment will apply these new provisions of Clause 5 to orders made under Section 51 by virtue of this clause. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 92:
Page 8, line 34, leave out ("(3), (4),") and insert ("(2B) to").
The noble Lord said: I beg to move Amendment No. 92. As with the previous amendment, this one is purely consequential on earlier amendments which I have moved—in this case Amendments Nos. 37 and 38. It merely applies the relevant provisions of
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Clause 5 to orders made under Section 51 by virtue of Clause 8 in this Bill. I beg to move.
On Question, amendment agreed to.
[Amendment No. 93 not moved.]
The Chairman of Committees: If Amendment No. 94 is agreed to, I cannot call Amendment No. 95.
[Amendment No. 94 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 95:
Page 9, line 13, leave out ("possible") and insert ("is reasonably practicable").
The noble Lord said: I beg to move Amendment No. 95. The argument is as before. I do not know whether at this stage, and in this part of the Bill, the Government could accept this amendment.
Lord Bellwin: I thought that I had spoken to this amendment when I spoke earlier to Amendment No. 46. I clearly have not changed my position since then. I understand my noble friend's feelings. I commiserate with them, but I cannot go any further than I did previously.
Lord Mottistone: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 96:
Page 9, line 14, at end insert—
("(1K) The provisions of this section shall not apply to any lawful operation, whether the consent to that working be deemed or actual.").
The noble Lord said: I beg to move Amendment No. 96. This is a fairly significant amendment. The whole of Clause 8 is objectionable because, for the first time, it suggests that mineral extraction, which under general planning law is an operation and not a use of land, should nevertheless be treated as a use. This change of the law in only part of the field is likely to raise serious consequential problems of interpretation. The Government have been pressed to suggest any lawful operations which can now continue, which do not have either deemed or actual planning consent, and they have failed to suggest any. If that remains the position, the clause should be deleted.
On the other hand, one justification that has been produced is that it would be convenient where unlawful mining operations are being carried out but which the planning authority is prepared to permit to continue. This extension of Section 51 would allow that authority to impose suitable conditions, without the operator putting in a planning application. Although this appears to be an unsatisfactory and unnecessary power, which does not apply to any other building operations, if it has to be accepted, it is believed that the power should be limited to unlawful operations. Therefore, the significance of this is that the aim of the amendment is to restrict the application of Clause 8 to illegal operations only. I beg to move.
Lord Bellwin: I understand that the purpose of this amendment is to dispense with the need to apply Section 51 to mineral workings and therefore rely on

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the power to revoke or modify a planning permission under Section 45. I am afraid that I cannot accept the amendment which does not take account of all the reasons why we consider Section 51 should be extended to mineral working—for example, to deal with mineral working proceedings under GDO rights, unauthorised operations on which it is more sensible to impose conditions rather than take enforcement action, and other cases where an express planning permission does not exist or the mineral working has been completed.
I recognise that the industry is doubtful about the need to use Section 51 in this way, but I do not understand what disadvantage there is to it in the course we have adopted, or what advantage there is in its solution over ours. I cannot believe that the industry intends to suggest that there is no need, for example, to impose up to date environmental and restoration conditions as pre-1947 workings. The application of Section 51 to mineral working is a convenient way of ensuring that there is no inadvertent gap in the powers available to most planning authorities in this respect. I do not think that there is the need for the concern which my noble friend expresses. For that reason I cannot accept the amendment.
Lord Mottistone: Yes, I note what my noble friend has said and we will take it away and examine it. It sounds very convincing when heard like that, but I think that it needs reading. With that thought, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 8, as amended, shall stand part of the Bill?
Lord Mottistone: In view of the speech that my noble friend the Minister has just made, which really covers the main point of the object of the clause, I do not think that it is in the interests of the Committee that we should continue the debate. Therefore, I do not propose to speak further.
Clause 8, as amended, agreed to.
Clause 24 [Discontinuance of use]:
Lord Bellwin Lord Bellwin moved Amendment No. 97:
Page 28, leave out lines 7 to 9.
The noble Lord said: This is a consequential amendment. It is the Scottish equivalent of Government Amendment No. 91. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 98:
Page 28, line 10, leave out ("(3), (4),") and insert ("(2B) to").
The noble Lord said: This, too, is a consequential amendment. It is the Scottish equivalent of Government Amendment No. 92. I beg to move.
On Question, amendment agreed to.
[Amendment No. 99 not moved.]
The Chairman of Committees: I have to point out that if Amendment No. 100 is agreed to, I cannot call Amendment No. 101.
[Amendments Nos. 100 to 102 not moved.]
Clause 24, as amended, agreed to.
Lord Denham: Although we probably have not got quite so far as we might have hoped, I think that we have made fairly good progress, and as the House has been rather under pressure this week, perhaps this might be a convenient moment to end without entering upon Clause 9, which I gather has quite a lot of it. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

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  UK PRISONS: PRIVILEGE SYSTEMS
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