Sitting of 10 February 1981

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

  BRITISH RAILWAYS BILL
  Queen's consent, on behalf of the Crown, signified.
  Order for Third reading read.
  To be read the Third time upon Thursday.

  LONDON TRANSPORT (NO. 2) BILL (By Order)
  Order for Third reading read.
  To be read the Third time upon Thursday.

  LLOYDS BANK BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Thursday.

Oral Answers to Questions
  Education and Science

    Teachers and Ancillary Workers
    Mr. Jim Marshallasked the Secretary of State for Education and Science what estimate he has made of the number of teachers and ancillary workers in education who will lose their jobs in the next year as a consequence of the Government's policy towards education.
    The Under-Secretary of State for Education (Mr. Neil Macfarlane): This will depend upon decisions taken by individual local education authorities. It is not possible to estimate the numbers for England as a whole.
    Mr. Marshall: Does the Minister accept that that is a totally unsatisfactory answer? Is he aware that it is a means by which the Government are evading responsibility for maintaining teaching standards in the State sector? Is he aware that large numbers of teachers and ancillary workers will be leaving the education service and that will inevitably lead to a decline in education standards? When will he wake up to the fact that local authorities are taking such decisions because of financial pressure from the Government?
    Mr. Macfarlane: I shall deal with the two or three points that develop from the hon. Gentleman's question. We accept fully that the savings through the reductions in the school meals service have been necessitated by the desire to preserve the core of education standards in our schools. But the hon. Gentleman, and other Labour Members, must understand that pupil numbers will fall by
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    25 percent, between 1977 and 1989. The current reduction in teacher numbers, like reductions elsewhere in the education service, is as much a response to that as to expenditure cuts.
    Mr. Speaker: Order. I remind hon. Members that long questions and long answers merely reduce the number of hon. Members who can be called.
    Mr. Latham: Is my hon. Friend aware that if local authorities such as Leicestershire did not make economies in the education service, as elsewhere, the burdens on private ratepayers would be impossible and there would be a sharp reduction in the amount of employment by private business?
    Mr. Macfarlane: I accept the point that my hon. Friend has forcefully made. He understands the Leicestershire situation fully. I acknowledge that the reduction in the number of ancillary workers employed in the schools is inevitable as pupil numbers fall. I want to make that clear. Natural wastage will play a major part in the rundown of numbers and we believe that large-scale redundancy is unlikely.
    Mr. R. C. Mitchell: What is the Minister doing to monitor the situation? What steps will he take if he finds that a particular local authority is dismissing far more teachers than he thinks is reasonable?
    Mr. Macfarlane: I do not think that the hon. Member has presented any statistics to my Department. So far we have not heard from him on that point. In the current financial year there have been 1,264 teacher redundancies and a further 4,483 teachers have accepted premature retirement. The figures for 1979–80 were, respectively, 1,334 and 2,271. The Department maintains a watch on the statistics and until hon. Gentlemen are prepared to provide evidence we shall have to wait and watch the position.
    Mr. Flannery: Does the Minister realise that the massive education cuts, far beyond what one might expect due to falling rolls, have resulted in the sacking of large numbers of peripatetic music teachers? Is he aware that the musical life of a school is vital and is not a frill? What will he do to ensure that the musical life in the State sector will be carried on properly, as no doubt it is in the private sector?
    Mr. Macfarlane: I do not accept the first point that the hon. Member made about massive reductions in expenditure on our education services. Therefore, the second part does not apply. It is a matter for local education authorities.

    Educational Standards
    Mr. Dubsasked the Secretary of State for Education and Science what assessment he has made of the effects of the recent rate support grant settlement on educational standards.
    The Secretary of State for Education and Science (Mr. Mark Carlisle): I gave my assessment of the implications of the recent rate support grant settlement, following consultations with representatives of the local authorities, in my answer to my hon. Friend the Member for Macclesfield (Mr. Winterton) on 16 December last year.
    Mr. Dubs: Does the Secretary of State accept that the consequences of the rate support grant settlement were that the Inner London Education Authority would have had to cut its services below a level that even the Secretary of State would accept, and that therefore the ILEA's only course was to maintain its standards? Does the Secretary of State agree that it made the right decision?
    Mr. Carlisle: I do not accept any of the premises underlying the hon. Gentleman's question. First, I do not accept that I am suggesting that the ILEA should cut its standards below what is acceptable. The rate support grant for the authority has been affected by the movement of rates away from inner London and by the fact that the ILEA has historically been a high spender. The amount of grant that it receives will depend on its budget. As I pointed out in a statement to the House last week, for every 1 per cent, by which the ILEA reduces its expenditure it will get another £4 million from the Government.
    Mr. Emery: As the question concerns the whole country, will my right hon. and learned Friend point out to teachers and educationists generally that at a time of world recession it is impossible for the Government to continue with projected expenditure that was based on trying to win an election and that unless the Government get on top of inflation the money spent on education in the next two or three years will buy much less than it can purchase today?
    Mr. Carlisle: I totally agree with what my hon. Friend says. As I have made clear on many occasions, the education services cannot be exempt from the need to reduce public expenditure and to bring it into line with what the country can afford. Unless we get our public expenditure more realistically in line with what we can afford, we shall have higher unemployment in future and more economic problems.
    Mr. Beith: How can the Secretary of State still claim that there is money in the rate support grant for youth and community capital grants when education authorities, including many Conservative-controlled authorities, say that they cannot meet their statutory obligations satisfactorily in the face of the present level of cuts?
    Mr. Carlisle: I confirm that for the purposes of arriving at the amount of relevant expenditure for education purposes I have assumed similar expenditure on the youth service in general terms as in previous years. I have visited some of the youth services in the area of the hon. Gentleman's local education authority. I realise that the services are under pressure in many parts of the country, but the Government have assumed that current expenditure should remain similar to the levels of previous years.
    Mr. Adley: Is my right hon. and learned Friend aware that Dorset county council's decision on school meals, which was criticised by a number of Labour Members and by some trade unionists, has been widely accepted without demur by the parents in my constituency? Will he therefore commend the decision of the county council to other local authorities as an example of good housekeeping?
    Mr. Carlisle: My hon. Friends remarks are a fair assessment of the reaction to the Dorset decision. I repeat
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    what my hon. Friend the Under-Secretary said earlier. We are anxious that authorities should make savings in school meals rather than in other parts of educational provision.
    Mr. Kinnock: Does the Secretary of State recall saying on 16 December, at the time of the rate support grant settlement that reductions would have some impact on educational provision and numbers employed? Does he accept that only his hon. Friend the Member for Macclesfield (Mr. Winterton) is likely to accept his figure of a cut of £87 million in local authority expenditure as accurate and that, in fact, that figure is a gross underestimate, because school expenditure will be cut in 1981-82 not by £70 million, but by £150 million? Does the Secretary of State realise that, because of his refusal to fund school transport services and his miscalculation of the savings on school meals, there will be another £157 million to be found? [HON. MEMBERS: "TOO long."] I know that Conservative Members do not like it, but they are going to get it. School cuts next year will mean a monsterous £307 million being taken away from the children of this country. Does the Secretary of State think, in the light of such figures, that local education authorities can discharge their legal responsibilities under sections 8 and 61 of the 1944 Act, or does he accept that as "Education Magazine" said last week, he is presiding over "a period of catastrophe"? Does he not think that he ought to resign?
    Mr. Speaker: Order. The same rules apply to Front-Bench spokesman as to Back Benchers.
    Mr. Carlisle: In the speech that we have just heard from the hon. Gentleman he has not added a single new fact that I have not told the House myself. If he cares to read what I said on 16 December he will realise that I said that it was £87 million in addition to the assumed cut in the previous White Paper and I went on to add that there was also £37 million assumed as a result of the reduction in school transport. For the hon. Gentleman to suggest that he thought that I said that the reduction was £87 million, when it was greater, means that he did not read, or did not understand, my statement.
    On the second part of the hon. Gentleman's question, I accepted in my statement that the additional cut was bound to have some effect on the level of provision in education. I said that we had to bring that level of provision into line with what the country could afford. I stand by that.

    Teachers
    Mr. Andrew F. Bennettasked the Secretary of State for Education and Science how many teachers it is proposed will be employed by local authorities in England and Wales at 1 September 1981; and how this compares with the last three years.
    Mr. Macfarlane: My right hon. and learned Friend made clear to the House on 16 December that the reductions then announced in educational expenditure in England in 1981-82 would have some impact on the numbers employed in the service. Provision for school teacher numbers is under review as part of the Government's expenditure plans. The staffing of schools in Wales is a matter for my right hon. Friend the Secretary of State for Wales.
    Mr. Bennett: In making calculations for the rate support grant and the review, what estimate has the Undersecretary made of the cost of redundancy pay for teachers, unemployment benefit for them, at least for the first 12 months, and the loss of income tax from them? Is it not true that the sums that it costs the State in those ways are almost the same as the cost of employing a teacher?
    Mr. Macfarlane: The Department has no detailed estimates of those sums, because they are a matter for local authorities and local social services. I must make clear to the Opposition that there has been a fall in teacher numbers of about 2·2 per cent, since 1978 and during the same period pupil numbers have fallen by 4·9 per cent. I should have thought that that was an important statistic and something which the Opposition should understand fully at the outset.
    Mr. Greenway: Does my hon. Friend agree that while a sound pupil-teacher ratio is of the utmost importance, the deployment of teachers and the quality of the work that they do are crucial to a successful education for the children of our country?
    Mr. Macfarlane: I accept that fully. I remind the House that the overall pupil-teacher ratio stands at the best level ever—under 19:1. We certainly do not anticipate any major change in 1981.
    Mr. Newens: Does the Under-Secretary recognise that reductions in the number of teachers inevitably result in schools being forced to cut essential subjects from the curriculums, irrespective of the fact that there may be fewer pupils? In those circumstances, surely the Minister must recognise that the quality and standard of education are being reduced.
    Mr. Macfarlane: The hon. Gentleman will understand what my right hon. and learned Friend has said in the House more than once. I certainly do not accept what the hon. Gentleman said at the outset of his question. We do not believe that education standards are necessarily determined by resource levels.

    Teachers' Pay
    Mr. Doverasked the Secretary of State for Education and Science if he is satisfied with current arrangements for negotiating teachers' pay.
    Mr. Mark Carlisle: No, Sir. I am consulting the teachers' and local authorities' organisations about possible changes in the present arrangements.
    Mr. Dover: Does my right hon. and learned Friend agree, that, as well as salary levels, matters such as pupil-teacher ratios, working conditions and working hours should be discussed?
    Mr. Carlisle: I have made clear to both sides of the Burnham committee that it would be helpful if pay and other conditions of service were brought into the same negotiating body. That is the basic purpose behind the document that I put to them.
    Mr. Kinnock: Is the Secretary of State contemplating any major changes in arbitration procedure? If he is, can he tell us what earthly constructive point would be served by having a system that would guarantee blockages and deadlock by having a two party reference to the arbitrator?
    Mr. Carlisle: I shall deal with that question in two parts. So far as the longer-term review is concerned, certainly the whole of the arbitration procedure is one of the matters that I put out in the document inviting discussion. In addition, as the hon. Gentleman knows, I have consulted the parties formally on whether the means of access to arbitration should be changed for the purpose of the current year, that is, from that whereby at the moment unilateral access should be made to that where it should be only by agreement of both sides. All that I can say at the moment is that I have received representations on this and I have received a deputation from the teachers' associations. I have not yet made a final decision, but I shall have to do so within the very next few days.

    Student Loans
    Mr. van Straubenzeeasked the Secretary of State for Education and Science whether he has yet come to a decision as to a loan scheme for students.
    Mr. Whiteheadasked the Secretary of State for Education and Science if he is now in a position to announce his policy on student loans.
    Mr. Allan Stewartasked the Secretary of State for Education and Science when he expects to conclude his current investigation into the possibility of introducing a system of student loans; and if he will make a statement.
    Mr. Nicholas Wintertonasked the Secretary of State for Education and Science if he will make a statement about his Department's continuing appraisal of the feasibility and desirability of replacing the present system of funding students in higher education with grants by a system of loans.
    The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): The question of loans for students is still under consideration.
    Mr. van Straubenzee: During that consideration, will my hon. Friend bring to bear his formidable critical faculties on a proposition floated in some quarters, namely, that a loan should subsequently be repaid by way of an additional tax upon the graduate? Would not that inflict additional direct taxation on wealth creators? Can it really be supported by anyone who is a true supporter of the Prime Minister's policies?
    Dr. Boyson: I am grateful for that question from my hon. Friend. Like him, I can identify myself as a true supporter of the Prime Minister's policy.—[HON. MEMBERS: "Stop playing for time."] I am not playing for time. When we asked for a report from the Department on various ways in which a loan or loan-grant scheme could be introduced, if we decided to do so, one of the schemes suggested was exactly that to which my wise friend referred, namely, a graduate tax. I believe that I went on record the same day as saying that I disagreed—as I am sure that my hon. Friend does—with such a graduate tax, which would seem to be a tax on intellect as well as direct taxation. Whatever schemes we are considering, we are certainly not considering graduate taxation.
    Mr. Whitehead: Perhaps I can offer the Minister some more fraternal help from his own side. Do the recent reported remarks of the hon. Member for Cambridge (Mr. Rhodes James), as the Prime Minister's liaison adviser on higher education, indicate that no Government proposal

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    for a loans procedure to replace the present grants system for first degrees is under consideration? Does he realise, from the questions that have been asked today, that many Conservative Members as well as Labour Members believe that access to education should not depend upon the ability to pay or on the ability to pay back?
    Dr. Boyson: I am getting helpful questions from both sides of the House today. On the question of a loan system, what we as a Government decide, knowing how much money will be available at any time, is the way in which that money can be used to the best advantage. I recommend that the hon. Member for Derby, North (Mr. Whitehead) should look at the number of people, including Open Universty students, who at present get nothing. There are people training for chiropody, speech therapists, those going into the law after their degree and those going into social work. However much certain people who are getting full grants may like it, hundreds of thousands of others are getting nothing. We shall consider the whole question.
    Mr. Allan Stewart: Has my hon. Friend seen recent opinion polls which suggest that student loans would actually be far more popular and acceptable than is often believed? Does he agree with me that the effective choice is not between a loans system and a grant system but that there may well be a great deal to be said for a combined system including both grants and loans?
    Dr. Boyson: What we are considering at present is the possibility of a grant-loan system, not a straight loan system. Recently information was put out regarding a vote at Edinburgh which, I accept, indicated that only 5 per cent, supported a direct loan system. But the same report showed that only 40 per cent, supported the present system of grants dependent upon parental income. So it is by no means as popular as some people pretend. A similar report from Bath and Exeter last year indicated that 56 per cent, of the students—[Interruption.] The hon. Member for Bedwellty (Mr. Kinnock) might learn something if he listened. I know that you, Mr. Speaker, are paying close attention to this. That report indicated that, 56 per cent, of students at Bath and Exeter preferred a loans system to the present grant system dependent upon parental income.
    Mr. Hardy: Will the Minister take note of one clear fact about a possible loan scheme? Is he aware that in the industrial North and other areas of high unemployment a remarkable regional disparity would be inevitable, as young people would be reluctant to enter a period of indebtedness, and that if he was concerned about unity in this country he would not wish to act in that extremely divisive manner?
    Dr. Boyson: I welcome the hon. Gentleman's question. I am sure that he will be as concerned as I am that under the present system the percentage of children from blue-collar worker families is now falling so that we are back to the level of the 1920s. Therefore, the present system is not solving the problem. If we introduce any system, it will certainly not penalise people earning low incomes when they enter college or low incomes when they come out.
    Mr. William Shelton: When will my hon. Friend reach a decision?
    Dr. Boyson: That is a very simple and direct question. We have now left the realm of philosophy and turned to
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    the calendar. I trust that within two or three weeks the Department can come to some form of conclusion as to whether there is a scheme that is likely to be viable, considering all the points that have been so wisely made in the House today. If we decide that there is, we shall put out a consultative document, so that everyone can spend even more time talking about it, and then make a decision in the summer.
    Mr. Freeson: Can we take it from some of the hon. Gentleman's remarks that in considering this matter he intends to go much wider than grants to university students and consider the question of educational maintenance support generally; the disparities between the different systems of support under the Manpower Services Commission, industrial training boards, LEAs and the like? Does he accept that there is a need to look at the totality of financial support for students in education and training as well as in higher education?
    Dr Boyson: I accept the points made by the right hon. Member for Brent, East (Mr. Freeson). As a neighbour, I always pay close attention to all that he says. There is no doubt that the present system has grown up in such a way, with different funding bodies, and that it is often unfair to those within it. Even within the education system for which we are responsible, the fact that some people are on mandatory grants while others are dependent upon an increasing number of discretionary grants is similarly unfair. I trust that we shall be examining the whole pattern.
    Sir Albert Costain: Is the Minister aware that there is a good deal of resentment among students from the dependent territories, particularly from Hong Kong, at the large increase in fees? Will he consider the possibility of loans for those students?
    Dr. Boyson: We have been in continued contact with Hong Kong regarding this matter. I believe that I actually said this in an Adjournment debate some months ago. If we could arrange some form of loans system with Hong Kong, we would see what we could do to co-operate in terms of students entering universities in this country.
    Mr. Heffer: Is the Minister aware that if a loans system is introduced it will be one of the most retrograde steps to be taken in education? Is he aware that my own family is a good example of what can actually happen? My wife, who left school at the beginning of the war with seven passes and three distinctions, did not get to a university, whereas my brother-in-law, at the end of the war, managed to get to a university because of the grants system. Does the hon. Gentleman understand that thousands of ordinary working people will never have these opportunities if a loans system is introduced?
    Dr. Boyson: I am glad to put the hon. Member's mind at rest. In this country at present, 23 per cent, of the intake to universities are children of blue-collar workers. In Sweden, where a loans system was introduced in 1964 by so-called social democrats—I know that those are dangerous words in this House—the percentage of children of blue-collar workers is 33 per cent, and rising, and the number in higher education has trebled since 1964.

    16 to 19-year-olds
    Dr. Mawhinneyasked the Secretary of State for Education and Science if he will make a statement on the education of 16 to 19-year-olds in the light of the publication of his Department's report on this subject.
    Mr. Dormandasked the Secretary of State for Education and Science what discussions he proposes to have on the document "Education for 16 to 19-year-olds".
    Mr. Gwilym Robertsasked the Secretary of State for Education and Science what plans he has for reducing the role of the sixth form and transferring A-level courses to colleges of further education and other relevant establishments; and if he will make a statement.
    Mr. Thorntonasked the Secretary of State for Education and Science whether he expects the recommendations recently published of the committee chaired by the hon. Member for Sutton and Cheam (Mr. Macfarlane) to lead to the phasing out of school sixth forms.
    Mr. Mark Carlisle: I welcome this joint review, and am grateful to the elected members and officers of local education authorities who took part in it. I believe their work will greatly assist authorities as they consider the pattern of provision that is most suitable in the light of their particular circumstances. The group itself recognises that in some areas sixth forms will continue to be appropriate, although in others it may be right to develop sixth form and tertiary colleges. We will be discussing aspects of the review in the course of our normal consultations with the bodies concerned.
    Dr. Mawhinney: I thank my right hon. and learned Friend for that reply. Can he assure the House that it is not the policy of his Department to encourage the disruption of perfectly good secondary schools by the removal of their sixth forms in order that sixth form colleges may be set up, perhaps only for the reason that they are administratively convenient?
    Mr. Carlisle: I can assure my hon. Friend that that is not the Department's policy. The report itself made clear that it believed that there was a continuing role for sixth forms in certain schools.
    Mr. Dormand: Will the Secretary of State make absolutely clear in all his discussions that the Government are prepared to contribute their share of resources to such fundamental changes? In particular, will he bear in mind the need to make adequate grants to 16-year-olds to stay on in full-time education? Is he aware that in the Northern region fewer pupils stay on because of the inadequacy of family finances and that, among other things, that is a terrible waste of talent?
    Mr. Carlisle: The provision made by the Government is part of the general provision in this area. It must be looked at in contradistinction to the type of institution which it is right to have in a particular area. I cannot give any promise that we are considering educational maintenance allowances at the present time, because I do not believe that we are in a position to do so. I am, of course, aware that the participation rate in some areas of this country is still lower than we would wish.
    Mr. Gwilym Roberts: Does not the right hon. and learned Gentleman agree that, as a general principle, the
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    adult atmosphere of a further education or technical college is a much healthier place for 16-plus education and that it would have the advantage of bringing people on academic courses together with people on non-academic courses? At the same time, it could save some of these colleges from the devasting attacks which the Government are making on the non-mandatory sector of education.
    Mr. Carlisle: I do not accept the hon. Gentleman's blanket assertion that the atmosphere is necessarily far better.—[HON. MEMBERS: "Visit some of them".] I have been in various ones. I was about to say that opinion differs in various parts of the country. For what it is worth, my own impression is that those in the sixth form and tertiary colleges like such places. My impression is also that those in sixth forms of schools like those sixth forms.
    Mr. Thornton: Will my right hon. and learned Friend acknowledge the concern which has been expressed by many parents and teachers about the possibility of sixth forms being abandoned in certain areas? Will he urge upon local education authorities the need for consultation within their areas before undertaking any such changes?
    Mr. Carlisle: Certainly. I believe that there should be the widest consultation. Where there are effective viable sixth forms, I hope that local authorities will continue them. In other areas of the country, where the numbers have dropped greatly, it may be that a sixth form or tertiary college is the correct answer. I believe that the solution will be different in different parts of the country. What the House cannot ignore is the fact that over the next few years there will be substantial reductions in the number of pupils in that age group, which means that local authorities ought to review their provision.
    Mr. Foster: Does the Secretary of State accept that there is widespread disappointment with those sections of the report which deal with vocational educational and training? Does he also accept that because of the large reductions in the youth service and further education, education authorities are unable to make the contribution to the youth opportunities programme which they should? Does he further accept that there is widespread frustration at his own Department's puny efforts in its discussions on the content of the youth opportunities programme?
    Mr. Carlisle: The hon. Gentleman has gone off at a slight tangent. I accept that the document refers to vocational training, but it mainly looked at full-time education between the ages of 16 and 19. As to the youth service, I can only repeat what I said in answer to an earlier question. As far as relevant expenditure is concerned, we have assumed no reduction in the expenditure on the youth service next year as against the present year. I accept that in the end these matters are decided by local authorities and I realise that they are under pressure generally. I have never disputed that. However, at a time of high youth unemployment, the youth service is an important aspect of their work.
    Mr. John Page: Is my right hon. and learned Friend aware that, on the few occasions when I wake up in the night with a terrible start, it is because I feel that he might be paying attention to trendy educationists? Before he makes any change in any traditional system, will he think retwice about changing from a very conservative attitude?
    Mr. Carlisle: I am sorry to hear that my hon. Friend ever has need to think of me in the middle of the night.

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    In general terms, I agree with him. I do not believe that one should merely go along with the most recent fad. I was surprised to hear the hon. Member for Bedwellty (Mr. Kinnock) apparently recommending that all education at 16-plus should now be undertaken in tertiary colleges. I do not believe that that is the right answer. I believe that we should retain some of the sixth forms.
    Mr. Armstrong: Does the Secretary of State recognise that his answers are somewhat complacent in view of the great urgency involved in this issue? The education of 16 to 19-year-olds is perhaps the most important issue in education today. Crucial decisions are now being made by local authorities throughout the country. Will he recognise that the provision of resources is vital, because right across the board children are now leaving school as a result of the economic circumstances of their parents and are unable to continue their education? This is an urgent matter.
    Mr. Carlisle: Of course I realise that this is a vitally important area of education. Indeed, it was for that reason that the committee, to whose report we have referred, specifically urged local authorities to review their provision in order to ensure that as full a range of opportunities as possible should be accessible to all in each locality. I hope that they will do that as a matter of urgency.
    I am afraid that I can give no promise at present of further resource provision in that area, other than that which has been assumed in Government plans for the coming year. However, contrary to what the right hon. Gentleman said, I believe that there are signs that in many areas of the country the participation rate beyond 16 is actually going up.
    Mr. Nicholas Winterton: While regretting the discourtesy of the Department in failing to notify a Member of this House that his question was being linked to a much earlier one, may I ask my right hon. and learned Friend what credibility he places upon assurances given by a local education authority that under reorganisation full sixth form facilities would be provided at a new secondary school, when in the event the local education authority in question is liable to back track on that assurance, which was given to parents who had little chance to complain about this change in policy?
    Mr. Carlisle: I think that I know the case to which my hon. Friend has referred. In the first place it is a matter for the county council concerned and not for my Department. I am sorry if he feels in any way insulted or offended by my Department. I would have thought that it was reasonable to link questions up to No. 20 and to assume that hon. Members who had tabled those questions would be present.
    Mr. Kinnock: If the right hon. and learned Gentleman thinks that I said that tertiary colleges were the only acceptable form of post-16 education, he is either myopic or he has been in hibernation with his hon. Friend the Member for Harrow, West (Mr. Page). Is he not concerned that Britain continues to have a much lower proportion of young people aged between 16 and 19 in systematic full-time or part-time education than any other comparable economy or modem society? If he is exercised by that fact, does he not think it possible to have a significant extension of opportunities for these young people when he is cutting non-advanced education by £12 million more next year
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    and advanced further education by £25 million more, thereby further reducing the opportunities which currently exist?
    Mr. Carlisle: Of course I am aware that the figures for full-time and part-time education in Britian for those beyond the age of 16 are lower than for any other European country. I am in contact with my right hon. Friend the Secretary of State for Employment about training opportunities for those beyond the age of 16. On the question of those in full-time education, it is important that we get rationality into the system which will provide the widest possible opportunities.

    School meals
    Mr. Flanneryasked the Secretary of State for Education and Science, further to his reply to the hon. Member for Birkenhead (Mr. Field), Official Report, 23 January, column 246, if the October school dinners survey is now available; what the figures are; and how they compare with a year previously.
    Mr. Raceasked the Secretary of State for Education and Science, further to his reply to the hon. Member for Birkenhead (Mr. Field) on 23 January Official Report, column 246, if the October survey on school dinners is now available; and if he will make a statement.
    Mr. Macfarlane: I refer the hon. Gentlemen to the reply given to my hon. Friend the Member for Streatham (Mr. Shelton) on 29 January.
    Mr. Flannery: Does not the minister realise that the catastrophic drop in the uptake of school meals is bound to cause concern about the health of working-class children? Does the fact that the Minister did not intervene in the abandonment of school meals in State schools in Dorset and Lincolnshire imply that the Government want to get rid of school meals altogether? If that is not the case, will he make it clear this afternoon that he intends to take action to ensure that there is an increased uptake in school meals in State schools.
    Mr. Macfarlane: I do not believe that the hon. Gentleman has read the press release issued by my Department shortly after I answered the question posed by my hon. Friend the Member for Streatham. There has not been a catastrophic decline in the provision of school meals. The Government believe in the importance of the school meals service. We are confident that local authorities can adapt to the changing requirements of youngsters in this day and age. It is clear that those local authorities which have adopted the principle of the cash cafeteria system have achieved an increase in take-up of meals. The trend during the past 10 or 15 years has been for a transfer from packed meals to cafeteria meals. The 17 authorities that have not yet introduced cash cafeteria systems must review their provisions.
    The Education Act 1980 made it clear in section 22 that children of those in receipt of family income supplement or supplementary benefit were entitled to free school meals.
    Mr. Race: Is the Minister saying that a fall of 1·3 million in those taking school meals is not catastrophic? What does he think about the Salvation Army soup kitchens, now operating in Lincolnshire, which feed

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    children at midday because they cannot obtain school meals because the reactionary Tory authority has abolished them?
    Mr. Macfarlane: The hon. Gentleman's prejudice is taking hold of him and clouding his judgment. The survey undertaken by the Department of Education and Science in recent weeks acknowledged that in the summer term of 1980 there was an inevitable decline in the number of pupils staying on school premises to take either the traditional or the cash cafeteria meals. During the past 10 or 15 years—under successive Governments-—there has been a notable increase in the number of children bringing packed meals to schools. The present statistics are much the same as they were under the previous Labour Government.
    Mr. Field: As the Minister's answer tells us that there has been a decline of about 25 per cent, in the number of children taking school dinners, and as he asserted to the House last November that he was confident that there would be no dramatic decline—his words—in the numbers taking school dinners as a result of the Government's increase in school dinner charges, would he now say what, for him, constitutes a catastrophic decline? Also—[HON. MEMBERS: "TOO long."] Also, as the increased charges hit hardest at the poorer families, will he report to the House what monitoring progress has been made by the Government on the nutritional effects of the loss of meals as a result of the increased charges?
    Mr. Macfarlane: The hon. Gentleman asked a number of questions. I can tell him that two-thirds of local education authorities in England have adopted criteria for entitlement to free school meals that are more generous than the statutory minimum. I hope that that will encourage the hon. Gentleman. On the question of the nutritional element, my right hon. Friend the Secretary of State for Social Services proposes to monitor the effect of the new school meal arrangements. I understand that the design of that study has yet to be finalised.
    The hon. Gentleman referred to the catastrophic decline in numbers taking school meals. That is not the case. I am confident that local authorities have the capacity to monitor the effects of the changes in the school premises, and also the social services aspects. The hon. Gentleman must understand that savings must be made on the school meals service in order to preserve the core of our educational service.

    Burnham Primary and Secondary Committee
    Mr. Hawksleyasked the Secretary of State for Education and Science whether the Professional Association of Teachers will now have a seat on each local authority teachers' negotiating committee.
    Dr. Boyson: It has always been open to local authorities to choose for themselves whom they should consult; but I am sure that local authorities generally will take note of the admission of this association, by my right hon. and learned Friend, to the Burnham Primary and Secondary Committee.
    Mr. Hawksley: I congratulate my hon. Friend on including the Professional Association of Teachers in Burnham. Will he go further and send a circular recommending local authorities to include that body in all local negotiations?
    Dr. Boyson: It has not been the Department's practice to send circulars suggesting to local authorities—which treasure their liberty—whom they should see. I am sure that they are aware that the PAT is now represented on Burnham, and will draw their conclusions from that.

  Prime Minister

    Engagements
    Ql. Mr. Ancramasked the Prime Minister if she will list her official engagements for Tuesday 10 February.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Ancram: Will my right hon. Friend find time today to study the Employment Act 1980, with reference to the case of Joanna Harris? Is she aware that many on the Conservative side of the House believe that a person's right to work should not depend on union membership, and that in such circumstances a closed shop is a denial of free choice?
    The Prime Minister: I agree with my hon. Friend about the operation of closed shops. I hope that those affected by it will take full advantage of the change in the law provided by the Employment Act 1980. As my hon. Friend will have seen from the Green Paper on trade union immunities, we are reviewing the law and will consider what action to take in the light of the Sandwell cases and other instances of its operation.
    Mr. Foot: Has the Prime Minister had the chance today to study what we consider to be the extremely serious matters arising on the agenda of discussions between the National Coal Board and the National Union of Mineworkers? Does she not think that it is utterly deplorable, at a time of world crisis in energy, that Britain should contemplate closing pits that still have coal in them? How does she square that with the undertakings given by herself and the Government at the Venice meeting a few months ago?
    The Prime Minister: That is a matter for the National Coal Board to consider in the light of its duties, its coal stocks, its requirements, its productivity, and the prices that it charges. We have already fixed the external finance limit for the NCB for next year at the considerable sum of £882 million.
    Mr. Foot: Will the right hon. Lady reconsider her answer? This is a matter for the nation to consider. Will she give an undertaking that no steps will be taken along that road until the House has had an opportunity to discuss the matter? Will she not reinstitute the tripartite system of discussions for the coal industry, which produced "Plan For Coal"—which the Government said they would carry forward for a period? Does she not agree that it would be better for industry and for the country as a whole if an agreement were reached between the NCB, the miners and the Government about a plan for the industry, rather than the right hon. Lady condemning it to the disaster of quarrels between all three?
    The Prime Minister: It would be quite wrong for the Government to attempt to manage every nationalised

    737
    industry. It is for the Government, in conjunction with the NCB, to fix the amount of finance that is available. We have done so, and the figure I gave to the right hon. Gentleman is considerable. That money will have to be found either from taxation or from borrowing, and will go to the NCB for its operations next year. That is in addition to the price that we shall pay for coal and the increased price that we shall pay for electricity because the price of coal is high.
    Mr. Foot: Since the future of the nation is involved in this matter and since we shall never recover from the recession if the right hon. Lady and her friends allow the coal industry to sink, may we have an absolute undertaking that all the proposals will be discussed in the House of Commons before the procedure under which she is directing that industry proceeds?
    The Prime Minister: No, Mr. Speaker. I am not directing that industry. We have fixed the amount available for the industry. It is for the management of the National Coal Board to make the arrangements and we shall stand by those arrangements.
    Mr. Lennox-Boyd: Although my right hon. Friend does not wish to direct any industry, does she agree that Great Britain is famous for its red telephone boxes? Does she accept that British Telecom's announcement that they are to be repainted because, in the words of its spokesman, "yellow is its colour", will be treated with the greatest possible dismay?
    The Prime Minister: I see my hon. Friend's point. I think that we are famous for one or two things other than red telephone boxes.
    Mr. Sever: Will the Prime Minister call to her office the Secretary of State for the Environment to tell him of the widespread concern about the statement that he made in the House yesterday about funding the inner city programmes? Will she tell him that the statement was not good enough and that hon. Members representing inner city areas are worried about the desperate need to improve our inner cities? Will she ask him to come back to the House with a new statement indicating new proposals?
    The Prime Minister: I cannot offer the hon. Gentleman any hope that more money will be made available for the inner city programmes. We are operating under considerable constraints. Whatever one wishes to do, one cannot go on borrowing more and more for causes, however worthwhile they are.
    Mr. Hannamasked the Prime Minister if she will list her official engagements for Tuesday 10 February.
    The Prime Minister: I refer my hon. Friend to the reply which I have just given.
    Mr. Hannam: Is my right hon. Friend aware of the growing resentment at the prospective increases in the water rate? Will she confirm that the Secretary of State has the power to dismiss as well as to appoint the chairmen of water authorities and that chairmen will be chosen because of their determination to reduce bureaucracy and cut costs?
    The Prime Minister: We are aware of the widespread concern about water charges. My right hon. Friend the Minister for Local Government and Environmental Services has therefore seen the chairmen of the English water authorities. With their co-operation he has appointed
    738
    a team of financial consultants to inquire into the scope for reducing water charges from their present levels and to advise him accordingly.
    Mr. Winnick: Is it not strange that people who always profess loyalty to Britain should now threaten to take up arms against this country? Is the right hon. Lady aware that a large majority of people in Britain want to see a lasting solution to the troubles in Ireland and, moreover, a solution which is based on the reality of the situation that exists in the whole of Ireland?
    The Prime Minister: The situation with regard to Northern Ireland has not changed and will not change unless the people of Northern Ireland themselves wish to change it and unless the Parliament here so decides. Until that time, it remains exactly as it is.
    Mr. Archie Hamilton: Will my right hon. Friend find time to study the statistics which show that one in four subscribers to BUPA are trade unionists? Does she agree that when it comes to making provision for the health of oneself and one's family it is better to be independent of the State than dependent on it?
    The Prime Minister: I noted the figures. I am glad that an increasing number of people are choosing to spend their money freely on increasing provision for their health.
    Mr. Alton: Is the right hon. Lady aware of the devastating consequences that the 1,500 redundancies at the Tate and Lyle sugar refinery in Liverpool will have on the economic and social infrastructure of that city? Has she received requests from the city council and from the spiritual and political leaders in Liverpool for a meeting with her to discuss the implications of that closure? Is she prepared to meet such delegates?
    The Prime Minister: We have received some representations. I cannot receive such deputations. They should see management representatives. The hon. Gentleman knows how the problem arose. First, there has been a reduction in sugar consumption. Secondly, an increasing amount of sugar is refined from sugar beet.

    Tel Aviv
    Q.3. Mr. Rentonasked the Prime Minister whether she has any plans to visit Tel Aviv.
    The Prime Minister: I have at present no plans to do so.
    Mr. Renton: When my right hon. Friend visits Washington at the end of the month will she discuss with President Reagan the great need for a settlement of the Palestinian question? To what extent does she feel that the Camp David concept of Palestinian autonomy within a framework to be determined by Egypt, Israel and, ultimately, Jordan is still valid?
    The Prime Minister: When we go to the United States we shall undoubtedly discuss this matter with President Reagan. I believe that Camp David was a great step forward. I have no doubt that the President of the United States will be considering how to take it further. One of the problems is that the concept of autonomy has so far been rejected by Jordan and the other Arab leaders.
    Mr. Hooley: If the Prime Minister goes to Tel Aviv will she go to the West Bank and talk to the Palestinians

    739
    there where she will discover that they are determined to secure the right of self-determination in their own independent State?
    The Prime Minister: We issued a declaration from Venice on this matter. If there is to be a settlement of the great problems in that area it is vital that one side should honour the right of Israel to live behind secure borders and in peace and that the other side should honour the legitimate rights of the Palestinian people. The problem has been to move those two essentials forward together.
    Viscount Cranborne: Will my right hon. Friend confirm that she recognises Israel's right to exist and that the Palestinian Liberation Organisation is still dedicated to the destruction of the Israeli State?
    The Prime Minister: Of course we recognise Israel's right to exist and behind secure boundaries. We have never recognised the PLO as the sole representative of the Palestinian people because of its relationship with terrorist activities.
    Mr. Ernie Ross: If the Prime Minister goes to Tel Aviv will she stress to the Israelis that they cannot expect to live behind any type of secure border when they continue to seize land as they did recently when they seized 4,000 acres around the Arab town of Nablus?
    The Prime Minister: That illustrates the importance of trying to secure an agreement on this long-standing problem. I do not think that it helps to hurl accusations at one side or the other. We must try to move both sides forward, recognising the two concepts that I indicated earlier.

    Common Agricultural Policy
    Mr. Lathamasked the Prime Minister what further proposals she will make at the next European Council to implement the Government's intentions regarding reform of the common agricultural policy of the European Economic Community; and whether she will make a statement.
    The Prime Minister: It is too early to say what will be on the agenda for this meeting or what stage will by then have been reached in negotiations on farm prices and related matters.
    Mr. Latham: Will my right hon. Friend ensure that the Government put as much determination behind refroming
    740
    the CAP as they did behind the successful renegotiation of the budget contribution? Does she agree that it is plain that the present system cannot continue for much longer?
    The Prime Minister: I assure my hon. Friend that we shall devote all our vigour to reforming the common agricultural policy. It seems to us to be absurd to have a policy which builds ever-increasing surpluses which take ever-increasing proportions of the budget and of resources to produce food that we do not want and cannot eat.
    Mr. Arthur Lewis: Is the Prime Minister aware that we are honoured with a visit of a delegation from the People's Republic of China? It is not a laughing matter. Although I am not allowed to draw the attention of the Prime Minister to the fact that they have not been in the Gallery, would she perhaps consider whether she could arrange a visit to China as soon as possible?
    Mr. Speaker: Order. This was not an open question, but one of the questions on the Common Market.
    Mr. Budgen: When my right hon. Friend goes to the European Council, will she take the opportunity to comment upon the interesting letter in The Times today by our distinguished colleague, Sir Fred Catherwood? In that letter he asserts, first, that the Euro-junkets such as we have read about recently are necessary and should continue. Secondly, he asserts that the EEC has a trade policy independent of the nation States within the EEC.
    The Prime Minister: I cannot vouch for precisely what the letter in The Times says, but, if the sums which were reported as spent on overseas travel visits by Euro Members of Parliament were correct, it was gross extravagance.

BILL PRESENTED
  FREEDOM OF ASSOCIATION
  Mr. Den Dover, supported by Mrs. Peggy Fenner, Mrs. Sheila Faith, Mr. Ivor Stanbrook, Mr. Robert Dunn, Mr. Bowen Wells, Mr. John Wheeler, Mr. Barry Porter, Mr. Tim Eggar, Mr. Christopher Murphy, Mr. John Carlisle and Mr. Michael Colvin presented a Bill to provide the freedom to belong or not to belong to a trade union: And the same was read the First time; and ordered to be read a Second time upon Friday 27 February and to be printed. [Bill 63].
  FREEDOM OF ASSOCIATION

    Coal Industry
    Mr. Dennis Skinner: 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 threatened closure of coal mines."
    I have just come back from the National Coal Board; I was not chucked out. I have not had an opportunity to raise the matter with you, Mr. Speaker, because I dashed straight in from Hobart House.
    The matter is serious, because 30,000 miners are being thrown on the scrap heap. It is important, because of what I said about the miners and because we could be witnessing another period of a pit closure programme from which we cannot escape, because pits, like so many factories—but not all—are unable to be reopened. It is important that we raise this matter at an early stage, because of what the Prime Minister said today in response to my right hon. Friend the Leader of the Opposition, when she implied that the closure programme had nothing to do with the Government. I have a statement from the board—not from the union—which says that it is as a result of the run-down of the economy that between 8 million and 10 million tons of coal must be—[HON. MEMBERS: "TOO long."]
    Mr. Speaker: Order. The hon. Member for Bolsover (Mr. Skinner) is entitled to raise this matter. I should have taken it before the notice of motion, but the hon. Gentleman had not given me notice. Therefore, I was not to know what matter he would raise. However, he must not make the speech that he would have made if I had granted the application. He must confine his arguments to saying why the matter is urgent, important and necessary.
    Mr. Skinner: I shall forgive you, Mr. Speaker.
    The matter is urgent, because, as a result of the joint discussions this morning, arising from the executive meeting on Thursday of the NUM and other affiliated bodies, it is likely that a joint meeting with the Department of Energy and perhaps also the Prime Minister will be requested. It would fall into line with what my right hon. Friend said during questions, namely, that the House should discuss this matter before talks are considered.
    742
    The matter is also important, because, if we are to ensure the future of the coal industry, it is necessary to put a curb on the ever-growing total of imports under the auspices of the Government. They have risen by as much as three times since the last year of the Labour Government. They need to be reduced, and urgent measures must be taken.
    The matter is urgent, because the coal industry, unlike many others that have fallen foul of the Government, has been increasing its productivity faster than any other. It is in line with Government policy. If we are to ensure that Government policy is to be kept intact, why should an industry that has managed to increase its productivity be thrown on to the scrap heap like the rest of them as a result of the general run-down in industry?
    The issue is very important. The miners' unions and other unions—not merely in some of the so-called militant areas but throughout the coal fields—have said that they will not stand for this closure programme. Therefore, it is essential that we give the matter priority for a debate at the earliest opportunity.
    Mr. Speaker: The hon. Member seeks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
    "The threatened closure of coal mines."
    As the House knows, under Standing Order No. 9 I am directed to take into account the several factors set out in the Order but to give no reason for my decision. I listened carefully to the hon. Gentleman and to the representations that he made, but 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.
    Mr. Skinner: But I can try again.

    EUROPEAN COMMUNITY DOCUMENTS
    Ordered,
    That European Community Document No. 4049/80, concerning the harmonisation of income tax provisions with respect to freedom of movement for workers within the Community, be referred to a Standing Committee on European Community Documents.—[Mr. Pym.]

    Muscular Dystrophy
    3.38 pm
    Mr. Allen Adams: I beg to move, That leave be given to bring in a Bill to put a statutory obligation on health boards to set aside a proportion of their existing resources for research into the causes and effect of muscular dystrophy or to fund any research project approved by the Secretary of State into the causes and effect of muscular dystrophy.
    The Bill is in no way a party political issue. I have drawn support for it from all political parties in the House, with the exception of the Liberal Party because I could not find any of its members.
    As the title suggests, the Bill is exclusively about muscular dystrophy. It would perhaps be appropriate at the outset to ask ourselves two questions—what is muscular dystrophy, and what can we do about it?
    I shall briefly explain in layman's terms what muscular dystrophy is. Unlike motor neuron disease, or multiple sclerosis, with which it is generally confused, it is essentially a disease of the muscle. It does not affect the nervous system. We must make that distinction. The muscle wastes away quickly. The disease is exclusively carried by females and is passed on exclusively to male children.
    It is a cruel disease. It is not necessarily apparent at birth. I know of many children who seemed to be normal at birth and in whom the disease did not become manifest until they were 5, 6 or even 8 years old. However, although the disease is not apparent at birth, it can be detected at birth by a simple procedure, which is in use in Japan, Germany and to some extent France. It is not used in maternity units in this country. Perhaps our maternity units could consider that process. Detection at birth is vital.
    The disease destroys half of a child's muscle by the age of 5. If the process is to be slowed down, detection at birth is vital. There is a medical wrangle over the suitability of one or two of the drugs, but certain drugs, if used from the age of 1 or 2 months until the child is 5, will undoubtedly slow down the process. However, by the time that the disease has manifested itself, generally at 5 or 6 years of age, it is too late even to slow its progress. I urge doctors to consider universal testing at birth.
    I do not wish to exaggerate the size of the problem. The disease affects only one in 100,000 children. It does not occur more frequently in areas of deprivation, or in different parts of the world. It affects all strata of society and all parts of the globe equally.
    If the disease is allowed to take its course, an affected child is in a wheelchair by the age of 8. As the muscles weaken and are destroyed, the child's body becomes progressively distorted. The child never leaves his
    744
    wheelchair. Death normally follows between the ages of 15 and 20 years. A few struggle on into their late twenties or early thirties.
    Any one of us can suffer from cancer or be struck down by heart, liver or kidney disease. We do not know whether such diseases will kill us next week, next year, or in three years' time. Muscular dystrophy kills, with certainty. No one survives. That is its unique feature. Not only does it kill; it destroys a child's ability to enjoy childhood. He cannot use his legs or arms.
    Society has done little to combat the disease. Dr. Thomson, of Knightswood hospital, in Glasgow, has had to work in a cupboard for the past 20 years. His annual grant is £22,000. Out of that he has to find his salary and that of his assistant, and the money to maintain his equipment. He has come upon a drug called Allopurinol. It is not claimed to be a miracle cure, but it appears to slow down muscular wastage and to maintain mobility for an extra two or three years. Such a horrible and cruel disease is worthy of the expenditure of more than £22,000 a year. We have perhaps seen the first chink of light, but more research needs to be done.
    I have a list of people who claim that they get money for research into muscular dystrophy. The Southern general hospital in Glasgow gets £43,000; Edinburgh gets £40,000; and St. Andrew's gets £5,000. However, their research is not specifically into muscular dystrophy. A great deal of the money goes towards other research, albeit necessary research.
    The Bill aims to give the Minister powers to tell health authorities—perhaps the wording is slightly wrong—to set aside a specific part of their budgets for research solely into muscular dystrophy. I repeat that it is one of the cruellest diseases that we know.
    We all know what Ten-Minute Bills are for. Their purpose is essentially to draw attention to a specific subject. I hope that when the Bill has a Second Reading, Government Whips and the Front Bench will go to the toilet or to the pub—I hope that they will disappear—so that we can examine the problem in detail, as in Committee.
    Question put and agreed to.
    Bill ordered to be brought in by Mr. Allen Adams, Mr. Harry Greenway, Mr. John Maxton, Mr. Ernie Ross, Mr. William McKelvey, Mr. Harry Ewing, Mr. Raymond Ellis, Mr. John MacKay, Mr. Dick Douglas, Mr. Frank McElhone, and Mr. Donald Stewart.
    Mr. Allen Adams accordingly presented a Bill to put a statutory obligation on health boards to set aside a proportion of their existing resources for research into the causes and effect of mucular dystrophy or to fund any research project approved by the Secretary of State into the causes and effect of muscular dystrophy: And the same was read the First time; and ordered to be read a Second time upon Friday 20 February and to be printed [Bill 64].

  Orders of the Day

    Atomic Energy (Miscellaneous Provisions) Bill
    Order for Second Reading read.
    3.48 pm
    The Under-Secretary of State for Energy (Mr. Norman Lamont): I beg to move, That the Bill be now read a Second time.
    The main purpose of the Bill is to enable the disposal of shares in the Radiochemical Centre Ltd. This is a small company, usually known as TRC, which makes radioactive isotopes for industry, medicine and research. The Bill clarifies the present powers of the Government to dispose of shares held in companies operating in the field of atomic energy in general and clarifies the present powers of the United Kingdom Atomic Energy Authority to dispose of shares in any company. In particular, it will enable the sale of up to 100 per cent of the shares in TRC. I emphasise that TRC is not a company operating in the field of nuclear power. For historical reasons, which I shall explain, it is a company owned by the Atomic Energy Authority.
    Before turning to why the Government consider that shares in TRC should be sold, I should like to give the House the background and history of the company. It is a remarkable company, although it is not well known.
    The origins of the company go back as far as 1940, when the Government invited a small company called Thorium Ltd to undertake the refining of radium and the manufacture of radium-based self-luminous paint for use in compasses and aircraft instruments. The company started in a small house in Amersham. Much of the early drive came from a young chemist, Dr Grove, an entrepreneur who had the ideas and vision to see the future uses for radio-isotopes and who was to lead the organisation as it grew for some 40 years. From those first modest steps in a house in Amersham grew a company that today is a world leader in its field and is internationally associated with the manufacture of radioactive substances.
    Thorium Ltd. initially acted as managing agents for the Government but relinquished that agency in 1946 when the Radiochemical Centre was established within the public sector. Its immediate purpose was concerned with natural radio-elements, but it was also envisaged that, when artificial radio-isotopes became available, the centre would undertake the processing and distribution of them as well.
    Although radium and its associated products dominated the work at Amersham until well into the 1950s, artificially produced radio-isotopes became more important as Pharmaceuticals and research chemicals incorporating these materials were developed and manufactured. During this period, the Radiochemical Centre continued to expand.
    In 1954, the centre became part of the newly formed United Kingdom Atomic Energy Authority, whose primary purpose was to carry out research and development in atomic energy. TRC has undoubtedly benefited from the growth in general scientific knowledge as a result of research into atomic energy, although—this
    746
    is a point that should be emphasised in case there is any doubt—the products that TRC produces are not directly relevant to the nuclear power programme.
    The Radiochemical Centre took over the functions of the isotope division of the Atomic Energy Research Establishment at Harwell in 1959 and continued to develop its sales. By 1959, sales exceeded £1 million per annum, with over 60 per cent. going overseas to some 50 countries.
    The 1960s were a period of further vigorous expansion. New laboratories were built to enable the manufacture of more radiation sources. The export business continued to prosper. The centre received the first of four Queen's Awards for Exports in 1967.
    This part of the Atomic Energy Authority's business—the manufacture of radioactive substances used for diagnosis and treatment in medicine—was transferred to a wholly owned subsidiary company, known as the Radiochemical Centre Ltd., by the Atomic Energy Authority Act 1971. When this company was set up in 1971 it was originally envisaged that there should be a private shareholding in the future. When the incorporation was made, the purpose was to see the centre develop as an independently run company and to encourage proper commercial and financial disciplines.
    Mr. Tam Dalyell: The Minister used the words "it was envisaged". Envisaged by whom?
    Mr. Lamont: It was envisaged by the Conservative Government who introduced the Act in 1971. I am coming to the view taken by an earlier Labour Administration. I am at the moment dealing with the view of the Government in 1971.
    Since then, when TRC was set up as a company, it has continued to trade profitably and to expand. It decided in 1973 to open a new green field manufacturing site at Cardiff. Work on this is almost complete and production has already started. The Cardiff plant is planned to be in operation in 1981. Recent capital investments have cost the company some £20 million and will enable it to double its manufacturing capabilities.
    Without doubt, TRC has developed into a commercial and manufacturing organisation with a worldwide business and a world-wide reputation. It employs some 2,000 people. Its main markets are in medicine, research and industry. It manufactures radioactive drugs for diagnostic purposes, ranging from biological research to engineering and advanced electronics. In the field of industrial radiation, the company produces sources for industrial radiography, with applications in industry—for example, the examination of pipeline welds.
    TRC is a world leader in its field. About 80 per cent. of its sales revenue comes from abroad, an astonishing achievement. In research radiochemicals, it has captured about 80 per cent. of the United Kingdom market, some 30 per cent. of the United States market and roughly 30 per cent. of the Japanese market. This has been achieved by a dynamic management and dedicated work force in the face of tough, international competition.
    I hope that this has given the House some idea of the nature of the company. I should now like to explain why it is the Government's view that shares in the company should be sold.
    The proposal that private capital should be introduced into the company is not a new idea. When TRC was

    747
    constituted as a limited company in 1971, the then Government stated that they favoured eventual private participation. This would also appear to have been the view in 1970 of the Labour Administration, which introduced a Bill similar to that which became the 1971 Act, which lapsed with the general election that year. At the time of the 1971 Act it was the intention that the Government and the authority between them would retain a majority shareholding, and this was provided for in the Act.
    Early in 1974 the then Conservative Government reaffirmed their intention to sell shares in TRC but deferred any such sale until after the introduction of an improved system of product costing and accounts based upon it. Nothing further has been done since then, and all the shares are still held by the Atomic Energy Authority.
    The present proposal to sell shares in TRC is in accordance with the Government's policy of introducing private capital into public sector companies and, in view of the previous proposals, coupled with TRC's outstanding record as a successful commercial operation, TRC is plainly an excellent candidate for privatisation.
    The Government have avoided intervention in the day-to-day running of the company and have never provided subsidies. Indeed, its only link with the public sector is the fact that its shares are held by the AEA, and this is now an anachronism.
    Mr. Arthur Palmer: The hon. Gentleman has explained the great merits and success of this company. What benefit does he think that the introduction of private shareholding will confer on it?
    Mr. Lamont: There are no reasons why this company should remain in the public sector. The company can only benefit from having total freedom from Government intervention. The hon. Gentleman will perhaps at least see this point. The time taken up by management and by civil servants reviewing the investment plans, the pay plans and the corporate plan of the company is valuable time given by people who have other things to do. There is every reason why this company should be available for investment by the private sector. We believe that this company can benefit through being fully integrated into the private sector. The company's board has been consulted and agrees with the principle of disposing of shares in TRC.
    The proceeds of disposal of shares in the company, less the administrative costs of making the disposal, will be paid into the Consolidated Fund. This is in accordance with one of the Government's other objectives from privatisation—this, too, answers the hon. Gentleman's question—to reduce the size of the public sector borrowing requirement. The reasons for privatisation are, therefore, twofold: to reduce public involvement in a company which will benefit from full commercial freedom, and to lower the Government's need to borrow money.
    Mr. Edward Rowlands: Is the Minister saying that the board and the staff agree with the power to be taken under the Bill to dispose of more than 49 per cent. of the shares?
    Mr. Lamont: The board thinks that the Government should retain some holding in the company. I have not said anything that is contrary to that. The board also thinks that it is right that there should be sales by the Government of shares in the company. It welcomes that.
    748
    I should now like to explain in more detail the provisions of the Bill and why it is necessary. When the company was set up in 1971 it was envisaged that a minority shareholding would be sold off at some time. As a result, the Act provided for a majority of the voting shares in the company to be retained in the public sector. The Government now wish to have the option of selling more than half the shares, and so the Bill removes the provision in section 11(3) of the 1971 Act, which requires that the Secretary of State and the authority between them should hold at least 50 per cent. of the voting shares.
    At the time of the 1971 Act it was thought that, subject to this provision, the Secretary of State or the authority could dispose of any shares owned by them. However, the Government have been recently advised that these general powers of disposal are constrained in respect of sales of shares by the Secretary of State in companies operating in atomic energy by reference to his general duties to promote and control the development of atomic energy, and constrained in respect of sales of shares made by the authority in any company by its ability to do only such things as are in accordance with its statutory functions.
    Arguments could therefore be advanced that the disposal of part or all of any of the AEA's existing shareholdings would be inconsistent with existing powers, and any such disposal might therefore be challenged in the courts. For this reason, it is essential, if this disposal is to take place—even this sale of shares amounting to less than 50 per cent.—that the general powers of the Secretary of State and the authority be clarified in the case of TRC.
    It seems sensible to take the opportunity similarly to clarify the present position of the other two companies in which the AEA holds shares—British Nuclear Fuels Ltd. and the National Nuclear Corporation Ltd.—and any company that the Government or the authority may require in future. The Bill ensures that the Secretary of State has the power to sell any shares that he owns in companies operating in atomic energy, and that the authority has the power to sell shares in any company that it owns.
    The Government and the authority have already the power to buy shares. It is surely right that they should have the freedom and power to sell shares as well as to buy them.
    One present restriction on the sale of shares is on the sale of more than half of the voting shares in British Nuclear Fuels Ltd., which is specifically imposed by section 11(3) of the Atomic Energy Act 1971. I draw to the attention of the House the fact that the restriction is retained by the Bill. The Government want to have the option, which was previously thought to exist prior to legal advice, of selling up to 49 per cent. of the shares in British Nuclear Fuels Ltd., but I emphasise that at present the Government have no plans to do so. The Government are merely clarifying the powers that it was previously thought the Government had.
    Similarly the option to sell shares in the National Nuclear Corporation Ltd. is being kept open, although at present the Government have no plans to make such sales. Should the Secretary of State or the authority acquire shares in other companies in future, they would likewise, as a result of the Bill, have the option to sell them, too.
    Mr. Peter Rost: The Government now have only a minority holding in the National Nuclear Corporation Ltd. They do not have a majority holding as they have in British Nuclear Fuels Ltd.

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    If it were the Government's intention at some future date to reduce their holding, would it be their intention to reduce it to virtually nil or to retain a small holding?
    Mr. Lamont: The Government have made no decision to dispose of their shares. My hon. Friend rightly says that the Government have only a minority holding. I believe that it is 35 per cent. at present. However, others have shares and there could be circumstances in which the shares held by others end up in the Government's hands. The potential provisions set out in the Bill are relevant to that. I emphasise that at this moment, at the beginning of the nuclear programme, the Government do not have plans to dispose either of the 35 per cent. holding or of other shares that might come their way. It is, of course, a matter that the Government could consider in future.
    Mr. T. H. H. Skeet: Is my hon. Friend saying that in this Parliament he will not be disposing of any of the shares of companies other than those of the Radiochemical Centre?
    Mr. Lamont: At present the Government have no plans to dispose of shares in BNFL. The Bill would allow the Government to do so up to 49 per cent. They have no plans at present to sell shares in the National Nuclear Corporation. As for the latter body, things might change. There is every reason to want to see a strong private sector construction industry building our stations. We must see how the programme develops. First, we must get it off the ground. We have no plans to sell shares at present. That is all that I am saying on that score. I am not going beyond that.
    Mr. Edwin Wainwright: Is it the Government's intention to give to private enterprise any section of a nationalised industry that happens to be viable and to allow the parts of the nationalised industries that are almost impossible to make viable and profit-making to remain in the nationalised sector?
    Mr. Lamont: It is the Government's firm policy to reduce the size of the public sector and wherever possible and practical to introduce private capital.
    Mr. Peter Hardy Mr. Peter Hardy (Rother Valley) rose—
    Mr. Lamont: I must get on.
    Apart from the provisions that I have mentioned, the Bill covers a few other matters. The requirement for TRC's account to be laid before Parliament is removed once more than half the voting shares are disposed of. Clause 2 makes it clearer than it is at present that, should the authority receive moneys from the sale of shares, the Secretary of State may direct them to be transferred to the Consolidated Fund. Clause 3 provides for the expenses associated with the disposal to be paid for out of sums provided by Parliament.
    The Bill also allows for the sale of shares to be made either by the authority or by the Secretary of State. As I mentioned earlier, the shares are at present held by the authority. If the Government wished to sell the shares in TRC directly the Secretary of State would first use his powers under the 1971 Act to transfer to himself those shares which it was intended to sell. It would then sell the shares and the proceeds would be paid into the Consolidated Fund.
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    Alternatively, the Bill gives the Secretary of State the power to direct the authority to make the sale and then to transfer the proceeds into the Consolidated Fund. It has not yet been decided who will actually make the sale, but legislating in this way provides greater flexibility.
    The Bill would enable a sale of up to 100 per cent. of the shares in TRC. The Government have not yet decided on the exact timing, the method, or the extent of the disposal, but it seems unlikely that a sale could take place before the end of this year at the very earliest. For the time being we wish to keep these options open.
    There is one final and important matter that I wish to make clear. The Government have decided that employees at present with TRC may remain in the Atomic Energy Authority pension scheme in which they are now members.
    Mr. Rowlands: Such generosity.
    Mr. Lamont: That means that TRC and its employees will continue to make the appropriate contributions to the scheme in the normal way. Employees joining TRC after some agreed date in the future will join a new company scheme which is being set up.
    I pay tribute to the employees of TRC, who, through their dedication and hard work, have enabled their company to be so successful and outstanding. I realise that there may be uncertainties about the disposal. However, I assure them that there are no grounds for such anxiety. The Government see TRC as a national asset and would not agree to plans that would endanger the company's future or the livelihood of those who work for it.
    Mr. Peter Viggers: Does my hon. Friend agree that it would be possible under the joint stock company provisions to have stock options and share options which would enable individual employees in the company to benefit, which is not possible if the company remains parts of a nationalised industry?
    Mr. Lamont: My hon. Friend makes an extremely important intervention. I am sure that he has referred to one of the attractions of privatisation for many people. When I met the trade unions at the Radiochemical Centre last week, that was one of the very issues that they raised. No decision has yet been made on whether the company will be privatised either by sale to a corporate buyer or through a flotation. A flotation enabling a share incentive scheme and profit-sharing schemes to be devised for the benefit of the work force is clearly a matter of importance. Further, even though Labour Members pooh-pooh it, the workers in TRC favour it.
    As I said at the beginning, the primary purpose of the Bill is to enable the disposal of shares in TRC. It therefore takes further the Government's manifesto commitment to roll back the public sector. The Government see no benefit, either to the nation or to TRC, in the Government continuing to own all the company's shares. Indeed, I believe that it is right that such a high technology company, which is both profitable and rapidly expanding, should be allowed to develop in an atmosphere of the fullest commercial freedom. I am confident that the injection of private capital into this company will not only be in the national interest but will benefit management and workers alike. TRC has been successful over the years. The House should give it the means to build on that success in the future.
    4.10 pm
    Mr. Edward Rowlands: On a day when a meeting of deep concern to the energy requirements of this nation is taking place, to bring forward such a petty and irrelevant Bill is a waste of legislative effort and time.
    As the Minister said, the only really significant change that the Bill seeks to make concerns the power to sell off the whole of the Radiochemical Centre. I understand that the provisions governing BNFL do not change the position that we thought existed after the 1971 Act, and that the situation regarding BNFL and the role of the Government's majority shareholding will be fully maintained. So there is no fundamental change of policy in that respect. However, I should like to ask the Minister about some of the extraordinary wording of the Bill in relation to the general power that the Secretary of State is seeking.
    The whole case for this two or three-clause Bill, this measly little Bill, rests entirely on the proposal to sell off completely the Radiochemical Centre. The power already exists for shares to be created in TRC. That is not in dispute. That power has existed since 1971. The only reasoned justification for the Bill is to give the Government power to sell off the whole of TRC. The power to create shares already exists, and, if it does not, we shall not dispute that part of the Bill that clarifies the matter. We are appalled with the rotten case presented by the Minister to justify taking the power to sell the whole or the majority of the shares in the centre.
    Mr. Tim Eggar: Is not the hon. Gentleman aware that considerable doubt is cast on the provisions of the 1971 Act by the provisions of the 1946 and 1954 Atomic Energy Authority Acts? Should he not bear those Acts in mind?
    Mr. Rowlands: I shall certainly bear them in mind, and I hope that we can reach a consensus before I finish my remarks. We support any part of the Bill that clarifies the position and role of the Atomic Energy Authority and the Government with regard to the sale of shares in this company. If that is the purpose of the Bill, we may be able to obtain a consensus.
    The hon. Gentleman knows that the Bill gives the Secretary of State power to sell more than 50 per cent. of TRC if he so wishes.
    Mr. Hardy: May I ask my hon. Friend to deal with the point on which the Minister would not give way a few moments ago? My hon. Friend mentioned that the Minister's explanation left a great deal to be desired. Will he pursue the point that the Minister's explanation gave no assurance with regard to the amount that the Government expected to receive for those shares? The Minister said that £20 million would be reinvested. We have a right to know whether that sum of money will be returned.
    Mr. Rowlands: That is a pertinent point and I shall deal with it later. However, I should like to deal first with the point that was made about the need to clarify the position.
    The problem that the Minister has had in presenting his case today is that the Government are so used to the claptrap about inefficient and badly managed State enterprises compared with the bright-eyed, sharp-eyed private sector, and this company did not fit any of those categories.
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    Grudgingly, the Minister had to admit that TRC had been a wonderful success story—a 100 per cent. Governmentowned success story. He could not say that TRC was losing money or that it had come cap-in-hand to the Government and had made demands on the taxpayer. He did not give the figures—
    Mr. Norman Lamont: It is wrong to say that my description of the company's success was half-hearted. Over and over again I emphasised the great achievements of the company. In the light of that, will the hon. Gentleman say what he thinks would be gained by retaining this company in the public sector and, at a time of public expenditure restraint, why the money that is tied up in this company should be left there rather than be used for the other valuable purposes for which the hon. Gentleman is always campaigning from the Dispatch Box?
    Mr. Rowlands: Because it is making money for the Government. The Minister did not give the figures, so I shall give them one by one.
    First, since 1971 the turnover of this company has risen from £8 million to £50 million a year—not bad for a socalled nationalised concern. That turnover has been matched by excellent profits—£26 million in that period—and with an average return on group capital investment of 26 per cent. I should like to know how many other companies in the private sector have achieved such good figures.
    I turn now to the question that the Minister asked. Why should the Government hold on to this valuable company and why should not the shares be sold? The dividend has been paid to the shareholders—the United Kingdom Atomic Energy Authority. In 1971–72, the dividend was 10 per cent.; in 1972–73, 10 per cent.; in 1973–74, 7 per cent.; in 1974–75, 11·49 per cent.; the same percentage the following year; in 1976–77, 8·2 per cent.; in 1977–78, 22 per cent.; in 1978–79, 12 per cent.; and in 1979–80, 12 per cent. The company is doing very well for the taxpayer and the State. It has been making profits and paying good dividends to the Government.
    Has the company made any demands on the public sector borrowing requirement besides being artificially a part of the PSBR? I should be grateful if the Minister would give the figures with regard to the significance of TRC being a part of the public sector and its impact on the PSBR. Has the company made large demands on the Government for its capital investment programme? Besides the initial capital investment of £6 million, which is now extremely profitable to the Government, has it made a huge demand on the public sector borrowing requirement to finance the large-scale £20 million exciting investment at the Cardiff factory? It has not done that. It raised most of it from its profits on its own reinvestment, along with some support from the Government in the form of equity, for which now the Government are receiving a very healthy return.
    So the company is not making any demand. In the large scale expansion programme that this company has undertaken it has made marginal, insignificant demands on the public sector borrowing requirement, for which the Government will get a very high and valuable return in the coming years, unless they go through this foolish act of selling the company off to the private sector at the moment of major growth and expansion by TRC.
    Mr. John Watson: I am sure that the hon. Member does not wish to mislead the House. Does he acknowledge that the £6 million profit figure to which he referred relates to 1979, that last year the profit figure was £4 million, and that this year it is likely to be distinctly lower than £4 million?
    Mr. Rowlands: I am sorry that the hon. Member is leading with his chin on this matter. The reason why it will be distinctly lower than the £6 million is that, as the Minister pointed out, 84 per cent. of TRC's products are exported, 30 per cent. going to the United States. The high interest rates and particularly the high exchange rate have some effect on the growth of profits of the company. That is the reason. Volume has risen, but the margin has become slighter because of the Government's policy towards exchange rates. I am sorry to report to the hon. Gentleman that the Government's general economic policy has been the chief cause for the slight dip in profits.
    I think that anyone who knows about this matter and anyone who has looked particularly at the Cardiff venture—I had the privilege of visiting it, as I shall mention again shortly—will say that the potential now for both expansion and profits is very considerable, as a result of the tremendous initial £20 million investment. If it was partly financed by the Government, they had a happy opportunity for handsome return on such investment.
    For the last six years the Government have received a 12 per cent. dividend return on their investment, which we hope will pay the marginal costs of the so-called management review and the corporate plans. It has been such a successful company that it should take about five minutes to survey and to study. In return for that, the Government have had a very large return on their investment.
    The next reason that the Minister gives as a case for selling off TRC is that we need private capital to be injected into the company for future expansion programmes, instead of the company having at some time in the future to come cap-in-hand to the Government. As the Minister admitted, already the £20 million investment programme has almost doubled the company's capacity to expand. That is already in place and has been financed. Therefore, we cannot expect a demand of any kind to be made on the Government until the late 1980s for any further expansion.
    Anyway, the power exists without the Bill for the Government to allow the injection of private capital into TRC. No one is arguing against that. It will not be the Opposition's case that there is not a case for shares or capital from the private sector to go into TRC. What we are saying is that we do not need the Bill to do it, except in the clarifying sense, and, secondly, that we are opposed most bitterly to the idea of the majority, if not the whole, of the company being sold.
    Mr. Norman Lamont: Why does the hon. Gentleman think that it is a good idea for private shares to be taken in TRC?
    Mr. Rowlands: I do not particularly think that there is a good case for that. [Hon Members: "Oh."] What I am saying is that the opportunity has existed since 1971. The Labour Government of 1974–1979 did not remove that opportunity. It can be taken up at any time, if it is judicious and sensible commercially or technologically so to do.
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    I do not think that at present there is any need for such privatisation or the introduction of private capital. But if the Government want to say "What we need is some worker shareholding", they can do so without the Bill. The Minister knows that.
    Mr. Lamont Mr. Lamont indicated dissent.
    Mr. Rowlands: The Minister shakes his head. He admits that this could be done without the Bill.
    Mr. Lamont Mr. Lamont indicated dissent.
    Mr. Rowlands: We shall discover further, when the winding-up speech is made, what is preventing worker shareholdings as part and parcel of TRC without the power to take more than 50 per cent. of the shares and sell off the company.
    The Minister was very disingenuous about the company's position and that of its staff and workers and their attitude towards the Bill. He said that he had visited them in Amersham. He said that the point that they raised with him was that they wanted some shares in the company. However, that was not the only topic which they raised with him, and it was not the main one. So why did he not tell the House about the main point raised by these dedicated staff, to whom he paid a great compliment, and the dedicated management, who have made such a commercial and technological success of this company, although it is 100 per cent. Government-owned? Why did the Minister not state is the position of TRC staff and workers?
    The Minister will know—I do not think that last Friday he found anything different—that their statement made last month expresses the position by which they stood last Friday and stand today. That statement says:
    "We believe that the Government should retain a controlling interest in the Radiochemical Centre."
    That is a statement of the wishes and feelings of the overwhelming majority of the staff and workpeople at TRC. Why did not the Minister tell that to the House? Why did he just say "Of course, one point that was raised with me was that they would like some worker shareholding of some kind"? That is because it conflicts with all the grand compliments that he has been paying to the company, and he knows that the action that he is proposing to take as a result of the Bill, would conflict with the wishes and feelings of the overwhelming majority of the staff and workers at TRC.
    Mr. Rost: Will the hon. Gentleman give way?
    Mr. Rowlands: I shall not give way. I have done so a number of times. I want to deploy one or two other arguments. The hon. Gentleman can make his own speech. He will have plenty of time to make his comment. We shall be here for a couple of hours at least.
    The Bill is about the power to sell off a company which has commercially and technologically kept more than one step ahead of its competitors in the game. It has made a great deal of money. It has invested very well. It is capable of making even more money as a 100 per cent. Government-owned company, or as a Governmentcontrolled company. Its industrial relations have been marred by only one half day's marginal dispute since 1944. In its industrial relations and its terms and conditions of service it has skilfully blended the best of the Civil Service arrangements with those of industry in the negotiations that have been taking place and evolving over the last year or two.

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    As the Minister admitted, I think, there is an intense and very special commitment to the company by its staff and workpeople. In the brief time that I have spent at the new Cardiff premises, I found that to be a very striking feeling and wish. There is a sense of commitment and of special relationship and identification with the company, which has grown out of its success.
    Why impair that? Why even cast doubt on it? Why create any uncertainty about it, as the Bill and its powers could do? Why cast doubt on a very successful ongoing operation? Why create the degree of uncertainty that can flow and is strongly felt by many members of the staff about the possibility of being taken over by some unknown company or organisation, when it is already a remarkably successful outfit, with a marvellously dedicated staff, and is doing extremely well?
    There is not a shred of evidence—the Minister brought none to the Dispatch Box today—to suggest that the structure of the company over the last eight or nine years since 1971, the organisation of the company, how it has been managed or how it is owned, have in any way inhibited the growth and development of the company. The Minister cannot produce such evidence, because the figures speak for themselves. There has been no demand from the management for this change. There has been no demand for the Bill from the staff or the workpeople.
    If there is a case for this change, where does it lie? In the end, the Minister gave the two reasons: first, party dogma and doctrine; secondly, the public sector borrowing requirement. Let us look at these two so-called reasons for casting doubt on certainty and creating uncertainty and doubts that need not exist about the continuation and development of this very successful company.
    Let us look at the public sector borrowing requirement consideration. As has been said, the Bill's main purpose is to enable the Government to realise the assets that they hold in the Radiochemical Centre and to reduce the public sector borrowing requirement. By how much will the public sector borrowing requirement be reduced? How is it to be reduced, and on what time scale? The Minister may say that the Government have taken the option and that they will think about the time later. What evaluation or assessment have the Government made?
    If the Bill represents a major item in the Government's policy of reducing the public sector borrowing requirement, the Government should tell us how much money is involved. Is it £50 million? Is it £100 million? This year the public sector borrowing requirement amounts to £12·5 billion. Can it be true that the Government want to create uncertainty and want to cast doubt on the development and continuing success of a company just so that they can knock £50 million to £75 million off the public sector borrowing requirement? That is peanuts in public sector borrowing requirement terms.
    The problems and uncertainties that the Bill will create will be far greater than any impact it might have on the public sector borrowing requirement. However, if that is the Government's case, the Minister should tell us what estimate the Government have made for the reduction in the public sector borrowing requirement during the next 12 months or so.
    There is a more dangerous and worrying aspect about selling the centre. If the Government desire to raise the maximum amount of money in order to reduce the public sector borrowing requirement, they must sell to the highest
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    bidder. They will, therefore, look for a premium price. Who will pay that price? Which companies are most likely to offer the largest sums of money to the Government? There is a lot of evidence to suggest that TRC will be quickly snapped up by a foreign-owned company, probably by a major American chemical or pharmaceutical company. Such companies will want to buy it because of its tremendous success.
    The hon. Member for Enfield, North (Mr. Eggar) seems to be nodding his head approvingly at the idea of an international company purchasing it. He now seems to be shaking his head. I do not mind if the hon. Gentleman has a 180 degree change of opinion about it. I had thought that the hon. Gentleman agreed that it would be nice if a large American international company were to pay a premium price for TRC. That would be absolutely disgraceful.
    Fear and worry have led the staff to ask the Government not to sell more than 49 per cent. of their shares in TRC. If the Government wish to reduce the public sector borrowing requirement, they will be sorely tempted to allow the highest bidder to buy the company. That would not be in the interests of those who work there or in the interests of the nation. It would certainly not be in the interests of the development of TRC as an independent company.
    Therefore, if the Government intend to reduce the public sector borrowing requirement, I hope that they will give a clear assurance about the sale. Before the Bill is enacted—given the Conservative Party's majority, the Bill will presumably be enacted during this Session—will the Minister give an assurance that the company will not be sold to any international or foreign company? Will the hon. Gentleman also give an assurance that TRC will be maintained as an independent company and that it will be allowed to thrive as it has in the past?
    The Bill is the result of Conservative Party dogma and doctrine. The Government are committed to privatise wherever possible. It is sad that a successful concern should suffer from the Government's narrow, blinkered and doctrinaire attitude.
    Mr. Skeet: The hon. Gentleman keeps saying the same thing over and over again.
    Mr. Rowlands: Repetition of the truth does not do any harm. That is the sort of cant that we hear from the Government Front and Back Benches. The worries and concerns of those 1,100 people at Amersham and of those 400 workers at Cardiff who made a success of the company are at stake. We have a right to ask that the Government's doctrinal views should not overcome the views and attitudes of those who—as the Minister admitted—have made the company a success. It seems to be suggested that the Bill has been introduced to clarify the sale of BNFL shares and the sale of shares in the other companies owned by the Atomic Energy Authority.
    In 1971 a Bill was introduced by, I believe, the right hon. Member for Bournemouth. West (Sir J. Eden). The debate was wound up by the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). They are two purist monetarists and are as good free enterprise freebooters as one could come across. When the Bill was introduced, they both justified the idea that the Government should retain a majority share in BNFL and in TRC. They said that it was reasonable to constitute the two companies in

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    an autonomous way so that they would have commercial freedom within the structures of independent autonomous companies whilst the Government maintained a 51 per cent. shareholding in them.
    In 1971 there was a happy consensus in the House. My right hon. Friend the Member for Bristol, South-East (Mr. Benn) supported the Bill, along with the right hon. Member for Bournemouth, West and the hon. Member for Cirencester and Tewkesbury. A trinity such as that should never be destroyed. This Bill will break that consensus. It seeks to cast doubt on and destroy that consensus.
    When the Minister replies, he may say that the Bill seeks to clarify the shareholding position in BNFL and TRC and the Government's right to sell a minority shareholding in either of those companies. If he says that, we shall not vote tonight but will give speedy support to the passage of the Bill. However, if the Minister seeks to retain a provision that will allow the Government to damage the company and to create uncertainty by selling more than half and probably the whole of TRC, we shall oppose the Bill in the Lobby tonight.
    4.37 pm
    Mr. Patrick McNair-Wilson: The hon. Member for Merthyr Tydfil (Mr. Rowlands) has made extremely heavy weather of a very light brief. He has completely failed to understand the Bill's provisions. He brushed aside the fact that the 1946 and 1954 Acts create problems for my hon. Friend the Minister and for the Government. This Bill provides the Secretary of State not only with the power to acquire shares but with the power to dispose of them. I should have thought that that was a sensible thing to do.
    With great respect to the hon. Member for Merthyr Tydfil, he tried to give the impression that those working in TRC would face a very bleak future if the hand of Government were removed from the company. The performance of the hon. Gentleman's party as regards nationalised industries—I refer not least to the Coal Industry Act 1965—probably sent a bigger shiver down the backs of those who work in nationalised concerns than any such prospect. The recent history of British Steel and the associated problems of job security will make those who work at TRC look forward to the day when they can shake off the hands of Ministers. As has been suggested, they probably look forward to the company's expansion in a highly successful industry.
    I welcome the Bill not only because it provides for tidying up, but because I hope that it will mark a turning point—albeit a small one—in the fortunes of the nuclear industry. In the 1950s, we led the world in the use of nuclear power for peaceful purposes. Indeed, we were the envy of the world. Since then, regrettably, there have been many stops and starts and many doubts which have created an extremely difficult period for this great industry with inevitably low morale as a result.
    I hope that my hon. Friend and his colleagues will ensure that a new impetus is given to the nuclear power industry in this country. We need a clear strategy for the next 20 years. We need a positive publicity and public relations campaign, not merely to allay the fears of those who are, perhaps, naturally concerned, but to show the positive benefits of the industry to the future economy of
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    the country. I hope that the example of the electricity industry in issuing stickers saying "Atoms for Energy" will be followed on a larger scale in future.
    I understand from Mr. Speaker that because this measure deals with miscellaneous provisions we can range fairly widely across the whole industry. I am sure that the hon. Member for Truro (Mr. Penhaligon), who complained in a recent debate on energy prices that we had no opportunity of discussing the atomic energy industry, will take advantage of the ruling that has been given. I shall restrict my remarks to a fairly narrow but vital area in the nuclear energy industry. I hope that my hon. Friend will kindly address himself to the question that I posed to him at the end of that energy prices debate.
    After an impressive start, we are now floundering. Regrettably, we have had major delays and cost escalations in the thermal programme. The AGR, through no fault of its own, has acquired a bad reputation. In fact, many of its problems relate to contractors' difficulties rather than to design problems. As a result, even now, in 1981, we are beginning to look at another reactor option. We have considered the options in the past. The Labour Administration considered the heavy water option. The Conservative Government stuck very strongly to the gascooled reactor option. I declare an interest in a company which makes graphite.
    Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I do not want the hon. Gentleman to go too far down that road. I was not here when he spoke to Mr. Speaker, but I think Mr. Speaker meant that the debate was wide in terms of its miscellaneous provisions. The hon. Gentleman must confine his remarks to what is in the Bill.
    Mr. McNair-Wilson: I shall, of course, relate all that I say to the fact that the Bill gives the Secretary of State powers to sell off holdings not just in the Radiochemical Centre, but in a number of other companies in the nuclear industry. To that extent, I include the company with which I am concerned, which makes graphite. The general nuclear programme is affected by the wording of the Bill. I shall be careful not to stray too far.
    Rather than develop a new and costly reactor system in the shape of the pressurised water reactor, it would be wiser to opt for a major leap forward towards the commercial fast breeder reactor. It would make for a better utilisation of fuel and would ultimately have the advantage of providing cheap electricity for our industries.
    That is where the nuclear industry, above all, can offer positive gains. Over the years we have seen the whole hydrocarbon market, whether oil or coal, rise inexorably to the point where industry has suffered. If the base load of electricity generation can be carried by nuclear power—ideally by the use of a fast reactor—we shall be able to make a positive contribution to our energy costs and to the success of our economy. Therefore, I ask my hon. Friend to indicate the possible timing for the introduction of such a reactor.
    4.46 pm
    Mr. Arthur Palmer: The hon. Member for New Forest (Mr. McNair-Wilson) raised one or two interesting topics, but they appear to be unconnected with the Bill. I, like him, am an advocate and a defender of nuclear power, but this Bill is a restricted measure.

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    I want to put one or two questions to the Undersecretary. First, why do we have the Bill at all? It is an extraordinary little measure. It deals with the affairs of the Radiochemical Centre, which is a highly successful enterprise. Indeed, the Minister did not deny that. In fact, he went out of his way to emphasise it. The centre is doing work of great technical complexity, work which needs high standards of care and safety in the manufacture and sale of radioactive materials for use in industry, medicine and scientific research.
    In no way is this a British Steel situation. A Conservative Member drew a parallel with British Steel, but there is no such parallel. The centre is a prosperous industry by current standards. From my inspection of the ninth annual report, it seems that it pays a dividend of 12 per cent. on invested capital. That is not bad these days. If only all British industry were doing as well there would not be much wrong with our economy. The Radiochemical Centre is acting fully commercially. So I do not understand what the Under-Secretary of State meant when he talked about supervision in detail by civil servants. They should not be doing that. The shares are held by public agencies, but there is no reason for civil servants to butt into an enterprise of this kind that is working well. Such interference should be stopped, and I hope that the hon. Gentleman will do something about it.
    The Radiochemical Centre is, as I say, acting commercially. It has a high standard of scientific research and development, and its products are distributed throughout the world. It is helping our exports. So what is its fault or crime? I cannot see what it has done wrong. The only fault which it appears to have, because of its very nature, is that all its shares are held by State agencies. Apparently, that is the only charge against it.
    Mr. Dalyell: Its crime is the fact that it is a suitable and convenient sacrificial lamb to be sacrificed on the altar of demands that are made on the Department of Energy and every other Department by Downing Street.
    Mr. Palmer: I am obliged to my hon. Friend. I shall come to the matter of Downing Street in a moment. The explanatory memorandum says, sadly, that the public custodians of the shares, the Atomic Energy Authority and the Secretary of State,
    "are not free to dispose of shares to mere investors with no expertise in the field".
    In my opinion, they should not be free to do so. Those who have a say in the control of this work should surely have an expert knowledge of it. That, as a principle, was accepted by previous Governments, and I think that it should be accepted now. Indeed, my hon. Friend the Member for Merthyr Tydfil (Mr. Rowlands) pointed out that the old Select Committee on Science and Technology which looked into these matters on an all-party basis in the late 1960s and early 1970s—I was Chairman of the Select Committee at that time—suggested this system of ownership with these safeguards. The Select Committee pointed to the importance of the industry to public welfare and to the community generally.
    I am sorry to repeat this, but I am driven to the conclusion that the reason for the birth of this little wretch of a Bill is doctrine. There can be no other explanation. It represents that view of society and industry which believes that all public ownership, big or small, is
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    undesirable and, hence, should be restricted and, wherever possible, the assets sold off whatever the merits in a particular case.
    I should like to see a better understanding between the parties on the mixed economy and ownership in industry. But if the time of the House is given to a measure which makes not the slightest practical difference when there is so much else to be discussed—for instance, of unemployment and inflation—any hope of getting any working understanding between the parties on the future nature of the mixed economy seems remote indeed.
    Mr. Rost: Will the hon. Gentleman explain why he believes it is any more doctrinaire to argue that because an industry is in the public sector it should be allowed to be released from the public sector than to say that because an industry is in the public sector it should always stay in the public sector, which is what he is arguing?
    Mr. Palmer: I suffer from the fault—a fault for which I can be blamed by hon. Members on both sides of the House—that I am a pragmatist. I believe that that which works best is best. I make no apology for that view. Here what is working best should be kept.
    My hon. Friend the Member for West Lothian (Mr. Dalyell) referred to Downing Street. The Prime Minister, in the television interview that she gave to Mr. Brian Walden—an interview which is notorious for many remarks that she made—referred to a number of countries in Europe which she thought had done better than we have done in recent times. Those countries were presumably, she thought, close to her political ideals. The right hon. Lady mentioned Austria approvingly. Austria has a Socialist Government who operate an incomes policy in co-operation with the trade unions; it has also more nationalisation than any European country this side of the Iron Curtain. Socialism, nationalisation, an incomes policy are all things the right hon. Lady hates. Yet the right hon. Lady said that Austria was an example for us, apparently not knowing the nature of the economy of that country. It is certainly not a free enterprise economy.
    But here I am not making points one way or the other. I am arguing that State-owned enterprises, if well managed, can be as efficient as the best private enterprise, and in this instance even more efficient.
    I shall simply leave—
    Mr. Eggar: Will the hon. Gentleman give way?
    Mr. Palmer: I was about to sit down, but I will give way to the hon. Gentleman.
    Mr. Eggar: Is the hon. Gentleman saying that if this company goes into the private sector it will immediately become less efficient?
    Mr. Palmer: No, I am not saying that. It will probably remain as efficient as it is now, so why do it? What is the gain from change?
    Mr. Eggar: Why not do it?
    Mr. Palmer: I thought that I had already given the House that answer. We have more important matters to deal with than to give our time to this unnecessary measure. Certainly I believe that the House deserves a better explanation of the reasons for the Bill than has so far been given.
    4.55 pm
    Mr. D. A. Trippier: I shall confine my remarks to the Bill and try to be brief.
    The hon. Member for Bristol, North-East (Mr. Palmer) asked why we needed the Bill. The answer is fairly straightforward. I hope that hon. Members on both sides of the House recognise the necessity for the passage of the Atomic Energy (Miscellaneous Provisions) Bill both because of the legal and legislative precedents for such action and because of the advantages which would ensue from its passage.
    At present, the sale of a minority stake in the Radiochemical Centre Limited is allowed under the Atomic Energy Authority Act 1971, although the sale of a majority stake is prohibited. The transfer of stock from the public to the private sector has many precedents, which are widely welcomed by Conservative Members.
    In July 1979, the National Enterprise Board disposed of all of its 50 per cent. holding in Ferranti. We widely applauded that at that time. Plans have been announced to float shares in British Aerospace in the near future. Part of our policy is to encourage privatisation, and we do not in any way apologise for that. We intend in legislation to dispose of the minority interest in the British Transport Docks Board and provide disposal powers for Sealink, Seaspeed Hovercraft and British Transport Hotels—all subsidiaries of British Rail.
    The British Telecommunications Bill will make possible a liberalisation of the Post Office monopoly on telecommunications and posts. Also, enabling powers will soon be taken to introduce private equity into the British National Oil Corporation and to dispose of both a majority interest in the National Freight Company and a minority interest in British Airways. All told, numerous attempts have been made to replace Government money with private capital and to increase the role of individual enterprise in the economy. The passage of the Bill would follow the precedent set by the actions that I have just mentioned.
    Although the sale of a minority stake in the Radiochemical Centre by the United Kingdom Atomic Energy Authority is allowed under the 1971 Act, other existing legislation clouds the issue. Indeed, the framers of the 1971 Act, as well as the framers of similar legislation in the 1970 Labour Government, intended that a minority stake would eventually be sold to the public. However, the Atomic Energy Act 1946 imposed restrictions upon the disposal of shares by the Secretary of State in companies in the atomic power sphere. Furthermore, the Atomic Energy Authority Act 1954 may prohibit the sale of the shares by the United Kingdom Atomic Energy Authority if it is decided that such action is not consistent with the statutory functions of the authority.
    The apparent conflict between the provisions of the 1971 Act and those of the 1946 and 1954 Acts seems to have been unintended and undermines the 1971 Act. It has not been decided whether the two earlier Acts affect the later one, but it is essential that all such unintentional restrictions be dealt with. These restrictions have the potential to cause further problems in the future as the Secretary of State would not be able to dispose of the shares in atomic power companies which the United
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    Kingdom Atomic Energy Authority is allowed to acquire and the authority would similarly be unable to sell shares after it had bought them.
    The Bill would remove any possible uncertainties about the 1971 Act and would ensure that the spirit of the legislation remains unaltered. That is very important.
    In addition to clarifying the position of the United Kingdom Atomic Energy Authority in relation to the disposal of its shares in the Radiochemical Centre, I welcome the fact that the Bill clarifies the position with regard to the centre's holdings in British Nuclear Fuels Ltd and in the National Nuclear Corporation. Although there are no present plans to sell shares in either of these companies—indeed, clause 1(6) specifically retains the 1971 prohibition on the disposal of more than a minority share in British Nuclear Fuels—the Bill prevents any future complications from arising. The only specific change regarding the disposal of shares affects the Radiochemical Centre, whereby the United Kingdom Atomic Energy Authority is allowed to sell up to 100 per cent. of its shares in the company.
    The removal of uncertainty is not the only advantage of the Bill. All those involved with the Radiochemical Centre will benefit from its full integration into the private sector. The radiochemical industry is growing and changing extremely rapidly. The company will be able to react to the changes more quickly and efficiently if it is more a part of the industry. The employees of the company will benefit from the freedom of the private sector. Those benefits will extend to consumers, as radioactive isotopes are used in medicine and industry, in addition to scientific research. The House will not be surprised to hear me say that eventually all taxpayers and the economy will gain.
    The provisions of the Bill will radically alter the connection between the Radiochemical Centre and Government. The majority of the company's finance is raised without Government guarantee and the management of the company is independent of the Government. Two loans made to the Radiochemical Centre from the Consolidated Fund represent the company's sole involvement with the Government, apart from the shares held by the United Kingdom Atomic Energy Authority. The proceeds of the sale of the Radiochemical Centre's stock would go to the Consolidated Fund to eradicate that debt.
    Mr. Palmer: Will the hon. Gentleman give way?
    Mr. Trippier: I do not have very much time. Many of my hon. Friends wish to speak.
    As the company is not part of the nuclear industry, the Government loses no control of that industry by selling part or all of The Radiochemical Centre. Control over the supply of such chemicals as are produced by the Radiochemical Centre is not necessary, as countless other equally vital chemicals are produced by companies in which the Government have no direct interest. Such control is also absent in other industrially advanced nations including Japan, Germany and the United States.
    The passage of the Bill will not weaken the Government in any way and will benefit the country greatly. Existing legislation will be clarified and the spirit of the 1971 Act will be preserved. The company will benefit from a more central place in the industry. Most important of all, strong advances will be made in the Government's efforts to strengthen the private sector of the economy.
    5.4 pm
    Mr. David Penhaligon: I must confess that when I see a Bill with the words "atomic energy" written across the top I am likely to be against it. That is true today as on previous occasions. I regard the Radiochemical Centre as very much the more acceptable face of the nuclear industry. It is a company which has a great deal to be proud of and a number of people owe their lives to the genius and expertise which has been demonstrably displayed by that company. I have no wish to lessen the company's impact.
    The company has won four Queen's Awards to Industry. A number of references have been made to its financial viability and the fact that it is a successful enterprise. When we consider the argument about who should own an enterprise of this size, I take the Government's view, in that I see little virtue in such an enterprise being State-owned. The Government will know that my colleagues and I have supported a number of measures to dispense with Government ownership of various enterprises.
    We know that, no matter what the Government propose to sell, the Labour Party will oppose them, whether the enterprise concerned makes a lot of money or no money. That is not my party's position. We take a rather more pragmatic view. However, I am worried about selling this company and the implications of the sale. I shall explain why.
    I should be willing to argue for a Government monopoly or near-monopoly in atomic energy. I am worried about the safety of the industry, as I know are great swathes of the British public. The public are confident in the knowledge that the Government are in charge of safety standards, own the company and will have to answer the questions about any incident happening anywhere.
    Anyone who read the Three Mile Island report will know that the further involvement of the Government in maintaining standards and instructions has a great deal to do with the better safety record of the nuclear industry in this country compared with that of the United States.
    Mr. Eggar: Will the hon. Member explain how the products that this company produces are in any way related to what happened at Three Mile Island?
    Mr. Penhaligon: I shall explain that. The British Government, who have a near-monopoly of the entire industry from A to Z, have set up and maintain a number of standards of reporting and safety and general investigation which for a long time they have been able to swap between one aspect of the nuclear industry and another. That has produced a high level of engineering expertise in safety. If bits of the industry are to be sold off to different owners—I shall come to that—there will be a division of the great attempt to maintain high standards and a tendency not to swap information that each has gained between one branch and another
    Mr. John H. Osborn: Is it not the task of Government to regulate, control and deal with health and safety at work rather than to own and run operations of this type?
    Mr. Penhaligon: I do not argue with that in general, but in the exploitation of the potential of atomic energy I take a different view. I was disturbed about the implication
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    of what the Minister said. I am unsure about what the Bill allows the industry to sell. I should like a clear guarantee that the understanding is that nothing but the Radiochemical Centre can be sold without the direct and specific approval of the House. I have no wish to see the control of atomic power stations or any other nuclear installation put in private hands.
    Mr. Eggar: I should be grateful if the hon. Member would answer my original question. What connection does the production of radioactive isotopes have with the generation of electricity by nuclear means?
    Mr. Deputy Speaker: Order. I have listened carefully to what the hon. Member for Truro (Mr. Penhaligon) has said. He has been relating his argument to what is in the Bill. But I must ask him to keep to what is in the Bill and not to go too wide, which is likely to happen if he seeks to answer the hon. Gentleman.
    Mr. Penhaligon: In my view, general safety standards are important throughout atomic energy. If that matter is maintained within a Government monopoly, the standards are likely to be higher than if it is diversified into a number of camps.
    The Minister explained why further legislation is required. If there is a desire to put private capital into the enterprise, I cannot see why the sense of the 1971 Act could not be implemented even if slight modification is required because of the point made by the hon. Gentleman. I did not understand his explanation why the 1971 Act was defective, but if that was his argument the sense of the measure could have been implemented by a minor change to the law.
    I argue strongly that if the company is to be sold a massive effort should be made to ensure that the shares are diversified among a large number of people so that no individual group or multinational organisaton succeeds in gaining control. The arguments for the employees virtually to be given a large stake in the capital appreciation of the company are strong. It is their genius, energy and enthusiasm which has made the company a great success. One hopes that that genius and effort will be maintained and will continue to add to the success of the company. As one who believes in an asset-sharing society, I see this as a good chance for the Government to demonstrate that they want to see a wide property and asset-owning society. They have a real chance to do something about it with the Bill. We have had this discussion before and I should have liked the Government to go even further with one or two of the Bills that are before us.
    A number of people in the industry are concerned that an American company, New England Nuclear, which employees of the British company say is of a size similar to the Radiochemical Centre Ltd., has been taken over on the American stock market by Du Pont, which paid £150 million for it. That is considerably more than figures that have been mentioned for the valuation of the British company, though those in the industry do not believe that the American company has more assets than the British company and they would therefore expect a similar price to be paid for the Radiochemical Centre Ltd.
    They are disturbed that they may become a mere branch of a giant chemical company. Despite what the Minister said about civil servants being endlessly involved in

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    various decisions, I understand that the freedom of those in the industry to practise and develop their expertise has been much appreciated and should be maintained.
    My objection to the Bill and to the sale of the company is that they are to do with atomic energy. It is the strong view of the Liberal Party that the Government monopoly of the exploitation of the possibilities of atomic energy should be maintained.
    We want to know what else in the nuclear arena the Government intend to sell. Do they look forward to the whole industry being privately owned? If so, there will certainly be opposition from the Liberal Party and from those who fear the industry, and the Government will have every conservationist in the nation on their back. I do not accept that the British people believe that the principle of a private enterprise economy, which Liberals support, is so important that it must be extended to small enterprises such as the Radiochemical Centre Ltd.
    5.12 pm
    Mr. T. H. H. Skeet: The hon. Member for Truro (Mr. Penhaligon) put forward a threadbare case. There are not many Liberals left, and they do not make up for their lack of numbers by any strength of argument.
    Opposition Front Bench Members repeat many things in an attempt to get the truth across. Unfortunately, it is not the truth that they are spreading, but never mind: they are entitled to make their utterances in the House from time to time. I wonder whether the new political party will have the same nuclear policy as the Labour Party. I always thought that Labour's policy was simply to advance the cause of coal, but we learn new things every day.
    I fully support this interesting Bill. Under clause 1, the United Kingdom Atomic Energy Authority may dispose of any company
    "whose activities include the development of atomic energy or research into matters connected therewith or the production, treatment, storage or disposal of radioactive substances."
    That is a broad provision and it will include all the subsidiaries not merely of the Radiochemical Centre, but of British Nuclear Fuels Ltd. and the National Nuclear Corporation.
    In a debate on the Atomic Energy Authority Bill in 1970 the right hon. Member for Bristol, South-East (Mr. Benn) said:
    "It was a Bill to establish two new mixed-enterprise companies, one for nuclear fuel and one for radio chemicals, both with 100 per cent. Government holdings at the start and both with a statutory Government majority for all time".
    It is the "for all time" that has created difficulties, and that is why we need the present Bill.
    The right hon. Gentleman continued:
    "Thus we had the beginnings of the mixed-enterprise ownership pattern which is embodied in the Bill. Nobody has said it was wrong then, and nobody has said, not even the Minister, that it is wrong now. Of course it is not wrong in an area in which publicly-financed research figures very highly and is applied in industry. The mixed-enterprise arrangement was right."—[Official Report, 17 December 1970; Vol. 808, c. 1602–6.]
    The Minister has indicated that he has no present plans for BNFL or the NNC, in which the Atomic Energy Authority holds a minority interest. I should have thought that it would be in our interests to dispose of those companies at the earliest opportunity, though I am prepared to agree that a time limit should be put into the Bill. We have another
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    Bill coming forward shortly dealing with the British National Oil Corporation in which powers will be taken. But will they ever be exercised? That is why I asked the Minister whether he intended to exercise the powers during the lifetime of this Parliament.
    The Opposition argue that there is no case for the Bill. They ask why a public asset should be disposed of. But the assets are owned by you and me, Mr. Deputy Speaker, and if we wish to dispose of them to private enterprise, for any reason, it is a good move.
    If the hon. Member for Merthyr Tydfil (Mr. Rowlands) were in Government and were prepared to run the Radiochemical Centre Ltd., he would be prepared to run every company in the country. If he were to put the profits into the Consolidated Fund they would be used for a number of miscellaneous Government purposes or to discharge the losses incurred by British Leyland and the British Steel Corporation.
    I should like to see the close monitoring and interventionism of the Government removed from the three companies that I have mentioned, particularly in view of the poor record of Governments over the past 35 years. The managements of the companies share my view. Furthermore, why should the taxpayer provide additional funds and capital for any of those companies? If they want additional funds they can go to the market, the banks or any shareholders that they can find.
    Mr. Palmer: On a point of order, Mr. Deputy Speaker. The hon. Member for Bedford (Mr. Skeet) is dealing with the affairs of the National Nuclear Corporation. The Bill has nothing to do with the NNC.
    Mr. Skeet: It is interesting that the informed and erudite hon. Member for Bristol, North-East (Mr. Palmer) should have made a speech without, apparently, having read the Bill. I must take him to task. Clause 1 states:
    "This section applies to the power of the Atomic Energy Authority to dispose of shares held by the Authority in any company and to the power of the Secretary of State to dispose of shares held by him in any company whose activities include the development of atomic energy or research into matters connected therewith or the production, treatment, storage or disposal of radioactive substances."
    When dealing with treatment and storage, we are concerned with BNFL. When dealing with research, we are concerned with the AEA. I am surprised that the hon. Member for Bristol, North-East, who has such an acute mind, should have overlooked the elementary matters contained in clause 1. Perhaps he would like my copy of the Bill.
    Mr. Palmer: The point that I was making is that the Bill is related essentially to radioactive substances.
    Mr. Skeet: No. I should like the Bill to be entitled The Radiochemical Centre Limited (Disposal and Miscellaneous Provisions) Bill. However, the Government have made it even broader. Fortunately, we can dispose of all the companies. We could even dispose of the AEA with the Minister's assent. However, the Government have been wise. They have provided that disposals may take place only if they will promote the national interest. That is the safeguard. I should not like the hon. Member for Merthyr Tydfil to complain about the national interest. The number of things done by the Labour Party in the national interest is legion. One thing can be relied upon. Conservative Ministers take it very much into account.
    Mr. Penhaligon: The hon. Gentleman and I often meet in these debates, and we know each other's views about atomic energy very well. Can the hon. Gentleman tell us how much he would like to see sold off? Would he like to see it all sold off? Does he look forward to the idea of a private enterprise nuclear waste dump in the middle of Wales? As one of the great advocates of the industry, what does he see the Bill leading to? How much does he want sold off?
    Mr. Skeet: The hon. Member for Truro can ask me all sorts of questions. For my part, I am only too glad to give him an indication. Two years ago I had a Private Member's Bill setting up a nuclear waste disposal corporation which would be 100 per cent. Government owned. It would never have been profitable. I think that there is an argument for keeping a State holding in the Atomic Energy Authority for some years to come.
    I believe that the three companies that I mentioned could suitably be sold off in the course of time. The market has a unique way of looking after such assets. I can deal with this point more fully by considering the situation abroad. The New England Nuclear Corporation, to which the hon. Gentleman referred, dealt with radio isotypes in the United States. That enterprise has now been acquired by a chemical company. I do not see President Reagan and others getting excited that that may let down the national interest. Far from it—all these matters can be referred to the appropriate authorities at the appropriate time. If the undertakings abuse their authority, they can be taken over.
    In France, apart for Amersham France SA, which is a subsidiary of TRC, the comparable body is the International CIS company which is owned by the CEA and Sorin Biomedica. There we have the State largely controlling the company. But when one moves a little further, to the comparable situation of British Nuclear Fuels Ltd., one finds the following situation in France. I mention France because it is one of the leading nuclear countries of the world.
    The company in France is Franco-Beige de Fabrication de Combustible. That is owned by a number of enterprises—Framatome, Pechiney-Ugine Kuhlmann, Westinghouse Electric—I understand that that holding is probably being returned to local private enterprise—and Creusot-Loire. Those companies, with a few others, hold an interest in the nuclear fuel manufacturing enterprise. So, even with their philosophy, the French believe in and tolerate having the shareholding of the company very broadly distributed. That is the position in France compared with that of British Nuclear Fuels Ltd. in the United Kingdom.
    Let us consider the National Nuclear Corporation, which we hope will build a number of nuclear power stations here. The French one is Framatome. I do not think that anyone doubts that that has been successful. It has about 60 reactors either built or under construction. That company is owned by the Empain Schneider Group, through a subsidiary, Creusot-Loire, 55 per cent., the CEA, which is the State body, 30 per cent., and Westinghouse, which has now been retired, held the other 15 per cent. The current position is 70 per cent. private enterprise and 30 per cent. held by the national body, the Commissariat a L'Énergie Atomique.
    What France is doing—and this is what I recommend that the United Kingdom should do—is gradually phasing out the State enterprises or at least some of these
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    enterprises, particularly the three with which I am primarily concerned. Let the private sector come in and gradually take them over and manage them. What is left for the Government to do is to lay down safety regulations, to see that they can be properly monitored, as all private companies can be, even in a sector of this nature, and to see that they are properly administered.
    Mr. Penhaligon: Sell the lot.
    Mr. Skeet: I did not say that, because I have said to the hon. Member for Truro that I would not sell the lot. I should keep an interest in the Atomic Energy Authority because I think that it is important that we should do so, but I should be prepared to dispose of those companies—BNFL, NNC and the Radiochemical Centre Ltd.
    I say that because I am very interested in the fuel cycle, and that is what British Nuclear Fuels is concerned with. That is an enterprise that I should dispose of over a term of years, in phases, but I should certainly get it despatched fairly quickly.
    We know that the French have been very successful with regard to their nuclear costs. In the United Kingdom, I believe that the Minister himself made a comparison between Hinckley Point 'B' and Drax. The cost of nuclear power is 1.35p per kilowatt hour as compared with Drax, where it is 1.52p. That is comparing relatively new stations. If we could have all this advantage in nuclear costs, we should go via the nuclear route. If we go by the nuclear route, integrating backwards, this comes back to British Nuclear Fuels Limited. It is vital that we allow other people to participate in the companies' development.
    One could also consider the newer power stations. I shall not weary the House by dealing with all of these. [HON. MEMBERS: "Oh".] My hon. Friends have a great appetite for hearing things that come out of various publications. However, I have given an assurance to you, Mr. Deputy Speaker, and I am mindful of the fact that I wish to speak next Monday on the gas levy. I fear that if I overstep the mark today, Mr. Deputy Speaker, you will be looking over your glasses rather earnestly and saying "Skeet, you have forfeited your position next Monday". I must therefore be disciplined and abide by the rules.
    To sum up, I believe that the Government have been courageous in bringing the Bill forward. They have argued their case very realistically on one company at Amersham, which has another plant in Wales, and a number of overseas subsidiaries—in the United States, France, the Netherlands, Germany and elsewhere. It is a very profitable company which could be adequately placed in the private sector without interfering at all with the nuclear power programme. It should be the Government's policy to have relatively cheap transport and energy costs. The French have given a lead. It might be a wise idea to follow the lead that they have established if we are later to enjoy economic prosperity.
    5.28 pm
    Mr. Tim Eggar: I feel very humble in following my hon. Friend the Member for Bedford (Mr. Skeet), whose knowledge in these matters is well known to the House. I shall be brief, as I, too, am interested in speaking on Monday and I do not wish in any way to impair my chances of catching your eye at that time, Mr. Deputy Speaker.

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    I welcome the Bill as the initiation of a programme of privatisation in the energy sector. We are dealing today with a relatively small company. I hope that this beginning will fire the imagination of the Government so that a BNOC Bill will speedily be introduced to ensure that shares in BNOC are sold as soon as possible. I trust that there is no question of that Bill slipping behind. I hope that the Government will then turn their attention to the British Gas Corporation. I believe that there is a great deal which could be sold on the periphery of that corporation, and I hope that in time we shall see the introduction of private capital into the core business of BGC.
    I return to the main purpose of the Bill, which is the privatisation, as it were, of the Radiochemical Centre. First, I am sure that Conservative Members recognise the points made from the Opposition Front Bench. We are dealing with a well managed, profitable and well run company. It is a tribute to the management and staff of that company that it has such a fine record to lay before the House. The fact that it has been so successful is no reason to keep it within the public sector. In May 1979, the Government were elected to bring back private enterprise and to denationalise wherever possible. It is therefore quite correct for them to be fulfilling a manifesto pledge on something which many Conservative Members regard as an important part of Conservative Party policy.
    We should go a little further. Inevitably, when boards of companies which are controlled by the Government make decisions, they must look towards their ultimate shareholder. The example has already been given of the £20 million that was raised for the new Cardiff plant. It is true that, apart from a small equity injection, the Government did not have to put money into that development. Nevertheless, in the planning and financing of that plant the management concerned must have asked, "What will the Government say? Will they be prepared to come up with the necessary finance? What will their angle be?"
    Exactly the same situation pertained when considering the possible positioning of a plant overseas to manufacture radio isotopes. Such management would have to ask "Whatever our commercial judgment may be, would the Government go along with it? Would they as a shareholder inject the necessary equity?" It is therefore right for the Bill to come forward so that the element of uncertainty which must have played a part in the decision taking of the board can be removed.
    There is something further that we Conservatives should say. Rightly, in my view, the Government have a coherent industrial strategy which in a number of specific cases involves the provision of aid to help companies in certain positions and, indeed, in certain geographical areas. Just as it is right for Government to put money into private enterprise companies which have certain temporary problems or even major problems—British Steel is an example—so also is it right that part of that coherent industrial strategy should be to return public sector companies to private enterprise. There is absolutely nothing wrong with that. I welcome it. I should have thought that the Labour Party would have accepted it. In a modern, complicated, industrial society there must be a movement between the public sector and the private sector. I see that as a two-way street.
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    I therefore regret the dogmatic view which has been taken by the Opposition Front Bench. Their argument is that this company was owned by the State and, therefore, it should stay owned by the State. But the same argument is not advanced when private sector companies get into difficulty. We Conservatives are quite prepared to say "All right, we accept that public sector money should help private enterprise firms in difficulties". I wish that Labour Mambers would display the same pragmatism in reverse.
    We must also look to the ultimate destination of the ownership of the company.
    Mr. Palmer: In principle, I do not disagree that in a mixed economy there should be a two-way traffic. But surely the practical test is the success of the enterprise. In other words, one leaves well alone.
    Mr. Eggar: That is an extraordinary argument. What particular reason is there to keep this company in the public sector? One simply cannot say "It is working fine at the moment". That does not mean that it should always stay in the public sector. Indeed, it is a justification for returning it to the private sector. The company's very success shows that by selling it the Government will raise funds. I have no idea exactly how much. That must depend on the timing of the issue of shares and the sale of shares. However, the sale of a successful company would result in a good return on the Government's investment which could then be used to help companies which are in difficulties.
    Mr. William Waldegrave: Does not my hon. Friend agree that the Government have recently given a good example of this two-way street by investing considerable sums of money in Cambridge in the latest advanced technology of microbiological techniques? By doing so, they are doing what we did just after the war in regard to nuclear matters. At that time we helped the industry get off its feet so that it could become self-sufficient and then reinvested the money in the new frontier technology.
    Mr. Eggar: I could not agree more. The whole point is that an industrial strategy is not a strategy to help lame ducks. It is a strategy for picking winners and for moving companies in and out of the public sector. It is unfortunate that the Opposition should be so totally dogmatic in their statements today.
    Mr. Rowlands: Perhaps the practical argument will appeal to the hon. Gentleman. Surely the wishes of the staff, management and scientists who have made this such a success story should be high, if not paramount, in the Government's thinking, especially as it cannot be proved that the wish of the overwhelming majority of the staff at the Radiochemical Centre is that the Government maintain a majority shareholding. Would the hon. Gentleman observe those wishes?
    Mr. Eggar: Of course. We should pay attention to the wishes of the staff. The Government must give some weight to them. When I refer in a moment to how the shares should be disposed of, I shall comment further on that point.
    We cannot have a situation whereby a company which happens to be 100 per cent. owned by the Government can be completely inviolate from takeover by any other company so that the staff achieve the position of civil servants and have long-term job security which they would

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    not have in the private sector. Such a company should be subject to the variations and movements of the market, just as a similar company would be in the private sector and just as the United States company has been relatively. If such companies are successful, and many of us think that they are, no doubt they will be given additional freedom of operation and additional opportunities by becoming part of the private sector.
    Obviously, while the hon. Member for Merthyr Tydfil (Mr. Rowlands) has been sitting down, he has been thinking of a lot more arguments which he was unable to deploy in his speech. When he spoke, he merely reiterated the same argument about five times.
    I hope that we will give some consideration to the way in which we dispose of this company. I accept the point made by the hon. Member for Merthyr Tydfil. I believe that we should follow what I hope will be a successful precedent set by the sale of shares in British Aerospace. In other words, we should make it quite clear that we do not wish control of this company to fall into foreign hands. It is easy to ensure that by limiting the percentage of shares which can be held or registered by foreigners.
    Secondly, I hope that it will be a public offering rather than a private sale to one other company or conglomerate.
    Mr. Bob Cryer rose—
    Mr. Eggar: I am sorry, but I wish to develop my argument. I have been extremely generous in giving way.
    We must try to give priority to British ownership. We must also try to ensure that the shares are held as widely as possible. By that, I do not mean that they should be held by one or two pension funds. I do not want to see them placed with one or two institutions. I hope that we shall follow the sytem used for British Aerospace where preference has been given to small allotments. In that way, ownership would be spread to individuals, which would be genuinely welcomed. I hope that the Government will also consider whether it would be appropriate to set a maximum percentage shareholding for any one company, institution or individual so that we achieve wide, and largely British, share ownership.
    I fully support the Bill. It is a welcome development from the Department of Energy. I hope that the precedent that it sets will be taken further, and that we shall see the same forthright and powerful application of Conservative policy in our dealings with the British National Oil Corporation and the British Gas Corporation.
    5.41 pm
    Mr. John Watson: The main purpose of the Bill is to give the Secretary of State power to remove the Radiochemical Centre Ltd. from the tender loving care of the Atomic Energy Authority and to place it in some form of private ownership. The Bill has been referred to as an insignificant measure. It may be insignificant in volume, but emotionally it strikes at the heart of the difference between the two major political parties. One can tell that from the terminology that has been used. If the Opposition wish to nationalise anything they do so as a burning matter of principle. Whenever the Conservative Party wishes to denationalise anything, it is accused of doing so because of party dogma.
    This year, the Radiochemical Centre Ltd. will have sales totalling almost £50 million. Last year, it made a profit of £4 million. It has 2,000 employees. It raises most
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    of its own finance. It is a manufacturing company selling to the medical, chemical and pharmaceutical markets throughout the world, and 83 per cent. of its products are sold overseas. It is an ethic of Conservative political existence that there is no earthly reason why such a successful company should remain in the public sector. There may be strategic reasons why, at certain phases in a company's development, public ownership has some relevance. But if ever that was the case with this company, that moment has long since passed.
    The hon. Member for Truro (Mr. Penhaligon) said that there might be a strategic need for the company to remain in the public sector. I was briefly entertained by his speech. He informed the House of what his Bench would need to know. It might be churlish of me to observe that at that moment there was a certain similarity between his Bench and the opinions that he put forward—namely, they were both empty. Has he read the list of products manufactured by the company? What does he consider to be the strategic need of radioimmunoassay serum ferritin, or rabbit reticulocyte lysate? That is a challenge to the Hansard Reporters, if ever I heard one.
    If it is considered strategically necessary for such substances to be manufactured by a company within Government control, why is it not considered necessary for such substances as dynamite, TNT or even penicillin similarly to be manufactured by companies under Government control? The United States finds no problem in having the equivalent company on that side of the Atlantic in private hands. The Japanese and the Germans have no problem in avoiding the existence of such a company at all.
    I take slight issue with my hon. Friend the Member for Bedford (Mr. Skeet)—I hope that I am not trespassing on a dangerous minefield—because I do not think that the same arguments can be extended to companies such as British Nuclear Fuels Ltd. That company, which buys almost all of its inward goods from the nuclear industry, and sells most of its outward goods to that same industry—with the goods being at least potentially capable of making nuclear bombs—provides a substantial strategic case for a company remaining within the public sector.
    I question the possible future contribution that the Radiochemical Centre Ltd. can make to the Government and to the public sector borrowing requirement. That point was put with some power by the hon. Member for Merthyr Tydfil (Mr. Rowlands) in his opening speech. Last year the company made a profit of £4 million—£2 million less than the previous year. In his forecast for future years, the chairman said:
    "Although 1980/81 will be another difficult year, thereafter a strong upward surge in profitability into the mid 1980s is planned and expected, provided that an appropriate adjustment of sterling's international value takes place. As a result of measures already taken or in hand the necessary production capacity will be available."
    The appropriate adjustment in the international value of sterling has not taken place. It may be that the profits, not only this year but in future years, will be somewhat less than they were in the immediate past. That should not detract from the "saleability" of the company in any way, but it might detract from the contribution that it might otherwise make to the public sector borrowing requirement.
    I wish to support my hon. Friend the Member for Enfield, North (Mr. Eggar). If we are to dispose of the company we must give serious thought to creating as wide

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    a franchise of share ownership as possible. I say that for a number of reasons. A wide flotation through the Stock Exchange will probably produce at least a realistic price, and possibly the best price. We have heard references to the morale and motivation of the company's staff. Clearly, with a high technology company, such morale and motivation are of paramount importance. One could almost say that the assets of the company go up and down in the lift every morning. If the staff will feel more content because it is holding a certain percentage of the shares—with the great majority of the remaining shares held by the British public and not, therefore, vulnerable to a takeover by an American company—so much the better.
    There may be some risk of an individual company, possibly not in Britain, buying the company as a defensive measure. We have had experience of companies taking defensive licences for products—in other words, taking a licence without any intention of exploiting the product but simply to keep it off the market so as to preserve the sales of other goods. That problem could best be obviated by wide share ownership.
    The accounting policies of the Radiochemical Centre Ltd. have been correctly pursued in a cautious manner. An individual company buying that company might, by dint of acceptable creative accounting, generate a greater degree of profit than has been the case to date. For example, the company spends about £5 million a year on research and development. All of that sum, quite correctly, is written off as revenue in the current year. Much of it relates to laboratory equipment, which would be available for capitalisation if the management so wished.
    The company operates a stock policy on the basis of FIFO—first in, first out. Through constraint of circumstances, most of British industry is currently operating on the FISH principle—first in, still here. With the auditors' permission, some ameliorative adjustments could be made in that connection, thereby adding artificially to the bottom line figure of the company.
    I wish to refer to what was said at the outset of the debate. The Government have been accused of dogma in wishing to dispose of the company. I refute that charge. I ask Opposition Members to accept that it is not dogma that makes us wish to sell the company. Instead, it is a pure, simple and fundamental part of our philosophy as a party. I appreciate that the philosophy of Opposition Members may not be in line with that which I have articulated. I humbly remind them that our philosophy is the one that has been most recently endorsed by the British electorate.
    5.50 pm
    Mr. Peter Hardy: I have listened to the debate because of my interest in energy, but I did not intend to take part in it. I do not wish to challenge the integrity of the hon. Member for Skipton (Mr. Watson) by contradicting him about dogma, but he spoke not about dogma, but about dreams. If the Bill took back rather than handed over, not so many Conservative Members would be eager to see where the opportunities lie. We are grateful to the hon. Member for Skipton for spelling out another of the company's attractions for people who wish to get
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    their hands on it, namely, that it is fiscally attractive. A company that wishes to pay a little less to the public purse will be able to do so by acquiring this asset.
    Mr. Rost: Will the hon. Gentleman explain why it is greedy for employees in nationalised concerns to be given the opportunity to get their hands on the shares of firms for which they work, and why it is not greedy for the Government to take their grubby hands off a company when it is denationalised?
    Mr. Hardy: The hon. Gentleman describes his own Government's hands as grubby, and I agree with him. We do not have such tight dogmatic beliefs as do the Government. If the Government were determined to reduce the State's hold on the company, it might be a good idea to set up a co-operative. As the hon. Member for Skipton said, the assets of the company basically are the skills and abilities of the people who work for it. Why do the Government not establish a co-operative, rather than put the nation at risk by handing the company over to the Arabs, the Japanese, the Germans or the Norwegians? I refer to the Norwegians deliberately because of the privatisation of a company in my constituency. A national asset is likely to be handed over in the name of privatisation to a publicly owned firm based abroad. Conservatives in other parts of the world might raise their hands in horror at the Government's reckless profligacy.
    I take a reasonable and balanced view. It is that a company with the record of success achieved by the Radiochemical Centre Ltd. is doing so well that we should leave well alone. The hon. Member for Skipton referred to the company's profound achievements. The Minister talked about its commendable record of 60 per cent. export output—and he referred to the four Queen's awards for export achievement. If a company is doing as well as that the Government should pause before they apply their dogma. If they want to demonstrate that they are modern and progressive, they should consider the co-operative approach and allow those who represent the assets of the company to have a greater stake in it. That would demonstrate an absence of dogma and be a worthwhile experiment.
    How much would the taxpayer receive from the sale of the Radiochemical Centre Ltd.? The Minister suggested that in the seven years since the Cardiff development began in 1973 £20 million had been invested. That suggests that the real value of the Cardiff investment exceeds £50 million and that the value of the total activity at the Amersham base must exceed £100 million. It is reasonable to assume that the real value of the company's equity is in excess of £150 million. Given the profits declared in the last few years, that seems to be a modest estimate.
    I asked the Minister a legitimate question, which should be answered. For how much do the Government intend to sell the company? If the figure is too low, in addition to being dogmatic, the Government will be grossly irresponsible in failing to serve the interests of the British taxpayer. If the Government sell the company to foreigners, widows, pension funds, or whoever, for less than a reasonable and honest sum they will act not merely irresponsibly, but in a manner that could be called criminally conspiratorial. In order to demonstrate that the Government are not embarking on a criminal conspiracy, or something that smells like it, the Minister should provide an estimate of the benefits to the PSBR.
    Mr. Waldegrave: The hon. Gentleman is a believer in the mixed economy, as I am. I am driven to my feet by his constant use of the word "dogma". The Government are investing large sums in new technology, such as Inmos and biotechnology. Surely it is sensible to float successful operations in which the Government have invested in order to roll the investment over into new technology.
    Mr. Hardy: I take the view that the National Enterprise Board was a useful development which should have been expanded. People running such boards should be given freedom to move in and out of companies and to indulge in experiments. However, I am not sure that I can approve of this development, since it is not left to the judgment of the NEB, for example, or to that of those who have proved their capacity for business and their concern for the nation's interest. Such action has not been taken by the present Administration. If the people who are concerned for the welfare of the British people were involved in such decisions, I should be prepared to be more generous.
    The Minister justified the need for the word "dogma" by talking of rolling back the frontiers of the State. If Britain is to move forward in high technology, where its future lies, the State's role is essential. Without it the fruits of entrepreneurial investment will be delayed by 8 to 12 years. If the State invests, it is wrong to require the taxpayer to pay out the initial investment, to wait and sustain the investment in the years before it bears fruit, and then to roll back the frontiers of the State so that others can make profits.
    The hon. Member for Sheffield, Hallam (Mr. Osborn) will understand why I am present today. I am as much concerned with the special steel industry as with the atomic energy industry. Today I tabled an early-day motion to congratulate the people in the special steels division in Rotheram, and at the Thrybergh Bar mill in particular, on breaking yet another set of world records last week. They have done that, not merely because they want their pay at the end of the week, but because they have a pride in their activity and want to see the steel industry in Britain succeed. If they believe—and this may apply to the workers in Amersham and Cardiff—that their endeavours, their improved relationships and their activity and devotion to work are merely to put profits in the hands of perhaps even a minority of shareholders who may be Arabs or Japanese, their incentives and motivation will be affected.
    If this country is to survive, it is time that the Government began to understand that motive and incentive in British Industry do not depend upon the carrot or the whip. They lie in the hearts of people. They lie in the hearts of the steel workers in South Yorkshire, as I believe they lie in the hearts of those operating for this company in Amersham and Cardiff. That is why I suggested to the Government that instead of selling off the company and pretending that it will go in small lots to widows—who would be better advised to put their money in building societies, which would be in the national interest—they should show us that they are flexible and that they have vision, perception and imagination. Let the workers share with the taxpayer the future benefits, which should accrue to the worker and the taxpayer. The handing over of those benefits on what I suspect is less than a reasonable market valuation justify the taunt or accusation of conspiracy and crime.
    Mr. John H. Osborn: The hon. Member referred to State involvement in the steel industry and special steels. At the moment, Government funding of the British Steel Corporation is putting in jeopardy the firms that are left in the private sector. Therefore, the State must know when to put its foot in and when not to.
    The hon. Member also referred to taxpayers' money and the interest of those working in an industry. One of the aims of a society, such as the free enterprise society in Japan, is to put the pension funds and the insurance of ordinary citizens into the wealth-creating activity of the country. Is that not something that we have missed out on over the last 25 years?
    Mr. Hardy: Successive Governments have used the taxpayers' money in the way that the hon. Member for Sheffield, Hallam has commended its use in Japan.
    As the hon. Member knows, the Rotherham works are an important part of the British Steel Corporation. I accept that the special steels section may be making a loss and may have done so exclusively as a result of Government policies over the past 18 months, but the hon. Member, being a Sheffield Member of considerable experience, is aware that during the post-war period that part of the British Steel Corporation made substantial profits. I am not prepared to accept that the taxpayer has forked out large sums of money for the British Steel Corporation in South Yorkshire, because that is not true. Since nationalisation, much money has been earned by that profitable sector. However, a great deal of money has been invested at Aldwarke, Roundwood and Thrybergh with the continuous casting at Templeborough.
    Without being offensive to the private sector, I suggest to the hon. Member that if it had devoted a sufficient share of its profits in the past to ensuring that it, too, had modern kit and plant in every particular it might not be in such difficulties today. I am not saying that we should not assist and sustain industry. The role of the Government, like that of Governments in Japan, America, Australia, France, Germany and everywhere else where there is sanity in administration, is to provide that sustenance. The sad fact is that the Government, faced with an appallingly critical industrial situation and the certainty of 3 million unemployed in 1981, are wasting their time, our time and the country's time with this sort of frivolity.
    6.5 pm
    Mr. Peter Rost: I shall not take up the comments of the hon. Member for Rother Valley (Mr. Hardy) because I want to get back to the Bill. Like my colleagues, I welcome the Bill, but the reaction of the two or three members of the Labour Party who have been in attendance has been predictable and typical. They say that because the company is part of the public sector, and because it is nationalised, it must remain so, irrespective of the circumstances. When the company was formed, it might have been justified to have State support, but the argument that that might not apply today, is neglected and overlooked. It is regarded as doctrinaire if we take a pragmatic view of individual pieces in the public sector and decide that the justification for them staying in the public sector is no longer valid.
    The Labour Party regards nationalisation, State control and domination as a one-way ratchet which must never be a two-way process. It does not seem to occur to it that there

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    are arguments, which we have put in the debate, to justify the sale to the public of industries in the nuclear sector which are now State controlled.
    I shall emphasise the main arguments why the Bill should be supported. It has been suggested by Opposition Members that, because of the profitability of the Radiochemical Centre and other nuclear companies, such as British Nuclear Fuels, which come within the category of the Bill for denationalisation, one should leave well alone. That is a valid point. However, it completely overlooks the argument that they could be more profitable if they were given the commercial freedom of the private sector instead of having to come cap in hand for every piece of borrowing which they have required over the years.
    It could be argued that if those companies had total freedom to take commercial decisions instead of being overrun by men from the Ministry, their profits could be more substantial, they could be employing more people than they are today and they might develop their export potential more successfully in the areas of high technology in which they operate. I cannot say whether that is so. One must speculate about it. One can only speculate that it could be so. That is a valid argument for suggesting that it is not necessarily justifiable to argue that, because those firms are doing relatively well, they should be left alone.
    The argument is comparative. One could cite many more examples in the private sector where, released from the control of politicians and civil servants, commercial freedom has given a new impetus to a company. That impetus is given not only by denationalisation, but by the possibility of private shareholdings and the accountability which that produces.
    I shall give the obvious follow-through example of that. If a company which has now one shareholder, namely, the State, were to redistribute its shares widely—as my colleagues have suggested should be done, which I support—and were to give a generous allocation of those shares to the employees who have helped to build up the success of that company, as we are doing with British Aerospace this Friday, who is to say that that would not provide a stimulus? It would provide an incentive and a new motivation for such companies to surge forward, improve their productivity and profitability, their export markets and their employment opportunities. Evidence exists to support that argument, although I do not expect the Opposition to accept it. Wider share ownership—democracy—should be applied to individual firms. It can be an added incentive in helping to create wealth. That is a fundamental argument in favour of the Bill.
    My hon. Friend the Under-Secretary was a little too timid. Under pressure, he admitted that there was no immediate intention to dispose of the shares in the Radiochemical Centre. He was even more hesitant about the disposal of part of the State's holding in British Nuclear Fuels, which is a larger company than TRC, with higher profits. It has an extremely good record in its advanced technological field of processing nuclear waste from Japan and other European countries, as well as from our own nuclear industry. It has tremendous potential to develop the technology in world markets. Like RCL, that company has to some extent been undercapitalised, because the men from the Ministry vet its every move.
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    With more privatisation, commercial decisions could be taken to raise money from shareholders or on loan finance, which would allow development and expansion with less restriction. That is an important consideration, which should make my hon. Friend less timid.
    We are proceeding with our manifesto programme successfully in other measures that the Government have introduced to reduce State control and nationalisation. I hope that the Minister can assure us that this proposal will proceed without delay.
    The Bill will enable us to proceed with the sale of part of the equity of British Nuclear Fuels to the employees who have helped to make the company a world renowned success. We could also use the powers under the Bill to reduce the State's holding in the National Nuclear Corporation. There is no justification for the State to retain a major stake in that corporation. It would proceed more successfully and dynamically if some of the shares could be redistributed, with preferential and beneficial participation for its employees.
    I welcome the Bill. It is in line with Conservative philosophy. We believe in genuine public ownership and not State monopoly ownership. Wider share ownership and employee participation are major incentives for wealth creation. By privatisation and reducing the State sector where justifiable, we can provide greater opportunities for companies to grow more rapidly and profitably. That argument applies particularly to such companies as the Radiochemical Centre, British Nuclear Fuels and the National Nuclear Corporation, which deal with advanced technology, where this country has to excel if it is to survive.
    6.14 pm
    Mr. Bob Cryer: Dogmas have been mentioned. Every hon. Member is elected on the basis of some sort of dogma. The difficulty for the Conservatives is that their dogma is palpably failing. We have the highest unemployment level since the war, productivity is low, production is falling year by year and profitability is at an all-time low. Capitalism, which is the Conservative beacon, does not seem to be the success that they claim. In June 1979 the Chancellor of the Exchequer gave tax concessions to entrepreneurs so that they could invest that money and provide jobs. Where are those jobs?
    Public enterprise has been successful in the sectors covered by the Bill. Because of their own failings, and to satisfy their friends, who have not been able to develop their dogma satisfactorily, the Government are pushing through legislation to enable them to get rich pickings from the public sector. The Conservatives want it both ways. On future election platforms, when they mention nationalisation they will talk about failure, debts and the cost to the taxpayer. Not one will mention the successful side of public enterprise, which makes handsome profits and provides a public service. It is those sections that they are concerned to sell off. They have not considered legislation to sell off rural branch lines, which cost the taxpayer a great deal. They have not introduced legislation to sell off part of the steel industry. The cost is too great for private enterprise. Thay are interested only in selling off the rich pickings. Profit and greed are the dogmas of the Conservatives. They elevate them to a principle.
    I have two points to make about the Bill. First, the Government are stepping into murky waters. This industry is not like any other. It is potentially hazardous. Private

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    enterprise tends to cut corners in order to boost profits. Conservatives may say "Tut-tut, that is totally wrong", but over the past 100 years or so successive Conservative Governments have introduced legislation to ensure certain operational standards for private enterprise, even before a significant public sector came into being, post-1945. They were concerned about short cuts. They also know that private enterprise safety standards are not necessarily the best.
    Secondly, we have the experience of America—that Valhalla of capitalism—where the man on the white horse from the B movies is now holding the reins, metaphorically and occasionally literally for press cameras. Private enterprise in the atomic energy industry there has not been found to have entirely satisfactory safety standards. We should remember Three Mile Island. It is generally felt that private enterprise standards of safety in America have been very much behind those of public enterprise here.
    The hon. Member for Derbyshire, South-East (Mr. Rost) talked about accountability to shareholders. Will shareholders prod and poke around the works to ensure that safety standards are applied? Of course not. They are looking for their profit. If that profit is returned, they will presumably be satisfied. What about public accountability in this Chamber and in this Parliament for safety standards? As soon as these companies become private, the right of accountability to this House, although not totally ended, is severely diminished.
    Mr. Rost: I am grateful to the hon. Gentleman for allowing me to respond to the naivety of his argument that shareholders who had invested their savings in a company would not be concerned about the safety of the factory that happens to be producing the products in which they have invested. The opposite is true. They would be most concerned that the company should remain in business. It would not remain in business if it had a serious accident of the sort that the hon. Gentleman describes.
    Mr. Cryer: I take an example. Where would a group of shareholders turn? They would turn, possibly, to the Nuclear Installations Inspectorate, a public body with some degree of supervision. If they did not go there, they would go to the company. But it is the company that is involved in the operation that is causing them concern. Public accountability means that the shareholders can turn to a publicly elected body such as Parliament and raise questions, either written or oral, or through other means known to hon. Members. That is public accountability. We can turn the spotlight on something far more effectively if it is in public ownership because it is publicly accountable. In this industry, that is a most important and crucial element.
    I am concerned about the atomic energy industry. I am not a supporter of further development of atomic energy generation. One of the tiny consoling factors about atomic energy in this country is that it is located in the public domain and is, therefore, accountable to the House and the public at large. Clause 1 drives a coach and horses through a number of statutory requirements that the Atomic Energy Authority has to supervise. If the Secretary of State says that selling off a company is in the national interest, that is a decision for him. He has the power so to do, but it is lamentable that that should be so. He is given powers that are far too wide.
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    The Secretary of State does not have to come to the House for an order. All that he needs to say is that, in his view, the decision is in the public interest. That is a complete erosion of democracy, in the interests of a tiny number of shareholders making a profit or receiving a dividend from a profit that has been made. I very much regret the introduction of the Bill.
    I wish to refer to the Radiochemical Centre Ltd. Selling off sections of the atomic energy industry is one thing but selling off a specific company should also be considered. I regret that I did not hear the Minister's comments. I was chairing a Select Committee at the time. I cannot, unfortunately, be in two places at once, much as I should like to be. The Radiochemical Centre Ltd. is highly successful. There is no provision whatever in this legislation for protection against multinationals and international competitors buying into this sphere. There has been reference from the Conservative Benches to the need for limitations, and I agree with that. Presumably, however, the sale of any shares will be subject to the usual company legislation. That legislation does not give sufficent access to nominee shareholding to enable us to determine precisely the purchasers of any given block of shares.
    There is no provision in law at the moment to ensure that this company, with a department at Harwell, can be retained even if one accepts the notion "All right, it is going to private enterprise, but let us keep it British". Even then there is no protection. An international purchaser will not only get the company; it will also get a channel into the heart of our atomic energy industry because of the connections of Radiochemicals Centre Ltd. with such areas as Harwell. The difficulties are real. A similar argument was not answered with regard to British Aerospace when we raised the matter on the Bill that is now an Act. The same is true now. There is insufficient protection against purchase by foreign nominees who wish to buy into our international atomic energy industry. I turn to another aspect.
    A few years ago the House passed the Atomic Energy Authority (Special Constables) Act which recognised the special and dangerous characteristics of atomic energy. We gave Atomic Energy Authority constables the power to carry arms in pursuit of people who they thought intended to interfere with fusionable and fissionable materials. That was an indication of the concern felt about atomic energy. The materials are dangerous in themselves. They are more potentially dangerous than any material that we possess because of their use in fusion and fission processes. To what degree will that security be protected in the future? The Bill does not make that clear. It is a real cause of concern.
    The Radiochemical Centre Ltd. is successful. The staff, by and large, are content with their status as a public sector concern. Why disturb them? Why not leave a public sector organisation that has a good turnover and provides a public service in the provision of radio isotopes, medicines and a wide variety of applications? It is a public service. It is accountable. It is a serious, potentially highly dangerous area of activity that is best kept in the public sector.
    All in all, the Bill will do no good. Public ownership actually protects. Dunlop, a large British-based multinational company, was recently the subject of takeover bids in international share dealings on international stock exchanges. Dunlop was so worried that it met a group of hon. Members from both sides of the House. It could do

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    little to protect the drift away from control in this country, which could spell serious difficulty for the many thousands of people who work for Dunlop in the United Kingdom.
    If shares are floated internationally, and if ownership goes abroad, very little protection can be offered to prevent the slow erosion of the shareholding, leading to the building up of a majority purchase. A final purchase may be prevented by the Industry Act 1975, which contains provisions to prevent the removal of the ownership of a company from this country if the Secretary of State for Industry believes that removal of such ownership would be against the national interest. Has the Minister consulted the Secretary of State for Industry about the matter? Is he prepared to use the powers in the 1975 Act if a situation is reached where he thinks that foreign ownership threatens control of this company? That is something that we would very much like to know.
    I hope that from this oak panelled Chamber the message will go out that we are talking about a part of the public sector that is successful. It is buoyant, it is developing and it is providing a useful and important social service. It employs hundreds of people who are satisfied to be in the public sector, yet the Tories are selling off this concern because they detest the public sector and want to see it fail. Where it is successful, they are prepared to hand it over to their friends for what they fondly imagine are rich pickings. Let them beware. The Labour Party's policy is renationalisation without compensation. Any potential share purchasers had better bear that in mind.
    6.30 pm
    Mr. John H. Osborn: "Renationalisation without compensation" epitomises the dogma that still divides Britain. I begin my speech with those words in mind.
    The debate reminds me of one that I listened to in the early 1970s when the then Minister of Transport, my right hon. Friend the Member for Yeovil (Mr. Peyton), decided to withdraw Thomas Cook from the clutches of British Rail. I have not re-read that debate today, but all the arguments as to why Thomas Cook should not go into the market place were deployed at that time. It is 10 years after the event, 10 years after the first denationalisation party celebration that I was able to attend in the Minister's office, and Thomas Cook in its new form is more vigorous and more effective now that it is outside the clutches of the State.
    Clause 1(5) contains some important references. It states:
    "Where a disposal by the Secretary of State would in his opinion be inconsistent with promoting or controlling the development of atomic energy, the disposal may only be made if in his opinion it would promote the national interest."
    Many reservations have been expressed by the hon. Member for Keighley (Mr. Cryer). I hope that my hon. Friend the Minister will spell out how the Bill's provisions will be operated in practice.
    When I read the Bill, I asked myself, bearing in mind the previous experience, "Is the Bill bold enough?" There are many problems in the energy industry that should be tackled. We have had a useful debate on when the State should and should not be involved. The hon. Member for Bristol, North-East (Mr. Palmer), for whom I have respect in his involvement in the Select Committee on Science and
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    Technology, asked, "If it is successful, why should we sell it?" The hon. Member for Rother Valley (Mr. Hardy), in a speech dealing with many issues, said that we should leave well alone.
    Surely, the State, the banks and the institutions should devise means to assist something that is new, but once something is successful, the State, and especially the banks, should withdraw and let the entrepreneur take over. There has been a debate on the extent to which the State should control health and safety at work. I hope that my hon. Friend will assure me that State supervision of safety in this area will continue and that there is no question of it not continuing. That is an issue entirely unrelated to the one with which we are dealing.
    I remind the House, that we are dealing with the Radiochemical Centre Limited, which had group sales of over £41 million last year, of which £34 million were overseas sales. It has assets of nearly £34 million and it has about 1,900 employees. The British Nuclear Fuels Ltd. operation has a turnover of £283 million, net assets of £393 million and employs over 14,000. That is the scale of the operation. Obviously, we are dealing with the smaller part of the industry.
    It seems sensible, as my hon. Friend the Minister said, to reduce the size of the public sector because of the public sector borrowing requirement. It is even more sensible that the proceeds should go to put into balance the Consolidated Fund. Over the past 25 to 35 years, Conservative Governments have found themselves the caretakers of the legacies, of the follies, of previous Socialist Governments.
    A feature of the debate has been the statement that is likely to be made about further funds going to the steel industry. Perhaps it will be £1 billion as against £30 million. The write-off is £3,000 million. Even the possibility of giving a face-saver of £100 million to the steel industry indicates how large a Conservative Government's expenditure has to be in one area and how small is the sum that will flow back as a result of the Bill.
    The hon. Member for Merthyr Tydfil (Mr. Rowlands) makes me wonder whether his approach is that of a Left-wing Marxist or a Social Democrat. Having spoken to Social Democrats in France, Germany and elsewhere, some of whom have been Members of the European Parliament and others in the Council of Europe, it is clear that they do not believe in excessive State involvement or the corporate State. For instance, the corporate State is anathema to Social Democrats in Germany.
    When the hon. Member for Rother Valley commented on taxpayers' funds, I had in mind the fact that last night, but for our whipping, I would have spoken to the life insurance and pension managers of Sheffield and South Yorkshire. They gave me papers and material that indicated their concern that pension and life insurance funds should be invested in the wealth-creating activities and assets of tomorrow. I had to comment that they would not have access to the North Sea oil and nuclear industries and that they would not be able to invest the pension funds of those employed in agriculture, industry and commerce throughout the country in those sectors, because the State is there already and drawing in the taxpayers' money. I shall not elaborate on the speech that I did not make last night, but the points are relevant to my intervention in the speech of the hon. Member for Rother Valley.
    When the Japanese developed their free enterprise system and their concept of consortia, which many of us

    783
    have had a chance of seeing, their concern throughout was to put the savings of ordinary people directly into industrial wealth-creating activity without channelling it through the grubby hands of the State. The tragedy that has happened in Britain is that the State has been the funnel through which the funds of private individuals have been poured to finance the activities of the State. The State, including the Select Committees—members of the Select Committee on Energy have participated in the debate—have not been able adequately to monitor this method of handling the funds of private individuals. Therefore, it is better to find some way of enabling private funds to go into activities of the sort that we are discussing and to put those funds into activities that are successful rather than trying to draw them into unsuccessful activities.
    The Bill is a move in the right direction and I have no hesitation in supporting my hon. Friend the Minister in putting the Bill before the House. It is a small step in the right direction, and with BNOC and other organisations in mind, I hope that my hon. Friend will be more courageous next time.
    6.40 pm
    Mr. Peter Viggers: I am pleased to be able to give my wholehearted support to the Bill and to the Minister.
    I yield to no one in my respect for the House of Commons, but there are certain limitations on its ability. One is that it should not run a company that is responsible for the manufacture of radio isotopes. Ultimately any company that is owned by the State has the House of Commons as its court of appeal. Ministers who are responsible for taking decisions are subject to political pressure, and such political pressure does not lead to good business decisions. Therefore, I applaud the movement of this company from public control to control that is equally public but which is channelled through private funds. In marketing and entrepreneurial matters, there is no substitute for private enterprise. Neither Whitehall nor Westminster has the ability to run a company in a proper and economic manner.
    One point of advantage is that it will now be possible for the company to introduce share incentive schemes that will give real shares and incentives to the workers in the company. In theory, it is possible for any company, public or private, to introduce such schemes, but it has been found that it is necessary to have a Stock Exchange listing in order to value the shares, for the share options to work well and for the individuals within the company to see the value of the shares that they have been given. For that reason, it is important that the company should be listed.
    Mr. Dalyell: A Stock Exchange Listing is all very well, but some companies, such as ICL today, may deeply resent being ludicrously underrated on the Stock Exchange, with all the difficulties that that causes.
    Mr. Viggers: Indeed, there are fluctuations in value on the Stock Exchange, and British companies are substantially under-valued. However, the individuals who hold the options have the timing in their hands, and they can decide when they wish to take the benefit of the options.
    Had I been called to speak earlier, Mr. Deputy Speaker, I would have given a paean of praise to the Bill, and I hope
    784
    that the Minister will not think that I am seeking to carp by picking up one point. I hope that it will be taken in perspective in my support for the Bill. Many people, both inside and outside the House, would like to know more about the manner in which we are to ensure that the control of the centre will remain within the United Kingdom. It is one thing for the Dorchester hotel to be acquired by people living outside the United Kingdom, but it is another matter for a company that has such central significance to the United Kingdom economy—a company that manufactures isotopes—to be potentially controlled outside the country. A British company is British because its workers are British, its ownership is British and its control is British. I have no doubt that the workers will remain British and that the control, in the safety sense of radioactive matters, will remain British.
    If ownership is not to be within the United Kingdom, there will be something missing from the company. I share the views of those who expressed concern that the workers in TRC should feel that they are working for themselves and for the country, and that the control should not drift away. It has been possible to find a way of controlling the ownership in British Aerospace. However, I am particularly concerned, because even such a magnificent company as British Aerospace is valued at only £300 million, which is not very much in terms of the international cash flow of oil and gas magnates in Middle Eastern countries and elsewhere. It is important that we should not allow our British assets to be picked up at low rates by bodies outside this country.
    6.45 pm
    Mr. Rowlands: With the leave of the House, Mr. Deputy Speaker, I should like to respond to this interesting debate, which has been dominated to an extent by references to dogma and doctrine.
    I should like to comment on areas of agreement. First, it is agreed that there is a need for clarification of the 1971 Act. We would support any Bill that clarifies that Act. Secondly, it is agreed that the Bill is principally concerned with the power of the Secretary of State to be able to sell the whole or the majority of the shares in TRC. Thirdly, it is agreed that the story of TRC is one of success, dedication and dynamism by skilled and professional people.
    There is certainly a measure of disagreement on the point raised by the hon. Member for Derbyshire, South-East (Mr. Rost) that the men from the Ministry are running all over the company and that the company could have had better commercial and technological skills. From all the evidence that is available, we know that the company has been extremely successful, has promoted its products and has gained major markets in this country and overseas. We are talking about a wonderful success story of a company that is 100 per cent. Government owned.
    There is not very much disagreement about exploring further the possibility of employees having a share in the company. The 1971 Act, clarified by this Bill, would allow the Government to encourage employee participationin the company, without the Government relinquishing their majority control.
    It is also undisputed—I hope that the Minister will confirm it—that the overwhelming majority of the staff at TRC would like the Government to maintain a majority control in the company. That is the simple statement that is cautiously presented by the staff and workers of TRC.

    785
    It would still leave wide opportunities for a minority shareholding to be sold off to private investment if necessary, and to encourage employee participation.
    The major difference, which is practical rather than dogmatic or doctrinaire, is that all Labour Members have said that we should leave well alone, and that the people who created the success should be left to get on with the job. They should be given full support.
    If the Minister is not willing to amend the Bill in the way that I suggested, which would create a consensus—I judge from his remarks and from those of the zealots behind him that he is not—we have to conclude that the argument from the Conservative Benches is that if a company is successful it is a crime, and that it must then be sold. The reason why it must be sold is that no evidence must be left to show that public enterprise works and is profitable. Unless the Minister offers some assurances, we shall oppose the Bill.
    6.49 pm
    Mr. Norman Lamont: Before I turn to the question of TRC, Mr. Deputy Speaker, I should like to reply to my hon. Friend the Member for New Forest (Mr. McNair-Wilson). Since it was in order for him to put the question to me, I imagine that it is in order for me to reply to that question. What I say to my hon. Friend, briefly, about the fast reactor is simply that this is something that we are actively considering. We do not expect to be in a position to make any announcement for some months. But we do not share the view, which I know my hon. Friend put in the debate a few weeks ago on energy prices, that it would make sense to jump straight from thermal reactors now to the fast reactor, and we foresee a continuing need for thermal reactors in this country. I am afraid that that is all I am able to say at this stage in reply to my hon. Friend's question.
    I had hoped and, indeed, rather expected that this Bill might have been not a very controversial measure. I thought that there might have been even a measure of agreement and interest from the Opposition. I was a little surprised to hear wild phrases. I think that I even heard the phrase "the erosion of democracy" thrown in from the hon. Member for Keighley (Mr. Cryer).
    The hon. Member for Merthyr Tydfil (Mr. Rowlands) talked about the fears of those who worked in the company. At times, it seemed as though he was doing his very best to stir up those fears, rather than doing what I think we in this House should do, which is to reassure those people, because the Government have the future of the company and of those who work in it very much at heart. We do not believe that what is proposed in the Bill will in any way endanger the company's future or the livelihoods of those who work in it.
    Mr. Dalyell: May we be clear on this point? What does the Minister think that the staff at Amersham actually said to him about the issue? Does he believe that they agreed to it?
    Mr. Lamont: When the hon. Gentleman made his speech he accused me of misrepresenting the views of the staff at Amersham, because when replying to a specific question from my hon. Friend the Member for Gosport (Mr. Viggers) about shares for employees I referred to the fact that the staff at Amersham had raised that matter with
    786
    me. But I did not say—I am sure that my hon. Friends will bear me out—that that was all that they had said to me. In my speech, I specifically referred to the fears—in my view, groundless, unnecessary and unfounded fears—and the anxieties of people who worked in the company. I know that the view of the staff and the trade union people is that it should not be a majority of shares that is sold off. I am not making any pretence that it is otherwise, but I am sticking to my argument that fears on those grounds are not well based.
    The hon. Member for Rother Valley (Mr. Hardy) asked what the proceeds from a sale of TRC would be. He did a rough back-of-an-envelope calculation. He worked out that the new plant near Cardiff was worth so much; there had been so much invested elsewhere; so therefore, on a back-of-an-envelope basis, TRC must be worth about £150 million. There are such things as loans to be taken into account. The Cardiff plant was financed out of loans and those loans would remain with whoever were the new owners of the company.
    I am afraid that I cannot give a precise answer about the valuation of the company. Quite apart from the fact that this would be a matter for negotiation and a matter on which there would be many views, the price for the company is bound to be based on its profits in the past, its record—which has been very good—and the prospects for the future. It is also bound to take into account what the hon. Member for Keighley said tonight—that a future Labour Government would renationalise the company without compensation. That is bound to be taken into consideration. The price for the company must be based on its track record.
    My hon. Friends the Members for Enfield, North (Mr. Eggar) and for Gosport made their views very clear when they said that they felt there should be employee shareholdings. For that reason, they very much favoured the route of the Stock Exchange flotation, because that would enable people to participate in the shares of the company. Certainly we shall bear that very powerful point very much in mind, although I must say, as I said in my opening speech, that as regards the method of sale no decision has yet been made by the Government.
    The hon. Member for West Lothian (Mr. Dalyell) asked about my talks with the trade union people at Amersham. I said to them what I am saying to the House now—that no decision on this matter had been made; that I was quite prepared to talk to them again about it; that we would not take steps which would jeopardise the company's future; and that I would be fully prepared to take their views into account and to have further talks with them.
    The hon. Member for Merthyr Tydfil also asked how the sale would affect the public sector borrowing requirement. It is right, as he said, that the company's borrowings do not count towards the PSBR, other than some loans from the Consolidated Fund, and those loans, by being repaid, will reduce the PSBR, and the proceeds from the company go towards reducing the PSBR.
    Mr. Rowlands: I appreciate that the Minister is anwering the points, but, if he has left the question of the future and who might purchase the company, will he at least give an assurance for which all hon. Members have asked—that every effort will be made to ensure that this company is not bought by companies outside the United Kingdom? That has been the unanimous request from both sides of the House.
    Mr. Lamont: I was intending my remarks to be a reply to that. I assure the hon. Gentleman that that view will be taken fully into consideration, because it has been expressed strongly on both sides of the House.
    There was some confusion on the question of how much intervention there had been by the Government in this company. I did not wish to give the impression that the Government had intervened in the detailed day-to-day business of the company. The Government have not done that. But it is a fact that a certain amount of time of management is taken up by having to submit a corporate plan and investment plans, and a certain amount of time is taken up in Whitehall. That is not a good thing. There is always the possibility of interference on pay negotiations, for example.
    Through speaking in debates on nuclear power, I have learnt that no subject is more surrounded by mythology and demons. Despite the fact that the Radiochemical Centre is not actually a company that operates in the field of nuclear power, before the debate I took a bet with someone that there would be bound to be a speech in the debate which misrepresented the Bill and said that what we were doing was lowering the standards of safety around nuclear power stations, and that someone would say that we were putting at risk the safety of the public because of nuclear power. I took a bet that it would be the hon. Member for Truro (Mr. Penhaligon) who would say that—and he did.
    The hon. Member for Truro even managed to drag in Three Mile Island. As my hon. Friend the Member for Enfield, North pointed out, Three Mile Island nuclear power has nothing to do with the provisions that affect the radiochemical company in the Bill. The Radiochemical Centre is not part of the atomic power industry. It is owned by the Atomic Energy Authority. It is a spin-off from it.
    Mr. Palmer: Will the Minister clear up the point about whether the Bill covers the National Nuclear Corporation? I should have thought that any readjustment of the shareholding there would not require legislation. If it is intended to cover the NNC, this would be of some interest in the City of London at present.
    Mr. Lamont: As my hon. Friend the Member for Bedford (Mr. Skeet) pointed out, the Bill refers to the National Nuclear Corporation but it refers to that corporation in precisely the same way as it to refers to British Nuclear Fuels. It is not altering the position as it was thought to be. It was always thought that the Government had the powers to sell shares, both in BNFL—up to 50 per cent.—and in the NNC. But, as I explained in my opening speech, the Government have received legal advice that the Government do not clearly have the power to sell shares in those two companies. All that the Bill is doing, as regards both BNFL and the NNC, is clarifying the position and putting it back to what everyone originally thought it was.
    In reply to the hon. Member for Truro, I stress that we are leaving the prohibition on selling more than 49 per cent. of the shares of BNFL. If the Government wish to sell more than 49 per cent. of the shares, we shall have to introduce a specific measure. My hon. Friend the Member for Sheffield, Hallam'(Mr. Osborn) asked about the safety of nuclear power stations and installations. Their safety is entirely unaffected by the Bill.
    The hon. Member for Keighley suggested that selling shares in TRC would give foreigners access to our nuclear
    788
    power technology. That is fantasy of the highest order. I must say that I admired the hon. Gentleman's style. I could not have done it. He managed to speak—for reasons that he explained—although he had not been in the Chamber earlier. The hon. Gentleman has misunderstood the Bill. It will not affect the atomic power industry in the way that he believes.
    As the hon. Member for Merthyr Tydfil said, TRC is very successful. Conservative Members have asked why the company should remain in the public sector. A company with such a history of success should be allowed the freedom of the private sector. It is doctrinaire and dogmatic to say that the company should for ever remain in the public sector. Even the Labour Government envisaged that shares in TRC would be sold. It is extraordinary that the hon. Gentleman should say that we should not sell shares in a company that is successful. I assume that the hon. Gentleman means that we should sell only the shares of companies that make losses. That will not get us far. As my hon. Friend the Member for Bedford said, that seems to be an argument for nationalising everything and for turning the Government into an investment trust. Indeed, it is an argument for nationalising ICI.
    That is not the route that we want to take. We are committed to reducing the public sector. We believe that the Bill will benefit TRC. There is no reason why those who work in that company—on either the management or union side—should fear the future. The introduction of private capital can only benefit the company. Therefore, I urge my right hon. and hon. Friends to support the Bill.
    Question put, That the Bill be now read a Second time.
    The House divided: Ayes 181, Noes 136.

    Division No. 67]

    [7.2 pm

    AYES

    Adley, Robert

    Cranborne, Viscount

    Aitken, Jonathan

    Critchley, Julian

    Alexander, Richard

    Crouch, David

    Ancram, Michael

    Dean, Paul (NorthSomerset)

    Arnold, Tom

    Dorrell, Stephen

    Atkins, Robert(PrestonN)

    Douglas-Hamilton, LordJ.

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

    Dover, Denshore

    Baker, Nicholas(NDorset)

    du Cann, Rt Hon Edward

    Bell, SirRonald

    Dykes, Hugh

    Bendall, Vivian

    Eyre, Reginald

    Bennett, SirFrederic(T'bay,)

    Fairgrieve, Russell

    Benyon, Thomas('T'bay)

    Faith, Mrs Sheila

    Berry, Hon Anthony

    Fenner, Mrs Peggy

    Best, Keith

    Fisher, SirNigel

    Biggs-Davison, John

    Fletcher, A. (Ed'nb'ghN)

    Blackburn, John

    Fletcher-Cooke.SirCharles

    Boscawen, HonRobert

    Fookes, Miss Janet

    Braine, SirBernard

    Forman, Nigel

    Brinton, Tim

    Fowler, Rt Hon Norman

    Brooke, Hon Peter

    Gardiner, George(Reigate)

    Brotherton, Michael

    Garel.Jones, Tristan

    Brown, M. (BriggandScun)

    Glyn, Dr Alan

    Bryan, SirPaul

    Goodhart, Philip

    Budgen, Nick

    Goodlad, Alastair

    Bulmer, Esmond

    Gorst, John

    Butcher, John

    Gow, lan

    Carlisle, Kenneth (Lincoln)

    Gower, SirRaymond

    Carlisle, RtHonM.( R'c'n)

    Greenway, Harry

    Chapman, Sydney

    Grieve, Percy

    Churchill, W.S.

    Griffiths, Peter Portsm'thN

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

    Grylls, Michael

    Clark, Sir W. (Croydon S)

    Hamilton, Hon A.

    Clarke, Kennetn(Rushcliffe)

    Hampson, DrKeith

    Cockeram, Eric

    Hannam, John

    Colvin, Michael

    Haselhurst, Alan

    Cope, John

    Hawkins, Paul

    Corrie, John

    Hawksley, Warren

    789

    Heddle, John

    Porter, Barry

    Henderson, Barry

    Prentice, RtHon Reg

    Higgins, Rt Hon Terence L.

    Proctor, K. Harvey

    Hogg, HonDouglas(Gr'th'm)

    Rathbone.Tim

    Holland, Philip(Carlton)

    Renton, Tim

    Howell, Rt HonD. (G'ldf'd)

    RhodesJames, Robert

    Hunt,John(Ravensbourne)

    Rhys Williams, SirBrandon

    Hurd, HonDouglas

    Ridley, HonNicholas

    JohnsonSmith, Geoffrey

    Rifkind, Malcolm

    Jopling, RtHonMichael

    Roberts, M. (Cardiff NW)

    Kaberry, SirDonald

    Rost, Peter

    Kershaw, SirAnthony

    Sainsbury, HonTimothy

    Kimball, Marcus

    Shaw, Giles (Pudsey)

    Lamont,Norman

    Shaw, Michael(Scarborough)

    Lang, Ian

    Shepherd,Colin (Hereford)

    Langford-Holt, SirJohn

    Shepherd, Richard

    Lawrence,lvan

    Sims, Roger

    Lee, John

    Skeet, T. H. H.

    LeMarchant, Spencer

    Speller, Tony

    Lester Jim (Beeston)

    Spence,John

    Lloyd, Ian (Havant& W'loo)

    Spicer, Jim (WestDorset)

    Loveridge, John

    Squire, Robin

    Luce, Richard

    Stainton, Keith

    Lyell, Nicholas

    Stanbrook, lvor

    Macfarlane, Neil

    Steen, Anthony

    MacGregor, John

    Stevens, Martin

    MacKay, John (Argyll)

    Stewart, lan(Hitchin)

    McNair-Wilson, M.(N'bury)

    Stewart,A.(ERenfrewshire)

    Major, John

    Stradling Thomas,J.

    Marlow,Tony

    Taylor, Teddy (S'endE)

    MarshallMichael(Arundel)

    Tebbit, Norman

    Marten, Neil(Banbury)

    Temple-Morris,Peter

    Mates, Michael

    Thomas, Rt Hon Peter

    Mather, Carol

    Thompson, Donald

    Maude, Rt Hon Sir Angus

    Thornton, Malcolm

    Mawhinney, DrBrian

    Trippier, David

    Maxwell-Hyslop,Robin

    Viggers, Peter

    Mellor, David

    Waddington, David

    Meyer, Sir Anthony

    Wakeham, John

    Miller,Hal(B'grove)

    Walker-Smith, Rt Hon Sir D.

    Mills, lain(Meriden)

    Wall, Patrick

    Moate, Roger

    Waller, Gary

    Moore, John

    Ward, John

    Mudd, David

    Warren, Kenneth

    Murphy, Christopher

    Watson, John

    Myles, David

    Wells,Bowen

    Needham, Richard

    Wheeler, John

    Nelson, Anthony

    Whitelaw, Rt Hon William

    Osborn, John

    Wickenden, Keith

    Page, John (Harrow, West)

    Winterton, Nicholas

    Page, Rt Hon Sir G. (Crosby)

    Wolfson, Mark

    Page, Richard (SW Herts)

    Pattie.Geoffrey

    Tellers for the Ayes:

    Pawsey, James

    Mr. Tony Newton and

    Percival,Sirlan

    Mr. Selwyn Gummer.

    Pollock,Alexander

    NOES

    Allaun, Frank

    Cowans, Harry

    Alton, David

    Craigen, J. M.

    Archer, Rt Hon Peter

    Crowther, J. S.

    Ashton, Joe

    Cryer, Bob

    Atkinson.N.(H'gey)

    Cunliffe, Lawrence

    Beith, A. J.

    Cunningham,G.(lslington S)

    Bennett,Andrew(St'kp'tn)

    Dalyell.Tam

    Bidwell,Sydney

    Davidson,Arthur

    Booth, RtHonAlbert

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

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

    Deakins, Eric

    Campbell-Savours, Dale

    Dixon, Donald

    Canavan, Dennis

    Dormand, Jack

    Carmichael, Neil

    Duffy, A. E. P.

    Carter-Jones, Lewis

    Dunwoody, Hon Mrs G.

    Clark, Dr David (S Shields)

    Eastham, Ken

    Cocks, Rt Hon M. (B'stolS)

    Edwards, R. (W'hampt'nSE)

    Concannon, RtHon J. D.

    Ellis, R. (NED'bysh're)

    Conlan,Bernard

    Evans, John (Newton)

    Cook, Robin F.

    Ewing,Harry

    790

    Fitch, Alan

    Newens, Stanley

    Fletcher,Ted(Darlington)

    O'Neill,Martin

    Foot, RtHon Michael

    Palmer, Arthur

    Forrester, John

    Park, George

    Foster, Derek

    Parker,John

    Foulkes, George

    Pavitt, Laurie

    Garrett, W. E. (Wallsend)

    Penhaligon, David

    Gilbert, Rt Hon Dr John

    Powell, Raymondf(Ogmore)

    Ginsburg, David

    Prescott, John

    Gourlay, Harry

    Race, Reg

    Grant, George(Morpeth)

    Roberts, Albert(Normanton)

    Grant, John (IslingtonC)

    Roberts, Ernest (Hackney N)

    Grimond, RtHon J.

    Roberts, Gwilym(Cannock)

    Hamilton, James(Bofhwell)

    Robertson, George

    Hamilton, W.W.(C'tralFife)

    Rodgers, Rt Hon William

    Hardy, Peter

    Rooker, J.W.

    Harrison, Rt Hon Walter

    Roper, John

    Haynes, Frank

    Ross, Ernest (Dundee West)

    Heffer, Eric S.

    Ross, Stephen (Isle of Wight)

    Henderson, Barry

    Rowlands, Ted

    Hogg, N.(EDunb't'nshire)

    Sever, John

    Hooley, Frank

    Sheerman, Barry

    Howells, Geraint

    Sheldon, Rt Hon R.

    Hughes, Mark(Durham)

    Silkin, Rt Hon S.C. (Dulwich)

    Hughes, Roy (Newport)

    Skinner, Dennis

    Janner, HonGreville

    Soley, Clive

    Jay, Rt Hon Douglas

    Spriggs, Leslie

    Johnson, James (Hull West)

    Steel, Rt Hon David

    Jones, Barry (East Flint)

    Stewart, Rt Hon D. (W Isles)

    Kerr, Russell

    Stoddart,David

    Lambie, David

    Stott, Roger

    Lamborn, Harry

    Summerskill, Hon Dr Shirley

    Lamond, James

    Thomas, Dafydd(Merioneth)

    Leighton, Ronald

    Thorne, Stan (PrestonSouth)

    Lewis, Arthur (N'ham NW)

    Tinn, James

    Lewis, Ron (Carlisle)

    Wainwright, E.(DearneV)

    McCartney, Hugh

    Wainwright, R.(Colne V)

    McElhone, Frank

    Welsh, Michael

    McGuire, Michael(lnce)

    White, Frank R.

    McKay, Allen(Penistone)

    Whitlock, William

    McKelvey, William

    Wigley, Dafydd

    Maclennan, Robert

    Willey, Rt Hon Frederick

    McWilliam, John

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

    Marks,Kenneth

    Williams,SirT.(W'ton)

    Marshall, D(G'gowS'ton)

    Wilson, Gordon (DundeeE)

    Marshall, DrEdmund(Goole)

    Wilson, William (C'trySE)

    Maynard, Miss Joan

    Winnick, David

    Millan, RtHon Bruce

    Miller, Dr M. S. (EKilbride)

    Tellers for the Noes:

    Morris, Rt Hon C. (O'shaw)

    Mr. Joseph Dean and

    Morton,George

    Mr. Donald Coleman.

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

    ATOMIC ENERGY (MISCELLANEOUS PROVISIONS) [MONEY]
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act of this Session to extend the powers of the United Kingdom Atomic Energy Authority and the Secretary of State with respect to the disposal of shares held by them ('the Act'), it is expedient to authorise—

    (1)the payment out of money provided by Parliament of any increase attributable to the Act in—

    (a)the administrative expenses of the Secretary of State;

    (b) the sums payable out of money so provided under any other Act;

    (2) the payment into the Consolidated Fund of any sums falling to be so paid by virtue of the Act.—[Mr. NormanLamont.]

    Armed Forces Bill
    Order for Second Reading read.
    7.12 pm
    The Under-Secretary of State for Defence for the Army (Mr. Philip Goodhart): I beg to move, That the Bill be now read a Second time.
    The primary purpose of this Bill is simple. It seeks to renew and to revise the provisions which determine the day-to-day legal framework within which members of all three Armed Services live their Service lives.
    The Bill is brought forward, as the preamble to it makes clear, in order that the Service discipline Acts may be continued for a further five years. Its scope helps to ensure that, as far as possible, the rules that determine Service life reflect and keep pace with civil experience and practice.
    It is now customary for Ministers when introducing or supporting these Armed Forces Bills to refer to the unusual nature of the procedures involved. In a similar debate five years ago, the hon. Member for Pontypridd (Mr. John), who now leads for the official Opposition on defence matters, referred to the 1976 Act as a "Brigadoon Bill", because this Bill, like the mythical Scottish village which inspired a successful Broadway musical comedy, appears occasionally but regularly in our parliamentary life.
    I think that I would prefer to compare the procedure that we have adopted to a Naval refit. As every hon. Member present will know, our major warships are put into dry dock every few years to allow the experts to swarm all over the vessels to repair, modify and improve them.
    In a roughly similar fashion, once every five years, we take the Army Act 1955, the Air Force Act 1955 and the Naval Discipline Act 1957 out of the legislative waters and let the experts swarm all over them, tapping here and prodding there, to consider whether any provisions need amendment, strengthening or scrapping.
    In this whole process, hon. Members have a particularly important role to play, and here I am glad that we shall have the benefit of the formidable legal talents of the hon. and learned Member for Accrington (Mr. Davidson). If the Bill obtains its Second Reading, I propose to move that the Bill be sent to a Select Committee, as happened on the last occasion in 1975, and has, indeed, been the tradition since the enactment of the 1955 Acts. There would seem great advantage in the continued use of a Select Committee, rather than a Standing Committee, in view of the opportunity it gives the members of such a Committee to range widely over the whole field of Service discipline in addition to detailed scrutiny of the Bill itself.
    Precisely because it is intended that this Armed Forces Bill, like its predecessors, should be the subject of detailed scrutiny at the Select Committee stage, I shall not weary the House in this debate with a full description of all the clauses contained in the Bill, many of which are highly technical. One such clause is clause 5, which permits an authority confirming or reviewing the sentence of a court martial to treat as not taken into consideration any offences which, in the opinion of that authority, should not have been taken into consideration at the trial. Another example is clause 9 which permits computer records to be produced in evidence in proceedings under the Army Act 1955 and Air Force Act 1955 in accordance with certain specified conditions which derive from the Civil Evidence Act 1968.
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    There will be ample time to discuss all those matters in Committee. Therefore I propose to concentrate on the more significant of the new powers proposed in the Bill and on certain recommendations made by the Select Committee which considered the last Act.
    With regard to clause 10, hon. Members may recall that one of the most significant provisions of the Armed Forces Act 1976 was the establishment overseas of the standing civilian courts to hear cases where the accused were civilians liable to be tried under the Service discipline Acts.
    The standing civilian courts approximate to magistrates' courts in England both with regard to the cases they may hear and the sentences at their disposal. The standing civilian courts are currently operating in Germany and a total of 285 individual cases has been heard by them in the three and a half years since they came into operation. Regular sittings of the standing civilian courts take place in Rheindahlen, Dusseldorf, Celle and Bielefeld and they are held in other locations as necessary.
    As was foreseen, the standing civilian courts have proved particularly effective in dealing with juvenile offenders. I understand that civilians serving overseas generally see the establishment of the standing civilian courts as a distinct improvement on the previous system. Moreover, the Army and the Royal Air Force have also found that the new courts have worked well, and there have been savings in the administrative work load of serving officers now that the standing civilian courts are available to deal with cases which otherwise would have to be dealt with by court martial.
    The opportunity has been taken in clause 10 and schedule 1 of making a number of amendments of detail to the existing provisions regarding the standing civilian courts. These amendments relate to the circumstances in which a social inquiry or other report may be provided on an offender, the manner in which a parent or guardian against whom a compensation order has been made may appeal against the order, a definition of "guardian" in relation to the powers of courts martial and the extension from 21 to 40 days of the time for lodging notice of appeal from the standing civilian courts to courts martial.
    Schedule 1 also contains a further measure of some importance relating to civilians in that the maximum fine which may be awarded to a civilian following a summary trial is increased from £25 to £100. Although this may seem a rather large increase, in fact it does no more than bring the level of fines into line with increases in British courts since this matter was looked at in 1966. The power to fine civilians, subject to the Acts, in summary proceeding is now much less needed in areas where the standing civilian courts are operating, but there is an obvious need for it to be retained in other areas, such as the Far East. I should perhaps add that there is a considerable safeguard for civilians in the exercise of these powers in that the accused always has the right to elect to be tried by court martial in preference to being tried summarily.
    Two important new powers are sought in clauses 13 and 14 with respect to the Service communities overseas. It is not, I think, always appreciated that, in addition to the 88,000 British Service men stationed overseas, there are also about 40,000 wives and 54,000 children living in Service communities abroad. The Service discipline Acts apply in a rather limited form to the families of Service

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    men resident with them at overseas stations and also to certain civilian support staff, who are attached to the Services.
    Clauses 13 and 14 will provide legal powers for the protection of the mentally disturbed and of children considered to be at risk in Service communities overseas. I stress that this in no way reflects an upsurge of either mental illness or child abuse. As a matter of policy, problem families are not posted abroad. The new powers would need to be involved only a few times a year. Nevertheless, in communities of the scale that I have outlined, some cases will inevitably occur. Hitherto, we have relied on administrative powers to return such persons to the United Kingdom where they could be cared for according to United Kingdom civil legislation. However, we consider—and members of the 1976 Select Committee expressed the same view when hearing witnesses—that specific legal powers should be laid down regarding the action which can be taken in overseas Service communities before an individual can be returned to the United Kingdom. We have, therefore, put forward powers as similar as possible to United Kingdom civil legislation.
    I should like now to turn to the retention of the death penalty and, in particular, to clause 17 of the Bill. The 1976 Select Committee on the Armed Forces Bill recommended in its report that the Ministry of Defence should review the need for the retention of the death penalty, particularly with a view to reducing the categories of offences for which it may be awarded. Under clause 17 the death penalty would not be retained as the maximum sentence for the offence of spying for an enemy on board one of Her Majesty's ships or within a naval establishment abroad. There is no equivalent to this offence in either the Army Act or the Air Force Act 1955. It is not felt necessary that the death penalty should be retained for this offence. The maximum penalty suggested is life imprisonment.
    There are now five offences under the discipline Acts which apply to Service men and also to certain civilians which attract the death penalty. These offences relate to communicating with the enemy, obstructing operations, mutiny or incitement to mutiny and surrender of a place to an enemy without lawful excuse. I must emphasise that these offences attract the death penalty only when committed with specific intent to assist the enemy and that those found guilty of them may be sentenced to lesser punishments. I must tell the House that after a thorough review of these offences, we have concluded that the death penalty should be retained for them.
    The offences in question are of the utmost seriousness since they could put in jeopardy the force to which the offender belonged and might well threaten the outcome of a battle or campaign. Those who commit such offences could put at risk not only the lives of their fellow Service men—possibly in very large numbers—but the survival of our country. Moreover, the death penalty may be thought the only effective deterrent for a potential offender on the battlefield who, like his comrades, may have to face death as a result of obeying orders and who, in consequence, is hardly likely to be deterred from assisting the enemy by the possibility of imprisonment.
    In this respect we are in line with our major allies, the great majority of whom also retain the death penalty for
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    military and war-time offences, although in practice the use of the death penalty has largely disappeared from their ordinary criminal codes and practices. Four of the NATO countries have a greater number of offences attracting the death penalty than the United Kingdom. I am told that the Soviet military code contains no fewer than 16 separate military crimes punishable by death in time of war. I hope, therefore, that the House will accept that it is right to retain the death penalty in those circumstances.
    If I might now move to a rather more agreeable subject, hon. Members will note that clause 20 is designed to complete the assimilation for the purposes of statute law of the women's Services. This will ensure that all statutory provisions applying to the Armed Forces generally apply in the same way to the women's Services.
    The psychological impact of this particular announcement may be somewhat muted by the fact that the right hon. Member for Stockton (Mr. Rodgers) made a broadly similar statement when introducing the Bill in 1975. But even after the passage of that legislation, which included officers and ratings of the Queen Alexandra's Royal Naval Nursing Service and the Women's Royal Naval Service in the general definition of "Her Majesty's naval forces", there was still doubt whether references in other statutes to the Armed Forces generally or the naval forces in particular included the QARNNS and the WRNS in every case. The present clause is designed to put this situation beyond all practical doubt.
    Dr. Alan Glyn: I congratulate my hon. Friend on his appointment. I am not quite clear about the clause. Am I right in assuming that the clause puts the women's Services on the same footing, both for punishment and for trial? But I presume that there is a difference, because the male Services are combatant and the female Services, I understand, are still non-combatant.
    Mr. Goodhart: Broadly speaking, that is correct.
    I turn to clause 24. The House will, I am sure wish to take note of the proposal to abolish the splendid office of Accountant General of the Navy. The Accountant General of the Navy is in fact an office—though there is no longer an officer—that was instituted before the Napoleonic Wars. Its former responsibilities included the Admiralty's spending generally, and the pay of the Navy in particular. However, its splendours and powers are long gone, as I understand that the actual post of Accountant General of the Navy as a separate entity was abolished in 1932 and that an MOD deputy secretary now performs the vestigial duties of the office, confined for the most part to the signing of documents under various trust deeds. Statutory references to the Accountant General of the Navy do, however, still exist and it is now proposed that these functions should be formally transferred to the Secretary of State.
    The effect of clause 26 is to abolish the statutory requirement for Army pensions to be paid in advance. This proposal reflects a general tendency towards payment of benefits monthly in arrears which reduces administrative costs without causing any loss to the individual. I must stress, however, that the clause will not affect those currently receiving pensions paid weekly in advance. They will, unless they wish to change, continue to receive then-pensions on the former basis. I understand that many new Army pensioners already wish to receive their pensions in

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    the proposed way. I should also perhaps explain that the clause will put the Army on the same footing as the other two Services which are also proposing to pay future benefits on the basis I have outlined, although, in their case, no statutory authority is needed.
    Inevitably, a debate such as this must concentrate on the penalties, summary proceedings and courts martial. Anyone listening to our past and present discussions on the discipline Acts might be forgiven for thinking that we face the same grave disciplinary problems that bedevil the armed forces of so many other countries, although the technical nature of so much of the Bill suggests that there is not too much wrong with our present balance.
    Of course a legal code is important, but what really matters is self-discipline. The House can take legitimate pride in the conduct and self-discipline of our Forces. As hon. Members may be aware, I have spent much time in the past 20 months in Northern Ireland. I can testify to the general respect there for the good humour and restraint with which our soldiers have responded to the special strains there. I am sure that the whole House joins in recognising the debt that we owe to the men and women who protect our country.
    7.34 pm
    Mr. Arthur Davidson: May I first congratulate the Under-Secretary on attaining his high office? I do so warmly because I have known him for a long time, and therefore I will dispense with the ritual of saying that I hope that he holds office happily for a short time—although I do.
    As the Minister has said, the Bill is, to say the least, far reaching, as both its predecessors have been. Any Bill that encompasses almost as a throw-away, tucked away in clause 17, the abolition of the death penalty for the, one hopes, rare event of spying on board one of Her Majesty's ships or within a naval establishment by a civilian not subject to the Naval Discipline Act is a rare and unusual Bill. A Bill that also embraces, again tucked away towards the end of the Bill in clause 24, the abolition of that grand and exotic post of Accountant General of the Navy is an unusual Bill. The whole House will mourn the passing of that great official, but perhaps less so now that we have been told that he is not some uniformed grandee, as I have always supposed him to be, but a mere member of the Ministry of Defence, no matter how distinguished. That is not quite the same creature.
    The Bill also makes a fleeting visit to the rarified and, for lawyers, profitable heights of the Patent Acts. It deals in a compassionate and humane way with the Mental Health Acts. I was pleased to hear the Minister say that the Mental Health Acts would be applied in the same way to military and civilian personnel serving abroad as they are here. That is long overdue.
    I hope that the Minister will expand on the present system and treatment when he winds up the debate. On behalf of the Opposition, I welcome the Bill. Like its five-yearly predecessors, its aim is to ensure that, as far as possible, equality before the law has the same meaning for those subject to the rigours of military discipline as it has for the rest of the public and that the consequences of the operation of the law—the investigation process, the trial procedure, treatment and punishment—are brought into line with the change in penal policy and practice in the civilian code. The Bill carries on that tradition, and therefore I welcome it.
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    But just as ideas in penal policy change over the years, so, unhappily, does the incidence of particular crimes. I should like to ask the Minister one or two questions. He paid tribute to the behaviour and excellent discipline of the forces, particularly in Northern Ireland. The Minister is in a good position to speak about that. I should like to pay tribute also. However, regrettably, in what I might call the outside world, there has been an increase in the use of firearms in the pursuit of crime. In view of the obvious accessibility of firearms to military personnel I should like to know whether there has been a corresponding, or any, increase in the use of firearms in the course of crime by military personnel. Equally, there is evidence that there has been an increase in drink-related crime. The Minister will know that military personnel serving abroad have access to cheaper sources of alcohol.
    Has there been an increase in drunkenness, or in crimes associated with drunkenness, and how are they dealt with by the military authorities? The Home Secretary shares the view that courts and prisons are not the proper places for those with a drink problem. Can the Minister tell us how those in military establishments who have a drink problem are treated and, particularly, whether there is any such problem in Northern Ireland where our forces face such severe strains and pressures?
    I welcome clause 2, which enables juveniles to be treated in borstals or detention centres. The purpose is to bring their treatment into line with the treatment of juveniles by civilian courts. When considering whether to send a juvenile to a detention centre the court has the advantage of a social inquiry report well prepared by trained social workers. That is of benefit to the court in deciding what punishment to administer. Are there sufficient trained social workers to prepare such reports under military procedures, so that the courts do not act on insufficiently assessed reports prepared by people who are not skilled or trained? In other words, is there a proper back-up service on which the courts can base their recommendations?
    The 1976 Act extended the summary powers of commanding officers to deal with certain offences instead of subjecting accused persons to the hardships, delays and shame of the court martial procedure, though they have the right to opt for that procedure if they wish. That was a sensible proposal, not only because it saved the time of trained court personnel, but because it ensured a greater degree of justice to the accused. How well has it been working? Have there been complaints from the Services or from defence lawyers about the procedure? Has there been much opting for the court martial procedure?
    The Act did not increase the powers of naval commanding officers because it was felt that they already had sufficient powers. Is the Minister satisfied that those powers are still adequate? As so much of our Fleet now serves in home waters, is there any need for a change in the powers?
    I was happy to hear the Minister say that the standing civilian courts, which were set up by the 1976 Act, have worked well. Instead of being tried by such a court an accused can opt for a court martial. Is there any inclination on the part of those who have that right to choose a court martial rather than a standing civilian court? Has there been any criticism by the Services of the fairness of the standing civilian courts?
    Clause 7(2) proposes to add subsection (3A) to section 141 of the 1955 Act. It says:

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    "The right of a person or his representatives to obtain a copy of the record under this section does not extend to so much of the record as relates only to a charge of which he was found not guilty."
    Why is that necessary? In many respects, what happens on a related charge on which a different verdict is returned can be relevant to an appeal in respect of a charge on which a person is found guilty. It seems a rather petty whittling away of rights to include that subsection in what is otherwise a rather expansive, magnanimous clause. Why has a minimal right, but one which could be of great benefit to an accused person, particularly one who may be pursuing an appeal, been excluded from the proposed subsection?
    I turn to a slightly more controversial area the Minister could not have expected the debate to remain placid throughout. We hear that the Government are considering military training in uniform as part of the youth opportunities programme. The Secretary of State for Employment has indicated that something like that is being discussed, and The Guardian has reported that the Minister is particularly enthusiastic about the proposal, though I do not know whether that is true
    This is not the time to debate the rights and wrongs of such a scheme, but the matter is relevant, because if young jobless people are to be trained in uniform, we are entitled to ask how they will be affected by the military codes of discipline. Youngsters recruited into such a scheme and working side by side in uniform with military personnel will presumably be treated before the law in the same way as other military personnel. I should be interested to know the Minister's thinking on that important, if somewhat controversial, proposal.
    The Minister complimented me on my expert legal knowledge and hoped that I would bring it to bear on the Bill. At some stage, I hope to do so. The House will be greatly relieved, however, to hear that I have not the slightest intention of doing so tonight. The Minister is clearly correct in submitting the Bill to a Select Committee, where the individual clauses, the reasons behind them and the thinking of the Aimed Forces on them can be explored in depth, and, where clauses dealing with the legal rules of evidence which are very complicated and technical, can and should be fully examined.
    This is an important Bill, although it is relatively non-controversial. Compared with some of the great defence issues that will be debated on future occasions, it may appear fairly minor. But it is not a minor Bill at all, because it deals with the basic concept of civil rights and civil liberties and the way in which the law treats those who choose to serve in the defence of our country. Such a Bill should be searchingly examined and treated very seriously by the House.
    In that spirit, I welcome the Bill, and I am sure that when it goes to the Select Committee it will be examined with the care that it deserves.
    7.51 pm
    Mr. Clive Soley: I wish to put a few points and a couple of questions to the Minister. I begin by identifying myself with the views of my hon. and learned Friend the Member for Accrington (Mr. Davidson), who asked the Minister to give an assurance that the facilities available to a Service man in terms of
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    social work provision are no less that they would be in civilian life. It is a matter of ensuring that those standards are adhered to in military as well as in civilian areas.
    I wish to develop a little further the point made by my hon. and learned Friend about alcohol abuse. He was absolutely right in saying that there has been an increase in the abuse of alcohol in this country generally and indeed in most Western nations. There is considerable evidence that, where there is easy access, the problem tends to be greater. That means that in places such as Germany where the price is relatively low in the NAAFI and elsewhere there is ready access to alcohol and there may easily be a problem.
    I must declare an interest here as chairman of the Alcohol Education Centre. Figures show that the people who come on our courses are the professionals—psychiatrists, probation officers, social workers, GPs and so on. During the past five years, the greatest single number that we have had from the United Kingdom Armed Forces—I speak of all three Services, the Navy, the Army and the Air Force—has been two on our basic course, and the figure is not dissimilar for the advanced course.
    The figure for other countries sending their personnel on our courses in one year rose to as great as seven. They are often United States and Canadian personnel, with the occasional Australian or West European. When one considers that all of those countries have their own courses and training yet still send people on our courses, it is clear that they take the problem rather more seriously than we are taking it at the moment.
    I should like the Minister to give careful thought to that matter. I had been considering a series of parliamentary questions on this issue and may well pursue it in that way. I am concerned, first, that we should have sufficient personnel in our Armed Forces who are able to spot a developing problem and, having spotted it, to respond to it. Secondly, one is concerned about whether the level of alcohol abuse is a disturbing one, and, if so, in what parts of the world where our Armed Forces are serving. I wish to comment briefly on the relationship with the Mental Health Act. I wonder how many qualified psychiatrists are serving in areas such as Hong Kong and Cyprus—and, of course, Northern Ireland—where depression is likely to be highest, not least because depression is a fairly common illness throughout the country generally, but particularly because in those areas there is a problem of isolation, separation from family and a host of other factors which might induce a person already prone to depression to tip over into a full clinical depression. Again, therefore, I seek reassurance that we have sufficient qualified psychiatrists in the areas in which they are needed.
    I should like to ask the Minister what I hope is a very simple question, although he may not have the answer readily to hand. Does the Rehabilitation of Offenders Act apply to people who have been through military discipline? In other words, does that Act apply to a person who has been through a court martial?
    Clause 14 deals with
    "Temporary removal to and detention in a place of safety abroad of children of service families in need of care and control."
    Where would they be removed to? If they were in Germany, it could be argued that the local authority social services department might have somewhere appropriate, although one would have to bear in mind that there would

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    be a language barrier for the child. In Hong Kong and Cyprus there are severe problems about where one would remove the child to. Needless to say, the problem can be just as serious in Northern Ireland, unless there is to be a major separation by bringing the child back to the mainland. I should therefore like some information on that.
    I am sorry that the Minister did not take his courage in both hands and abolish the death penalty altogether. He is absolutely right in saying that the Soviet Union has that penalty for 16 separate offences in its armed forces, and indeed is far more prone to use it for civilian offences as well. I believe that in some significant way the existence of a death penalty is a measure of a society's standard of civilisation and sophistication.
    I find it very difficult to envisage a situation in which it is likely that the death penalty would deter the behaviour that the Minister described. Indeed, I would challenge him to give examples of circumstances in which it might be used in our day and age. I put it to him that if a person in the front line is in danger of deserting, or abandoning or surrendering his position because of that, with bullets whistling around his ears, the last thing that he is likely to consider—and there are many examples of this—is the penalty that he will suffer if he is caught doing what he is doing. We are well aware from all kinds of other situations in the civil law here and in other countries that even the most terrible punishments do not deter certain forms of behaviour if the stress is high enough, and we are here speaking of a high stress situation.
    Similarly, I find it hard to believe that an officer or a colleague will go up to the person who is offending in this way and say "Look here, old chap, if you leave this position now, you can be hanged when you get back to England". It just does not happen like that. It is far more likely that one of his mates will rush up to him, grab him by the throat and say, "You move from here, and I shall …" and then say various other things which I should perhaps not quote in this House—indeed, the imagination boggles.
    Similarly, if the person was in danger of deserting before the enemy was in sight and this was being used as a threat, I suspect that one would be dealing with a person who was unable to cope with that threat and was probably already in a state of near—breakdown. I doubt very much whether any civilian court, or indeed with today's attitudes any military court, would be inclined to sentence that person to death after the event.
    I therefore ask the Minister to think again on this, take his courage in both hands and abolish the death penalty altogether. It is unlikely to be used. We do ourselves no service by having such a penalty. I do not believe that it is a deterrent. When one considers that some West European countries have not used the death penalty for over 100 years, it is clear that we are behind the times in keeping this floating around in our legislation. Let us therefore have the courage to abolish it altogether. If I thought that it was likely to be used, I should seek to divide the House on the matter, but I cannot envisage a situation in which it would be used unless, as the words of the song would have it, we all go together when we go—and by that time it would be too late.
    Finally—and this, again, may save the Minister being asked a parliamentary question—when I was in Hong Kong recently my attention was drawn to the question of pensions, and particularly pensions for Gurkhas. As I
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    understand it, what tends to happen is that the Gurkha, on retiring to Nepal, receives a pension which is in fact set up by an agreement reached among Britain, India and Nepal in 1947.
    The problem is that if India increases the pension we apparently do not get to hear about it until some bright spark in Nepal shows us a copy of the "Indian News", or whatever, and says "Have you seen that pensions have been increased?". That slowly filters its way back to the pensions unit in Hong Kong which informs the people here and two years later the Gurkha gets his pension in arrears, just as the Minister is seeking permission to provide in the Bill.
    Perhaps the Minister will look at that and see whether there is some way in which we can rationalise the situation so that people get their pension increases a little quicker than the two-year period would suggest.
    8 pm
    Mr. Keith Best: I do not wish to lengthen what has been such an amicable debate. I only hope that my intervention will not endanger the good relations that have hitherto existed on both sides of the House. I shall keep my remarks brief.
    I wish to refer to two clauses, but before doing so I should like to congratulate my hon. Friend on his new appointment. We are all glad to see him in that position, and we know that he will bring a great deal of thought and care to his new post. We are all looking forward to working with him in his new role.
    I refer my hon. Friend to clause 2(1), where one sees that under the proposed section 71AA a court shall have the power, instead of punishing an offender by sending him to prison,
    "to make an order … committing him to be detained in accordance with the provisions of this section for a maximum period to be specified in the order of not more than two years."
    It goes on to say that the institutions in question are borstals and detention centres.
    My hon. Friend will know that in the civilian criminal courts when an offender is sentenced to a period of borstal no time limit is set upon it. The sentence is for borstal training, and it is then left to the discretion of the assistant governor to decide the date upon which that person will be released, so long as it is for a minimum of six months. I do not know what discussions my hon. Friend has had with prison officers, but if the court were to specify a maximum period of, say, nine months, would that effectively remove the discretion of the assistant governor to release that person at an earlier stage? Alternatively, if he feels that that person has not fully completed the period of training that is best suited for him, does it mean that he cannot release him until after that period? It may well be that my hon. Friend has thought of this already. If not, I should like him to consider it carefully, because it seems to me that the clause is likely to remove the discretion of the assistant governor.
    My other point relates to clause 6(3), which deals with the time limit for the commencement of proceedings. The new subsection says that no proceedings shall be taken against a person unless
    "the proceedings on the summary dealing with the charge are begun within three months".
    Perhaps my hon. Friend will say what exactly is meant by "proceedings". I can envisage a situation in which it might well be difficult to ascertain the whereabouts of someone

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    within the three-month period. I am thinking in particular of members of the Territorial Army, who might well undertake their training in Germany at the 15-day annual camp, commit some form of solecism, or even worse, and disappear into the anonymity of civilian life. Their whereabouts may be difficult to discover, especially if they know that they have committed some offence while at the camp.
    My second point relates to trials that are begun within six months. Again, that seems unequivocal, in that the trial must be begun within six months or the proceedings will fall. Has my hon. Friend contemplated the situation where, for a number of reasons, it might be difficult for a trial to be begun? One can appreciate that proceedings may be begun within six months, but this subsection states that the trial must be begun within six months.
    From my own limited experience of practice in the civilian criminal courts, I know of the great difficulty of bringing a matter speedily to trial. There may be all sorts of difficulties, such as the attendance of witnesses and related matters. I should welcome my hon. Friend's comments on that aspect of the matter.
    8.6 pm
    Mr. Ronald W. Brown: I should like to ask a question about clause 13. This is a new feature dealing with powers
    "in relation to persons under incapacity".
    Why has this come about? It is a stringent introduction. Is there a great deal of history of members of the Armed Forces and other civilians who come under the control of the Armed Services suffering from mental disorders?
    Mr. Douglas Hogg: General Gordon.
    Mr. Brown: I was trying to be serious. I am rather surprised at the hon. Gentleman. I was trying to understand why this new provision has been introduced. It is often said of the Armed Forces that they are lacking in moral fibre due to various causes—first, mental disorder; secondly, alcoholism; and, thirdly, drug taking. Perhaps the hon. Gentleman will take this matter more seriously and ask why—
    Mr. Hogg Mr. Hogg rose—
    Mr. Brown: The hon. Gentleman is a grossly rude and offensive fellow. I was about to say "Yes, of course I shall give way".
    Mr. Hogg: I am grateful. The hon. Gentleman asked rhetorically whether we could think of any soldiers who suffered from some form of mental handicap, and I said General Gordon of Khartoum. We all know that he did.
    Mr. Brown: Once again, the hon. Gentleman hardly gives himself time to listen. He sits there in his rather foolish form and listens, but it does not seem to click inside his brain and he comes out with the wrong answer. I did not ask him rhetorically whether General Gordon, or himself, or his family, were ever mentally ill. I was merely asking why clause 13 has come about, because it is a long and involved clause. I am anxious to know why it has come about. What has occasioned it?
    I had taken the view that the clause gives a power to the commanding officer to call for two registered medical practitioners. However, if one is abroad, where does one find them? Will they be Service personnel? If so, I am
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    worried about the clause. Obviously, under pressure from the commanding officer, two medical officers serving within a unit could perhaps be pressured into declaring that a difficult individual was suffering from a mental disorder. Therefore, will the registered medical practitioners be Service personnel or will they be medical practitioners from the area in which the commanding officer is serving? Under subsection (7), when a commanding officer has gone through this enormous exercise—which presumably has been undertaken because the individual was a danger to himself or his unit—and when that individual has been treated and has returned to the United Kingdom, he cannot be detained for more than 24 hours. Perhaps the Minister will explain why this somewhat strong piece of legislation had been introduced. Is there protection for an individual who disagrees with a commanding officer, but who, according to the commanding officer, is suffering from a mental disorder? Why is it that he must be detained for 24 hours following his return to Britain? When a man is finally brought home, will he be a candidate for discharge immediately or will some other provisions allow him to be successfully treated and then returned to his normal service duties?
    8.10 pm
    Dr. David Clark: I shall not detain the House for long, but not because we do not feel that the Bill is important—of course we do. I suspect that this is the sole occasion on which the Government and the Opposition will face each other across the Dispatch Boxes in such an amicable fashion about matters connected with the Armed Services. I do not intend to probe the Bill in great detail because we welcome the Government's proposal to place the matter before a Select Committee. We feel that that is the right place for the detail to be examined. We presume that any suggestions that might come from the Select Committee will be accepted by the Government, as has happened in the past. I hope that the Minister will reassure us on that point.
    We regard the Bill as important. We take such matters for granted, as we take every good thing for granted, for example, fresh air. Although the Bill is technical, legal and highly complicated, it enshrines two basic principles that we so often take for granted, namely, the principle of the civilian control of the military, and the principle that, wherever possible, the rights of individual members of the Services must be as near as possible equal to the rights of the citizens at large in society. We accept that the rule of law under which we live must be modified slightly for those serving in the forces. Having said that, we believe that the quinquennial reviews give us the opportunity to enshrine in the military discipline codes, and in the Armed Services generally, the changes and patterns that have taken place in society.
    I counsel the Government gently that we are concerned about the Accountant-General. Not so long ago, the Labour Administration were thankful for another ceremonial official—the Official Solicitor. I hope that demise of the Accountant-General for the Navy, if it comes about, will not mean that any unusual approach which any future Government might have to take will be removed. I presume that the Greenwich hospital pension fund will not in any way be affected by that move. I am sure that it will not be.
    Part of the purpose of the quinquennial review is to bring the Armed Forces into line with movements and

    803
    patterns in society. We have seen that happen. I wish to develop a point hinted at by my hon. Friend the Member for Hammersmith, North (Mr. Soley) in relation to members of Armed Services who do not appear to be entirely covered by the Bill. Various clauses cover the reserve forces, the nursing services, the WRAC and the WREN, and so on, but nowhere does the Bill mention the Gurkhas or, more specifically, the Chinese personnel in the Army. There are many Chinese personnel serving in the Royal Navy, especially in the Far East, and the Gurkha battalions in the Far East, Belize, Brunei, and even in Britain on household duties. How are they affected by the Bill?
    Is the Minister satisfied that the general trends and patterns that we have seen in society, and that we have tried to reflect in the Bill for our indigenous forces, are being reflected for people whom we might describe as non-indigenous? That is an important point. My hon. Friend the Member for Hammersmith, North raised a point about pensions, which come under clause 27. The point that he made about the Gurkhas is correct. Perhaps at a later stage the Minister will be prepared to review the whole procedure for their pensions, because they are not prepared on a computer but are prepared by hand in Hong Kong. It is a laborious process which needs to be reviewed. We should welcome an assurance about the Gurkhas and the Chinese personnel within our Armed Services.
    My hon. and learned Friend the Member for Accrington (Mr. Davidson) mentioned the women's Services. The position has changed slightly—and I emphasise the word slightly—in the past six months, because for the first time we are training certain members of the women's Armed Forces to use small firearms. I appreciate that that is ostensibly for a self-defence capability, but does it in any way affect their role as covered in the Bill? It changes their status in the Armed Forces.
    I must press the Minister on the point raised by my hon. and learned Friend the Member for Accrington about the scheme that the Opposition regard as ludicrous, namely, military training for the young unemployed. Not only is it ludicrous but, I feel, offensive. Does the Bill in any way cover youngsters in that position? Has the Minister given any thought to the proposal for military training in relation to the Bill? I understand that the Minister, by tradition, will not be a member of the Select Committee. However, will he seek to make certain amendments to the Bill to cover that proposal if such measures are introduced before the report of the Select Committee?
    We do not often find ourselves in such an amicable position. We share the Minister's high regard for discipline in the British forces. We are fortunate in the high morale and discipline in the forces. The Bill seeks to ensure that our Armed Forces are not second rate citizens. Coupled with that, we should always try to ensure that when we ask our Armed Forces to do a certain job—I am sure that this is both our philosophy and the hon. Gentleman's philosophy—we should not ask them to do the most impossible tasks. When we ask them to do something, it must be done with the right equipment.
    8.18 pm
    Mr. Goodhart: The debate has been short but in just over an hour many points have been packed in. I am grateful to the hon. Member for South Shields (Dr. Clark) for his kind words. I welcome him to our debates. He and the hon. Member for Hammersmith, North (Mr. Soley)
    804
    referred to the Gurkhas and other non-indigenous forces. The Gurkhas are full members of the Armed Forces. Their claims are unlikely to be treated lightly. For the first time we have a Secretary of State for Defence who was a regular officer in the Gurkhas. The Chief of the General Staff is also the colonel of the Gurkhas. It is unlikely that their claims will go unnoticed. I have noted what has been said about pensions.
    The hon. and learned Member for Accrington (Mr. Davidson) asked about firearm offences. There is no increase of which I am aware to indicate an upward trend in such offences, fortunately. He and the hon. Member for Hammersmith, North were rightly concerned about drink problems. When a large number of young men are together, drink is a problem and it has traditionally been a problem in the Armed Forces, as Winston Churchill once pointed out in a memorable phrase. Drink is regarded as a problem in overseas stations only where it is duty free—in other words, in BAOR. Service commanders have grasped the problem and a comprehensive education programme has been instituted by each Service, including the showing of specially made films. Senior ranks are trained to recognise the symptoms of alcolholism, with a view to early treatment. The problem is under control. There has been no noticeable increase in drink-related crimes. One can note with a degree of relief that drug-taking, which afflicts some allied Armed Forces, is not a serious problem in our Armed Forces. We should be thankful for that.
    The hon. and learned Member for Accrington also asked about reports on juveniles and whether they are as good and as competent overseas as they are in Britain. One cannot expect that always to to be so. I say that with a degree of knowledge since I have a daughter who is a probation officer and who makes reports about juveniles. I am sure that not all the reports on juveniles overseas are as good as those that she makes.
    The hon. and learned Member asked whether our naval powers are adequate in relation to summary convictions. I am glad that he approached the question from that angle. I have said that the extra powers of naval commanders must be justified. I am glad that the hon. and learned Member supports that.
    I am grateful to my hon. Friend the Member for Anglesey (Mr. Best) for his kind remarks. He referred to clause 6 and the reserve forces. They are the principal reason for clause 6. Under present legislation, on a number of occasions a summary trial has to take place on the day that the offence is committed. Justice is often dispensed more quickly in the Forces than in civilian life but it is stretching matters a little far to guarantee legal proceedings on the day that an offence is committed.
    The hon. Member for Hammersmith, North referred to the retention of the death penalty. He suggested that the grounds on which the death penalty might be invoked could be abused in the heat of battle, where those concerned were unable to cope. I assure him that in every instance there has to be a motive of actively trying to help the enemy before one would seek to invoke that sanction.
    A rare note of controversy was struck with reference to the possibility of training in the Armed Forces for the young unemployed. As the Secretary of State for Employment said in a written answer on 4 February, the Ministry of Defence

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    "is considering what further help it might offer unemployed young people and we are in discussion with it about this."— [Official Report, 4 February 1981; Vol. 998, c. 138.]
    No firm decision has yet been taken on that matter.
    I remind the hon. and learned Gentleman that in the Armed Forces we have some of the best training establishments for young people in this country. At the moment they are not fully used. While on the subject of work experience or youth opportunities in the Armed Forces, I should point out that for many years there has been a short service limited commission scheme. A young man may come in for a few months and gain experience of the Army, before going up to university. He may be attracted by what he finds and may come back to the Armed Forces. That scheme has worked well. My elder son was part of that scheme and benefited from it. Therefore, I do not share the horrors expressed by Opposition Members about extending that scheme.
    Many points have been raised in the debate. I hope that the Bill will be passed and that in Select Committee we can consider the many points that have still to be raised.
    Mr. Ronald Brown: Before the Minister sits down, could he give me an answer to the point I raised on clause 13?
    Mr. Goodhart: I have referred to the points on clause 13 which the hon. Member raised. If he looks at the record of my speech in Hansard, he will see that I gave a lengthy description of the powers in clause 13 and why we have them.
    Mr. Soley: I would appreciate an answer at some time to the three important matters that I raised concerning the Rehabilitation of Offenders Act, the psychiatric provision and a place of safety for children.
    Mr. Goodhart: About 30 points were raised in the brief debate and I am not able to answer them all in detail. I shall write to the hon. Gentleman. I hope, too, that those points will be discussed by the Select Committee.
    Dr. Glyn: My hon. Friend was gracious enough to give way when he was dealing with clause 20 on a point concerning the status of women. It was said that some women in the Armed Forces were being trained in the use of small arms. If a member of the women's Services was involved in armed conflict, would she be treated as a combatant or non-combatant under international law? That is an important point.
    Mr. Goodhart: During war any member of the Armed Forces involved with the enemy would be treated as a combatant. However, the training given to members of the women's Forces is solely for self-defence and not to prepare them to take part in offensive operations.
    Question put and agreed to.
    Bill accordingly read a Second time.
    Bill committed to a Select Committee.—[Mr. Brooke.]

    British Railways Board (Increase of Compensation Limit)
    8.31 pm
    The Secretary of State for Transport (Mr. Norman Fowler): I beg to move,
    That the draft British Railways Board (Increase of Compensation Limit) Order 1981, which was laid before this House on 28 January, be approved.
    The purpose of the order is to provide for the continuing payment of grant by the Government to the British Railways Board for the operation of its rail passenger system. At present the limit on total cumulative payments which may be made from the end of 1978 is £1,750 million, as provided for in section 14 of the Transport Act 1978. The order will increase that limit to £3,000 million.
    It may help the House in its consideration of the order if I outline the background to the subsidy arrangements for British Rail. By far the most substantial grant—the public service obligation or PSO grant—is paid in accordance with EEC regulation 1191 of 1969, which provides that railways shall be operated on a commercial basis except where a public service obligation has been imposed. The Railways Act 1974 gave effect to the provisions of that regulation in Great Britain. Section 3 empowered the Secretary of State, as the competent authority, to impose a general obligation on the Railways Board. Accordingly, in December 1974 the then Minister of Transport, Mr. Mulley, imposed an obligation, which still stands, that the board shall provide a rail passenger service which is broadly comparable with the one existing at that time.
    The subsidy for the board's passenger services has been paid in respect of that obligation ever since. In addition, a much smaller grant is paid to the Railways Board under EEC regulation 1192 of 1969. This grant is paid towards expenditure on level crossings.
    When the House considered the 1974 Railways Bill, it agreed that the total subsidy payable to the board under these regulations, assessed on a cumulative basis, should be subject to an overall limit. That decision allows the House a periodic opportunity to consider the amount of public funds made available in grants to the board.
    I believe the original limit of £1,500 million set in 1974 was intended to last five years. The House will not be surprised to learn that the inroads of inflation meant that, in spite of the board's success in keeping within annual grant ceilings, the limit was exhausted before that time. As a result a new limit of £1,750 million, applicable to grant paid from 1 January 1979, was set by the Transport Act 1978. It is that limit which this order seeks to increase.
    I understand that grant covered by the existing limit totalled £1,089 million up to the end of 1980. There is still, therefore, some time before the existing limit is exhausted. Our expectation is that payments will approach the limit only towards the end of this year. We thought it right, however, to bring this order forward now so that the House's views may be known before my right hon. and learned Friend the Chancellor of the Exchequer presents his Estimates for the next financial year.
    That is the background. But, of course, we also have the opportunity to debate briefly the position of British Rail. I welcome that. First and foremost, we should be clear about the position as regards British Rail and the

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    finance going to it. I saw a story in one of the Sunday papers which referred to Government neglect of the railways. That is emphatically not so.
    The truth is that, at a time of public expenditure restraint, the railways have been generously treated. That is the fact of the matter. There are no apologies to be made. Despite the current economic recession, the Government have maintained, and in some cases increased, support to British Rail. I give the House five facts about Government support for the railways.
    First, in the current year 1980–81, we increased the total of grants and loans within which the railways board has to manage—its external financing limit—by £40 million to £790 million. In other words, we have given to the board the flexibility it asked for. The board has welcomed this policy.
    Secondly, the board's external financing limit for 1981–82 is, at £920 million, £30 million above what had been provided for in previous plans. Of course, we have set it a tough target, but it is also realistic and I know that the chairman recognises it as such. The board has accepted that EFL.
    Thirdly, within these increased external financing limits, the provision for the public service obligation grant in 1981 is £678 million, that is £23 million above the previously planned provision. That additional provision was made to help the board maintain a 12-month interval between fare increases.
    Fourthly, I wish to make it clear that we have not cut investment. We have maintained it. There still appear to be some who do not understand the present position. I saw on television the leader of the Liberal Party freely asserting that the Government had cut the investment ceiling. That simply is not the case. We freed track renewal from control of the investment ceiling. When allowance is made for that, the investment ceiling remains at the same level in real terms as when we came to office, that is, £325 million a year.
    Within that ceiling the board has been able to carry out a wide-ranging programme of improvements and renewals. It has been able to effect considerable improvements in its inter-city services, including the introduction of high speed trains, of which 95 are now in service or authorised. It also has authority for substantial builds of modern freight locomotives and wagons—1,500 of the latter. A number of major investments have been carried out, or are being carried out, to improve London commuter services—for example, electrification of the Bedford-St. Pancras line, and re-signalling projects at Victoria and on the London to Brighton line. In addition, there is a rolling programme for 220 EMUs a year, many of them intended for Southern region inner suburban services.
    Mr. Donald Anderson Mr. Donald Anderson (Swansea, West) rose—
    Mr. Fowler: To that I have added proposals for major re-signalling on the West of England route costing about £28 million. I announced my approval on 28 January. I have also welcomed in principle the board's proposals for new train ferry services. That will be dependent upon the progress towards recovery of the freight business.
    The next large investment issue is that of electrification. We shall publish tomorrow the final report of the joint British Rail and Department of Transport review. The review was set up some time ago. We do not intend to take
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    instant decisions. The report presents several broad issues that the Government will need to consider. Electrification would require substantial extra investment, mainly for the benefit of the board's commercial rail businesses, intercity and freight. It will make cash flow demands well into the 1990s. I shall have to consider carefully with my colleagues the prospects of the board's commercial business and how the funds to finance electrification might be generated. That will be the next stage in our consideration.
    Mr. Anderson: Will the right hon. Gentleman indicate what progress, if any, has been made between himself and his right hon. and learned Friend the Chancellor of the Exchequer on introducing a more flexible means of British Rail financing, especially lease and lease-back arrangements?
    Mr. Fowler: That involves a number of issues. There is some flexibility behind what we are doing in the Transport Bill in bringing investment into the rail subsidiaries. That is one way of achieving flexibility. That is being debated at some length in Committee. We have also given the board the sort of flexibility that it wanted in the external finance limits at the end of each year—in other words, the increase in the carry-over for which the board, and especially Sir Peter Parker, have asked. We have gone a long way in trying to create flexibility.
    Mr. Stephen Ross: The right hon. Gentleman referred to track repairs and expenditure on track maintenance. Is it not a fact that the advanced passenger train, which is soon to be introduced on the Euston-Glasgow route, will not be able to travel at the speed of which it is capable because certain areas of the track are not up to standard? Is he prepared to advance some money for that to be put right?
    Mr. Fowler: I am prepared to consider that. The hon. Gentleman should be under no illusion about what is holding up the advanced passenger train. Responsibility does not lie with Government policy. The advanced passenger train is behind time and there are still matters that have to be put right. We want to see the prototypes in service, and we shall make our decisions when that has taken place. The train is not in service, but we hope that it will be as soon as possible. The delays have not been caused by Government policy.
    The fifth policy achievement of the Government is that I have given a clear commitment that there will be no new round of Beeching cuts. I am interested in ensuring that we have the most cost-effective service that is possible. I am especially glad that my commitment has stimulated the board to develop new solutions to what has clearly been a problem for many years.
    I hope that the board will now be able to mount a demonstration project using low-cost, light-weight vehicles and radio signalling on one of its rural lines. It: is not enough for us to say that the present situation should be maintained. I want to see forward development. A demonstration project of the sort to which I have referred will be a useful way forward for the rural services, which undoubtedly and unquestionably are important for many members of the public. We should try to move forward here, and I am glad that the board is now seeking to do that.
    Other measures that we have taken have been designed to assist the board to move with the times, to rationalise

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    its business and to provide increased flexibility. The 1981–82 external finance limit includes an additional £53 million to cover the short-term costs of closing the collected and delivered parcels business, which has been losing nearly £1 million a week. I think that there would be agreement on both sides of the House that it would be sensible for the Government to make special provision for the closure and contraction of business of that sort. Track renewal has been free from the control of the investment ceiling. In common with other nationalised industries, the British Railways Board is now allowed some end-year flexibility in meeting its external financing limits.
    In spite of those measures, we recognise the legitimate concerns that are felt by the public, both by those who use the railways and undoubtedly feel that standards are not keeping pace with fares, and those whose concern is the continuing demand for taxpayers' money. The Government share both those concerns.
    If the present financial constraints are biting hard, we have to ask why. The board's income has increased in the last five years. A traveller has had to pay more, with real fare increases. Grant payments have also increased in real terms since 1975 by about 6 per cent., if both Government and local government payments are included. This year we expect British Railways to receive nearly £2 million a day in direct passenger grants.
    here is a further area of concern—that of investment. The Board has made no secret of its view that more public money for investment is necessary. Its thinking has now been set out in its corporate plan for 1981–85, which I am now considering, and on which I shall make a statement when I have had an opportunity to consider it in detail. In the last few days I have had constructive discussions about various aspects of the plan with the Rail Council, which, as the right hon. Member for Barrow-in-Furness (Mr. Booth) knows, represents not only the board but the major unions in the railway industry.
    I understand the board's concern about the level of investment, but the future of the railways is not simply a matter for the Government. It is a matter for the whole railway industry, including the unions. There is no doubt that there must be an increase in productivity. In its corporate plan, which it published in November, the board drew attention to the fact that it could run the railways with 38,000 fewer posts. That does not mean a smaller railway. It may be slimmer and leaner, but it will not be smaller. It is planned to increase output in terms of passenger and freight tonne miles. By increasing productivity and efficiency British Railways can generate the funds that could enable them to afford the investment that will secure the long-term future of the railways. The Government believe sincerely in that long-term future.
    Mr. Stanley Newens: The Minister talks about increasing productivity on the railways, but does he recognise that steps such as closing stations in the evenings and at weekends are part and parcel of the process? Does he approve of the recent proposals to close 150 stations in the South-East of England? Surely that is depriving people of a service that could easily be provided by those who are otherwise likely to be on the dole.
    Mr. Fowler: I am sure that the hon. Gentleman will make his contribution on that point and the question of services. I shall be glad to respond when he does so. The
    810
    general point that I make to him is basically that we say to British Rail that this is the cash limit within which it has to live, and clearly it must be right for us to give to British Rail the discretion and the decisions on how it comes within that. I should not have thought that any Government—whether I or the right hon. Member for Barrow-in-Furness was Secretary of State—would contemplate a system which was totally unchanging, year in and year out. Therefore, it is fair to say that this must be a decision that the chairman and the board of British Rail must make. I am quite prepared to deal with that argument in more detail if the hon. Gentleman wishes me to do so.
    By the actions that the Government have taken to help British Rail through its current and, I hope, short-term difficulties, they have shown that they believe in the future of the railway industry, but that future must be earned. Current trends must be reversed. The board's costs have been increasing in real terms, and there has been no satisfactory explanation of why that has been so.
    Underlying all the efforts of the British Railways Board must be the issue of increased productivity. The chairman of British Rail, Sir Peter Parker, has said—and I agree with him—that productivity is the rock upon which we must build the future of the railways. The board has recognised that in its corporate plan, which provides for substantial productivity improvements in the next few years. The experience of the past 10 years has not been as encouraging as that of the previous decade. During the 1960s, output per man rose by about 97 per cent. In the 1970s the net productivity gain, according to the Monopolies and Mergers Commission, was about 5 per cent. The commission noted in its report on the London commuter services the relatively low rate of productivity improvements over the last 10 years and said that had been a significant factor inhibiting improvements in pay levels.
    I believe that improvements are necessary and possible on both sides of the industry. I know that British Rail's management is tackling the criticisms made by the Monopolies and Mergers Commission. For example, one area was that of maintenance costs, where the commission found that, with the present system of controls, British Rail had not immediately been able to explain with any certainty the reason for varying rates of increase in rolling stock maintenance costs, nor give any reliable figures for the effect on maintenance costs of ageing rolling stock. The Monopolies and Mergers Commission also commented on a lack of direct material cost control.
    I am concerned also about overall cost control. The commission commented that the board's planning system had probably not been effective in building cost reduction targets into its plans. The commission's general view was that the board had made major efforts to reduce costs only at times of financial crisis. It is fair to say that the commission also found evidence that British Rail was taking steps to correct those failings. We must all hope that those succeed. I think that action lies with the board. The setting of cost targets and progress towards them is something that I shall pursue vigorously with the board.
    The House will expect to hear how I see the future of the obligation and of the different parts of the passenger business. There is no question but that the obligation will have to be revised. We cannot for ever expect the general service levels that were appropriate in 1974. The board must have better objectives. I do not propose to amend the extent of the obligation. As long ago as 1979 I ruled out

    811
    any substantial reduction of the passenger network. I am glad that the board is actively investigating more cost-effective ways of keeping the rural services going. I trust that it will give proper priority to maintaining the track.
    The London commuter services represent one of the most important areas. We certainly need clearer accountability and clearer objectives. I shall make a fuller statement later on action to follow up the report of Monopolies and Mergers Commission. Meanwhile, I have asked the board to let me have a clear statement about its plans for commuter services and about the options for improving the quality of service to the customer.
    I am bound to tell the House of my concern over the business performance of the inter-city services. Last March I announced an interim financial target—which had been agreed with the board—as a step towards a full commercial objective. The board's corporate plan says that this interim target will not be reached, even on a very rosy traffic forecast and even with all the expected productivity improvements. It is clear that this situation, at the heart of the railway, presents serious problems of investment and business planning that will have to be tackled.
    Finally, the Government recognise the importance of the railways. We accept the need to support passenger services. We have given British Rail a fair deal this year. Indeed, we have given as much support as the Labour Government thought adequate. But we must continue to look for cost savings, increased productivity and better performance in the commercial business. The future of British Rail will be secured in this way, through a constructive partnership between the board and its staff. The order provides for a continuation of this policy and of the realistic arrangements for Goverment revenue support. I urge the House to endorse that view.
    8.57 pm
    Mr. Albert Booth: Under this order the limit of the public service obligation will be subject to increase. The obligation was introduced in 1974 and was intended to enable British Railways to maintain their network. It was the way that the House had of saying "No more Beechings. We do not want railway services cut. We have had too many cuts. We want to maintain our railway services."
    Like those who are concerned about keeping the network, the Secretary of State should realise that it is increasingly apparent that the network of 1974 cannot be maintained by the present level of public service obligation. The strain of attempting to maintain it has created serious problems for British Rail. I am not saying that there has been a dramatic change in the Government's concept of the public service obligation. As we wish to have a constructive debate, I hope that hon. Members will accept that the public service obligation has, in real purchasing power terms, been roughly maintained at the level set when it was introduced. It may have fallen a bit, but it is about the same.
    It is my contention—supported, I think, by most people who have studied the railway service—that this PSO will not sustain the network. There is evidence of that on every hand. If I give a few examples from Cumbria, not because I maintain that Cumbria has a worse service than any other part of the country—of course, it is a more important part
    812
    of the country because my constituency is there—but because they show that there are a number of lines in difficulty.
    I shall start with the main line from Euston to Carlisle. On that line, there are arrears of track work in Cumbria which require the relaying of 2¼ miles of track, reballasting for several miles and some earthworks. Because of the condition of the track, from June next the timetable will have a 10 minutes addition placed upon it. In spite of that, I am told by British Rail that, even with that additional time, the punctuality targets will be revised downwards.
    The signalling system on the coast line—serving the constituencies of Barrow, Workington, Whitehaven and Carlisle, and the constituency of the Home Secretary—which is contended to be still safe—dates back to 1879. They must have built good signalling systems in 1879, because they still work today. Indeed, 60 per cent. of the boxes date back to the early 1900s. Obviously they are labour-intensive. Perhaps that casts some reflection on what the Secretary of State said about productivity. On that line, there are arrears of track work which now require the relaying of 13 miles of the track, and reballasting of four miles, to say nothing of the work that needs to be done on the sea defences.
    Let us consider the rolling stock on the lines that serve my constituency. The diesel multiple units, which were built to last for 10 to 15 years, are now over 23 years old. I cannot believe that an estimate cannot be given of how much it would cost to keep these diesel multiple units on the track. I have been to the workshops where the DMUs are refurbished. The cost must be known because so much of that work is done.
    It is not unusual in the Preston division, which operates from the south into my constituency, to start the morning with seven out of 40 units short. It is a wonder that there is so little severe disruption in the service. I imagine that the only reason is the very skilled manipulation by the BR controllers of the very outdated DMUs.
    About 3,000 miles of the 12,000 miles of the country's network are at risk of being put under speed restriction and ultimate closure because there is not enough investment. Signalling systems such as the one I mentioned on the coast line are not hard to find. They will soon be incapable of repair and will need replacing. Viaducts which carry vital rail links are in need of replacement, and some are in danger of collapsing. Carriages are threadbare, and in many areas rolling stock is at the end of its useful working life.
    All these facets of the system are calling out for investment. They reached their peak of service years ago. What will the future be if we maintain the same PSO regime, using the powers of this order to keep it going for another few years? In other words, why has the situation developed?
    I contend, first, that it has developed, in part, because the cost of replacing railway equipment has increased since the PSO was set while the PSO has not increased. It is not for want of increases in fares. There have been substantial increases in fares. We have probably the highest fare levels in Europe. But the proportion of the cost borne by fares in maintaining social lines, even if they maintain their fare income, still leaves that remaining proportion more expensive to finance in terms of replacing the equipment on those lines.

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    Of even greater significance has been the postponing of investment by British Rail to keep within its PSO and external financing limit. The Secretary of State was unfair when he quoted an occasion on which British Rail went outside the limit, because its record of staying within its PSO and financing limit is extremely good. Generally speaking, it keeps within the PSO limits by a margin which shows that it is a careful cost controller. However, it has kept within the PSO margins only by delaying work. It has said "If we are to keep within the limits this year, we cannot afford to carry out this or that investment project or this or that piece of track maintenance. We shall not be able to replace this signalling system or these DMUs."
    Increasingly, British Rail is facing higher operating costs because it is using outdated stock. It is obviously more expensive to operate an old life-expired DMU than its modern equivalent. Therefore, that adds to the cost.
    It is not inappropriate to draw an analogy between British Rail and a man who is deciding whether to replace his car. In making a decision whether to replace one's car, one estimates how much it will cost to keep it on the road for another year or two years. One considers what major repairs will need to be carried out and whether the tyres will have to be replaced. One may come to the conclusion, having made such an assessment, that it will be cheaper to buy a new car than to retain the old one, even if one has to borrow money at present high interest rates to buy a new car. British Rail is very much in that position. It is clear that British Rail is determined that there will be no reduction in safety standards as a result of these arrears of track maintenance and because it is operating with outdated life-expired stock.
    Mr. Anderson: I suggest that the analogy drawn by my right hon. Friend has an even stronger effect on rail transport, because it provides services for others. Investment in new stock is likely to increase revenue, because it will attract passengers.
    Mr. Booth: I take my hon. Friend's point. The analogy could have been better chosen. I should have referred to the replacement of a bus rather than a car. The bus operator would know that he would be likely to attract more passengers if he provided a new bus. Therefore, he would make his calculations in that light.
    The point is that there is a cost over and above this financial cost to the railways. It is a cost to passengers in terms of services which are being cut. My hon. Friend the Member for Harlow (Mr. Newens) referred to a massive cutback in services to South-East commuters. But throughout the country one is seeing cuts in the frequency of services.
    There is a further cost to be borne by passengers in speed reductions and the extension of journey times unless there is a change. Some reductions have already taken place. There is a further cost to be borne by passengers in railway operation reliability.
    I am sure that British Rail will not deliberately reduce safety margins. But if British Rail has to put an old piece of rolling stock on a not so well maintained track with an outdated signalling system, its chances of being able to maintain scheduled services must be reduced. Indeed, there must be a greater possibility of breakdowns.
    The longer we delay the decision—I say "we", because I accept that the problems have not arisen since the
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    election of the Government—the greater will be the cost to the public of dealing with it. It will not only be greater cost up to the point when the decision is taken, but the greater cost of running outdated stock and the higher cost of new investment. I assume that a greater public service obligation will be required in the future for feeder or social lines, if only to pay the higher interest on the new heavier investment. On the main lines, where one can reasonably hope to gain a full return on the investment, that factor does not bear. It will affect the public service obligation which is largely related to feeder lines where it is understandably held that there must be a social contribution to maintain the services.
    If one judges British Railways—by that I mean all those who work in the railway unions as well as members of the board—by their ability to meet their costs against any other railway system in Europe, one finds that they have performed remarkably well. They are the best in Europe measured by the yardstick of their ability to meet the costs from fares and freight charges. They are nearer to being self-financed than any other system. No railway system is self-financed, but the British Railways system has the highest self-financing ratio in Europe. That is why it is unfair of the Secretary of State to imply that there are some great productivity improvements to be made by cutting out stock.
    Part of the productivity improvement that can be brought about depends on the ability to invest in more modern equipment. On the Cumbrian coast line a modern signalling system would reduce manning requirements by decreasing outdated signal boxes. Part of the productivity gain will come only with the decision to invest. I maintain that British Rail has achieved a higher self-financing ratio than any other railway system in Europe. In addition, it gained passengers up until 1979. Any loss of passengers reflects two changes that could not have been avoided by any action by British Railways. It would be tragic if we were to allow our railway system to rattle into decline because we did not face up to the question of the inappropriateness of the concept of public service obligation which maintains it at that level.
    I turn to an issue which directly relates to public service obligation. It stems from the views of the EEC Commission and the role of the EEC in railways. In a debate about public service obligation, that is appropriate. The EEC Council regulation 1191/69 obliged us to introduce the 1974 Act provision for public service obligation. We have to bear in mind that Britain is not alone in wrestling with financial prospects for railways. The EEC recently has published a document entitled "Community Railway Policy: Review and Outlook for the 1980s". The document is a communication from the Commission to the Council. The document refers to the potential increased demand for railway transport both for freight and passengers, and indicates that between 1973 and 1977 State financial intervention in EEC railways increased by more than 60 per cent. We should see our maintenance of a level PSO against an increase in the EEC of 60 per cent. in financial obligation.
    The document states:
    "The railways therefore may look forward to a growing market, but their potential to realise a greater market share is a function of internal management decisions and Government-railway decisions regarding investment and restructuring. The basic objective must be efficiency, both in the production of high quality social and commercial services for users, and in marketing these services."

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    Those are sentiments with which I suspect the Secretary of State agrees. I do not suppose that he will object to them, and neither would most hon. Members.
    When I first read the document, I assumed that, having expressed such views, noted the massive intervention and realised the potential for expansion of the railways, the Commission would go on to state that EEC policy should reflect those factors. Strangely, almost perversely the second chapter of the document, headed "Community Railway Policy", comes to almost exactly the opposite conclusion. It states:
    "Community railway policy has two basic objectives: elimination of distortions in the inland transport market—improvement of the railway service performance and financial situation."
    The document sets out the basic principles on which Community legislation has been built in order to attain those objectives. It says:
    "these objectives are"—
    and this is the first—
    "reduction of public service obligations".
    It outlines other reductions of aids, but I have no need to go through them. I want an assurance from the Secretary of State that he will resist any move by the EEC to suggest that we should have a reduction in the PSO, following a period when the general rise in intervention in Europe has been about 60 per cent., while our PSO has been maintained at a virtually flat level.
    The public service obligation must be sustained. It is our society's payment for the service that it needs now and which, when we exhaust the oil stock of the planet, will be increasingly needed. I hope that we can look objectively and realistically at a serious problem for the United Kingdom and be prepared to recognise that we cannot use an instrument that appeared to be right in 1974 as though no changes had taken place and as though it had been completely successful. The reality is that it is not up to the job that has to be done in the 1980s, and accordingly we must change it.
    9.18 pm
    Mr. Bob Cryer: The rubric on the Order Paper stating that the order has not been considered by the Statutory Instruments Committee is not correct, because it was so considered this afternoon. The Committee asked for a memorandum from the Department of Transport on the instrument and felt that the explanatory note was less than adequate in explaining the purpose of the instrument. For example, there is no indication of the cumulative nature of the total expenditure that the instrument authorises, and the Committee has commented to that effect. We have not held up the instrument and we were pleased that the Department co-operated in providing an explanation.
    On the general purpose of the instrument, the subsidy, of course, is entirely separate. The Committee does not deal with the merits of an instrument, as I shall do. It deals purely with the powers of the Minister and the scope of the instrument under the primary legislation, to see whether the instrument is within the scope of that legislation, and reports any inconsistencies to the House.
    I turn briefly to the merits of the order, which are of great importance to me and to other hon. Members. The subsidy paid under the regulations is clearly extremely important, and the raising of the limit in anticipation of expenditure is certainly very welcome.
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    There are, nevertheless, areas of concern. The Minister said that the track renewal programme was freed from the investment ceiling. Can he tell the House, first, whether this is the result of the railway inspectorate's last annual report? Paragraph 30 of that report contains a clear implication that the financial limits on British Rail are resulting in a lowering of track maintenance standards, to the point where some kind of danger is lurking, or would be lurking, but for improvements. I hope that the Minister can give an answer to that very important—and very rare—comment by the railway inspectorate. There is no question but that British Rail's safety standards are extremely high.
    Mr. Fowler: Perhaps I can help the hon. Gentleman on his first question. The fact is that action there pre-dated the report to which he has referred. It was action that was taken a year previously.
    Mr. Cryer: That makes it even more serious, because the implication in the report is that there is a need for yet greater investment in order to raise the standard of track maintenance to account for the services—the increased speeds being maintained by the HS 125s, and so on. The hon. Member for Isle of Wight (Mr. Ross) raised the question of track speeds of the APTs under existing maintenance standards. I therefore hope that the Minister will bear the inspectorate's report very much in mind because it is an important element.
    With regard to productivity, British Rail, by and large, has an enviable safety record. While an increase in productivity is clearly desirable, it cannot be undertaken by lowering safety standards. There are situations in which productivity cannot be increased except at the expense of safety standards. There must be people, for example, to maintain scrutiny of passengers on curved platforms. One cannot dispense with guards unless there are straight platforms so that drivers can look out to ensure that all passengers have boarded.
    The railway unions have co-operated with alterations in practice. They have, for instance, abandoned the practice of the guard always riding at the back of the train. After long internal argument they have allowed the guard to be carried on the locomotive. But that was only possible as a result of investment in continuously braked trains. So long as there is lack of investment, allowing loose-coupled freight trains to travel at 40 miles per hour, there is a risk of a breakaway and there must be somebody at the back to put on the hand brake and pin down the wagon brakes.
    All this may seem terribly old-fashioned. Indeed, it is. But until there is investment in new wagons with continuous acting brakes, so that if there is a breakaway the brakes go on automatically as they do on passenger trains, one cannot risk a lowering of safety standards by moving guards from the rear of the train. The railway unions are keenly aware of this matter. They want to help, but they are not prepared to lower standards, and quite properly so.
    Mr. Robin F. Cook: My hon. Friend has made a number of useful and interesting points concerning productivity in British Rail. He will wish to acknowledge that recent figures show conclusively that British Rail's productivity in terms of men per locomotive or men per track mile is substantially higher than that of most other European networks.
    Mr. Cryer: I was about to make that point. Productivity compares extremely well on an international European basis in spite of a lack of investment in British Rail to achieve the modernisation that I have outlined.
    The cries from the Conservative Benches that it is the fault of overmanning and the unions simply are not true. The Minister has not made that claim tonight, and I do not want to be unfair to him. However, that is a claim which is often made by Conservative Members in an entirely unknowledgeable and superficial way.
    The railways are bearing the brunt of the recession. The freight side of the business carries basic commodities for the iron, steel and coal trades. As a result of the difficulties in those industries, exemplified by the announcement of the proposed closure of 50 pits, where will the bulk of the coal be carried for those 50 pits if those closures ever come about? I do not think that they will, because of the attitude of the NUM. However, if they do take place probably around 90 per cent.—certainly the top percentage—will be lost to rail. Therefore, the railways will be hit yet again. I hope that the Minister takes that point seriously into account when providing support for the railways. They are taking the brunt of the recession because they carry these basic services.
    The right hon. Gentleman also mentioned parcel closure. That is a loss of traffic for British Railways. However, the decline in parcels is another reflection of the recession. There is a large parcels depot in Bradford because there are a number of mail order firms, such as Grattan Warehouses. I understand that the decline in parcel traffic will mean about 200 redundancies.
    My hon. Friend the Member for Harlow (Mr. Newens) asked what the achievement would be in cutting railway jobs, forcing people to go on the dole, with support being paid by the Department of Employment. The closure of the parcels service will lead to redundancies. Again, that is a consequence of the recession.
    The Minister said that he wants to see better objectives. I hope that that does not mean any reduction in the railway passenger network in the future. We have about 11,000 miles of railways and they are extremely precious. I hope that the right hon. Gentleman will define more precisely what he means by "better objectives".
    He talked about a reduction in railway manpower of 38,000. We should like more information about what British Railways have in mind and what they have explained to him. Railwaymen tell me that on a service such as the Morecambe-Keighley-Leeds service, which uses 20-year-old diesel multiple units, the manpower available for maintenance is simply inadequate to keep those old units in operation, even though they have been refurbished, up to the level of service which is necessary. They explained to me that a locomotive-hauled train often arrives late because of the lack of maintenance facilities for the diesel multiple units, which in any case is more expensive.
    Have British Railways advanced any proposals—I know that a plan will be announced tomorrow and I hope that the Minister is sympathetic to it—for replacements for the DMUs? I doubt whether they will last another five to 10 years without a significant increase in maintenance facilities.
    If we are to attract passengers on to the railways, we must have an efficient, speedy, punctual service. That is what British Railways want. Such services are provided more often than general comment supposes. However, as
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    the multiple units must undertake this task, and as the years pass, it is increasingly difficult for British Railways to achieve such a service. Keighley station is attracting many passengers. It wants to improve the passenger figures to provide a viable railway service.
    Some of the investment figures mentioned in the Armitage report on heavy road vehicles refer to massive sums of money—up to £1·2 billion to strengthen bridges to comply with EEC heavy vehicle standards. When we talk about investment for British Railways, we are talking about relatively modest sums of money.
    The Minister said that the inter-city services did not generate the expected amount of passenger traffic. That is a reflection of the recession. British industry is grinding virtually to a halt, and that must be reflected in fewer passenger journeys. Engineers are not travelling to carry out outfitting, and salesmen are not travelling to sell their goods or services, simply because the demand is not there.
    The service from Leeds to London on the HS125 is excellent. From observation—although I know that that is not totally reliable—it runs to time, has good investment and runs smoothly. Of course, I do not know the exact percentage of efficiency. The Minister must bear in mind that when his right hon. Friend the Secretary of State for the Environment announces that the Government will spend £25 or £30 million on a Leeds-Bradford airport runway extension, that money must have some effect on the excellent British Railways service. If that investment improves the availability of aeroplanes flying to and from Leeds-Bradford, that will divert passengers from British Rail. It does not make sense to have an excellent railway service and, at the same time, to divert resources to a rival air service that will detract from our publicly owned transport system.
    I hope that the debate will bring home to the Minister the need for an increase, in real terms, in investment in British Railways. It is an important network which the British people own and appreciate.
    9.32 pm
    Mr. Ted Leadbitter: I shall speak only for four or five minutes because I spoke about transport not long ago.
    The debate gives us the opportunity to ask, once again, a number of questions and to pinpoint the concern of British Rail and the trade unions. It is clear that Sir Peter Parker, the chairman of British Rail, is deeply concerned. That man, whose judgment is not to be questioned and who has available to him the expert knowledge of his officers, has described the position as being corrupt not at the skin of the apple, but at the core. He is extremely worried because British Rail will have reached the point of no return unless we make a commitment to invest considerably larger sums than those we are discussing.
    It has already been pointed out that we cannot measure the significance of the order because the explanatory note refers simply to an increase from £1,750 million to £3,000 million. We do not know the significance of that figure within the total ceiling of the powers of the Secretary of State in relation to the public service obligation.
    A recent visitor to the House of Commons was the divisional manager of the North-Eastern division of British Railways. He was so concerned with the present position that he brought with him his technical officers. I was surprised to find that, in his judgment, some part of his region had more than a year's backlog of track

    819
    maintenance. He referred to another part of his area where trains were subjected to more than 50 varying speed limits to take account of the track conditions.
    Recently, at Question Time, I asked about safety in relation to investment and cash limits. I was glad to hear that British Rail standards are such that accidents are minimal. British Rail has a proud record. However, British Rail officials believe that they are reaching the point of overstretch. Track maintenance and the condition of some rolling stock and in particular the diesel multiple units on feeder lines are causing anxiety. The Secretary of State would be wise to consider whether there is an imbalance between the proposals for roads and the proposals for British Rail.
    I wonder to what extent the unions can react. The general secretaries of ASLEF and the NUR have publicly announced their anxiety about the physical conditions of the track and support systems. The House must respond to the judgment of Sir Peter Parker and the unions. They are worried about British Rail's efficiency and the safety of workers and passengers. A large reduction in the work force is not acceptable unless the highest standards of investment and safety are observed.
    An ominous note was sounded when the Secretary of State referred to better objectives within the programme. The objectives must be made clear. If they are not, suspicions will be aroused about the consequential implications.
    A divisional manager in my area is visiting all the authorities and all the bodies interested in the railways in order to whip up a campaign and to impress upon hon. Members the need to underline the erosion of efficiencies as a result of the Government not providing the wherewithal to meet the target demands.
    The order says little. We should reflect, nevertheless, on the larger questions and the implications of cash limits and investment. I apologise to the Secretary of State for not being able to be present to hear what he said. I am sure that he will understand if I have referred to matters with which he has already dealt. I am interested in transport and I am sure that he will accept my apology.
    9.39 pm
    Mr. Stephen Ross: I shall not delay the House for more than a few minutes. I am sure that the Minister is genuine in his support for the railways. I welcome his total rejection of any Beeching-type operation. The troubles in the railways have certainly not arisen only in the last 18 months, and the Minister should not take responsibilty for them. They have built up over many years.
    I hope that the Minister's undertaking on the Beeching cuts will apply to the Isle of Wight, where we have the most decrepit underground system overground in the country. When British Rail, at great expense, decided to electrify our lines with the third rail systems, it could not find wagons which would go through our tunnels, so it bought up Piccadilly Line stock of 1927 vintage. We are keeping the lines repaired, but it is quite a run between Ryde and Shanklin, as the train shakes the daylights out of the passengers. The lines will have to be replaced. Therefore, I am making a plea that the promise that the Minister has given tonight will extend to my constituency.
    It is sad that the British Rail Board has been advised to raise its fares to the present extent. Tonight I was at a
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    meeting at which someone who had come up especially from Cornwall told me that the return fare was about £100. It is about £20 for a first-class return fare to Southampton. I know that those are weekly returns and that day returns are much cheaper, but they are huge sums. My son is studying at the agricultural college in Aberdeen. Even with his student rail card, it is cheaper for him to go back on a coach to Aberdeen than by train—although he would have to suffer a long journey. That is not right when the service is so good north of London.
    I, too, make a plea for track maintenance. It is a worrying matter. I cite the example of the United States, where they wish that they had maintained their tracks. Now they are paying the penalty for not doing so. That is not an example that we should follow.
    I make a plea for the London commuter service. The Minister said that he would study it as a special report and that he would make a statement to the House. Those who travel in the Southern Region have had the worst end of the bargain on investment in recent years. The services north of London—out of Euston, Paddington and Kings Cross—are superb. They are not better anywhere in the world, including Japan.
    However, south of London the services are not superb, particularly the South Coast services to Southampton, Portsmouth and Brighton. We have a marvellous one hour, 10 minute service between London and Southampton, but we are rattled to pieces by the train. That cannot continue much longer. I fear that the service will be slowed down, because it will be impossible to maintain it with the present stock. The Portsmouth service has not been improved for 30 years and the trains are dirty. Travellers on those trains deserve better.
    Morale on those services is at a low ebb. I was lucky to travel on one of the HSTs when they were first introduced. The morale of the passenger manager and the staff on the train was sky high. They were proud to be on a new train, to have new stock and to be doing a good service. Many people were flocking on to the trains. The staff felt that at long last there was a new era when it was worthy to be on a railway that worked.
    However, the staff on trains to Portsmouth and other places have lost heart. I am not criticising them in particular, but this is a typical example. Last Friday week I arrived at Portsmouth Harbour station, which is not the best place in the world to arrive, and it was mobbed. There was no boat to the Isle of Wight. I asked if the car ferry was running and I was told that it was not. I then asked if the hovercraft was and the reply was "Don't know, mate". In fact, the hovercraft was running and it is a pity that the opportunity was missed to provide a service to the passengers with a mini-bus to run them to the hovercraft, either paid for by British Rail or subsidised by the passengers. That service does not exist because the staff is demoralised. That is what happens when facilities run down.
    I ask the Minister to look with sympathy at the report that will be coming to him about commuter services and to see what finance he can find. He will have a battle. The Cabinet does not like spending money these days. The Minister will continue to fight a good battle. He believes that our railways are worthy of investment. I ask him to direct particular attention to the services south of London.
    9.45 pm
    Mr. Donald Anderson: From my experience of the railway in South Wales I confirm the point made by the hon. Member for Isle of Wight (Mr. Ross) about the increase in morale when investment takes place.
    I should like to take up two points made by my hon. Friend the Member for Keighley (Mr. Cryer) in his most valuable speech. They concern labour productivity and the effects of recession. The Minister overstressed the possibility of improvements in productivity. He compared this decade with the previous decade and said that our productivity was greater in the previous decade. That goes without saying. The previous decade was the era of Beeching. Track mileage was reduced in a draconian way in the 1960s that productivity gains inevitably resulted.
    The Minister also failed to place his point on labour productivity in the European context. The booklet that I have here "European Railways Performance Comparisons" covers the major EEC and Scandinavian railways. In the period 1971 to 1976, comparing changes in traffic, train kilometres and staff, British Rail labour productivity per man was above average, bettered only by Sweden and the Netherlands.
    In the Western region roughly three-quarters of the receipts from freight come from the coal and steel industries. We know what has happened with the slim-line operations on the major steelworks in Port Talbot and Llanwern. We are aware of the threat to so many pits from today's announcement. The railways can hardly be penalised as a result of Government decisions in other areas. The recession generally is affecting the use of the rail network by passengers.
    The Minister stated that, although the order appears to be within a fairly narrow compass—the increase in the PSO to £3,000 million—it has a wider application. The finances of our rail network are interdependent. Within the context of the order we are bound to consider wages, investment and fares. The debate gives us an opportunity to examine the totality of public funding of the rail network.
    The order arises from an EEC regulation, and it is instructive to compare the public financial support for British Rail with public financial support for railway undertakings inside and outside the Community. I have referred to the performance comparisons published in March last year. The booklet reaches the significant conclusion that the main reason for the different level of usage of the passenger railway is the difference in Government policies over the support level. More public money is spent on the Paris Metro than on the whole British Rail network. That is remarkable. With SNCF—the French national railway company—support from public funds is double that of British Rail.,British Rail is 71 per cent. self-financing. That is more than any of our neighbouring rail networks.
    The message is clear. If it is a national objective of the Government, whether for energy conservation reasons or for environmental reasons, to encourage the use of rail passenger services, the way to do so is to increase public investment in the railways. The order deals specifically with the public service obligation grant that relates directly to investment in track and signalling. My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) has already referred to the cumulative effect of the neglect of
    822
    investment over the years in track and signalling. British Rail's recently published corporate plan refers to massive arrears in signalling and predicts the closure of 3,000 miles of track by 1990 on present investment levels.
    No one on the Labour Benches has claimed that the deterioration in investment began in May 1979. It has been accumulating over a large number of years as Governments have taken short-term investment decisions. It is fair to say, as my hon. Friend the Member for Hartlepool (Mr. Leadbitter) remarked, that there is bound to be unreliability caused by engineering breakdowns as a result of lack of investment. As the reliability of the service becomes more unpredictable, the railway service itself becomes more unpopular and passenger receipts are reduced.
    My right hon. Friend the Member for Barrow-in-Furness mentioned some of the outdated signalling stock in his area. According to figures that I have, over 7,000 miles of track are covered by signal boxes that are over 50 years old. It is generally recognised that the diesel multiple units, built largely at the end of the 1950s and expected to have a short life, are likely to be with us until at least the late 1980s and the early 1990s when, presumably, they will fall apart. They have far outlasted their expected life when they were originally built, during the phase of investment that occurred in the late 1950s.
    I shall not dwell on the safety factor which has already been dealt with. If there is less investment in track renewal it is bound to have an effect on the safety record. At the last transport Question Time the Minister mentioned that there have been no passenger deaths in three of the past five years including last year. He failed to note the alarm contained in the McNaughton report in September 1980—the report of the chief inspecting officer of railways—which talked of the risk of the situation deteriorating and part of the reason for the increase in accidents arising from
    "the direct or indirect effects of the continuing financial problems facing railway management".
    How do threats of closures on this scale arising because of constraints and because of the increasing obsolescence of stock and the increasing need to invest to patch up that stock, square with the continuing commitments made by the Minister about there being no reduction in the overall network? He made those commitments initially in November 1979 and confirmed in a letter to The Guardian, following a report in that newspaper, that there would be
    "no substantial cuts in the passengr rail network".
    Many of us have asked "How substantial is substantial?" The Minister talks about there not being another Beeching. No one seriously expects the cuts to be on the scale of the Beeching cuts in the early 1960s, but to what extent will the Minister allow a reduction in the present passenger network of roughly 11,000 miles? Unless there is investment on a far larger scale there will, as the chairman of the board has said, be 3,000 fewer track miles in the network by the end of the decade.
    British Rail has said that if the cash crisis continues there will be widespread line closures. These are inevitable, and large areas will be threatened by having no rail communications. No doubt the Minister saw the map of vulnerable lines that was published in The Sunday Times on 30 November 1980. I need hardly say to the right hon. Gentleman that some of the country lines, especially, are in politically sensitive areas. The closure of these lines will have an effect on outlying areas such as Wales.

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    If there is a reduction on the scale envisaged there is bound to be an effect on the Cambrian coast line and the Central Wales line. That will mean that there will be no lines in Wales between the North Wales coastal line and the South Wales coastal line, except, rather curiously, British Rail's last steam service in Wales, the Aberwystwyth to Devil's Bridge tourist route.
    The chairman of British Rail said in November in a speech at Cardiff—which the right hon. Gentleman will no doubt remember because the chairman called him "courageous" among other things—that he could not direct cash from the core to the edges and that there was not enough money available to him for what he called
    "essential repairs let alone the modernisation of the rural railway."
    The Minister will know about the problem of the Barmouth viaduct because of the eating away of the timber piles by the common shipworm. The £2½ million that is needed for the repair of the viaduct compares with the £265 million for 20 miles of the North Wales motorway. The fear in Wales is that British Rail is unable to meet the repair costs, which are estimated in excess of £2½ million, and that if the Government will not help specifically to overcome the special problems of the viaduct, the line will close, followed by the closure of the Machynlleth to Aberwystwyth line and eventually the Machynlleth to Shrewsbury line also.
    Following the budget settlement of 30 May last year, the Minister will know that the first tranche of payments to the United Kingdom in December 1980 from the EEC meant that 30 per cent. of public investment in our rail network in Wales was covered by EEC grants. It is worth asking whether the Minister will consider increasing that proportion of assistance from the EEC. What consideration, if any, has been given to that?
    I know that the railway unions are especially concerned about whether Wales is receiving a fair share of the PSO grant. The Minister will know that since the passage of the Railways Act 1974 it has been impossible to know what grant is attributable to any particular line. In the past, because of the receipts from steel and coal, we were able to live with a situation which cannot be maintained now because of the deep recession in those industries. The rail unions in South Wales feel that there is a real possibility—although there are no data to justify it or otherwise—that we are not receiving our fair share of the PSO grant.
    I shall not discuss the cuts in London and the South-East because I know that my hon. Friend the Member for Harlow (Mr. Newens) will take up that point, which
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    effectively concerns his constituency. The British Railways Board admitted that the leaked documents about 150 station closures were authentic, but it said that in some cases the closures constituted timetable improvements. That must have come from the same joker who, when fares are increased, says that the fare structures have been reviewed. They are always reviewed upwards.
    The Minister will know that for too long the country has been getting its railways on the cheap. Certainly for my father's and grandfather's generation work on the railways was the aristocracy of labour and very much at the top of the league table of wages. By contrast, the Minister will be aware of the Low Pay Unit report showing the extent to which railwaymen have to rely on family income supplement to bring up their wage levels. It also shows how low our railwaymen's wages are in comparison with international levels.
    The Minister has now been presented with the corporate plan for 1981–85. British Railways are proposing a programme of investment which they say will mitigate in the 1980s and 1990s the past under-investment and meet the overall aim of the board to become viable on a long-term basis, increasing the investment from about £330 million to £450 million in the mid-1980s. That incorporates an extension of the electrification network. At present we are seventeenth in Europe in the percentage of electrified network. In the current year, only £11 million was spent on electrification. The Minister will have seen that there is a growing consensus in this country on the under-investment on railways in the past. We concede that he has kept the level of investment stable at a time of reduction in total Government expenditure. There is virtually unanimous press that consensus has been built up, so the Minister would be moving with public opinion if he now reacted positively to the corporate plan.
    The Minister will also make the distinction between wasteful subsidies to the public sector and so-called creative investment. Investment in electrification will have a considerable return and the reaction of the Government to the electrification proposals will be a litmus test of their commitment to railways. It will be perceived by people in the railway industry as such, as the Minister was no doubt made aware when he attended the meeting of the Rail Council on 29 January. If there is a positive response to the electrification proposals, I assure the Minister that it will raise the morale in the industry and have a considerable effect on the climate of industrial relations in the industry. It will also make people realise that they are working in an industry of the future.
    10.4 pm
    Mr. Stanley Newens: My purpose in intervening is to raise the question of cuts in the rail services that are used by people who travel between the large number of stations in South-East England and central London. I am astonished that of all the Conservative Back Benchers who represent constituencies around London, not one has sought to intervene in the debate. This is a contentious issue because commuters in the London area feel that they are being severely penalised at present.
    We have heard from the Secretary of State that investment has not been cut and that various projects have gone ahead. Despite this, we in the South-East are faced with an extensive range of economies which will represent a substantial reduction in services available to rail users. Many of those affected will be rail commuters. However, many others who do not use the railways daily will be affected—those who wish to visit their relatives, to go on shopping trips or to go to the theatre or some other form of entertainment. Many of them will be hit hardest by the sort of cuts which are proposed.
    I am, naturally, particularly concerned about my constituents in Harlow and the surrounding villages. They have banded themselves together in a commuters' association to voice their grievances over a considerable period. They have done this with dignity, raising many issues concerning the Liverpool Street to Cambridge and Liverpool Street to Bishop's Stortford lines. The frustrations to which they have been subjected have been enormous. Trains have been cut out. There has been overcrowding of subsequent trains and failure to meet connections. In addition, these people have been faced with ever-increasing fares, which have now reached a very high level indeed. The latest proposed cuts will inflict yet another blow not only on my constituents but on commuters who use these services around London.
    I do not think it is fair that the British Railways management should reap the primary blame for this. The restrictions on cash provided by the Government are ultimately to blame. In these circumstances, the Government must accept that it is their fault that commuters are being obliged to accept these reductions in services.
    The Secretary of State made clear that he believed that the answer was basically one of increasing productivity and becoming cost conscious. I would not deny for a moment that a high level of cost consciousness is desirable, but we must recognise, as my hon. Friend the Member for Keighley (Mr. Cryer) pointed out, that productivity improvements have their limits and they certainly ought not to be embarked upon if they threaten safety standards in any way.
    The fact is that in other respects, in my view, one cannot achieve increased productivity without causing a severe deterioration in services. I have already raised the matter of the proposal to close 150 stations, as was said originally, at weekends and in the evenings. I have now been told that it may be only 120 stations. Many of these stations are not in rural areas; they are in inner London. It is quite deplorable that we should be allowing this to take place in our day and age when in previous ages, when undoubtedly the community was less wealthy than we are today, it was possible to provide a very much better service. Every cut increases the incentive to use the roads
    826
    and other forms of transport. If passengers defect from the railways, there will be a reduction in the number of fare receipts. That would provide a pretext for another cut in services. We face a vicious circle. We shall attract passengers to the railways only if British Rail provides a good service. That means that the Government must recognise that investment should be greater.
    I have cited the hardships faced by my constituents. However, the proposed cuts will affect lines that serve terminals such as King's Cross, Euston, Paddington, Victoria, Charing Cross, Waterloo, London Bridge and Liverpool Street. Further investment is needed if some alleviation is to be provided.
    Savings in labour costs will probably be balanced by an increase in the number of those unable to find employment and by a reduction in the earnings of others. The cost will ultimately fall on the public purse, even if British Rail and the transport system may not have to bear it. The Government should recognise that the level of support is inadequate. If the Government stick to these proposals, they must bear responsibility for the inconvenience and hardship caused to commuters and to the general travelling public.
    It is no good trying to pass the buck. It is no good trying to blame the management of British Rail or the trade unions. The trade unions involved have an excellent record—I am glad that the Secretary of State is nodding in agreement—of supporting proposals to improve the quality of service that British Rail provides.
    I turn to another issue that particularly affects West Essex. The Secretary of State will be aware that Essex county council has refused to give financial support to the Epping-Ongar stretch of the Central Line. As a result, London Transport has brought forward proposals for closure on the grounds that the Government should financially support all commuter services. A Conservative-controlled local authority is pressing the Government to take on greater financial commitments and to support commuters. I hope that the Secretary of State will clarify that issue.
    The present level of investment in our railways is inadequate. The travelling public will be increasingly subjected to hardships and to deteriorating standards. The spirit of revolt will inevitably spread. The Government should realise that they will be responsible. Once again, I appeal to the Secretary of State to recognise the problems faced by commuters. In particular, the right hon. Gentleman should accept that more support and investment must be given if our services are to be maintained at a reasonable level in the years ahead.
    10.15 pm
    Mr. Allen McKay: I shall not detain the House long, but it would be sad to miss an opportunity when the Minister is here to answer questions regarding the railways in my area.
    The Beeching cuts in the 1960s coincided with the closure of collieries. Now, we read of the possibility that 50 collieries may close. One wonders whether it will percolate down to the railways and whether there will be more cuts than we at first envisaged.
    I want to raise three matters. I hope that one of them will be answered in tomorrow's report about the electrification of the line between London and Sheffield. Sheffield has received disturbing news during the past few months about cuts in local government grants, loss of

    827
    assisted area status and as an enterprise zone. It will be a boost for the city if tomorrow's news is that the electrification of the line between London and Sheffield is to go ahead. I hope that the Minister will see that sufficient money is made available for this purpose.
    The second matter concerns the passenger link between Sheffield and Penistone. It was the subject of a public inquiry. The need for the service in that area was demonstrated by the number of letters and petitions that were received by British Rail. It was one of the greatest outcries against a passenger service closure for many years.
    The main item concerns the Woodhead line. I have written to the Minister on this subject on many occasions during the last two years. The answer that I usually get is that it is a matter not for the Minister but for British Rail. However, the time has to come when the Minister can no longer hide behind his ministerial cloak, and a decision has to be made. On this occasion, the decision is one of national importance because it involves the main line between Huddersfield, Manchester and Sheffield. The links on either side are complete passenger services, and the Minister says that the middle section is a freight service.
    I wrote to the Minister on this subject on 6 January. As yet, I have received no reply. My letter asked him to meet a deputation of the main railway unions, representatives of the South Yorkshire county council and the cities of Barnsley and Sheffield and the Members of Parliament concerned with the line. That was over a month ago. I believe that it is a slight on the trade unions and the bodies involved that the Minister has not yet seen fit to reply. I do not ask him tonight for a specific date, but I asked for an assurance that he will see us within the next few weeks. I shall then be able to tell the people involved that the Minister has not forgotten them. I am sure that that would help to ease the situation.
    Before I leave the matter, there is a further question. The Minister said in a letter that he has nothing to do with the section of the line from Penistone via Woodhead because it is a freight line. But it is not only a freight line. During six months of the year on Sundays, and as is published in the public timetables, it is a passenger service. No doubt, the right hon. Gentleman will say that that is only temporary. But what does "temporary" mean? To me, it means that something has gone wrong with one line, as sometimes happens, and, therefore, the other line is used as a temporary measure. But I am talking about a regular passenger service on a Sunday. It should therefore be subject to the same procedure as normal passenger lines—namely, a public inquiry, if the public so wish.
    I hope that the Minister will reply on this subject, because precedents have been created in the past on such a point. In the case of summer-time services to certain seaside resorts, trains have run for four months of the year on Saturdays. When it was proposed to close the line, the Minister directed that a public inquiry should take place, and an inquiry was held. If it is right to run one service on a Saturday for four months of the year, it is equally right to run a service on a Sunday for six months of the year. I should like the Secretary of State to reply to this.
    10.20 pm
    Mr. John Prescott: I should like to react to some of the remarks that have been made by hon. Members—all from the Opposition side of
    828
    the House, with the exception of the Secretary of State. It is somewhat amazing when one considers the heat generated by Conservative Members at Question Time regarding railways in the South-East. One could hardly call this late at night, even for South-East Members who are near home and, unlike Northern Members, do not have to stay here anyway. Presumably they were dashing for their last trains, which, according to the latest cuts, leave at about 7 pm. It is a dereliction of duty on their part that they are not here tonight when we are considering important investment matters—the public service obligation. The European Community says how much money will be available for unprofitable lines. We are concerned with social commitment and expenditure. Therefore, it is a bit much to hear protests at Question Time by Conservative Members about lack of money and deplorable services in the South-East only to find that they are not here to make their views known at the appropriate time.
    All who have taken part in the debate have given examples of the deterioration of rail services in their areas. I do not intend to repeat their comments. However, it is interesting to take on board the argument about railways in the South-East, because the Monopolies and Mergers Commission was asked specifically to look at the quality of railway services in London and the South-East.
    The Secretary of State referred to a number of points in that report. He informed the House of deficiencies in management, particularly in productivity and proper costings which the commission revealed, and said that the British Railways Board would be making a report to him on these matters with recommendations on how to improve them. Any improvement in these areas is to be welcomed.
    However, the Secretary of State did not tell us about the investment constraints on the quality of services in the South-East railway system—a matter that was specifically excluded from the commission's inquiry. Anyone reading the report would have to agree that the management of British Rail comes out of it pretty well. The belief that poor services in the South-East are due to incompetent management and to labour exploiting its strength and not co-operating in productivity deals is not borne out by the report. Indeed, the report makes it clear that the quality of service will not be sufficiently improved by savings brought about by productivity gains.
    The commission pointed out that it was specifically prevented from looking at the investment constraints. As the report makes such a strong point on this matter, it behoves the Secretary of State to say that his Department is considering the constraints on the services. If, as the report seems to indicate, there are other reasons for the poor quality of service, what is the Secretary of State doing to correct the investment deficiency in the South-East railway services?
    In these less hurried circumstances, the Secretary of State will have plenty of time to address himself to these points. Outside the heat, push and pressure of Question Time when he has been asked these questions, perhaps he will outline the Government's view on investment constraints in the South-East.
    A number of hon. Members, including my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth), have pointed out that the problems of investment in the rail system did not start in May 1979. We want the Secretary of State to hear us say that. We do not believe that the inadequacies of investment in the rail system, which are

    829
    evident to all, started in May 1979. They go back further than that. Having said that, I hope that the Secretary of State will shut up saying that investment is at the same level as the investment provided by the previous Government, thereby implying that it is sufficient. We hope that he will cease ducking questions about the quality of investment by arguing that it is the same as the amount provided by the previous Government.
    It is clear that to put off investment six or seven years ago was much easier than it is now. The investment cycle has reached a dangerous stage. Not only is the investment expensive to British Rail and inadequately maintained, but, as my hon. Friend the Member for Keighley (Mr. Cryer) pointed out when he reminded us of the safety inspector's report, we face serious considerations of inadequacy of investment, even in maintaining trains on tracks. The number of accidents and incidents of trains coming off tracks have been increasing considerably, and there is a correlation with the lack of proper maintenance investment in track.
    The Secretary of State says that investment in track is outside investment constraints, but it still comes within the problems of the external financing limits. That causes problems for British Rail in deciding whether it can make investment that is commensurate with the speeds that it wants on certain lines. The problem of investment is crucial. It did not start only two years ago, but it must be solved.
    According to The Observer at the weekend, the Secretary of State is fighting hard in the Cabinet for increased public expenditure. I assure him that we will not attack him if he announces £1,000 million investment in the railway system, picking up the call of my right hon. Friend the Leader of the Opposition in the North-East. My right hon. Friend pointed out that it is not an arid argument about whether one is for or against public expenditure but a question of spending money to keep engines on the lines with fewer accidents and a proper public service. That is what public expenditure means. If the Secretary of State comes to the House for £1,000 million of investment in any transportation system, whether for electrification or the maintenance of track, he will have our full support.
    We welcome the Secetary of State's announcement that he intends to produce the report on electrification tomorrow. We shall be pressing him hard on that. We hope that an announcement of Government policy will follow shortly.
    The Secretary of State referred to the parcels service, in which the losses are about £1 million a week. In our debate on the Armitage report, I asked whether the solution to the problems of the parcels business might have been to rationalise and integrate that section. Unfortunately, that was not done. The Secretary of State has made great play of the fact that the nationalised industry chairmen could not agree in the Freight Intergration Council. Apparently, that was not true. Perhaps the Minister will confirm that.
    Although he was not the Secretary of State at that time, I am sure that the right hon. Gentleman has access to the reports of the council, which make it clear that the chairmen of the postal industry, British Rail and the National Freight Corporation reached agreement on the rationalisation of the parcels sector. If that solution had
    830
    been implemented by the Tory Minister in 1972–73, we should not now be facing the losses that the right hon. Gentleman spoke of tonight.
    The Minister also informed the House of a further restriction in railway activity, with its consequential effect on railway business. I do not know whether he took time to look at the report. I hope that he will do so, if only to accept the arguments that integration is a workable and feasible project and should not be seen as a measure that people may refuse to implement. In that regard, he should take into account the Armitage report development and energy requirements.
    The Tory ideology has undermined the rail system in its concept of integration because the direct beneficiaries of the parcels trade will be the private sector. There will be a growth of companies such as Securicor. That trade could have provided traffic for British Rail, but instead it will benefit the highly specialised private sector. That is true also in relation to inter-city services. It is the latest example of how Tory policy is beginning to undermine the policy of British Rail.
    The Secretary of State told us tonight—we want to hear more when he replies—that he is somewhat concerned about the economics of the justification for inter-city. I may be wrong, but I was left with a distinct impression that investment in high-speed trains and inter-city was not producing the expected return. Was that a suggestion that he was considering whether he should continue with the present level of investment? I see that the right hon. Gentleman is shaking his head. I understand him to be saying "No."
    I shall give him one reason why inter-city is not profitable. The Secretary of State has introduced the de-licensing of bus services. We have seen a tremendous growth in the express services. There is competition between the National Bus Company—a nationalised concern—and British Coachways. Fares have tumbled, to great acclaim by the Secretary of State. He even opened one of British Coachways' first services. The reality is that British Coachways has not survived well against the National Bus Company, which is expanding at a far greater rate and is running British Coachways off the road. Unfortunately, British Coachways has run itself off the rural bus services also—exactly as we predicted.
    From information that we have received, it appears that on the inter-city network, especially some of the routes to the North-West, the National Bus Company has increased its ridership by about 200 per cent. They are not new passengers travelling to the North and South but passengers who were previously travelling on British Rail. They have changed to buses because of the cheaper fares to which the right hon. Gentleman referred. The bus service is producing more buses on our motorways on the national network, fewer services in the rural areas gaining more money from routes, and achieving a profitable return. But British Rail is feeling the effect of that policy. No doubt it will now have to knock on the Minister's door to suggest that the taxpayer should give it more money, or it will have to use much of the money that is needed for investment in the rail system.
    That is the sort of Government policy that we said would undermine the integrated transport system. It will certainly undermine the rail system. I want to know exactly what the right hon. Gentleman thinks about that redirection of traffic from rail to bus and whether he is prepared to provide compensation for that difference.

    831
    We have already heard tonight that the Secretary of State feels that the economics of inter-city services have not proved to be good. What will be the consequences of those remarks? I have made a hurried and rather unexpected summing-up, but I hope that the Secretary of State will take the ample time that is available to him to answer all our questions.
    10.35 pm
    Mr. Fowler: It is tempting to take the 56 minutes available to me to reply, but the House might not believe that I need such a long time in view of what I said earlier.
    The debate has been constructive. It has not been on party lines. Only in the speech of the hon. Member for Kingston upon Hull, East (Mr. Prescott) did the old political problems and issues come up. For some reason, the hon. Gentleman has a thing about the Freight Integration Council, although no one else noticed its demise. He asked me about the de-licensing of buses. About 200 new services have developed as a result. Now, new bus services operate between cities and fares have come down.
    I was speaking at a lunch today, and everyone there came from Exeter to London. The return fare between Exeter and London is £4. That illustrates the difference between the Government and the Opposition. We believe that the public should have the right to choose how they travel between cities. They should not be directed. Our information is not that which the hon. Member for Kingston upon Hull, East receives. Our information is that cheap fares and good service are attracting new people to the coach services. Most people would welcome that. New services and lower fares do not happen often.
    Collect-and-deliver parcels have been mentioned. I must remind hon. Members that, although the figures might be regretted, on revenue of £40 million a year British Rail made a £40 million loss. The costs were £80 million and the revenue was £40 million. That is not the type of business that is in the interests of British Rail. It is not a business for the future. British Rail is right in its decision, and I hope that the House will agree that we were right to give it special transitional aid.
    I apologise to the hon. Member for Keighley (Mr. Cryer), who was wearing his other hat, because the wording of the explanatory note is not as clear as it might be. The wording is exactly the same as that used in the 1977 order which was introduced by the right hon. Member for Stockton (Mr. Rodgers). I accept that improvements could be made.
    I also apologise to the hon. Member for Penistone (Mr. McKay) because he has not received a reply to his letter about the Woodhead tunnel. I cannot promise to see a delegation, but I shall consider it. However, I promise that the hon. Member will receive a reply to his letter by the end of this week. Important policy issues are involved. British Rail is making that decision as a result of its judgment on the needs of its business and because of the expense of reinvesting.
    I should like to make one general point about the debate. Whatever questions have been asked about the order and whatever points and criticisms have been made about myself or British Rail, no one has challenged the purpose of the order. Its purpose is to provide continuing payment of grant by the Government to the British Railways Board for the operation of its rail passenger system.
    832
    I believe that the hon. Member for Hartlepool (Mr. Leadbitter) missed the whole of my speech, but that did not prevent him from intervening. I listened to him with my customary attention. However, I remind him of what we are doing in the order. The limit on total cumulative payments which may be made from the end of 1978 was £1,750 million as provided for in the Transport Act 1978. The order will increase that limit to £3,000 million. That is what the debate is about. Unless I have misundersteed the intention of any hon. members who has spoken, no one denies that the order has to be made and no one wants to vote against it.
    Mr. Leadbitter: The Secretary of State said that I missed his speech. His memory must be rather short. When I spoke, I apoligised to him. I thought that he would have been gracious enough to bear that in mind. I am surprised that his exuberance took him so far.
    Will the Secretary of State comment on the Woodhead tunnel? This matter has been contentious, and he knows that it is serious. I am not aware of the conditions for a public inquiry, and there may not be the conditions to support one. However, the concern in the area is such that that is the mood of the people who are affected. Perhaps the Secretary of State could briefly say whether there is any possibility of considering a public inquiry or whether he does not have the powers to call one.
    Mr. Fowler: In the letter which I shall write to the hon. Member for Penistone, I shall seek to set out the answer to that question and shall also deal more fully with other issues. We are dealing with a freight line. If we were dealing with a passenger line, there would be an inquiry, which would be taken by the transport users' consultative committee, which would report to me. The same rules do not apply on train services. That matter is up to the discretion of British Rail. Therefore, if the hon. Gentleman asks me whether there is a precedent for conducting an inquiry, the frank answer is that there is not.
    The subject of productivity was raised by a number of hon. Members, including the hon. Members for Keighley, for Swansea, East (Mr. Anderson) and for Harlow (Mr. Newens). I agree with them that there has been a dramatic improvement over the last 20 years in the productivity of British Rail. I have always paid tribute to that. I pay tribute not only to British Rail but to the co-operation of the unions involved. That is important and genuine.
    However, we must also face the fact that wages and salaries account for more than 60 per cent. of the cost of running the railways. There is a premium, and the greatest value must be placed on high productivity. That is what we are saying and what British Rail is saying. When it is said that over a period the railways could do with 38,000 fewer posts, I am quoting the figure in British Rail's corporate review, not from a departmental paper.
    I repeat that the future of the railways is not only a matter for the Government. Every Government must have the future of the railways in mind. I hope that we have made it clear that we do. However, everyone who works in the railway industry must play his part. I do not want to put words into anyone's mouth, but at a meeting of the Railways Council, when leaders of important rail unions were present, I sensed that they understood that message. It is the message put forward by the chairman of British Rail. It should be supported on both sides of the House.
    I believe that the memorandum from Commissioner Burke was issued for discussion. It has not come to the

    833
    Council of Ministers. On Monday I shall be discussing the matter and other transport matters with my colleagues in Europe. I in no way feel committed by the expression of opinion in the memorandum. I believe that it refers more particularly to other EEC countries.
    I remain totally opposed to substantial cuts in the passenger rail system. How can we safeguard the future of rural rail services? The best way is by seeking to reduce costs. I therefore welcome the board's recent initiatives in developing low-cost operation techniques. With my hon. Friend the Member for Eye (Mr. Gummer), I travelled on the railbus service on the East Suffolk line. The service impressed me. It sets an example to other rural services. We should not for ever look backwards. We should look to the future to see what opportunities there are for achieving a better, more cost-effective rural service.
    Mr. Anderson: When the chairman of British Rail makes dire predictions about the effect of low investment on the network, he surely has in mind possible improvements.
    Mr. Fowler: With respect, that is a slightly different point.
    I am aware of the board's concern about the condition of its physical assets. Some of the assertions have serious implications. I have only just received the board's assessment, and I want to discuss it with the board. I stress two points. First, the board has consistently made plain that the very high safety standards for rail travellers will be preserved. Secondly, the board has brought no information about specific services to my attention. It estimates that it needs to increase its annual expenditure on track and signalling. However, the additional sums that it is talking about are relatively small in railway terms. The estimate is less than £20 million to maintain the infrastructure on the fringes of the network. Clearly, the corporate plan will be one of our most important considerations when looking to the future.
    I understand the concern of the hon. Member for Harlow about the reduction in rail services. No one likes such reductions. However, they have to be kept in proportion. Brititish Rail has suffered a loss of traffic and must, therefore, respond by making some changes in services. Clearly, some passengers will find the service less convenient. This is, however, a far cry from some of the predictions that are made about the effect of cuts in services. The service cuts are in line with one of the main recommendations of the Monopolies and Mergers Commission that the board should take action to adjust services to changes in demand. As a general policy, it is a policy that we should support. I think that the chairman of British Rail deserves support in putting that forward.
    The hon. Member for Hartlepool raised the question of the external finance limit and finance generally. I mean no discourtesy to the hon. Gentleman, but I should like to reiterate the important point that the Government have recognised that British Rail has had financial difficulties over the last year. No one can argue—few have tried to argue—that we have not been flexible in our approach to these problems. I announced last September that the external finance limit for 1980–81 would be increased by £40 million to £790 million. We provided flexibility at the end of the year concerning the external finance limit that
    834
    the board had been urging not only on this Government but on the previous Government. It was this Government who gave it the flexibility.
    The external finance limit for 1981–82 has been set at £920 million—again, an increase over previous plans. I believe strongly that we have sought to recognise the problems that British Rail has faced. The chairman of British Rail may feel the 1981–82 external finance limit to be a tough limit. That is undoubtedly the case. It is, nevertheless, a limit that British Rail accepts as something within which it can work.
    I believe that the Government's record on investment is good. I understand what the right hon. Member for Barrow-in-Furness (Mr. Booth) and some of his colleagues have been saying. As they have also fairly stated, the investment problems of British Rail have not emerged overnight. We are putting £28 million into West of England signalling. Some of the signalling being replaced is 70 years old. That is the problem that the Government have inherited. It is the problem that we have had to tackle. At a time when restraints on public spending are severe, I believe that British Rail has been treated extremely fairly, not only in terms of the support going to it in passenger support but in terms of investment.
    I have been asked about the objectives. The reason why we want to set new objectives is that we aim to improve. services. I agree with the hon. Member for Isle of Wight (Mr. Ross) that one of the problems has been Southern Region. One of the aims of setting new objectives—we may have to set targets and think of new ways of doing this—is to try to improve the service on that region. We are making no reductions in the passenger network. We need, for example, clearer accountability and clearer objectives for the London commuter services. That is what we are trying to develop.
    This has been a good and constructive debate. The order provides for a continuation of the policy, which I believe is welcomed on both sides of the House, of realistic arrangements for Government support to British Rail. I believe that the railway system in this country has a great future. I do not believe that hon. Members need to take different sides on the issue. It is a future that the Government, the unions and the board want to see and to ensure. I urge the House to support the order.
    Question put and agreed to.
    Resolved,
    That the draft British Railways Board (Increase of Compensation Limit) Order 1981, which was laid before this House on 28 January, be approved.

    School Meals Service (Lancashire)
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]
    10.54 pm
    Mr. Stan Thorne: In opening this Adjournment debate, for which I am indebted to Mr. Speaker, I wish to make it clear that I shall give my hon. and learned Friend the Member for Accrington (Mr. Davidson) the opportunity to say a few words.
    The recent press publicity in Lancashire given to this problem has highlighted the difficulties which face the school meals service. Some may consider that some of the observations are extravagant, but we shall examine that in the course of the debate.

    835
    The Lancashire county council, for example, has said that school meals now are worse than the meals served in our prisons. Others have shown that the numbers taking school meals have fallen by one-half during the past year. It has been reported that meals staff are doing the best they can within the financial resources available to them. Teachers are said to have observed that the meals presently being provided are disgusting. The nutritional value is not good, and the 40p charge is considered by teachers to be exorbitant in view of the food provided. Clearly, this necessitates a serious examination on our part.
    I have obtained from the Lancashire education committee a sample two-course menu that is available in the schools for the five days from Monday to Friday. On one day, for example, the meal provided was vegetable and beef soup with added beef, bread rolls and sultana sponge. On another day it was a beefburger in barncake with onions—a sort of hot dog—and apple flan and mock cream. It is not surprising that Oliver Twists abound in Lancashire in consequence of that sort of menu.
    If we are to examine the service in some depth we need to consider what happened from October 1979 to October 1980. There has been a reduction of 40·3 per cent. in the number of children in primary schools taking school meals. In secondary schools the reduction has been 15·6 per cent. Those are the reductions for the whole county. During the same period, the nature of the meals has changed and there have been two price increases, from 30p to 35p and, in the autumn term 1980, from 35p to 40p. One outcome is a large increase in the numbers of children bringing packed lunches. The figures are interesting. The most marked increase is in primary schools. In October 1979,·98 per cent. of children brought sandwiches, whereas in October 1980 there had been an increase to 40·2 per cent. That is a highly significant increase.
    There are severe employment implications. It has been reported that the equivalent of 1,000 full-time staff have been lost in the school meals service. In district 6, which embraces my constituency of Preston, the percentage of children in primary schools taking meals has been reduced from 78·9 per cent. to 47·5 per cent.
    The figures show that within the county in October 1980,10·6 per cent. of the children present in school on a specific day took a free school meal. In Preston the figure was 16·7 per cent. Put another way, within the county as a whole 22 per cent. of the children normally taking meals obtained a free meal, and in Preston, the figure was 31·3 per cent. The 10·6 per cent. figure of children present during a specific day taking a free meal compares reasonably with the national average of 9·9 per cent., but the 16·7 per cent. figure for Preston gives cause for serious concern because it may be a form of barometer indicating rising severe poverty caused by increasing local unemployment.
    Unemployment during that same period has virtually doubled. Poverty and free school meals are inextricably linked. A sliding scale for eligibility for free school meals ranges from a net income of £46·80 for a family of three—a family with one child—to £107·80 for a family of eight—a family with six children. Those figures give no real clue as to how many people within those categories failed to apply. Are the regulations generally known, and are the allowances that families receive and that can be disregarded for purposes of net income fully understood by the people in the area? I think that many more children would be seen to be entitled to free school meals in Preston
    836
    and other parts of Lancashire if the county council's regulations covering entitlement were more widely known.
    No doubt the Minister will have seen early-day motion 149, which is a reflection on school meals standards. My hon. Friend the Member for Blackburn (Mr. Straw) has been very much involved with the issue in his area, where considerable concern has been expressed, particularly about nutritional aspects of school meals.
    I should like to emphasise, in regard both to what I have said previously and to the early-day motion, that this is in no way a reflection on school meals catering and other staff, who are anxious to restore confidence in the service under extreme difficulties, which stem mainly from higher prices and falling demand, and particularly the failure of the county council to provide the means by which the standard of nutrition could be improved.
    The future of the school meals service in Lancashire is in jeopardy, and no commitment has been given by the Conservative-controlled Lancashire county council to continue the service. A tremendous campaign was waged at the turn of the nineteenth century for free school meals for necessitous children. Subsequently, a phrase was introduced that meant "detectable malnutrition". Now, as a consequence of Government policy, the concept of nutritional content of school meals no longer appears appropriate.
    If Lancashire county council finishes up by providing meals only for those who are entitled to free meals, the social consequences should be obvious. The county council may find itself in a position in which it needs to recruit, at considerable expense, more child psychologists to cope with the reactions in that sort of situation among the schoolchildren who will feel branded in some way because they are the only ones receiving school meals.
    Poorer quality meals and price rises during 1980 are said to have cost the county council about £1 million extra. The council refers to its having three choices—the raising of prices, the cutting of staff and an increase in demand. It has obviously already expended two of those choices, on pricing and staffing, but it seems quite incapable of recognising that increasing demand is a factor of both.
    I should like to think that the Minister could advise the county council how to overcome its problems, but, of course, I recognise that although the county council is dominated by the same political philosophy as the Minister and his Government, the policy that it is pursuing has been created by the Government. Since it is the Government's policy which diminishes standards and causes mothers to describe the service and the meals as disgraceful, I consider that it is incumbent upon the Minister to set up an inquiry into Lancashire's school meals service without delay. I commend that course to him.
    11.6 pm
    Mr. Arthur Davidson: I congratulate my hon. Friend the Member for Preston, South (Mr. Thorne) on initiating this short debate. I also congratulate my hon. Friend the Member for Blackburn (Mr. Straw) on what he has done to draw attention to the appalling state of the school meals service in Lancashire.
    The attack on the school meals service is a particularly mean and nasty attack, because it affects badly and savagely the weakest members of the community. In my constituency, as in that of my hon. Friend the Member for Preston, South, there is a high proportion of low-income

    837
    families and, sadly, a growing proportion of families in which there is an unemployed member, either man or woman.
    The effects have meant that in some families there is discrimination among the children. As a result of the lowering of the threshold, one family has been able to send only one of its children for school meals, and two of its children now have to go to school with low-cost sandwiches. That is not a healthy situation within a family.
    It is attacks such as this which have led to the formation of the Accrington-based school meals campaign. I should like to quote from what one lady who helps to serve meals has said in the report which that campaign is compiling, because the attack has been not merely on nutritional standards for children and, therefore, upon their parents; it has been an attack upon wage earners—admittedly very low wage earners—in the family. The lady said:
    "Last week my husband was made redundant and my daughter goes to school. I am the only person bringing in a wage. So how can it be pin money?"
    Lancashire county council said that many such people worked only for pin money. The Minister knows that many working-class families, particularly in North-East Lancashire, survive only if the woman works.
    It is reported that Lancashire county council said that the new snack lunch would mean less waste. Less waste for whom? Again I shall quote from the report. A member of the school meals staff said:
    "Forty children come with sandwiches and we now have a bucketful of waste left after each day from the sandwiches."
    My hon. Friend told the House about the percentage of those who use the school meals service. The situation is deplorable. As a society, we should be ashamed. As the Minister knows, the Secretary of State intends to visit Blackburn on Friday. I shall cut short the remarks that I intended to make, but I should inform the Minister that members of the Accrington school meals campaign have requested me to ask the Secretary of State to see them. It would be unfair to ask the Minister to give that assurance tonight. They hope that they will be able to speak to the right hon. and learned Gentleman and to bring home to him the savage way in which the cuts have hit them and their children.
    11.11 pm
    The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): I am grateful to the hon. and learned Member for Accrington (Mr. Davidson) and to the hon. Member for Preston, South (Mr. Thorne) for having given me an opportunity to participate in this important debate. I listened with great interest to what they said about the school meals service in Lancashire. In the media in recent weeks, and in this debate much attention has been focused the comparison drawn by the hon. Member for Preston, South and by the hon. Member for Blackburn (Mr. Straw) between one of the meals served in Lancashire primary schools and, according to the media, a meal that was provided by the Blackburn workhouse in 1933.
    It comes as something of a surprise that the hon. Member for Blackburn is not here. I accept that there may be other constraints on his time that prevent his being here. However, in recent weeks much comment has been
    838
    initiated by the hon. Gentleman. This subject is important enough for the hon. Gentleman to join his hon. Friends on the Opposition Benches.
    Whilst such comparisons make good headlines, they are very misleading and do great damage to the school meals service. They also denigrate the efforts of school meals staff, who work hard and imaginatively to provide meals for pupils. The unfair and destructive criticism that has been heard not only in recent weeks but over a series of months is one factor that has contributed to the fall in take-up since 1979. Therefore, we must establish the facts and put them into perspective.
    The hon. Member for Preston, South made certain assertions that I wish to put right. It has never been the intention that a school meal should provide for the full daily nutritional needs of schoolchildren. Even before the Education (No. 2) Act 1980, the Department's nutritional guidelines were that the meal should meet one-third of the child's daily energy requirements and about 40 per cent. of the protein requirements. It follows, therefore, that the majority of a child's needs was assumed to be met by the meals provided at home by the parents. If hon. Members say that children do not have the balance made up at home, I suggest that this is the responsibility of the parents, not of the State or the education service. We must also bear in mind that pupils spend nearly half the year outside school, when provision of their meals is entirely a matter for the parents.
    One conclusion to be drawn from this, in passing, is that the critical comparison made by the hon. Member for Blackburn between the school meal and what was provided in the workhouse in 1933 would apply with equal force to the school meals that were being provided prior to 1980.
    Let us now consider Lancashire. Again, what are the facts? Under the Education (No. 2) Act 1980 it is a matter for each local education authority to decide what to provide at midday, and there is no Government control over this. Nevertheless, I asked my officials to obtain from Lancashire details of what it provides. We have heard the interpretation by the hon. Member for Preston, South of what the Lancashire school meals service provides.
    I understand that all primary school meals are planned on the basis of a 20-day menu cycle, which has been carefully constructed in consultation with the Health Service dieticians to provide overall the same proportion of the recommended daily amounts of protein and energy as was provided in previous years. That is to say, over a four-week period a pupil will receive in total one-third or more of the daily amounts of energy and protein recommended by the DHSS advisory committee on medical aspects of food policy. Clearly, if there is to be variety in what is provided, there will be some days during the four-week period when some aspects of the nutritional content of the meal will be below the average. Equally, there will be days when it is above the average.
    The school meal referred to by the hon. Member for Blackburn in his comments on the north-west of England happened to be below the daily average for protein content but above the average for energy content. As examples from the authority's menu cycle which have a higher protein content, I can quote Lancashire hot pot, potato and meat pie and beefburger and chips. For these meals parents pay 40p, which is substantially less than the cost of providing the meal. By any standards, it represents good value for provision by the authority, which, as an outside

    839
    caterer, has to meet substantial staffing costs and overheads.
    What the authority is not claiming to do is to provide a meal that is suitable as the main meal of the day. For this reason, meals such as the one described have less bulk than would be appropriate to a main meal. Again, in passing, it is doubtful whether many children today would think much of being given half a pound of dry bread with their meal, as was apparently included in the workhouse dinner.
    Because the hon. Gentleman referred to nutrition, I should like to quote from a newspaper from the North-West an article by Jill Sutton, the education correspondent, in which she said:
    "Professor Arnold Bender, head of the nutrition department at Queen Elizabeth College, London, said that the children would be eating at least 760 calories—very near the 800 calorie target set by the Department of Education."
    That article goes on to describe the meal that was consumed that day. It is important to put on record that the nutritional content of meals is well understood and acknowledged by the Lancashire county authority.
    Mr. John: I am not in a position to comment on the situation in Preston, Accrington or Blackburn, but I should like to place on record that, from my recollection, none of my constituents has written to me or come to see me in my surgery about their unhappiness at the school meals in the Pendle area.
    Mr. Macfarlane: I am grateful to my hon. Friend for that observation, because it helps to put this discussion into perspective.
    In 1979–80 the subsidy on the school meals service in Lancashire amounted to £13½ million. That represented a substantial subsidy on every meal provided, taking the average over paid and free meals, for pupils and adults of 43p. Lancashire therefore decided, in line with Government policy, to seek a substantial reduction in its net expenditure on school meals. It is aiming to do that, as I have already made clear, without reducing the nutritional standard of the provision in primary schools. It is seeking cheaper and more efficient ways of providing meals. It has kept its price increases to a level that is below the national average. The House must understand that. In secondary schools it has introduced the cash cafeteria system, which, experience shows, is likely to encourage pupils to continue taking a meal at school.
    Hon. Members who were present at Question Time today will acknowledge the force that I attach to urging local authorities to become more conscious of what our young people expect to see in schools. The hon. and learned Member for Accrington spoke about a bucketful of waste caused by sandwiches being consumed on the premises, but the bucketsful of waste have also resulted from the traditional two-course meals, which, to the delight of many young people, are progressively being eliminated.
    I am confident that Lancashire county council is seeking cheaper and more efficient ways of providing
    840
    meals. The proportion of Lancashire secondary pupils taking a meal in October 1980 was higher than in the country as a whole. That is a commendation for the way in which the county authority has shown flexibility and open-mindedness. The figure was also nearly as high as that for the country as a whole in 1979. Lancashire is an authority to be wholly commended. I am strongly critical of some of the cheap electioneering which has, alas, taken place in recent weeks and which could undermine the stability of the school meals service in Lancashire.
    Hon. Members refer to the increase in the number of packed lunches in Lancashire, and I wish to quote some statistics. In 1975, a total of 163,000 pupils took packed meals to primary schools. In 1977, as a result of price increases by the previous Government, 408,000 were taking packed meals. In secondary education, nationally, in 1975 a total of 316,000 pupils were taking packed lunches to school. In 1977, the figure was 616,799. That gives some indication of the tremendous growth that occurred in that two-year period. It is a common trend over the past 10 years or more that there is a steady increase in the numbers who take packed meals to both primary and secondary schools.
    Hon. Members do not always appreciate the damage that they do to the service that they claim to be supporting when they make the sort of generalised, unfair, inaccurate and destructive comments that we have been hearing not only in recent weeks from the media in the North-West but, to a certain extent, tonight. School meals have come in for criticism since the year dot, but they have been progressively improving over recent years.
    Criticism is often unjustified and it is particularly damaging at this time, when the staff in many authorities are doing their professional best to provide attractive nutritious meals at prices that represent good value for money. They are not helped by loose talk about poor meals, low nutritional standards or a collapsing school meals service. I wonder how many parents in Lancashire, reading press reports of the comments by the hon. Member for Blackburn or the speech of the hon. Member for Preston, South, will decide that they no longer wish their children to have a school meal.
    I urge the hon. Members who have spoken, as I would have urged their colleagues who would have been present if they believed the subject to be of true importance, to find out precisely what is happening in the schools in their constituencies.
    The fact is that the meals planned for Lancashire primary schools are up to the standards of nutrition that were recommended prior to 1980. At 40p, that represents a considerable achievement, and the authority and its catering staff, who work long hours from long before schools open, deserve to be congratulated. The increase in the price reflects no more than the increase in wage rates and food costs over 12 months.
    By its good housekeeping, Lancashire has reduced its net expenditure on the school meals service by about £4 million. with increased take-up of paid meals, it would be able to increase the number of kitchen and canteen staff hours worked and increase its expenditure savings. That

    841
    is what the service in Lancashire is trying to do—to attract back to the school meal those pupils who at present are taking their own food.
    If the paid school meals service in Lancashire primary schools were to collapse, the country will know after tonight's debate that the destructive and carping criticism of Labour Members, not least the hon. Member for
    842
    Blackburn, who has not attended the debate, is totally destructive.
    The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
    Adjourned at twenty-four minutes past Eleven o'clock.

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Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the woolsack.
Prayers—Read by the Lord Bishop of Truro.
The Duke of Portland—Sat first in Parliament after the death of his brother.

Nuclear Weapons: Council Resolutions
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether South Yorkshire, Manchester, Sheffield and Tyne and Wear have declared themselves nuclear free zones with no nuclear weaponry or technology; and if so what they propose to do about it.
The Earl of Avon: My Lords, the Government have received representations from the city councils of Manchester and Liverpool in which they call upon Her Majesty's Government to refrain from the manufacture or positioning of any nuclear weapons within city boundaries. I understand that other local authorities have passed similar resolutions. The Government are, however, responsible for national security, and we will continue to take any steps which we consider necessary to maintain this.
Lord Brockway: My Lords, is the noble Earl aware that last October the council in South Yorkshire declared its area a nuclear free zone and that the councils of the other areas that I mentioned in my original Question have similarly passed such resolutions? May I ask whether he knows that the Manchester City Council has not only adopted that resolution but circularised all local authorities in Britain to adopt similar resolutions? Will not the Government be faced with great opposition, probably from the majority of local authorities, to placing nuclear weapons in their areas?
The Earl of Avon: My Lords, as I said in my original reply, Her Majesty's Government have received representations from two cities only. All that I can offer to the noble Lord is the fact that the Government are responsible for national security and they will continue to take any steps necessary to maintain it.
Lord Clifford of Chudleigh: My Lords, can the noble Earl give any other suggestions for Questions which the noble Lord, Lord Brockway, might ask which would encourage our potential enemies in the belief that we will never defend ourselves?
The Earl of Avon: My Lords, as members of the North Atlantic alliance we are always conscious of the defence of this country.
Lord Leatherland: My Lords, can the noble Earl tell me whether these areas declaring themselves nuclear free zones have notified Moscow to that effect?
The Earl of Avon: My Lords, I have not seen a copy of their Hansard.
Lord Brockway: My Lords, making no comment on the supplementary question which has been asked, may I ask the noble Earl whether he is aware that, although the Manchester City Council circular has only just been issued, seven other councils have adopted this resolution and it is very probable that the majority in Scotland, Wales, North England and the Midlands will do so? Is he aware that not only Labour Councils are involved? Has his attention been drawn to the position at Huntingdon covering Molesworth, the site where the cruise missile is to be stationed, and the fact that there, on the seconding of the Conservative leader of the committee responsible, a resolution for non-co-operation was carried and for a seminar regarding civil defence?
The Earl of Avon: My Lords, I can but repeat that Her Majesty's Government are responsible for national security. In these terms, I might quote part of a supplementary question put by the noble Lord, Lord Shinwell, to a Question asked by Lord Brockway on 2nd February last? Lord Shinwell said (in col. 909):
"My Lords may I ask the Minister whether he would agree that the strong line now being taken by President Reagan about Soviet activities in various parts of the world may prevent missiles of a nuclear character ever being used at all?"
Lord Morris: My Lords, will my noble friend agree that the passing of resolutions can hardly shield one from the realities of life?
The Earl of Avon: My Lords, I agree with my noble friend.
Lord Davies of Leek: My Lords, is the noble Earl aware that, without looking at it with jocularity, many of us are impaled on the horns of a dilemma for the future of mankind? Some people believe sincerely that no nuclear war is possible. Will he ask his colleagues in Government to do their utmost to move nearer and nearer to what they conceive to be the effort to secure at least multilateral disarmament in the nuclear field?
The Earl of Avon: My Lords, as I am sure the noble Lord is aware, this Government are pursuing all the targets of disarmament which the previous Administration did, both in Geneva and in Vienna.
Lord Strathclyde: My Lords, would my noble friend care to give the House his opinion of the mental stability of those who make declarations such as are contained in this Question?
The Earl of Avon: My Lords, this is a free country. I would not like to comment on that question.
Lord Goronwy-Roberts: My Lords, the noble Earl rightly reminded the House that this Government,

129
like the last, are pursuing all targets of disarmament—which prompts a request for reassurance, which I am sure I shall get, on this point. Among those targets is the securing of as many nuclear free zones as possible particularly in the South-East Asian area, where the majority of the littoral states are reported to be strongly in favour of them.
The Earl of Avon: My Lords, I think that is a rather different question from the local one on Yorkshire that was raised originally.

Tax Privileges for Investment
2.42 p.m.
Baroness Sharples: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will introduce measures to make the tax privileges available for equity investment in independent businesses as attractive as those for investment in large companies through pension funds.
The Minister of State, Treasury (Lord Cockfield): My Lords, while I note what my noble friend says, I am afraid that I cannot anticipate my right honourable friend the Chancellor of the Exchequer's Budget Statement. Since coming into office, we have however introduced a large number of measures to improve incentives and help businesses, particularly small businesses.
Baroness Sharples: I thank my noble friend for that reply. Could he please impress on his right honourable friend that any further encouragement given to small investors in unquoted companies would be very welcome?
Lord Cockfield: My Lords, I shall be most happy to convey my noble friend's views to my right honourable friend.

UNRWA: Financial Crises
2.43 p.m.
Lord Gladwyn: 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 they have done or are doing in the Council of Ministers of the EEC to translate the views expressed by Lord Trefgarne on 14th January (Official Report, cols. 164–167) into effective Community action to prevent the collapse of the United Nations Relief and Works Agency for the Palestinian Refugees.
The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne): My Lords, we shall take the earliest opportunity to discuss UNRWA's
130
financial crisis with our partners in European political co-operation. As a first step we are raising the matter at the meeting of the Political Committee in the Hague which starts today.
Lord Gladwyn: My Lords, I thank the noble Lord for that reply. Will he make every effort to induce his colleagues to be more forthcoming in the matter of supporting UNRWA?
Lord Trefgarne: My Lords, if the noble Lord is suggesting that the United Kingdom should do more—as I think he is—then I should tell him that our record is a very good one. We have pledged £5 million for 1981, which is in itself a 10 per cent. increase over 1980. We also contribute through our one-fifth share of the European Communities' contribution which in 1980 stood at £11·39 million. We are thus the second largest contributor over the 30-year period of UNRWA's existence.
Lord Goronwy-Roberts: My Lords, does the Minister recall that, in the short, sharp and very informed debate that we had on this matter the other day, we all agreed that Her Majesty's Government were doing quite well in this matter, and indeed had increased their contribution to this year over last year? Does he further recall that information was given to the House—at least from this side—that very many, if not most, of our partners in the EEC were falling short of last year's performance rather than improving upon it?
Lord Trefgarne: Yes, indeed, my Lords. We acknowledge that some of our European partners contribute less than the United Kingdom. We hope they will respond sympathetically to the Commissioner-General's appeal for funds. But we think, of course, that prime responsibility rests with the Arabs.
Lord Chelwood: My Lords, can my noble friend say what contribution the Soviet Union makes to this fund?
Lord Trefgarne: So far as I know, none, my Lords.
Lord McNair: My Lords, will the noble Lord bear in mind at the Hague that a sum of only 13 million dollars would enable UNWRA to keep the schools open in the occupied territories, and a further 5 million dollars would take in the Lebanon, as well? May I suggest to the Government that this should be the minimum target at which Western Europe should aim?
Lord Trefgarne: My information is that rather more money than that is required—certainly if the sub-stantial closures foreshadowed by the Commissioner-General are to be avoided. We shall certainly do our best to persuade our colleagues at the committee to which I referred to take this matter very seriously.
Baroness Gaitskell: My Lords, may I ask the noble Lord this? Would it be true to say that over the century the PLO have received more than many organisations and more than a great many refugees

131
have received over the years? Usually we do not recognise that. They have received more help than a great many people who are in need of help.
Lord Trefgarne: My Lords, I do not think that the noble Baroness is necessarily wrong in the figures to which she has referred; but I cannot hide from your Lordships the gravity with which we face this problem.

The North Sea Gas Gathering System
2.47 p.m.
Lord Grimston of Westbury: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they can give the starting date for the North Sea gas gathering system.
The Minister of State, Department of Employment, (The Earl of Gowrie): My Lords, the gas gathering organising group already has work on the project well under way. The detailed off-shore conceptual design was completed in January and included a construction schedule confirming that completion of the project by 1984–85 is achievable.
Lord Grimston of Westbury: My Lords, may I thank my noble friend for his reply? Will he please confirm that the timetable allows for no flaring of the 12 or so associated fields which are due to come on stream during that time, thus avoiding waste of resources?
The Earl of Gowrie: My Lords, obviously one cannot avoid flaring if one is to develop an oilfield. It is in order that the flaring should not be wasteful that the gas-gathering scheme is being developed.
The Earl of Lauderdale: My Lords, can the noble Earl tell us whether there has yet been agreement on the price to be paid by the BGC for the gas and ethanes?
The Earl of Gowrie: Not without notice, my Lords.
The Earl of Lauderdale: My Lords, can the noble Earl tell us the result, if any, of the Secretary of State's visit to Norway the other day to press the case for getting Norwegian gas into the pipeline?
The Earl of Gowrie: My Lords, the Norwegian licensees have recommended that gas from the Statfjord field be transported via Norway to the Continent; but their recommendation is subject to strong conditions which may not be met. I understand that this recommendation will now be considered by the Norwegian Government, along with other possible solutions, and then put to the Storting for decision in the spring.
The Earl of Lauderdale: My Lords, I thank the noble Earl for that information. Can he say whether there
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is any truth in the report that the British Government have proposed that we could provide a link to the Continent to carry the Norwegian gas from our own pipeline?
The Earl of Gowrie: My Lords, my advice is that the Norwegians have been told that if gas from their side of the median line is committed for transport through the line, arrangements will be made for Norwegian participation if they so wish; but I imagine that that implies that it could be done without such participation.

Dinners
Lord Denham: My Lords, I think it might be for the convenience of your Lordships if I tell the House that in view of the relatively small number of amendments tabled for the Report stage of the Contempt of Court Bill, it has been decided that dinners should not be available this evening; but light refreshments will be provided in the Guest Room and the Grill Room facilities will be available in the normal way.
Lord Elwyn-Jones: My Lords, I hope the noble Lord will note the restraint of lawyers on this occasion!

County of Avon Bill [H.L.]
Read 2a, and committed to a Select Committee.
Felixstowe Dock and Railway Bill
Read 3a with the amendments, and passed, and returned to the Commons.

Procedure of the House
2.51 p.m.
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move that the First Report of the Select Committee on the Procedure of the House be agreed to. I should like to draw your Lordships' particular attention to this report because it contains three matters which have been recently discussed on the Floor of the House. The first is the question of amendments on Third Reading, which was specifically referred to the Committee and which the Committee have recommended should be treated by revising the Companion to the Standing Orders. The revision is on the Order Paper. One new paragraph defines the principal purposes for which amendments are put down at Third Reading and another paragraph repeats the present advice that,
"It is considered undesirable that an issue which has been fully debated and decided upon a previous stage of the Bill should be re-opened on Third Reading".
Considerable discussion took place on whether the word "undesirable" should be strengthened: but in the event it was felt that since it is a word used throughout the Companion to the Standing Orders it would be better to retain it but to emphasise (as also appears

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in the report) that in the context of a House where there is no Speaker with power to rule on matters of order, the word as used in this House is equivalent to the term "out of order" in the context of the House of Commons.
The other two matters raised in the report are on congratulations to maiden speakers speeches and reference to strangers. These, I think, are self-explanatory. I beg to move.
Moved, That the First Report from the Select Committee be agreed to.—(Lord Aberdare.)
The report read as follows:
1. AMENDMENTS ON THIRD READING
The Committee have considered the question of Third Reading amendments following two recent incidents when the practice of the House has been disputed. The first of these was on 1st August, 1980, when an amendment was moved which was substantially the same as an amendment which had been rejected by the House at Report stage. The second was on 5th November, 1980, when a series of amendments to leave out 26 clauses of a Bill were tabled at Third Reading.
The Committee recommend that the practice of the House, as set out in the Companion to the Standing Orders, should be revised in the light of these incidents to read as follows:
"Amendments may be moved after the Third Reading has been agreed to and before the Motion 'that this Bill do now pass'. Notice must be given of them not later than the day preceding that on which they are to be moved (except in the case of privilege amendments) in sufficient time to enable them to be printed and circulated in the form in which it is proposed to move them.
The principal purposes of amendments on Third Reading are to clarify any remaining uncertainties, to improve the drafting and to enable the Government to fulfil undertakings given at earlier stages of the Bill.
It is considered undesirable that an issue which has been fully debated and decided upon at a previous stage of a Bill should be reopened on Third Reading.
The guidance applicable to amendments to leave out a clause or schedule on Report applies also to such amendments on Third Reading."
The Committee wish to draw particular attention to the use of the word "undesirable" and to remind Lords that in the context of a House where there is no Speaker with power to rule on matters of order, the word as used in this House is equivalent to the expression "out of order" in the context of the House of Commons.
2. CONGRATULATIONS TO MAIDEN SPEAKERS
The Committee have considered the growing practice of successive speakers in a debate congratulating a maiden speaker. They draw attention to the convention of the House, as set out in the Companion to the Standing Orders, that a maiden speaker should be congratulated by the next following speaker. The next following speaker is assumed to speak on behalf of the whole House.
3. REFERENCE TO STRANGERS
The Committee have considered the practice of the House on the reference in debate to Strangers in the Galleries. The Committee is of the opinion that the practice of the House of Lords is similar to that of the House of Commons. The Committee, therefore, recommend that the practice of the House should be set out in the Companion to the Standing Orders as follows:—
"It is undesirable to refer to persons in the Galleries (except generally for the purpose of an order for their withdrawal)."
Lord Strabolgi: My Lords, I listened to all that the noble Lord the Chairman of Committees has said, but would ask whether this proposal with regard to amendments on Third Reading refers also to Government amendments?—because very often a Government amendment is put down on Third Reading as a result of long deliberation during the Committee and Report stages. Very often the department concerned may not
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have time to table it until the very last stage. There is one later this afternoon on the Energy Conservation Bill which concerns a most useful concession given by the Government as a result of pressure from noble Lords behind the Front Bench and supported by Members from all sides of the House.
The Chairman of Committees: My Lords, I am very grateful to the noble Lord. I thought possibly he might have read the report before I moved it, but the fact is it does say:
"The principal purposes of amendments on Third Reading are to clarify any remaining uncertainties, to remove the drafting and to enable the Government to fulfil undertakings given at earlier stages of the Bill".
Therefore I think he can be reassured that it does apply to Government amendments as well as others.
Lord Derwent: My Lords, it has been pointed out to me, I need hardly say by my friends, that if all noble Lords were to read this report in conjunction with the Companion to the Standing Orders it might go some way to curtailing that tiresome habit I have of interrupting on matters of order!
On Question, Motion agreed to.

Public Passenger Vehicles Bill [H.L.]
2.55 p.m.
The Lord Chancellor (Lord Hailsham of Saint Mary-lebone): My Lords, I beg to move that this Bill be now read a second time. It is a consolidation Bill, and its purpose is to bring together conveniently in one Act the enactments relating to passenger vehicles used for public transport both in England and Wales and in Scotland. It is a technical Bill on a subject which is perhaps not of throbbing human interest. If given a Second Reading it will as usual be referred to the Joint Committee on Consolidation Bills. I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

Statute Law (Repeals) Bill [H.L.]
2.54 p.m.
The Lord Chancellor: My Lords, I beg to move that this Bill be now read a second time. Your Lordships will be aware that one of the functions of the two Law Commissions—that is, the Law Commission for England and Wales and the Law Commission for Scotland—is to promote
"the repeal of obsolete and unnecessary enactments, the reduction of the number of separate enactments and generally the simplification and modernisation of the law".
For that purpose they have presented to Parliament a number of reports with draft Bills attached. The Bill with which your Lordships are today concerned was annexed to the tenth report in this series, which was laid before Parliament in December last year. The

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nine previous reports have resulted in the repeal of over 2,000 enactments, including 947 whole Acts; the present Bill proposes the repeal of 119 whole Acts and the removal of redundant provisions from 123 others.
Those of your Lordships who have read Part IX of Schedule 1 to the Bill will see that one of the Acts amended is the Lord Chancellor's Pension Act 1832. Last December, when I was moving the Second Reading of the Judicial Pensions Bill, I explained that it was hardly necessary for me to declare an interest, because the pensions of Lord Chancellors are unaffected by that Bill since they are granted under the Act of 1832. For completeness I should perhaps now say that the amendment proposed to the Act of 1832 in no way affects the pensions of Lord Chancellors, past, present or to come, but merely recognises that there is now no separate holder of the office of Lord Keeper of the Great Seal.
A Bill of this nature inevitably awakes memories of historic facts. The Unlawful Oaths Act 1797, which is to be found in Part I of Schedule 1, is the very Act under which, in 1834, the Tolpuddle Martyrs were sentenced to seven years' transportation for administering oaths of secrecy to members of an agricultural workers' trade union which operated legitimately by virtue of the Combinations Act 1825. The accused were subsequently granted a free pardon and brought home at public expense, and the Act of 1797 appears to have slept peacefully ever since.
I am sure that the House would wish me to express to the two Law Commissions the appreciation of Parliament for the valuable work which they are doing in this particular, if somewhat recondite, field. If this Bill is given a Second Reading, it will be referred to the Joint Committee on Consolidation Bills in the usual way. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(The Lord Chancellor.)
3 p.m.
Lord Elwyn-Jones: My Lords, I am sure the House will join with the noble and learned Lord in thanking the Law Commission for continuing the admirable process of removing obsolete dross from the statute book. This bag—if I may so describe it—of interesting relics from our past is a good example of the value of the work. I am particularly glad that it has fallen to the noble and learned Lord to refer to the fact that we are, at last, repealing the abominable legislation under which the agricultural workers of Tolpuddle were made martyrs. It is a piece of interesting historical irony that it should fall to a Conservative Government to remedy this ancient injustice.
Its quality as a piece of legislation is reflected upon in the appendix to the report of the Law Commission with a quotation from The Times of 1st April 1834, following the conviction of the agricultural workers in that case. The decision in the case caused a public outcry, one reason being a suspicion, as The Times reported it, that,
"advantage has been taken of the letter of the law by prosecuting a man for one offence, in itself a matter of little moment, as the only means of ensuring his chastisement for another offence, morally and substantially of a graver character, which it may be thought desirable to punish … The dilemma in which the prosecution
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stands is this:—the crime which called for punishment was not proved; the crime brought home to the prisoners did not justify the sentence"—
a noble statement on a piece of monstrous injustice. The noble and learned Lord has said that the men concerned were granted a free pardon and were properly brought home at the public expense, but after much suffering in a case which has taken a memorable part in labour history.
The Unlawful Oaths (Ireland) Act ought perhaps, also, not to be passed by without notice. That corresponds substantially with the Unlawful Oaths Act 1797, but the main difference is that the penalty provided under the Irish Act was transportation for life, instead of for a mere seven years. It is reassuring to read in the report that the Director of Public Prosecutions in Northern Ireland agrees to the proposed repeal.
There are other matters of interest which well merit the attention of noble Lords, because this is an admirable insight into much of our great island story. The noble and learned Lord has drawn attention to a matter to which I gave more than passing notice myself; namely, the Lord Chancellor's Pension Act. Does this mean that now, finally, the office of Lord Keeper of the Great Seal has been abolished? I never suspected that any part of my vast remuneration arose from the fact that I was Lord Keeper of the Great Seal, but it would be interesting to know. I think that the Act of 1562 was repealed in 1969, but it would be interesting to know whether the responsibilities of the Lord Chancellor as Lord Keeper of the Great Seal have now terminated. It was a responsibility which led to difficulties for some of the noble and learned Lord's predecessors, one of whom, unfortunately, lost the Great Seal, and another threw it in the river—practices which in recent times, I am happy to say, have not been repeated.
The Lord Chancellor: My Lords, I am terribly grateful to the noble and learned Lord for the gracious way in which he has received this humble offering in the legislative field. I do not think he should express surprise that it has fallen to me to repeal the Unlawful Oaths Act. It is always left to a Conservative Government to do really useful work which is left undone by its Labour predecessor.
As regards the office of Lord Keeper, yes, it has been abolished, I understand, but the Lord Chancellor's office intrinsically involves keepership of the Great Seal. It has a curious and rather involved history. The noble and learned Lord will remember that Queen Elizabeth I was very reluctant to call Lord Chancellor the persons, to whom she entrusted the Great Seal, though they had ordinarily been called so from time immemorial. She therefore began calling them Lord Keeper. Nicholas Bacon, the father of Francis Bacon, was such a Lord Keeper and it was not until she became slightly attracted, I think, to Christopher Hatton that the office of Lord Chancellor was, after a period, restored. So I do not think that the keepership of the Great Seal is in question. It is only the curious and obsolete title of Lord Keeper that has gone.
Incidentally, the House might like to know that my brother and I tried to persuade my father to accept the office of Lord Keeper of the Great Seal in place of

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that of Lord Chancellor, in order to prevent him from taking a hereditary peerage, which it would have successfully done, but unfortunately the old gentleman was not to be persuaded. So I am in the happy position of having held the office which my father once held. I am grateful to your Lordships.
On Question, Bill read 2a, and referred to the Joint Committee on Consolidation Bills.

Energy Conservation Bill [H.L.]
3.6 p.m.
The Earl of Gowrie: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a—(The Earl of Gowrie.)
On Question, Bill read 3a.
The Earl of Gowrie The Earl of Gowrie moved the amendment:
After Clause 15, insert the following new clause:
("Alleviation of charges for abstraction of water in certain cases
. In section 60(2) of the Water Resources Act 1963 (exemption from and reduction of charges payable to water authorities) the following paragraph shall be inserted after paragraph (b)—
"(bb) the need to conserve sources of energy (other than water) and the consequent desirability of preventing the charges in question from inhibiting that person from abstracting water to use as a source of power;".").
The noble Earl said: My Lords, I beg to move the amendment standing in my name. The House has discussed this issue fully, both in Committee and at Report stage, and therefore I shall introduce it very briefly. My noble friend Lord Strathcona and Mount Royal, who is unable to be here this afternoon as his daughter is getting married—we all wish her very well—has ably and persuasively argued the case for alleviating the burden of water charges upon small hydro-power users. As I explained on Report, the Government sympathise with my noble friend's concern and we believe that the appropriate way to meet that concern is by amendment to Section 60 of the Water Resources Act 1963.
Section 60 of that Act empowers water authorities to make agreements waiving or abating charges for the abstraction of water. This Government amendment would add a further matter to those to which the authority is required to have regard in exercising the power to waive or abate charges. It would require the authority to have regard to the need to conserve sources of energy other than water power, and the consequent desirability of preventing the charges in question from inhibiting the applicant—that is, the hydro-power user or potential user—from abstracting water to use as a source of power. As I said on Report, I believe that this will go a very long way towards meeting the legitimate grievances of water power users.
The amendment would relate only to England and Wales, since Section 30 of the Water Resources Act 1963 applies only in those parts of the United Kingdom. The legal position regarding abstractions for hydro-power generation in Scotland and Northern Ireland is different. As far as the Government are aware, the
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problem regarding charges made by water authorities for hydro-power abstraction is confined entirely to England and Wales. I therefore commend this amendment to the House and I should like, once again, to thank my noble friend Lord Strathcona for bringing this important matter to our attention. My Lords, I beg to move.
The Earl of Halsbury: My Lords, my noble friend Lord Strathcona and I withdrew our amendment at Report stage, against an undertaking by the noble Earl to take its subject matter under his wing and review it—Hansard, col. 1298 of 5th February. The amendment which he now puts forward is his implementation of that undertaking, and we have received it too recently to be able to give it more than a guarded welcome in the form it now takes.
Naturally I do not want to look a gift horse in the mouth or to be ungracious about the efforts of the noble Earl and his advisers to do their best to implement the undertakings which the noble Earl gave. However, I feel that at present I must to some extent reserve our position for the day when the matter comes up again in the other place. I do not want it ever to be supposed that we necessarily accept the noble Earl's solution as satisfactory because today it is too late to propose an alternative at short notice.
At first scrutiny of the amendment, two mischiefs emerge in it. First, it deprives water power users of the opportunity to assert that the type of use which they contemplate is not an abstraction under the Water Resources Act 1963, the definition being:
"In this Act"—
that means the 1963 Act—
"except in so far as the context otherwise requires, the following expressions have the meanings hereby assigned to them respectively, that is to say: "abstraction", in relation to water contained in any source means the doing of anything whereby any of that water is removed from that source of supply and either (a) ceases (either permanently or temporarily) to be comprised in the water resources of that area,"—
that means it is diverted out of the area—
"or (b) is transferred to another source of supply in that area, and 'abstract' shall be construed accordingly".
To take water out of a river and to return it to the same river is not putting it to another use in that area, nor does it remove it from the area. So anybody who is accused of wrongfully taking water and abstracting it in those circumstances has the defence that it is not an abstraction under the 1963 Act. At first scrutiny, the amendment removes that defence.
Secondly, the amendment gives no assurance of the user not being charged on a volume-related basis. That comes under Section 58(2) of the 1963 Act, which states that
"A charging scheme shall provide that the charges to be levied under the scheme in the case of any licence shall be calculated by reference to the quantity of water authorised to be abstracted from time to time in pursuance of the licence".
The wording of Section 58(2) of the 1963 Act is in direct contradiction of the opinion expressed by the noble Earl at the Report stage when he said that the Government believe 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. But charging on a volume-related basis at first

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scrutiny appears to be mandatory under the 1963 Act.
There is a bit of misunderstanding as to the situation which will arise. Administrators and self-employed persons are quite different sorts of animal. Administrators never cost their own time on a job. It is a sort of miracle that their maintenance and supplies reach them out of the benevolence of the taxpayer, ratepayer or whoever it may be. But a farmer who is busy and whose time is money costs his time on a job. If some scheme to cheapen his electricity supply by diverting water from a level above his house to a level below it and running it through a turbine is to be made subject to endless directions from water authorities, to correspondence, and so on, he just will not do it, or he will be less likely to do it than if it were a straight-forward matter of no locus standi for the water authority, as is the case in Scotland.
For that reason, I feel that it would be the wish of my noble friend, if he were here, and it is certainly my wish on behalf of both of us, to say that at first scrutiny we do not feel that the amendment proposed by the Government is in satisfaction of what we wanted to accomplish by the amendments which we withdrew. We must therefore reserve our position under that heading for another day in another place. I shall not raise my voice against the amendment, but I felt that I must state what I feel about it at first scrutiny.
Lord Strabolgi: My Lords, we are grateful to the noble Earl, Lord Gowrie, for going into this and for putting an amendment before the House. However, like the noble Earl, Lord Halsbury, I also have some reservations about it. I hope that it is going to be something more than just a pious hope. As the noble Earl, Lord Halsbury, has said, the trouble has been the Water Resources Act 1963, the general effect of which was to nationalise without compensation the ancient water rights of millers, who had either to shut down or to obtain a licence and pay water rates. The various water authorities have been using quite different yardsticks for calculating these rates. The problem is not that the charges generally have been exorbitant—in fact, the noble Earl said at an earlier stage that three out of the water authorities in England and Wales do not charge for abstraction—but they are there, and they could become so at any time. One region, as I said at an earlier stage, had to pay a very large amount. This was increased from, I think, £50 to £30,000 overnight.
I hope that this amendment will be some protection and that the Secretary of State, particularly on appeal, will take into account this new subsection. As the noble Earl, Lord Halsbury, said, it is something, though it does not go as far as we would wish. On the other hand, we have made a small breach in the Government's defences and I hope that this will be enlarged somewhat when the Bill goes to another place.
3.17 p.m.
The Earl of Gowrie: My Lords, obviously I should have liked a little less modification of the rapture with which the Government's amendment has been received, but I suppose that in these difficult days one must be
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grateful for any rapture at all. Far from talking about breaches in our defences, it seems to me that our aims are identical to those expressed by my noble friend Lord Strathcona and Mount Royal, by the noble Lord, Lord Strabolgi, and indeed by the noble Earl, Lord Halsbury, from the Cross-Benches this afternoon. We do not wish to see anything but encouragement given to those who would use water to generate electricity or hydro-power, whether on a small or a large scale.
My noble friend's original amendment for which, principally for technical reasons, I wish to substitute the Government's amendment which we are now discussing did not seek to abolish all charges in all circumstances. At the Report stage I gave as an example that researches had revealed that the Central Electricity Generating Board was paying over £140,000 in the current year to the Welsh Water Authority for hydro-power abstraction. Therefore what pertains to very large bodies, from which we have not had a complaint, at any rate up to this stage, about such charges may be very different from the issues discouraging the smaller hydro-power user.
I appreciate that they wish to reserve their position, but if the noble Earl, Lord Halsbury, and the noble Lord, Lord Strabolgi, will look carefully at the amendment to the Water Resources Act 1963 which I have put down in my name and check that amendment with the original provisions of the 1963 Act, they will see that two things are absolutely clear. The first is that charges should not inhibit the use of water to generate electricity. Any charge which did so inhibit the use of water would be unlawful. The second is that if there were a disagreement between the water authority and the person or organisation seeking to use water for electricity generation, the latter would have the power of appeal to the Secretary of State.
The Secretary of State in this and, indeed, in other legislation is required to take energy conservation into account. So, one way or another, while one is legislating for hypothetical situations, which means that the language may be able to be slightly less robust or slightlymore non-commital than noble Lords would like, the intentions of the legislation are quite clear, and so are the provisions which allow for appeal as to its working. As I said earlier, I appreciate that noble Lords need a little longer to look at this amendment, but I hope that they will look at it in the spirit in which I have tabled it, which is to encourage this kind of conservation and this kind of activity rather than to discourage it. I beg to move.
On Question, amendment agreed to.
An amendment (privilege) made.
Bill passed, and sent to the Commons.

Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1981
3.22 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead)The Parliamentary Under-Secretary of State, Home Office (Lord Belstead) rose to move, That the draft order laid before the House on 14th January be approved.
The noble Lord said: My Lords, I beg to move that this draft order be now approved. The purpose of this order is to raise the limits on the permitted election expenses of candidates at elections to the Greater London Council to compensate for the fall in the value of money since March 1977, when these limits were last fixed. The order has been introduced now so that the new limits may come into effect in good time for the elections to the Greater London Council to be held on 7th May. The Representation of the People Act 1978 removed the need to introduce primary legislation to update election expenses limits, and instead permits the Secretary of State, subject to the affirmative resolution of both Houses of Parliament, to vary the limits by order to the extent justified by changes in the value of money.
The present limits in respect of candidates for GLC elections were last fixed in March 1977 at £320 plus 2p per registered elector for the area. The latest available figures show that the Retail Price Index has risen since March 1977 by 57 per cent. This indicates the need for this increase in the limits to £500 plus 3p per registered elector. In bringing forward this order to your Lordships' House we have consulted the major political parties, the local authority associations and the Greater London Council. None of these bodies raised any objection to the proposed new limits. My Lords, I beg to move.
Moved, That the draft order laid before the House on 14th January be approved.—(Lord Belstead.)
Lord Boston of Faversham: My Lords, your Lordships will be indebted to the Minister, the noble Lord, Lord Belstead, for his clear and concise explanation. Plainly inflation has taken its toll and therefore it seems that the proposed new limit is inevitable and inescapable, and I would invite my noble friends to support it accordingly. There is just one point that I should like to raise with the Minister and that is whether this new limit is meant to last for some time; that is, whether it only brings us up to current prices or whether, in putting forward a new limit of this kind, some account is taken, so far as that can be done, of present and future rates of inflation, so that a new limit might be expected to last for a little while instead of our having to introduce a further order within a limited time. Clearly the order is needed. I think it is right to say that printing costs alone have again increased quite substantially, and those take a substantial proportion of the amount that a candidate spends on his election expenses.
Viscount Ridley: My Lords, before my noble friend replies, can he explain why this order is only applicable to London? The rest of England and Wales are having elections on 7th May and I wondered whether there was any reason why they should be excluded.
Lord Belstead: My Lords, the noble Lord, Lord Boston, in giving a welcome to the order, for which I thank the noble Lord, asked me in essence whether something has been built into the level of expenses, provided for in this order, to take account of inflation. The short answer to the noble Lord is, no, because the order-making power in the 1978 Act allows only for changes to be proposed to the level of expenses
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to take account of the change in the value of money. This order, therefore, makes its proposals by reference to the rise in the retail price index from the time when GLC election expenses were last raised, which was in 1977, until the present time.
However, in answer to a number of representations this order has deliberately not been introduced until shortly before the next GLC elections are due to take place on 7th May of this year. By doing this, my right honourable friend hopes to allow GLC candidates to have election expenses permitted which are absolutely realistic for the year 1981. My noble friend Lord Ridley asked me about other local elections in Great Britain. It is true that GLC elections and county council elections are both being held in Great Britain this year. The expenses limits for all local elections in Great Britain, save for those of the GLC, were in-creased in March of last year by the Representation of the People (Variation of Limits of Candidates' Election Expenses) Order 1980, and we hope that that took account of the needs of candidates for county council elections.
On Question, Motion agreed to.

Contempt of Court Bill [H.L.]
3.27 p.m.
Report of amendments received.
Clause 2 [Limitation of scope of strict liability]:
Lord Wigoder Lord Wigoder moved Amendment No. 1:
Page 1, line 16, after ("a") insert ("substantial").
The noble Lord said: My Lords, this amendment was originally the second amendment in the somewhat lengthy Committee stage proceedings on this particular Bill, in the course of which the noble and learned Lord, Lord Elwyn-Jones, and I both sought to argue that where the press and the media were to be liable under the strict liability rule, the proper wording should be that they should only be liable where their publication created a substantial risk that the course of justice would be seriously impeded or prejudiced. We did that because we felt that the inclusion of the word, "substantial", would materially assist the media and would diminish the restricting effect which the liability rule is bound to have upon the media. It was also argued—I can now be very brief about it, I think—that inserting the word, "substantial", would be very much in line with the Phillimore Committee's report at paragraph 112 and very much consonant with the decision of the European Court in the Sunday Times thalidomide case, and indeed with Article 10 of the European Convention.
At that stage in Committee the arguments did not appeal particularly to the noble and learned Lord on the Woolsack and the amendment was in due course withdrawn. As the Committee stage went on it became apparent that the amendment had rather more significance in various other aspects of this Bill than had then been realised. For example, it became apparent that if the strict liability rule was going to be extended, as the Government proposed, not merely to

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courts but to thousands of different tribunals, the question of whether there was a substantial risk was something of great importance to the press if they commented on the proceedings. It became important, because we discussed whether the Attorney General's consent was necessary or whether any aggrieved individual could bring proceedings, and if, as the Bill now stands, it is open to any individual to bring those proceedings, again to make the risk a substantial risk would be a real protection to the media.
There was also the situation in which the press might know that proceedings were active within the terms of the schedule and yet in fact not likely to take place in the near future, for one reason or another, because a warrant had not been executed, and again if they wished to comment the issue would be whether there was a "risk" or a "substantial risk". It appeared to those of us who were concerned for the situation of the media in that position that the word "substantial" should be included.
I need not pursue the matter any further, because I am happy to be able to say that the noble and learned Lord the Lord Chancellor has written to me to indicate that upon reflection he is prepared to accept the amendment which is being proposed. If I may say so, I regard this as a substantial and generous concession by the noble and learned Lord, and one which I am sure will be widely appreciated both inside and outside your Lordships' House. In these circumstances, I hope this amendment will now find favour with your Lordships. I beg to move.
Lord Elwyn-Jones: My Lords, in view of what the noble Lord, Lord Wigoder, said at the end of his speech, I do not wish to add anything to this, save to thank the noble and learned Lord for having given further thought to this. He gave the impression previously that he was, if it is not an indelicate expression, under a bit of pressure from the draftsmen, but he has decided to listen to what was said in this House and to apply his own judgment to the matter. I think this will give reassurance and indicate the intention that contempt of court should really only apply to serious cases giving a risk of serious prejudice. Therefore, while thanking the noble and learned Lord I hope he will permit me to say that I think he has taken a wise course.
Lord Ardwick: My Lords, may I say that I am sure the media will be most appreciative of the course the noble and learned Lord has now taken.
The Lord Chancellor: My Lords, as has been indicated, it is my intention to accept this amendment. I do not know if the noble and learned Lord or others who participated in the Committee discussion remember that I rather took the view that this was a sort of mediaeval monk's question as to how many angels stood on the point of a needle. I am afraid I still think that, but if it makes no difference, and if persons of such eminence support it and want it, why not give in?—and so I am doing so.
Lord Wigoder: My Lords, I am glad to include the noble and learned Lord the Lord Chancellor among the angels.
On Question, amendment agreed to.
Clause 4 [Contemporary reports of proceedings]:
3.34 p.m.
Lord Gifford Lord Gifford moved Amendment No. 2:
Page 2, line 25, leave out from first ("proceedings") to ("order") in line 26.
The noble Lord said: My Lords, this is an amendment which I put down at Committee stage but was unable to be here to move. I am rather sorry that I was not here, because I feel that the House has not been able to come to terms yet with the real dangers which the power introduced in Clause 4(2) of the Bill presents. Clause 4(2) gives to the court the power, in the circumstances which are described, to order that the publication of a report of the proceedings or part of the proceedings should be postponed for such period as it thinks necessary. I think we should examine first of all the breadth of that power. It applies to all legal proceedings, whether they are in magistrates' courts, tribunals, or courts high or low. It is exercisable where there is any risk of any prejudice. There are not the qualifying words "serious" or "substantial", which are now introduced into Clause 2(2).
The power to order postponement of reporting applies not only to proceedings over which the court is presiding, which it is likely to know all about, but also where the risk of prejudice arises from proceedings which are pending or imminent. The court, in order to assess that risk, is going to have to rely on information, probably put forward to it by a party who wants the postponement of reporting, information which it will have no possibility of verifying. The length of time over which the order of postponement operates is at the complete discretion of the court, and in a case where there may be a series of linked cases it may stretch over many, many months. Finally, there is no possibility of the public interest being represented when this determination is made. The representatives of the media would not, I think, have a right to object in court, nor do they have any right of appeal or review built into the operation of this new power.
We know that it is desirable, and the press certainly consider it is desirable, for reports generally to be linked in time to the events which are being reported. Something which has to be reported six months after it has happened loses immediacy. Therefore, an order to postpone reporting is likely in many cases to be in effect an order which suppresses reporting, because in the event the case may never be reported at all, or reported too late for anybody to assess its implications.
That being the breadth of this power, one looks to Phillimore to see what justification for it there is. What has to be appreciated is that, as I interpret the Phillimore Report, this Clause 4(2) is not a Phillimore recommendation. The topic is dealt with very fully in paragraphs of the report, beginning with paragraph 134. In paragraphs 134 and 135 the present law is analysed, and the committee conclude that it is important that the position should be clarified.
In paragraph 136 the case for restricting reporting of cases where there is a risk of prejudice is argued. But then in paragraphs 137, 138 and 139 the contrary case is argued and a number of powerful points are made. One of the most powerful is in paragraph 138. I quote:
"A premature prohibition on publication on the assumed ground of future prejudice could be wholly misguided and even misleading".
Then at the end of paragraph 139 the committee come to their conclusion:
"But the greater public interest in freedom of press coverage of a public trial, as opposed to committal proceedings, in our view tilts the balance of public advantage the other way when the accused comes to be tried.
"We think that the inherent risk in the Poulson situation of successive trials involving some of the same persons, which is fortunately rare, must be accepted".
Finally, at paragraph 140 they say, when talking of the Poulson case:
"This reinforces our view that the fair and accurate reporting of proceedings in open court should in no circumstances be liable to be treated as a contempt".
It is true that there is then a recommendation which has been embodied in Clause 4(1) of the Bill. I think it ought to be said also that on the following page there is a footnote which deals with the issue of naming names, which arose in the Socialist Worker case: The footnote says:
"We incline to the view that the important question of what the press may publish concerning proceedings in open court should no longer be left to judicial requests (which may be disregarded) nor to judicial directions (which, if given, may have doubtful legal authority) but that legislation, analogous to that referred to in paragraph 136, should provide for these specific circumstances in which a court shall be empowered to prohibit, in the public interest, the publication of names or of other matters arising at a trial".
As I understand it, that much more restricted recommendation has been brought into the Bill in Clause 10 which deals particularly with directions about the non-publication of names or other matters.
The far wider power which is put into Clause 4(2) has not been sanctioned by the Phillimore Committee and I suggest that it goes much further than is necessary or desirable. There are obvious dangers. In the civil field there are often a series of linked cases. For example, perhaps a major manufacturer or a drug company is facing a series of cases brought against it in relation to a disputed drug or in relation to the same accident or an alleged defect of design or something of that kind. No doubt it would apply at the end of the first case—win or lose—for an order that reports should not be published until all the other cases are disposed of. A judge might well find the evidence powerful. He might well find that there is a risk of prejudice. He may well give the order and matters which ought to be brought out into the open will not be brought out.
In the criminal field there is a difficult question which arises when one accused person is likely to be on trial for a number of different indictments. I would take my stand with the Phillimore Committee, who considered this most carefully and drew up a number of disadvantages of allowing a prohibition of reporting. For example, they say at paragraph 139 that such a prohibition in order to insulate a defendant from any
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risk of prejudice would have to extend over the whole of the trial, so that the opening of the prosecution and the evidence given, possibly in a very serious case arousing much public interest, would be suppressed because there was a risk of prejudice in subsequent pending proceedings.
My instinct was to delete the whole of Clause 4(2), but my amendment is more limited in an attempt to find a reasonable way through. There is, I think, a case for a power which covers only the proceedings which the court is trying. One obvious example is when there is a trial within a trial and possibly, with the new law in Clause 4(1), a reporter would not be guilty of contempt if he reported a trial within a trial. Phillimore thought that that would be covered by the use of the words "fair and accurate", but I am not so sure. Given that a power to order the postponement of the report of those proceedings until they are over might be justifiable, the real dangers arise when the order covers the alleged risk to the administration of justice in any other proceedings, pending or imminent. There the judge, relying on information presented to him partially, may be disposed to make an order and cause much too great a tilting of the balance against the open reporting of what goes on in court. The power should be limited, and I urge this amendment upon the House. I beg to move.
The Lord Chancellor: My Lords, I am afraid that, although the noble Lord, Lord Gifford, was unable to be present last time, a number of those now present, were present on both occasions, and I must apologise to them if and in so far as I repeat to some extent what I said in connection with other matters, although not this particular matter, last time.
I do not recommend the House to accept this amendment. The noble Lord, Lord Gifford, is, I think, wrong as regards the first point that he made and, if I may say so, I think that he will see that he is wrong. I think that the first point he made was that the defence of a fair and accurate report was not protected by the word "substantial". As the noble Lord, Lord Wigoder, said when moving the amendment from which we have just passed it is, in fact, so protected, because it is only in relation to the strict liability rule that Clause 4 affords a special defence. And as we have just defined "liability" under the strict liability rule, and defined it so that it contains "substantial risk", and "serious prejudice" to the administration of justice, I should have thought that the protection was in fact there.
Exactly what Phillimore reported can, as the noble Lord rightly divined, be read somewhere around paragraphs 133 to 141 of the report. After arguing the pros and cons they came to the following conclusion at paragraph 141, where they say:
"We therefore recommend that it should be provided by statute that it is a defence to contempt proceedings to show that the publication was a fair and accurate report of legal proceedings in open court published contemporaneously and in good faith".
That is what we think we have done. It is true that they canvassed advantages and disadvantages as regards the right of the court to prohibit reports of proceedings for a time and they are, of course, precisely the pros and cons which would enter into the mind of a court when it came to consider whether such a prohibition should be made.

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Of course, it would be open to any of the parties to the proceedings to argue for or against it. They are obviously entitled to take into account, for or against, precisely the arguments which were canvassed in the Phillimore Report. But when the noble Lord, Lord Gifford, says, as he did in argument, that what we are doing is contrary to the Phillimore Report, I frankly do not think that he is right. The Phillimore Report made a recommendation for a change in the existing law, and we have made that change. They canvassed the arguments for and against further change and they did not make any recommendation. It may be that the noble Lord, Lord Gifford, is entitled to draw his inference, but I think that I am entitled to suggest that he has drawn the wrong one.
The reason that this was so, and why I think that it is abundantly clear that it was so, is—as I ventured to point out to the House when it was in Committee—that the right which is enshrined in subsection (2) is in fact a statement of an existing right which has existed for more than 160 years, if my mathematics are right, because it was first introduced at the time of the Cato Street conspiracy, which, unless my memory is at fault, was in 1821. I do not think that it has ever given rise to any kind of complaint during the whole of that time.
But what has happened is that in two, three or four cases—those of the Kray brothers, Poulson and the Cato Street conspiracy itself (which for some reason is called R v. Clement)—certain things have happened. One is that the same defendant can be involved in a series of indictments for different offences. It could prejudice his trial if every juror who appeared on the second indictment knew, first, that the defendant had been convicted on the first indictment and, secondly, what convictions had been read out against him as regards his previous record when he was convicted and sentenced.
A more common case is when there is one set of proceedings in which a defendant is accused alone and a second set of proceedings in which he is accused with somebody else. The case of Poulson naturally springs to mind because one has lived through that traumatic experience in previous but fairly recent years. It was a case in which Poulson was widely named and the proceedings were widely discussed, but certain parts of the proceedings would certainly have prejudiced the trial of a second indictment in which Poulson was indicted jointly with a man called Pottinger, or some such name. At any rate, it would have prejudiced the second trial.
One, of course, wants to protect a fair and accurate report and we have done so in subsection (1), but we also want to protect the right of a man to a fair trial. This is set out in Article 6 of the European Convention on Human Rights. If we do not have subsection (2), I think that we should be in breach of Article 6 of the convention, we should be breaking it all over again, and have reports in the Sunday Times the other way round. I think that this is a bad amendment and I do not ask the House to accept it.
Lord Mishcon: My Lords, one always listens with the greatest of respect to the words that fall from the noble and learned Lord the Lord Chancellor. If I
148
may say so, that applies especially when he talks upon matters appertaining to the law. I must remind your Lordships, if I may be permitted to do so, that it is not very material for us, or even very relevant, that we should have a recital of what may or may not have been the law in regard to contempt and in regard to the publication of proceedings over the last couple of hundred years, by virtue of the fact that the Phillimore Committee was set up to carry out a very important task and did it so well—namely, to try to collate recommendations in order to deal with a sea of uncertainty which was the law of contempt at the time it sat upon and dealt with its deliberations.
The important point that I believe it is necessary to emphasise is as follows. The Bill which we are now considering deals with the question of strict liability in regard to the report of proceedings, both criminal and civil. I think that it is a fundamental point that here one is dealing with a very valuable principle: that the public shall be informed of what is transpiring in our courts and the media shall not be muzzled, improperly and unnecessarily, in regard to their duty in that respect.
Therefore, there is a strict materiality, when we look at this clause, in regard to the freedom of the press and the media generally to make a report, provided that they do it in the language of Clause 4:
"published contemporaneously and in good faith".
There is an exception to that which is contained in subsection (2), because a power is given to the court in certain circumstances to tell the media that for a certain period of time either the whole or part of such proceedings shall not be published. One imagines that, first, that is absolutely right, when one knows that the court is seized of the whole of the circumstances relating to the question whether or not it is just, in the interests of justice, or in the interests of the accused to postpone the publication of those proceedings.
In his amendment my noble friend Lord Gifford says that he admits that; but what he does not admit is the right of the court to look beyond those proceedings and to listen to the application of an advocate who may be very keen—for the sake of his client's skin, or for the sake of his client's future commercial activities for the next few months, for all one knows—that there should not be publication of those proceedings. The advocate then gets up and addresses the court and talks—it could he very vaguely—about proceedings that might be imminent; rather more vaguely one thinks than about proceedings that are pending. It seems to some of us that it is wrong for such a power to be given to the court in regard to proceedings other than those upon which the court is deliberating; that it is wrong for that court to be given the power to postpone the report and, therefore, to bring within its ambit the strict liability rules that will muzzle the media.
It is a simple point and a question of judgment. I say this with great deference, as the noble and learned Lord the Lord Chancellor knows. It does not help to say that this is or is not consistent with Phillimore. There is one simple fact: this is not a recommendation of Phillimore in these words, and I am sure that nothing that the noble and learned Lord who sits on the Woolsack would say would mislead the House into thinking

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that this is what Phillimore recommended. One can argue that Phillimore did not necessarily argue against it, but one certainly cannot say that it recommended it.
It is a question of balance, not just for the lawyers, but for people of your Lordships' inordinate common sense and sense of justice; and one always praises your Lordships when one is trying to get your support in regard to an amendment. It is in that spirit that I would support the amendment, which I thought was so well moved by my noble friend Lord Gifford.
Lord Gifford: My Lords, if I may, with the leave of the House—
The Lord Chancellor: My Lords, no leave is necessary.
Lord Gifford: My Lords, may I say one or two things in reply? First, I do not think that the Lord Chancellor's answer took account of the concern which we feel about the breadth of this power. He thought that I had taken a bad point about the absence of the words, "substantial and serious". But look at the wording of Clause 4(2):
"In any such proceedings"—
that is, any legal proceedings held in public—
"the court may, where it appears to be necessary for avoiding the risk of prejudice"—
not a substantial risk; not a risk of serious prejudice—
"to the administration of justice in those proceedings, or in any other proceedings …".
So the standard which the court has to apply is a low one. It need not be satisfied of very much before obviously the power needs to be lawfully imposed.
The second point—and I am not going to labour it, because we cannot, of course, treat Phillimore as some kind of legal text, although in the course of this Bill we have sometimes tended to do so—is that I think that if noble Lords read those paragraphs which I have mentioned, particularly paragraph 140, it is evident that the defence which Phillimore was recommending in paragraph 141 was not intended to be subject to the qualification which is enshrined in this second subsection.
Thirdly, what is perhaps most dangerous of all is that this power is given to courts, all of whom are fallible, all of whom may act on inadequate information, without there being any recourse on appeal. I think I am right in saying that a newspaper which felt that the judge's power had been wrongly exercised could do nothing. It could possibly apply to the High Court in certain cases for an order of judicial review, but on very limited grounds, and then not, I think, when the High Court itself had exercised the power. Therefore, it is an untrammelled power. At some time I would hope that those points would be looked at again, and that some kind of modification of this clause before this Bill passes through, at any rate, all its stages in Parliament should be envisaged, whether according to the limitation I have put forward or according to some other criterion.
On Question, amendment negatived.
Clause 5 [Discussion of public affairs]:
4.3 p.m.
Lord Elwyn-Jones Lord Elwyn-Jones moved Amendment No. 3:
Page 3, line 1, leave out ("in good faith").
The noble and learned Lord said: My Lords, we discussed this amendment in Committee when it was moved by my noble friend Lord Mishcon. Your Lordships will see that it relates to the important provision in Clause 5 of the Bill relating to discussion of public affairs, and it is a provision which is meant, at any rate in part, to deal with the decision of the Court of Human Rights on the Sunday Times case.
The clause, as it stands, reads:
"A publication made as or as part of a discussion in good faith"—
those are the words I seek to leave out—
" of public affairs or other matters of general public interest is not to be treated as a contempt of court under the strict liability rule if the risk of impediment or prejudice to particular legal proceedings is merely incidental to the discussion".
So we are here dealing with discussion of public affairs in respect of a matter appropriate for public discussion.
As my noble friend Lord Gifford said in Committee, it is everyone's right to take part in the discussion of public affairs. My submission is that if the words, "in good faith", were left out we should be left with a proper, objective test in relation to a discussion of public affairs, whereas the introduction of the phrase "in good faith" introduces a subjective test which, it seems to me, could restrict very seriously the value of this new provision in regard to discussion of public affairs. It would add greatly to the difficulty of introducing this beneficial change in our law, and accordingly I hope that your Lordships will approve of the amendment. I beg to move.
Lord Mishcon: My Lords, my noble and learned friend was gracious enough to remind the House that this was an amendment that I moved on Committee. The noble and learned Lord who sits on the Woolsack was equally gracious at the end of the discussion to utter these words at column 194 on the first day of the Committee proceedings of this House on 15th January:
"I do not want to make this a last-ditch tight and I will certainly accede to the request of the noble Lord, Lord Mishcon, to discuss the matter again".
I wish I could end on that hopeful note, but in sheer fairness I must quote the second sentence.
"On the other hand, I do not want to pretend to be wholly impartial about this; I shall not say I have a closed mind, but I have a mind which at any rate is a long way towards being made up."
Anyone who endeavours to open, even by a small aperture, the mind of the noble and learned Lord who sits on the woolsack when once he has decided that it is in the closing process has indeed an extremely difficult task, but it is one that I hope shortly at least to attempt.
This is a simple issue. It is a question of whether, in regard to strict liability, a discussion which takes place—an article that is written; a publication that occurs—can walk within the defence of really there being no question of any substantial injustice. One would have thought that one could have ended the

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proposition there, but to put the onus upon those who are endeavouring to avoid strict liability by having to say, and indeed prove, that what they did was in good faith is capable of a very subjective interpretation, as my noble and learned friend Lord Elwyn-Jones indicated. It is a serious onus. Are you doing something in good faith when you feel rather spiteful about the existing Government? Are you doing something in good faith when you attack existing establishment institutions? That may be the matter of very difficult decision by any tribunal.
These are not the words which were used in the Phillimore Report. As the noble and learned Lord who sits on the Woolsack reminded us last time, they did not use those words; they used the word, "legitimate". That is all right, because legitimate—that which may be permitted in law is, I think, a fair interpretation of the word, "legitimate "—is something that any tribunal worthy of the name is capable of being guided upon and deciding objectively. It is in those circumstances that I try to put a verbal wedge into the Lord Chancellor's mind, hoping that it will be sufficiently open to receive my humble offering, which is the amendment moved on this occasion by my noble and learned friend.
The Lord Advocate (Lord Mackay of Clashfern): My Lords, as has been said, the amendment was discussed in Committee and my noble and learned friend undertook to consider it in the words to which the noble Lord, Lord Mishcon, referred. Our view is that the word "legitimate" was intended to convey in the Phillimore recommendation an important idea, and that in the context of this legislation that idea is accurately reflected in the phrase "in good faith" which we have chosen.
As has been pointed out, leaving that phrase in would have the effect of removing the defence from a person who, although he does not intend to cause prejudice, has a malicious or oblique motive in publishing the material which causes the prejudice, and we consider that the clause in its present form would have the desirable result that it would prevent an accused person or litigant from being seriously prejudiced by a discussion which was not genuine but was orchestrated for the purpose of causing embarrassment to the litigant or person accused. The phrase appears in other areas of the law of contempt; for example, the law recognises that the conduct of judges and decisions of courts are matters of legitimate public concern and that bona fide criticism is permissible. Lord Atkin in a well-known passage pointed out:
"Whether the authority and position of an individual judge or the due administration of justice is concerned, no wrong is committed by any member of the public who exercises the ordinary right of criticising, in good faith in private or public, the public act done in the seat of justice".
Accordingly, our view is that the clause is better with the phrase "in good faith" in than it would be by removing it, and accordingly we must advise the House not to accept the amendment.
Lord Elwyn-Jones: My Lords, I am sorry that the indication from the Lord Advocate, if it is correct, is that the Lord Chancellor's mind has become clamlike and that there is no hope of opening it, and so the
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expectation which we were encouraged to have, to some extent at any rate, has been defeated. I find the response of the noble and learned Lord the Lord Advocate extremely disappointing. It is very important that there should be freedom and a free discussion of public affairs, and I submit that the restriction in this way will limit the discussion of public affairs and achieve the very kind of difficulty that occurred in the Sunday Times case. I therefore feel that we should press the matter to a decision by the House.
4.13 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 81; Not-Contents, 115.

CONTENTS

Allen of Abbeydale, L.

Kinloss, Ly.

Amherst, E.

Kirkhill, L.

Ampthill, L.

Leatherland, L.

Ardwick, L.

Lee of Newton, L.

Aylestone, L.

Leonard, L.

Banks, L.

Llewelyn-Davies of Hastoe, B. [Teller.]

Beaumont of Whitley, L.

Beswick, L.

McNair, L.

Birk, B.

Maelor, L.

Blease, L.

Melchett, L.

Blyton, L.

Mersey, V.

Boston of Faversham, L.

Mishcon, L.

Briginshaw, L.

Oram, L.

Brockway, L.

Paget of Northampton, L.

Brooks of Tremorfa, L.

Pargiter, L.

Bruce of Donington, L.

Peart, L.

Cledwyn of Penrhos, L.

Reilly, L.

Cooper of Stockton Heath, L.

Ross of Marnock, L.

David, B.

Seear, B.

Davies of Leek, L.

Sefton of Garston, L.

Donaldson of Kingsbridge, L.

Segal, L.

Donnet of Balgay, L.

Shinwell, L.

Elwyn-Jones, L.

Somers, L.

Fulton, L.

Stamp, L.

Gaitskell, B.

Stedman, B.

Gardiner, L.

Stone, L.

Garner, L.

Strabolgi, L.

Gifford, L.

Strauss, L.

Glenamara, L.

Tanlaw, L.

Gosford, E.

Taylor of Gryfe, L.

Greenwood of Rossendale, L.

Taylor of Mansfield, L.

Grey, E.

Underhill, L.

Hale, L.

Wallace of Coslany, L. [Teller.]

Hampton, L.

Hanworth, V.

Walston, L.

Hayter, L.

Wells-Pestell, L.

Henderson, L.

White, B.

Houghton of Sowerby, L.

Wigoder, L.

Hughes, L.

Wilson of Radcliffe, L.

Hunt, L.

Winstanley, L.

Jeger, B.

Wootton of Abinger, B.

Kaldor, L.

NOT-CONTENTS

Ailesbury, M.

Caccia, L.

Airey of Abingdon, B.

Cairns, E.

Alexander of Tunis, E.

Chelwood, L.

Allerton, L.

Cholmondeley, M.

Alport, L.

Clitheroe, L.

Auckland, L.

Clwyd, L.

Avon, E.

Cork and Orrery, L.

Balerno, L.

Cullen of Ashbourne, L.

Bathurst, E.

Daventry, V.

Bellwin, L.

De Freyne, L.

Belstead, L.

De L'Isle, V.

Berkeley, B.

Denham, L. [Teller.]

Bessborough, E.

Diplock, L.

Boyd-Carpenter, L.

Drumalbyn, L.

Brookes, L.

Ebbisham, L.

153

Effingham, E.

Malmesbury, E.

Ellenborough, L.

Mancroft, L.

Elliot of Harwood, B.

Mansfield, E.

Erne, E.

Margadale, L.

Evans of Hungershall, L.

Marley, L.

Exeter, M.

Matthews, L.

Faithfull, B.

Monckton of Brenchley, V.

Falkland, V.

Montgomery of Alamein, V.

Ferrier, L.

Morris, L.

Fortescue, E.

Mowbray and Stourton, L.

Fraser of Kilmorack, L.

Murton of Lindisfarne, L.

Freyberg, L.

Northchurch, B.

Gage, V.

Nugent of Guildford, L.

Gainford, L.

Onslow, E.

Gibson-Watt, L.

Orr-Ewing, L.

Gisborough, L.

Pender, L.

Glenkinglas, L.

Porrit, L.

Gormanston, V.

Ridley, V.

Gowrie, E.

Rochdale, V.

Gridley, L.

Roskill, L.

Grimston of Westbury, L.

St. Aldwyn, E.

Grimthorpe, L.

St. Davids, V.

Hailsham of Saint Marylebone, L.

Saint Oswald, L.

Sandys, L. [Teller.]

Henley, L.

Savile, L.

Hill of Luton, L.

Selkirk, E.

Hillingdon, L.

Sempill, Ly.

Hives, L.

Sharples, B.

Home of the Hirsel, L.

Skelmersdale, L.

Hornsby-Smith, B.

Spens, L.

Inglewood, L.

Stradbroke, E.

Kemsley, V.

Strathclyde, L.

Killearn, L.

Strathspey, L.

Kilmany, L.

Swansea, L.

Kinnaird, L.

Swinfen, L.

Lauderdale, E.

Teviot, L.

Lindsey and Abingdon, E.

Tweeddale, M.

Long, V.

Vickers, B.

Lovat, L.

Vivian, L.

Lyell, L.

Westbury, L.

McAlpine of Moffat, L.

Wise, L.

McFadzean, L.

Wolverton, L.

Mackay of Clashfern, L.

Wrenbury, L.

Resolved in the negative, and amendment disagreed to accordingly.
4.22 p.m.
Lord Morris Lord Morris moved Amendment No. 4:
Before Clause 7, insert the following new clause:
("Defence of confidentiality of source
. No court may require a person to disclose, nor is any person guilty of contempt of court for refusing to disclose, the source of information contained in a publication for which he is responsible, unless it be established to the satisfaction of the court that disclosure is necessary in the interests of justice or national security or for the prevention of disorder or crime.").
The noble Lord said: My Lords, I feel sure that my noble and learned kinsman Lord Salmon would wish me to say at the outset that he most bitterly regrets his inability to be with your Lordships this afternoon. I would say further that his regret is nothing to mine, for I feel that there could be no better advocate than he for this important cause. However, as indeed I do, he must draw immense comfort from the fact that so great a lawyer as the noble and learned Lord, Lord Scarman, should be devilling.
First, may I deal with one rather technical, but nevertheless important, point which was raised at the Committee stage and met in the redrafting of the amendment at this stage of the Bill. In the course of the Committee stage my noble and learned friend the Lord Chancellor, if I may most respectfully say so,
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yet again made a most valuable contribution in pointing out that the amendment as originally drafted suffered from a flaw. As I understand it, the noble and learned Lord argued, with telling effect, that particularly in cases of defamation it is both relevant and vital to the administration of justice that the source of information be disclosed; and more particularly in cases where fair comment is pleaded, the establishment of the presence or absence of malice is crucial. That point was made yet again most eloquently by the noble and learned Lord, Lord Denning, the Master of the Rolls, in the course of his Mulholland judgment, albeit indirectly. Bearing in mind that wise advice, your Lordships will see that the redrafting of the amendment meets squarely the point of the noble and learned Lord the Lord Chancellor, by including the phrase "in the interests of justice".
The substantial issue underlying the amendment is clear. It could never be more eloquently expressed than it was by the noble and learned Lord, Lord Denning, in the course of his judgment in the Granada case in 1980, when he said:
"After studying the cases it seems to me that the courts are reaching towards this principle. The public has a right of access to information which is of public concern and of which the public ought to know. The newspapers are the agents, so to speak, of the public, to collect the information and to try to tell the public of it. In support of this right of access the newspapers should not, in general, be compelled to disclose their sources of information, neither by means of discovery before trial nor by questions or cross-examination at the trial".
Furthermore, again in the Granada case, the noble and learned Lord, Lord Salmon, put it this way:
"The freedom of the press depends upon this immunity. Were it to disappear, so would the sources from which its information is obtained, and the public would be deprived of much of the information to which the public of a free nation is entitled".
However, during the Committee stage of the Bill the noble and learned Lord, Lord Fraser of Tullybelton, in the course of his most valuable contribution, suggested that your Lordships were to be treated not only to the edifying spectacle of lawyers not agreeing with each other but also to the spectacle of one particular lawyer apparently not agreeing with himself; for he drew comfort from quoting the noble and learned Lord, Lord Denning, the Master of the Rolls, in the Mulholland case some 17 years earlier than the Granada case, in which he—that is, Lord Denning—said:
"The only profession that I know of which is given a privilege from disclosing information to a court of law is the legal profession, and then it is not the privilege of the lawyer but of his client. Take the clergyman, the banker, or the medical man; none of these is entitled to refuse to answer when directed by a judge. Let me not be mistaken; the judge will respect the confidences which each member of these honourable professions receives in the course of it and will not direct him to answer unless not only is it relevant but also it is a proper and indeed necessary question in the course of justice to be put and answered".
So what do we see, my Lords? We see yet again that no man better understands or demonstrates than the noble and learned Lord, Lord Denning, the Master of the Rolls, that the law, like the language, is a living thing, like a river ever moving, ever changing, and ever live. It should never be forgotten that it was 17 years later that the principle underlying this amendment was being striven for.
Furthermore, for the noble and learned Lord, Lord Fraser of Tulleybelton, to consider the amendment as conferring an especial privilege upon journalists is, with the greatest respect, to look down a telescope the wrong way, notwithstanding the fact that the inclusion of the words "in the interests of justice" places the journalist in the same position as the clergyman, the banker, and the medical man. As the noble and learned Lord himself said during the Committee stage—as did the noble and learned Lord, Lord Denning, in the Mulholland judgment—the privilege of the lawyer in not being obliged to disclose advice that he has given to his client is not for the benefit of the lawyer but for the benefit of his client. In other words, it is a privilege in aid of litigation. Similarly, this amendment is not designed to grant a privilege to a journalist, still less to his informant. It is the privilege of the public interest—the client, the ultimate beneficiary of journalistic endeavour.
At this stage I must respectfully say that I cannot possibly believe that any of your Lordships would so mislead yourself as to confuse the public interests with that which is interesting to the public. As the noble and learned Lord, Lord Wilberforce, said in the course of his judgment in the Granada case, there is a wide difference between what is interesting to the public and what it is in the public interest to make known. To put it another way, the amendment creates a privilege in aid of truth, a privilege in aid of the public interest, a vital and essential privilege, particularly when one bears in mind the ever-encroaching power, whether direct or indirect, of the Executive over the wellbeing or otherwise of the taxpayer and voter. My Lords, I beg to move.
Lord Mishcon: My Lords, I wonder whether, most respectfully and purely on a personal basis, I may venture another view from the one which has just been put before your Lordships. This happens to be an age, some of us may think, of leakages. Some of us may think that some of the principles that we grew up with have flown out of the window—principles of the loyalty of partners and the loyalty of employees. Some of us may think that disclosures are made which contain only half the truth, if even that fraction is achieved, and which do an amazing amount of harm when published in the newspapers. Some people may think of journals or weekly periodicals that have not got the best reputation but have a circulation which is based purely and simply upon the amazing revelations which are made, in which people's reputations are torn to tatters, leaving them with only the remedy of a writ for libel if they wish to go through the courts and have what sometimes appears to be the inevitable apology at the end of the day, but with people saying all the way round, "But, you know, there is no smoke without fire".
If somebody is brave enough to make a statement about a firm, an individual, a Minister or any other public person, whoever he may be, and even if he be the humblest in the land, is that person not also to be courageous enough to say what was the source of his information? If you measure it up in balance, are you really safeguarding public information and the rights of the public when you are in fact saying that people
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need not, unless they come within the exceptions in this provision, disclose the source of their information? Or are you in fact—I have an obvious dissenter behind me, and when I find it is in the gracious form of my noble friend I do not object. But is it not a graver injustice that, as I say, people can make so-called disclosures without having the guts (if I may use that phrase in your Lordships' House) either to say who it was who told them or to own up themselves?
To me, the issue is simple; and unless people can bring themselves within the privileges that exist, or unless your Lordships have a much broader debate dealing with the right of the minister or religion, of the doctor and of people of that kind, I would have thought it was a very serious disservice to this House, without a full discussion of matters of this kind, to bring this provision within this Bill.
4.34 p.m.
Lord Scarman: My Lords, the emotional misconceptions of the noble Lord, Lord Mishcon, have brought me to my feet earlier than I had otherwise intended in support of this amendment. In this amendment we are not discussing the guts or lack of guts of journalists. We are not in any way discouraging journalists from being brave and disclosing their sources when justice, national security or the prevention of disorder and crime require it. What we are doing, or what we are seeking to do in this amendment, is not to preserve the privileged position of fearful or timid journalists, if they exist, but to preserve and strengthen the right of the public to be informed.
One knows that if information is going to reach the public through the media of the press of misdoings or inefficiency in high places, it is more than likely (let us face it) that the channel, the agent or the messenger of that information will be some "weasel", some pretty despicable person, and his confidence is essential if the journalist is to get the information. One does not wish to protect the "weasel"; there is no need to protect the journalist; but there is every need to ensure that the right of the public to get the information is supported.
Whether or not this amendment succeeds to that extent is a matter for your Lordships' House at this particular moment, but I wish to persuade your Lordships to lift your eyes from the so-called privileged journalist, to lift your eyes from the contemptible figure whom, we assume, nobody wishes to protect, and to look face to face at the public interest. That is basically why I support the amendment. I went into the argument in some detail in Committee, and I will not weary your Lordships with repeating what I then said except to say that, notwithstanding the magnificent but misdirected denunciations of the noble and learned Lord the Lord Chancellor, I stand by what I then said.
A word or two about the amendment that is now before your Lordships' House. It has, I think, been improved since the Committee stage. There was, I think, one omission (or certainly many of your Lordships would have felt, I think reasonably, that there was an omission) from the amendment as it was moved in Committee, and that is that there was no exception for the interests of justice. Now the exception provision—that is, the provision in the amendment which requires the information to be disclosed if the

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court demands it—includes the interests of justice as well as national security and the prevention of disorder and crime. The introduction of that extra exception puts this amendment into an entirely new perspective, and since the matter is important I will ask your Lordships' indulgence for me to explain it, I hope shortly.
As was said in the course of the Committee discussion on the previous amendment, our judges have for long followed the practice of seeking to avoid questions being put to journalists, the answers to which would disclose their source of information, unless they thought it was absolutely necessary; and seeking also to protect the journalist from answering unless they thought it was absolutely necessary. Of course, that practice was unsupported by any rule of law, but it was a wise practice and it was one which led the judge to assess where the true interests of the public lay and how the balance went between the requirements of justice and the public interest, represented by the journalist seeking to protect the confidential character of his source of information. Such has been the practice for a good deal of time. Should this amendment meet with your Lordships' approval and with the approval of another place, it would not in any way alter that practice, that which has been the practice of many judges for a very considerable period of time. What it would do is to give a statutory basis supporting the practice. Judges would not have to rely on their ingenuity or on their personal influence in their court to see that the practice was observed; they would have the statute behind them.
I admit that the practice which I have been describing is applicable also to priests and doctors when they are giving evidence in our courts. The right reverend Prelate the Bishop of London at the Committee stage made a point for which I have great sympathy, even though I think it a bad point: What are you doing here? You are exalting into a rule of law the privilege of the journalist; but what of the priest and the doctor? I understand the motivation of that sort of argument; but if it be right that we are discussing not the privilege of journalists but the right of the public to be informed, then this so-called privilege of the journalist takes on a new character, a character which can distinguish it from the privilege of the doctor and the priest.
It is important to a proper understanding of this amendment and to the practice of the courts which this amendment seeks to support that the journalist is to be regarded in this respect as the agent or the channel for the public interest. It is said—and I think that this was really what was in the mind of the noble Lord, Lord Mishcon—that the journalist will abuse it. No right has ever yet been discovered which some will not endeavour to abuse. But if the courts have the power, where justice requires it, to insist on an answer, and if the refusal of an answer in those circumstances is a contempt of court, then I think that abuse can be taken care of if it should raise its head.
The only point which has ever seemed to me to be a powerful point was the one raised by the noble and learned Lord the Lord Chancellor at the Committee stage, that the Contempt of Court Bill, this Bill, is not the appropriate place for introducing what would be, I recognise, a substantial reform of the law even though its effect would be merely to buttress a practice already
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followed by the judges. Of course, I see that point but, as I have said before, in our system with its historical concepts it is very difficult to find the appropriate legislative vehicle for reforming positive and sub-stantial rules of law. Too many of our rights and many of our duties are to be found in the interstices of our procedural law. If we are going to wait until we have got substantive law and procedural law into their correct relationship before introducing worthwhile reforms, then it will not be in our lifetime that those worthwhile reforms are ever enacted.
Therefore, recognising the validity to some extent of the procedural point that this is a Contempt of Court Bill and not an appropriate place for this type of reform, I say that, notwithstanding that, we must do something about it now because, if we do not, we never will. And if it be said that the proper time is to wait until somebody produces a Bill dealing with confidences and confidential communications, I think I could say with a certain amount of plausibility that, properly understood, this amendment is not about confidences and not about confidential communications; it is an attempt to ameliorate the law relating to contempt of court so that the public right to be informed is not impeded or obstructed. It is for those reasons that, notwithstanding the difficulties which, of course, I see as a lawyer, and notwithstanding the emotional doubts of the noble Lord, Lord Mishcon, I ask your Lordships to give very careful consideration to this amendment.
Lord Wigoder: May I make two brief comments in support of this amendment? First, I would hope that we will not get unduly involved in drawing analogies between the position of the journalist and that of the doctor, the lawyer or the priest. They seem to be so very different in degree as eventually to raise totally different issues in kind. Secondly, I should like merely to go on record in support of what the noble and learned Lord, Lord Scarman, has just said: that the real issue which we are faced with by this amendment is whether we want the greatest possible amount of information to reach the public through the media. One accepts that among that information, if one has a free press, there will be much that is irresponsible; there will be many warts; there will be much that, to use Lord Mishcon's word, is "scurrilous". Nevertheless, the right of the public to know what is going on seems to me to be of crucial importance in the sort of society in which we live.
Perhaps I might pose this question to whoever replies on behalf of the Government to this amendment. Will there be more information reaching the public if this amendment is carried than there will be if the Granada decision remains the law? It seems to me that, under the terms of the Granada decision, the inevitable result will be a slow but steady drying up of much essential information to which the public should have access.
Baroness Jeger: I apologise to my noble friend Lord Mishcon for muttering dissent behind his back. I want to say briefly that I am sure that members of my profession and my union are not asking for the support of this amendment for any special category for journalists. If read carefully, the amendment

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refers to information contained in a publication for which the journalist is responsible. This might apply to a vicar bringing out a parish magazine. It seems to me that it could refer to candidates publishing election addresses. The whole range of publications would be concerned. I think that it would be a mistake to think that in any way there is a special plea for journalists in this amendment. But, as the noble Lord who has just spoken has made so clear, it is a plea for wider access to information by the general public.
Lord Ardwick: I have been warned by my doctor not to waste my convalescent energy in debate; but I must say how strongly I associate myself with the words of my noble friend Lady Jeger, and how much I dissent from my noble friend Lord Mishcon on the Front Bench, and how much I agree with what was said by the noble and learned Lord, Lord Scarman, and with what was said, too, from the Liberal Benches.
4.50 p.m.
Lord Mackay of Clashfern: My Lords, as has already been made clear, the amendment which is before your Lordships is substantially different from the one which was moved at the Committee stage. One point is underlined by that change and it is that this matter is concerned with contempt only incidentally. As the amendment now makes clear, it is primarily a question of the court not requiring a person in particular circumstances to disclose; in other words, it is a restriction on the compulsory answering of questions. Of course, whatever be the rule about that, matters of contempt may follow if a lawful question is put and the judge requires the witness to answer and he refuses. Then, obviously, that has consequences for contempt. But I think it is proper to regard that as incidental to the main matter which is here in question. Accordingly, we would certainly suggest to your Lordships in the first instance that the amendment, as now drafted, is not really an amendment which directly relates to the subject matter of this Bill.
The next point I should like to mention is that the whole area of which this is a part was considered by the Law Reform Committee in 1967 (Cmnd. 3472) They summarised the results of their inquiries in this way:
"Privilege in the main is the creation of the common law, whose policy, pragmatic as always, has been to limit to a minimum the categories of privileges which a person has an absolute right to claim, but to accord to the judge a wide discretion to permit a witness, whether a party to the proceedings or not, to refuse to disclose information where disclosure would be a breach of some ethical or social value and non-disclosure would be unlikely to result in serious injustice in the particular case in which it is claimed".
As the noble and learned Lord, Lord Scarman, has pointed out, one of the purposes of this amendment is to give statutory backing to that practice. If that is right—as I am sure it is—then the answer to Lord Wigoder's question must surely be that it will not really make any difference because just to give statutory backing to what the judges presently do ought not to have much effect on the flow of information.
The Phillimore Committeee looked at this matter
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also and they reached the conclusion that the evidence which had been put before them did not lead them to differ from the Law Reform Committee's conclusion to which I have already referred. They set out their conclusions in paragraphs 39 and 40 of the report. As the noble Baroness, Lady Jeger, said, it is not a matter of journalists only, it is a matter of those responsible for publication, and of course there are many types of publication. It has been pointed out to me, for example, that one could find this being resorted to because a publication is made essentially for the purpose of securing this particular protection.
The provisos at the end about the interests of justice of course might mean that such an artifice would not be successful; but still, such an artifice would be possible under this amendment. I should also like to suggest that one cannot leave aside doctors, ministers of religion, priests and so on. The public interest is just as much tied up with the confidence being reposed in such people, in social workers and so on, as it is in journalists and publications. I agree that it is a different form of the public interest but it is no less important. Surely we could properly be accused of not giving a balanced effect to the public interest if we were to afford protection such as is proposed in this amendment for those responsible for publications—
Lord Hale: My Lords, would the noble and learned Lord forgive me? I listened to every word of the speech of the right reverend Prelate the Bishop of London who raised this matter. I am afraid that I did not quite hear the concluding sentences in which he suggested a preparedness to accept the existing situation after it had been explained by many of the noble Lords who had taken a substantial part in the debate. With great respect (and rather contrary to his usual practice) the noble and learned Lord on the Woolsack dismissed the right reverend Prelate the Bishop of London—
The Lord Chancellor: May I interrupt the noble Lord's interruption? I never dismissed the right reverend Prelate. What the noble Lord is doing is to intervene in the Lord Advocate's speech. He really must not do so. He will have plenty of opportunity of making a speech of his own if he wants to do so.
Lord Mackay of Clashfern: My Lords, certainly I am trying to take account of what the right reverend Prelate the Bishop of London said on the last occasion, and I am suggesting to the House that it is wise to take account of that and it would not be a balanced approach to the problem to single out publications for particular treatment on this occasion. Therefore, what I would say in seeking to sum up the position from this point of view is that the present position, as has been found by the Committees that I have referred to, and in the light of the Granada decision, is reasonably satisfactory and therefore best left alone so far as a contempt Bill is concerned. The amendment perhaps does not leave the flexibility which the present law leaves. Above all, it singles out the publication for special treatment in the public interest while leaving many other areas of confidentiality, which are equally important to different aspects of the public interest, untouched.
Lord Morris: My Lords, I feel that I ought to disregard the determination of the noble Lord, Lord Mishcon, not only to look down a telescope the wrong way but also to look through a glass darkly—if your Lordships will excuse my mixed metaphors. I must confess that I am surprised that Her Majesty's Government should take so unduly legalistic an attitude regarding the point whether this amendment should lie within the scope of this Bill. I can absolutely assure your Lordships, when somebody is carried protesting into the cells for refusing to disclose something which the judge wishes to hear, which he in all conscience felt it was important that the public should know, when he asks why he is being carried down there, he will be told that he has committed a contempt of court. So far as he is concerned this is very relevant regarding the Bill.
I am puzzled whether the noble Lord, Lord Mishcon, was speaking for Her Majesty's loyal Opposition on this point or whether they have a free vote on this matter.
Lord Mishcon: My Lords, I wonder whether I can help the noble Lord. At the very outset of my speech I made it abundantly clear that I was putting before the House most humbly a personal point of view.
Lord Morris: My Lords, I must ask your Lordships to forgive me. Obviously I did not pay the noble Lord, Lord Mishcon, the attention which he undoubtedly deserves. Bearing in mind the support that this amendment has received from noble friends behind him and from the Benches of the Liberal Party, I feel that this issue, being of such great public importance, should be decided through the Lobbies.
The Lord Chancellor: I wonder whether I can persuade my noble friend that he might possibly be wrong. First of all, one has to ask oneself what this amendment will do and what it will not do. I am sorry to appear to be, as it is alleged, legalistic; but that is what I am paid for. This amendment is supposed to protect journalists. Would it have protected the only two journalists who have been sent to prison for contempt of court for refusing to disclose the source of their information? The answer is, no. Mulholland and Clough would have gone to prison just the same, because it does not apply to tribunals of inquiry. This is not an accident because, as the noble and learned Lord, Lord Scarman, explained on Committee—and I apologise to him for the fact that because his amendment was put down so late in Committee stage I had not had time fully to consider its implications: it was not my fault—quite clearly it is not meant to save Mr. Clough and Mr. Mulholland from going to prison.
Secondly, who does it protect? It protects anyone who makes a publication. Who is a man who makes a publication?—anybody who puts an advertisement in a newspaper; and he is not necessarily a journalist. Supposing I want to put an advertisement in a newspaper, I am protected. However, do the "interests of justice" require it? From a perusal of the definition clause at the beginning it is evident that anyone who makes a public speech, however malicious, is protected. He is not a journalist; he is not an editor; he may be a
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scurrilous know-all. Anyone who writes to the newspaper a letter of the most scurrilous kind is protected. He is not a journalist.
What is the good of this amendment? Supposing I want to commit a breach of copyright. I hate to say this to my noble and learned friend Lord Scarman, but how does this amendment affect the law of copyright? If I want to publish somebody else's book I am making a publication, and if I do it through a publisher the publisher will be protected. Am I to escape from being known as guilty of piracy? I think this amendment might well protect me. Supposing I am a dishonest servant of a company and I go off with the trade secrets of my employers. I sell those trade secrets to a rival company; I publish an advertisement in the newspaper containing the necessary information. I am protected. Why should I be?
This has nothing to do with journalists, with the press or with confidentiality. I come back to the point of my noble and learned friend: this would bring in by a side wind, using a totally inappropriate vehicle, an absolutely revolutionary concept which might affect the whole range of law. It is not a thing which will protect editors. Of course it does not protect the priest in the confessional: the right reverend Prelate said that, and I do not dismiss him at all. It does not protect the doctor in his consulting room and it does not protect any other form of confidentiality. As a matter of fact, the Law Commission is about to report in a few months' time on confidentiality and presumably the Law Commission will say what it thinks about this sort of thing.
I really do make this appeal to my noble friend Lord Morris, whose persuasive, gracious and obviously sincere speech excited my admiration: Is he really doing right to force this to a Division when, as a matter of fact, he might find that he is pre-empting the report of the Law Commission on confidentiality, which is a totally different subject, and when he is forcing to a Division an amendment which may have the effect which I suggest?
The absurdity of the thing is this. He thinks, as does my noble and learned friend on the Cross-Benches, that their amendment has been improved, in deference to a point I thought I had legitimately made which was limited to the law of defamation, which is in this connection very important. So they thought that they would put in an amendment so that a man may be asked to disclose the source of his information, if that is required "in the interests of justice".
What are the interests of justice? I suggest that they are as long as the judge's foot. What does my noble friend think he is achieving by this, except a mish-mash of muddled thinking? Clearly the interests of justice will demand in a defamation case that the source of the information should be disclosed. The journalist might be protected in a defamation case if malice is an issue. The interests of justice may well demand disclosures in a copyright case when a publisher is asked: "Who gave you this manuscript?" It may be demanded in a trade secrets case. What is it thought is being achieved by this curious amendment? I wonder: am I just being pedantic? I hope not, but I am very puzzled.
I would venture to say—and I say it in fear and trembling with so many pairs of eyes looking at me

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from the Cross-Benches—that a judge ought never to permit a question of any sort to be asked of anybody which is not required in the interests of justice. Suppose a man goes into the witness box in a running-down case and is asked whether he committed bigamy 20 years ago. I think, if I were a judge of first instance, I might say: "This is not required in the interests of justice" and I would not allow it. But of course if this amendment were passed, a counsel who wanted to press the question in cross-examination might say: "There is no statutory privilege here. You must answer the question; it affects your credit." I think this is a mish-mash of muddled thinking and if my noble friend persists in putting it through the Lobbies, then let it go through the Lobbies, but he will do it against my advice.
On Question, amendment negatived.
Clause 7 [Scope of jurisdiction to protect inferior courts]:
5.7 p.m.
Lord Fraser of Tullybelton Lord Fraser of Tullybelton moved Amendment No. 5:
Page 3, line 20, leave out from (" of ") to end of line 23 and insert (" the inferior Courts and tribunals specified in Schedule [INFERIOR COURTS AND TRIBUNALS] ").
The noble and learned Lord said: My Lords, this amendment is, on the face of it, the same as one moved at Committee stage by the noble and learned Lord, Lord Gardiner, and it relates to Clause 7 of the Bill. I hope to explain in a moment that it is really different in substance, because it is accompanied by a suggestion of the particular tribunals to which it refers. Might I remind your Lordships that Clause 7 at present provides that there should be jurisdiction to punish for contempt in respect of proceedings in inferior courts. It says that it applies—
"… to … all inferior courts, tribunals and bodies … which are constituted by law and exercise any part of the judicial power of the State ".
The proposal in my amendment is that the reference to inferior courts exercising the judicial power of the state should come out and be replaced by:
" It should apply to the inferior courts and tribunals specified in Schedule 5 to the Bill ".
The reason, as your Lordships will appreciate, is to substitute for the present statement of principle, which is lacking in precision, a precise list of the tribunals which are to be affected by this provision.
The present clause is drawn, as I said last time (I hope I may be forgiven for repeating myself slightly) from the speech made by my noble and learned friend Lord Scarman in a case during judicial proceedings of your Lordships' House. The principle was there stated in a way which is proper and appropriate for that tribunal but it is a way which, in my submission, is not appropriate for inclusion in an Act of Parliament, because one has not got certainty.
I just ask myself rhetorically, and metaphorically ask your Lordships: how do you apply the expression:
"… inferior courts … which are constituted by law and exercise any part of the judicial power of the state"?
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That principle was enunciated in the course of considering whether a local valuation court was, or was not, entitled to protection from contempt. It took the Apellate Committee of your Lordships' House two or three days, with the assistance of arguments from counsel, to conclude, in the end, that the local valuation court was not entitled to protection against contempt; that is to say, it was not exercising part of the judicial power of the state.
It is, of course, very difficult to draw a precise line and when this Bill was in Committee the noble and learned Lord, Lord Rawlinson of Ewell (who I think is not here today), said that he could not tell whether the list of tribunals which would fall within that definition would be short or would occupy two or three pages, and the noble and learned Lord the Lord Chancellor said that it was impossible to draft a list of tribunals fitting that description.
The noble and learned Lord the Lord Chancellor, if I may say so respectfully, rather teased the noble and learned Lord, Lord Gardiner, and perhaps myself also, for being unable to produce a list. He said, "It is all right to refer to a list, but if you do not produce it it is not very much good". Somewhat nettled by that charge, I at least attempted to produce a list which will be found in Amendment No. 16 and, with your Lordships' leave, I should like to refer briefly to it now, because I cannot make sense of the present amendment without doing so.
Amendment No. 16 (the last amendment on the Marshalled List) gives a list of the tribunals to which I suggest the law of contempt ought to apply. These are the inferior tribunals. The first one is the magistrates' courts. There can be no doubt that magistrates' courts exercise part of the judicial power of the state. They fall well within the definition and ought to have protection from contempt. I do not imagine there is much doubt about that. The next four courts—county courts, coroner's courts, courts martial and consistory courts—it was decided earlier should each be entitled to protection. The noble and learned Lord the Lord Chancellor mentioned that the other day and I regard that as not being open to doubt. We then come to the Lands Tribunal for England and Wales and the Lands Tribunal for Scotland. They are dealing with what appear to be judicial matters. Their chairmen are distinguished lawyers and I suggest that they are suitable for inclusion in this clause.
Then we have the Employment Appeals Tribunal. That is a body which I put in rather ex abundante cautela. I think it is unnecessary to do so, because the chairman of any sitting of that body is, I believe, always a judge, in which case the tribunal would fall within the last paragraph of the schedule. Your Lordships will see that I have put that
"Any court or tribunal of which the Chairman is, or has the status of, a judge of the High Court in England and Wales, or of the Court of Session in Scotland"
shall always have protection from contempt. So that an employment appeals tribunal may not need to be specified, but I put it in to be beyond doubt.
The last one, the industrial tribunals, may he open to rather more doubt. They do not deal with such major matters, but they have quite an important jurisdiction in industrial law and in various spheres

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related to that. I paid attention to the speech of the noble and learned Lord the Lord Chancellor, who said that, above all, the industrial tribunal was a body which ought to be included. I have included it, so I do not think he can criticise me at any rate on that ground.
There may very well be other tribunals which should go into the list and, if so, I should be the first to agree that that ought to be done. I am not convinced that this list is the last word on the subject, and I said in Committee that I thought that any list was wide open to amendment, both now or subsequently. If it is found that certain tribunals have been omitted I see no reason why they should not be added by amendment at a later stage. The important thing, to my mind, is that there should be a definite list to which people concerned with publications can refer, so that they can say, "This is a court or a tribunal to which the law of contempt applies, and that one is not". That is important for the conduct of publications, and it seems to me to be the duty of Parliament to define a list in some way. If my definition is unsatisfactory—and it may well be that it is—then let us amend it. But, in principle, I submit that there certainly ought to be a definition and that is what I have sought to do. My Lords, I beg to move.
The Lord Chancellor: My Lords, is it your Lordships' pleasure that Amendments Nos. 5 and 16 should be discussed together?
Noble Lords: Yes.
The Lord Chancellor: The Question is, therefore, that Amendments Nos. 5 and 16 be agreed to.
5.15 p.m.
Lord Elwyn-Jones: My Lords, I rise to support both amendments which we are now discussing together. It is, I think, likely to be agreed that it would be wrong to extend the strict liability rule to the whole mass of tribunals, and some definition of the tribunals and inferior courts in respect of which the contempt rule should apply should be made. The attempt to define the relevant tribunals in the Bill is, in my submission, ineffective and has left nothing but uncertainty. The very uncertainty of it has been manifested in what has been said from the Government Benches, and in their own difficulty in providing now a list of the inferior courts and tribunals to which the provisions should apply.
The attempt that has been made by the noble and learned Lord, Lord Fraser, to present a list is an effective one. In so far as it may be thought that some that ought to have been included have not been included, an amendment could be put down to add to his list. If new bodies arise, which are worthy of inclusion in the schedule, we could make provision in the Bill that, by order, the list could be added to if that were deemed to be necessary.
I appreciate, as the noble and learned Lord, Lord Fraser, said, that the inclusion of industrial tribunals is perhaps less certain. I myself think that they ought to be included. Their jurisdiction is important, they sit regularly up and down the country on controversial matters where a good deal of public interest arises, and it is a very scene where, potentially, contempt of
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court could well and easily arise. I should therefore strongly favour the inclusion of the industrial tribunals, as the noble and learned Lord, Lord Fraser, has done, and I hope that now this effort, made under some provocation, will be approved by the noble and learned Lord opposite.
The Lord Bishop of London: My Lords, I am interested to see the inclusion of the consistory courts under the heading of Inferior Courts and Tribunals. I confess that I did not come to this House with the preparation that I would wish to have made, to be able to pronounce rather more authoritatively upon this matter. If it is the intention to include the consistory courts in this category, then there must be some careful consultation with those who are more learned than I am in these matters.
For instance, I know that there are some noble Lords who have, at various times in their previous existence, been Chancellors, and therefore they will know exactly what is the status of the consistory court. I understand it to be the case that a Chancellor cannot commit for contempt of court, but must go to the High Court for such order as is required. There are, however, other courts which have been set up under the ecclesiastical jurisdiction measure, such as the courts of ecclesiastical causes reserved, and I should want to know whether they are to be included in this category.
Recently we have also, rather to our cost, included some tribunals under new measures, such as the Vacancies (Benefices) Measure which has not worked very well. There needs to be careful examination of the church courts in general as to how far they come within the scope of the schedule. If therefore this amendment is carried, I hope it will be on the understanding that there will be some consultation with the Dean of Arches and other learned ecclesiastical lawyers as to what exactly is the status of the ecclesiastical courts.
Lord Wigoder: My Lords, when the noble and learned Lord the Lord Advocate replies, I wonder whether he would be good enough to deal with one point which was raised by me during the Committee stage. Does not Clause 7 at the moment cover both contempts in the face of a court and the extension of the strict liability rule to inferior courts? Would the noble and learned Lord indicate whether there is any convincing reason why the two areas should be coterminous? May it not be that there is a strong case for extending contempt in the face of a court to all tribunals? And may it not be that there is an equally strong case for not extending the strict liability rule to more than a very few tribunals? Before the Bill leaves this House, would it not be better to try to sever these two issues?
5.22 p.m.
Lord Mackay of Clashfern: My Lords, the purpose of Clause 7 is to seek to give-somewhat more precision to this particular area of the law than it enjoys at present. So far as the Phillimore researches went, it did not appear that there was much dissatisfaction with this particular area of the law of contempt from the point of view of confusion about its scope and

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precisely which tribunals it covered. However, in view of the discussion in the Judicial Committee of your Lordships' House in the BBC case it was thought useful to take the principle which had been stated there very succinctly and put it into this clause as being a clear statement of the doctrine of the law as it defined the scope of contempt.
So far as that goes, therefore, we think that this is the right way to proceed towards greater clarification. What the noble and learned Lord, Lord Fraser of Tulleybelton, wishes to do is to go even further. I should like to say how much we appreciate the effort which he has put into supplying a list. It makes it possible to discuss the matter against the background of an actual list. As the noble and learned Lord has made clear, he does not claim that this list is exhaustive. A good deal can be said about the various tribunals which might or might not go into it. There is the question of the ecclesiastical courts which the right reverend Prelate the Bishop of London has raised. Jurisdiction to deal with contempts so far as these courts are concerned is, as he said, already dealt with in Section 81 of the Ecclesiastical Jurisdiction Measure 1963.
The view which so far we have been able to form on the matter—my noble and learned friend the Lord Chancellor dealt with it in some detail on the last occasion—is that in the present situation it is difficult to frame a list which one can commend as being reasonably acceptable. One of the reasons is that many of the tribunals which are listed in the Tribunals and Inquiries Act—that is the sort of tribunal which one would think of for possible inclusion in this field—exercise both administrative functions and sometimes judicial functions. There is therefore a kind of hybrid within the actual tribunal. A mere list cannot deal with that satisfactorily. One needs to have some criterion for distinguishing that part of the function which is judicial from that part which is not.
If you have to go that far, is it not just as well to maintain that as the principle, which is reasonably recognisable, for determining whether any tribunal in relation to particular proceedings is exercising any part of the judicial power of the state? We would suggest that, looking at a particular proceeding it is reasonably easy to decide whether or not it is a judicial proceeding, whether the tribunal in question is exercising the judicial power of the state, or part of it, and that in many ways that is a better approach, at least at this stage of the development of the law, than to attempt an exhaustive list. However, we are very much obliged to the noble and learned Lord for what he has done in that respect.
May I give one illustration—there are a number one can think of—of a tribunal which the noble and learned Lord has not included but which would obviously be for consideration: the mental health review tribunal. That is a tribunal which has to deal with issues which are very close to the heart of people. The liberty of the subject is a very important matter indeed. We should have thought there was a strong argument for at least some of the proceedings of that tribunal being regarded as covered. This sort of argument one can apply to the very long list of tribunals which occurs in the Tribunals and Inquiries Act.
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This is the sort of reasoning which has led us to conclude that on the whole it would be wise to be not too ambitious at this stage: to go for the clarification of the law which the clause at present attains and not to go further. So far we have not thought it wise to make any distinction along the lines which the noble Lord, Lord Wigoder, has suggested. Too many distinctions in this area of the law might not be a desirable simplification.
I hope that the noble and learned Lord, Lord Fraser of Tulleybelton, will feel that we have given a good deal of consideration to the matter. I am obliged to him for giving me such early notice of the list that he was proposing. We have not by any means dismissed the suggestion out of hand.
Lord Gifford: My Lords, I support the amendment of the noble and learned Lord, Lord Fraser of Tullybelton. Surely we should be able to decide today on the principle. We want there to be in the Bill a list of the courts and the tribunals which are covered and therefore to know which courts and tribunals are not covered. Of course we can all think of some tribunals for which a case might be made for adding them to the noble and learned Lord's list, but surely that should not prevent us from deciding the matter in principle. If at a later stage, either before the Bill leaves this House or in another place, the Government want to perfect the list, if it has imperfections, that can be done.
Lord Fraser of Tullybelton: My Lords, with regard to the point raised by the right reverend Prelate the Bishop of London about church courts, I considered that matter more from the angle of the Church of Scotland, with which I am more familiar, than from the angle of the Church of England. It seemed to me to raise great difficulties for the courts of the Church of Scotland go right down to Kirksession. I do not believe anybody would think that it was right to protect Kirksession against contempt of court. I certainly would not do so. The same may be true of some of the lower courts of the Church of England. However, I am not very familiar with them. To let in many church courts would probably be a mistake.
I should like to thank the noble and learned Lord the Lord Advocate for his polite and welcoming reply to my amendment. However, I am bound to say that I do not regard his reply as entirely satisfactory. It is quite clear that he has in view a much longer possible list of tribunals than I have. I should be very sorry if this list became very much extended, partly because the more you extend the list the more you are restricting the freedom of reporting and speech about those bodies and partly for this further reason, that if a large number of bodies, perhaps sitting in various parts of the country, are all protected against contempt it can become difficult for the people concerned—mainly the press—to know what proceedings are pending before those bodies. It would raise great practical difficulties if all sorts of tribunals sitting in country towns all over the place were to enjoy protection against contempt of court. I know that it is a defence under the Act to say that one had made reasonable efforts to find out and did not know that proceedings were going on, but I am not sure how far such "reasonable efforts"

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would have to go. It would raise considerable difficulties in a long list of tribunals.
Finally, I very much welcomed the intervention at the end by the noble Lord, Lord Gifford, who said exactly what I would wish to say, that we ought to have the principle decided on this matter and that by all means the list itself should be amended in due course.
The Lord Chancellor: My Lords, I am told that I must put Amendment No. 5 to the House separately although I got the agreement of the House to do it otherwise. The Question is, therefore, that Amendment No. 5 be agreed to.
5.32 p.m.
On Question, Whether the said amendment (No. 5) shall be agreed to?
Their Lordships divided: Contents, 77; Not-Contents, 105.

CONTENTS

Airedale, L.

Jeger, B.

Ardwick, L.

Kilbracken, L.

Aylestone, L.

Kilmarnock, L.

Balogh, L.

Lee of Newton, L.

Banks, L.

Leonard, L.

Barrington, V.

Llewelyn-Davies of Hastoe, B.

Birk, B.

McGregor of Durris, L.

Blease, L.

Mackie of Benshie, L.

Bledisloe, V.

McNair, L.

Blyton, L.

Maelor, L.

Boston of Faversham, L.

Melchett, L.

Bridge of Harwich, L.

Mishcon, L.

Briginshaw, L.

Mountevans, L.

Brockway, L.

Oram, L.

Brooks of Tremorfa, L.

Peart, L.

Bruce of Donington, L.

Ross of Marnock, L.

Collison, L.

St. John of Bletso, L.

Cooper of Stockton Heath, L.

Seear, B.

David, B.

Segal, L.

Davies of Leek, L.

Shepherd, L.

Diplock, L. [Teller.]

Shinwell, L.

Donaldson of Kingsbridge, L.

Simon, V.

Donnet of Balgay, L.

Somers, L.

Elwyn-Jones, L.

Spens, L.

Fisher of Rednal, B.

Stedman, B.

Fraser of Tullybelton, L. [Teller.]

Stone, L.

Strabolgi, L.

Gardiner, L.

Tanlaw, L.

Gifford, L.

Taylor of Gryfe, L.

Glenamara, L.

Taylor of Mansfield, L.

Gosford, E.

Tweeddale, M.

Grey, E.

Wallace of Coslany, L.

Hale, L.

Walston, L.

Hampton, L.

Wells-Pestell, L.

Harris of Greenwich, L.

Whaddon, L.

Hayter, L.

White, B.

Houghton of Sowerby, L.

Wigoder, L.

Hughes, L.

Wilson of Radcliffe, L.

Hylton-Foster, B.

Wootton of Abinger. B.

NOT-CONTENTS

Ailesbury, M.

Brookes ,L.

Airey of Abingdon, B.

Cairns, E.

Alexander of Tunis, E.

Camoys, L.

Allerton, L.

Campbell of Croy, L.

Alport, L.

Cathcart, E.

Ampthill, L.

Chelwood, L.

Auckland, L.

Cockfield, L.

Avon, E.

Cork and Orrery, E.

Balerno, L.

Craigavon, V.

Bathurst, E.

Craigmyle, L.

Bellwin, L.

Cross, V.

Belstead, L.

Cullen of Ashbourne, L.

Boyd of Merton, V.

De Freyne, L.

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Denham, L. [Teller.]

Margadale, L.

Drumalbyn, L.

Marley, L.

Duncan-Sandys, L.

Massereene and Ferrard, V.

Ebbisham, L.

Mills, V.

Ellenborough, L.

Monckton of Brenchley, V.

Elliot of Harwood, B.

Montagu of Beaulieu, L.

Erne, E.

Montgomery of Alamein, V.

Exeter, M.

Mowbray and Stourton, L.

Fortescue, E.

Murton of Lindisfarne, L.

Gainford, L.

Newall, L.

Gisborough, L.

Northchurch, B.

Glenarthur, L.

Nugent of Guildford, L.

Gormanston, V.

Onslow, E.

Gowrie, E.

Orkney, E.

Gridley, L.

Orr-Ewing, L.

Grimston of Westbury, L.

Renwick, L.

Hailsham of Saint Marylebone, L.

Rochdale, V.

St. Aldwyn, E.

Henley, L.

St. Davids, V.

Hillingdon, L.

Saint Oswald, L.

Hives, L.

Sandford, L.

Home of the Hirsel, L.

Sandys, L. [Teller.]

Hornsby-Smith, B.

Savile, L.

Inglewood, L.

Selkirk, E.

Kemsley, V.

Sempill, Ly.

Kilmany, L.

Skelmersdale, L.

Kimberley, E.

Soames, L.

Kinnaird, L.

Stradbroke, E.

Lauderdale, E.

Strathclyde, L.

Lindsey and Abingdon, E.

Strathspey, L.

London, Bp.

Swansea, L.

Long, V.

Swinfen, L.

Lonsdale, E.

Thorneycroft, L.

Lucas of Chilworth, L.

Trenchard, V.

Lyell, L.

Trumpington, B.

McFadzean of Kelvinside, L.

Ullswater, V.

Mackay of Clashfern, L.

Vickers, B.

Malmesbury, E.

Wakefield of Kendal, L.

Mancroft, L.

Westbury, L.

Mansfield, E.

Woolley, L.

Resolved in the negative and amendment disagreed to accordingly.
5.40 p.m.
Lord Gifford Lord Gifford moved Amendment No. 6:
After Clause 7, insert the following new clause:
(" Documents disclosed in litigation
It is hereby declared that the obligation to protect and maintain the confidentiality of the contents of a document disclosed to a party to litigation or his agent terminates if and to the extent that the contents of the document are read aloud in open court inproceedings which are not subject to any limitation on reporting.").
The noble Lord said: My Lords, this amendment was moved by me in identical form on the Committee stage. It then received expressions of support and concern from a number of noble Lords, including the two former Lord Chancellors who sit in front of me, my noble and learned friends Lord Elwyn-Jones and Lord Gardiner. The noble and learned Lord the Lord Chancellor was good enough to say at the end of the debate that I had rendered a service to the Committee in raising the matter, and on the merits of the amendment he said this:
" I do not want finally to close the mind of the Government at some stage in this Bill (though not the present) to examining any issues, when they emerge, with a little greater clarity ".—[Official Report, 20/1/81, col. 369.]
With that, and because it appeared possible that the Court of Appeal might give a decision in the near future, I was, of course, very happy to withdraw my amendment.
The Court of Appeal now has given a decision in the case of the Home Office v. Harman. It was given last Friday. In the very first paragraph of the decision, reference is made to the debate in this House, and I quote these words from The Times report:
"Lord Gifford, whose ancestor was Master of the Rolls in 1824, thought that the decision was so wrong that he moved an amendment to the Contempt of Court Bill so that the Court of Appeal might be in no doubt what he thought they ought to do in the particular case. Other peers followed suit, feeling no inhibitions about sub judice".
Having said that, the Master of the Rolls continued:
"The court could not criticise the House of Lords proceedings".
The Lord Chancellor: My Lords, in fact he said: "Nor did the Lord Chancellor advise them to desist".
Lord Gifford: My Lords, I thought he had said that but I did not have the benefit of an exact transcript, so I did not put that bit in. In view of that I think it is necessary to say that the discussion of this issue in your Lordships' Committee did not offend against the sub judice rules, which say, quite rightly and for good cause, that the rules do not apply to Bills or delegated legislation; and for good cause because it is the right and it is the the duty of your Lordships' House, as I perceive it as a comparatively young Member, when legislation is passing through, to raise matters which are of concern to them, even if they affect issues which may be pending in court. The present position, as I understand it, is that leave to appeal to the House of Lords has been refused; it may be that Miss Harman will petition the House of Lords for leave. It may be that they will give it; we know not. But the stage has come when this House ought to take a view on the issue.
The issue in the Harman case, and on this amendment, is really quite a simple one. In the case, as in every case, documents were disclosed by one party, the Home Office, to the other party, Mr. Williams, the prisoner, who was suing them. Miss Harman, as Mr. Williams' solicitor, had a duty to keep those documents confidential, and that was right and proper. That is the condition under which documents are disclosed to other parties in advance of trials. Many of those documents were never read out in court and have been kept entirely confidential. But some were read out in court, and through being read out in court they obviously took on a somewhat different character. Instead of being purely private documents they became part of the evidence in a public trial of an important issue, as to whether the Home Office had broken the law in setting up control units in prisons. As part of the evidence given in a court of law it was a matter of legitimate public and press comment. Miss Harman did not show to any reporter any document which had not been read out in court. She did, with the authority of her client, show a reporter some documents which were read out. He took notes and used them to write an article which was highly critical of the Home Office. That conduct is the conduct which has been held to be a serious contempt of court.
The reasons why it was so held appear, in part at least, to stem from a grave disapproval by the court of the journalist in the case and of the plaintiff prisoner.
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In part of his judgment—again I quote from The Times—the Master of the Rolls said that there was no public interest in having the highly confidential documents in the present case made public. It was in the public interest that they should remain confidential. The use made of them by the journalist in the present case was
"highly detrimental to the good order of our society".
They had been used
"to launch a wholly unjustified attack on Ministers of State and high civil servants, who were only doing their very best to deal with a wicked criminal who had harassed society and was serving a long sentence for armed robbery".
It is all very well, with respect, to say the documents were highly confidential. They had been made public. In view of what was said about the journalist, Mr. David Leigh, I think it is right to say that this is a most experienced and respected man. What the Master of the Rolls thinks about the article is his opinion. I do not agree with it, but that should be neither here nor there. The point is that it is not a sound basis for making or enforcing a punitive law of contempt. It is a good example of what many of us are so anxious about in different parts of this Bill, that judges when faced with press comment prove to be so restrictive and suspicious of the right of the press to comment on judicial proceedings that they bring out the bludgeon of contempt to strike at what they do not like.
My Lords, my amendment seeks to bring the law as it has now been declared to he into line with commonsense. The commonsense proposition is surely this, that when evidence is given publicly in a court of law it is no longer confidential. A party to the litigation may, subject to the laws of defamation, talk about the evidence, write about the evidence, tell journalists about the evidence, get people to write books about the evidence. If he has shorthand notes of the evidence he is at liberty to divulge them to whom he pleases. If he has a transcript of the evidence, which any member of the public, if he can afford to, can buy, he can pass it on to journalists or writers or anybody else, however embarrassing that might be to those whose conduct in the case may be held up to question.
That is one of the consequences of open reporting and open justice, and we should be at pains to preserve it. Equally, if the party has documents, if the evidence has taken the form of documents which were read out, then the contents of those documents should equally well be capable of disclosure. What the party to litigation can do in order to draw public attention to a case, so can his solicitor with his authority. If we allow what has been made public to be the subject of contempt of court proceedings, then quite serious dangers can flow. All sorts of misdeeds can remain hidden which may be brought out publicly in court, sometimes in documentary form, by the chance that a reporter happens not to be in court at the relevant time or happens not to have heard what has been said. There is, I suggest, an important point of principle at issue and I beg to move this amendment which cures the now stated law.
5.50 p.m.
Baroness Jeger: My Lords, I rise with hesitation among so many legal luminaries to speak as just an ordinary member of the public. It seems to me that

173
if we are to expect respect for the law and consent for the law of our country it is absolutely essential that the law must be seen to be fair to the ordinary people who are expected to obey it. I know that all we ordinary mortals must accept that there are very wise and esoteric beings—many of them in your Lordships' House—who are experts beyond our understanding. But, at the end of the day, respect for the law must depend to a very large extent on a gut feeling among ordinary people that it is fair and sensible.
I am supporting my noble friend's amendment because it seems to me that those criteria are not fulfilled in this case or in any similar cases which may arise in the future. Not long ago we had in your Lordships' House an interesting debate on the use of the English language. There seemed to be a general feeling in the House that words should mean what they say and say what they mean. Therefore, when one reads a report of a law case which seems to maintain that documents previously confidential do not lose their confidentiality when they are read aloud in public, one is bound to wonder about the meaning of words.
Lord Justice Dunn on 6th February referred to "the right of the public and the press"—and I am not making any special pleading for the press—"to take notes" of material read out in open court or even "to buy transcripts". So, there seems to be a terrible muddle of thought when one knows that one can take down something in full, in shorthand, or at a later stage can buy a transcript, and yet there is this element of confidentiality when those matters are used in certain ways. I think that the general public find it difficult to understand that the status of confidentiality seems to depend on the status of the persons disclosing and not on the status of documents, for no one who understands the English language can accept that a document read out in open court must be regarded, in any circumstances, as confidential. There may be an etiquette among lawyers about all this, but I do not see how it can be part of the law of our country.
I cannot help wondering—and I, too, read The Times report very carefully—whether, had the article that was written about the Home Office been complimentary, this action would never have been taken. I think that it is very relevant—and I quote these words—that:
"The use made of them by the journalist in the present case was highly detrimental to the good ordering of our society. They have been used to launch a wholly unjustified attack on ministers of state".
It makes me wonder: Was it part of his reasoning that because of the nature of the article the case had to go the way that it did? It seems to me extraordinary to suggest that if the article had not been critical the case would have not stood up. Once the argument about the critical nature of the article is brought into the case, then ordinary people must wonder about the legal status of that argument.
I do not want to over-emphasise this, but it seems to me that there could creep in an element of censorship, and that a journalist would feel that as long as he says something uncritical it might be all right but the whole majesty of the law might be brought down upon him and upon the person who supplied him with the documents if he uses them for some criticism of government
174
or criticism of some institution, which does not appeal to the establishment. I therefore think that we should take this opportunity to amend the Bill, because there is a great deal of public disquiet about this situation. I hope that your Lordships will support this amendment.
Baroness Wootton of Abinger: My Lords, I very much regret that I have to leave the debate in a few moments. However, before doing so I should like to make a short speech of about two sentences. The law is often said to be an ass, but I do not think that it could be a greater ass than if it decreed that a document which had been read out in open court and listened to by any members of the public who happened to be there is still confidential and must not be reproduced in print.
Lord Mishcon: My Lords, I have intentionally removed myself from a Bench which I do not say that I grace but which has graced me until now, in order that there can be no doubt whatever that my speech to your Lordships is based upon a personal view, and a personal view only.
However, I cannot as a lawyer allow this debate to go on any further upon one issue and that is my understanding of what the Court of Appeal was saying. I should like to make it clear that I find this amendment to be very attractive and I belive that the principle behind it is a correct one. But the Court of Appeal was not dealing with the particular matter of whether it was right or wrong that documents which are disclosed and read out in court shall be deemed in every event to be confidential and therefore not for publication.
The Court of Appeal dealt with the case of a lawyer who was acting on a case—very properly acting for a plaintiff who was very properly legally aided—and who obtained disclosure of documents in that case first of all upon the basis, which she herself confirmed, that the documents were disclosed to her confidentially and were not to be disclosed to a third party, and thereafter, after an order had been made for specific discovery of documents which the Home Office were not willing to disclose on public policy grounds, impliedly got disclosure of those documents upon the same understanding.
The question of the undertaking and the implied good faith of solicitors and barristers as officers of the court is something valued in my profession and something that I feel your Lordships ought to know about with regard to its relevance to the decision of the Court of Appeal, as I understand it. I therefore have made this contribution to your Lordships' debate not in opposition to the amendment, but only in justice to what was being discussed in the Court of Appeal, as I understand it.
The Lord Chancellor: My Lords, I only want to intervene very shortly as regards this amendment because I think that the issue has been wholly misunderstood largely along the lines which have been explained by the noble Lord, Lord Mishcon, already. I had the advantage only today of reading for the first time not a press report of the Court of Appeal judgement but a transcript of the Court of Appeal judgement. I am bound to say that I do not think that the issue, as it was put forward by the noble Lord, Lord Gifford, was

175
correctly stated: nor do I think that it is as simple as he tried to make it out to be. This is not a question of press reporting of a case at all. It has nothing whatever to do with a press report of any case. I start with that proposition. Miss Harman was not adjudged guilty of contempt because she had disclosed to a member of the press a document which had been read out to the court. She was adjudged to be guilty of contempt because, as an officer of the court, she had made a promise and had broken it.
As the matter might conceivably come before the House of Lords, it is open to her to apply for leave to the Appeal Committee of your Lordships' House. Therefore, at this stage I do not want to adjudicate as to whether the Court of Appeal was correct or incorrect in its findings. But that that was the finding there can be no doubt at all, either from the press reports of the case or from the transcript, which I have now read.
On a point of fact, I ought perhaps to defend myself against the obviously implied rebuke by the noble and learned Lord the Master of the Rolls that I should have intervened at the Committee stage and tried to stop the discussion. I think that for once that is unjust to me. I did not, of course, intervene in the debate and ask the House to desist from discussing an amendment for the very good reason that I knew the rules of this House better than the noble and learned Lord the Master of the Rolls. They are as the noble Lord, Lord Gifford, stated them, and there was no sub judice rule attached to the discussion of an amendment, although if he will allow me to say so without the smallest desire to offend him, when he said—if he did say it, because I did not hear him say it—that he was moving his amendment so that
"the Court of Appeal may be in no doubt about what I think they ought to do in the particular case".—[Official Report, 20/1/81; col. 351.]—
which is what the noble and learned Lord the Master of the Rolls said he said, all I can say is that although I do not think he was guilty of contempt of court because these proceedings are privileged, on the other hand, I think that he was possibly slightly impinging on the sub judice rule.
Lord Gifford: My Lords, perhaps I may seek to clear myself and also put the record straight, because I think that I was somewhat misquoted out of context. What I said was this:
"I intend, if I can, to follow the spirit of this Bill, and particularly Clause 5 of it. I hope my amendment may serve as the introduction of a discussion in good faith of a matter of general public interest, and that if in the course of the discussion the Court of Appeal may be in no doubt about what I think they ought to do in the particular case, that will be merely incidental to the discussion".—[Col. 351.]
The Lord Chancellor: My Lords, I think that the noble and learned Lord the Master of the Rolls was obviously reading a garbled report of the noble Lord's speech, because I certainly did not hear him—and I have already said that I did not—make the particular remark which was attributed to him. I think that the House will be grateful to me for giving him the opportunity of clearing up the matter.
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I shall come to the main questions of principle in a moment, but there is another question of fact which I think that I ought to make clear. The Court of Appeal did not decide—and it was in dispute—that all the contents of all the documents handed over to the journalist has been read out in court. This is what the noble and learned Lord the Master of the Rolls said about that, and again I make no comment as to whether he was correct as a matter of fact. He said:
"One week before the trial commenced, Miss Harman selected 800 pages and bound them in two bundles and made nine copies for the use of the judge and counsel. She said that 'all material parts of the documents in the two bundles were read out in open Court by counsel for the plaintiff '. Note her words 'all material parts'. She does not identify those parts. Probably she does not know what they were. She was not in court all the time. I should imagine that no one except the shorthand-writer or the tape could tell what parts were read and what were not. I should be very surprised if every word of every one of the 800 documents was read out".
So simply as a matter of fact we are not even discussing whether she was entitled to hand over to the journalist the entire documents, part only of which were read out, which parts she did not identify if the noble and learned Lord the Master of the Rolls is right, and neither did she identify which parts were material. What she did was to hand them all over, as I understand it—at least, that is what I understand from the judgment.
Lord Gifford: My Lords, I do not want to clutter up the debate—
Lord Sandys: Order! My Lords, we are speaking on Report and I think that the noble Lord, Lord Gifford, is testing the rules of this House.
Several noble Lords: No!
Lord Gifford: My Lords, I intervene only because it is a small matter of fact about which I had taken pains to find out. Although the matter is not made the subject of any formal finding by the Court of Appeal, I am satisfied, from talking with counsel in the case and others, that in fact the documents were read out and she did not hand them over—she let him read those parts which had been read out. I certainly approach it on that basis.
The Lord Chancellor: My Lords, I am not sure that the noble Lord, Lord Gifford, can give evidence of what happened in the court, at which I do not think he was present; but I certainly cannot. All I can do is to tell the House what the Court of Appeal said had happened. I do not put anything further on it than that. I have read the transcript of the judgment and that is what the Court of Appeal said.
I now come to the issues of the principle involved. The point was this. As I explained on Committee—but I think that it is essential that I should say it again here—there is a process in the interlocutory proceedings of an action in the High Court called "discovery", which means that each side must disclose all its documents—even the most private, sensitive and confidential documents—relating to a case. Many of us—I suppose most of us—who have practised at the Bar (including I expect the noble Lord, Lord Gifford,

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but certainly myself) know how difficult it it so persuade lay clients to make full discovery of documents, when they say "But that was a confidential document". You have to explain to them that that does not give them privilege.
I go on to say that there is a special exception to to that; that is, that the Crown is entitled to object to the disclosure of a class of documents, the disclosure of which it says belongs to a class, the disclosure of which would be contrary to the public interest. I had to swear such an affidavit about the class of documents in the recent libel case in which Judge Doyle in Northern Ireland was concerned, and I swore it about the documents relating to the appointment of Judge Doyle by the noble and learned Lord on the Front Bench, which, being a purse chevalier—although I daresay that I could have seen them if I wanted—I did not look at because I said that they belonged to a class of documents which should not be disclosed in the public interest.
Of the documents which were disclosed, some were disclosed voluntarily by the Home Office on a condition and some were not. Of those which were disclosed on a condition, there was an exchange of letters between the plaintiff's solicitor, who was Miss Harman, and the Home Office. The Home Office said this:
"However, having regard to the very large number of policy documents intended for internal use which have been disclosed, my client is concerned at the risk of improper use of the documents…my client (the Home Office) would not wish the documents to be used for the general purposes of the National Council for Civil Liberties outside your function as solicitor for the plaintiff".
One must emphasise that the plaintiff was a Mr. Williams. He was not for the Council of Civil Liberties. Miss Harman was acting as solicitor for Mr. Williams, although at the same time I believe she happens to be the solicitor for the National Council for Civil Liberties.
Miss Harman replied in her own hand:
"As far as the general purposes of the NCCL is concerned you may rest assured that as a solicitor I am well aware of the rule which requires that documents obtained on discovery should not be used for any other purpose except for the case in hand".
She gave that express undertaking. That was before the Crown privilege point was decided.
A minority of the documents—a fairly small minority—was the subject of a claim for class Crown privilege by the Home Secretary. Again I must emphasise that this has nothing whatever to do with party politics. The documents were the documents of the Labour Government and they contained ministerial statements made in confidence by the Labour Government. Until a very recent date that would have been a conclusive bar to the disclosure of that small quantity of the documents.
Certainly during the war there was a case called Duncan v. Cammell Laird, which lawyers in this House will know. In a later case called Conway v. Rimmer the courts in England attracted to themselves the right which had long been claimed by the courts in Scotland, which was to decide the claim of class privilege for themselves by inspecting the documents quietly, and making out whether they thought that the public interest involved in not disclosing them overrode the private interests of the parties in obtaining judgment. So there was a hearing in chambers before Mr. Justice McNeill and he ordered the disclosure of
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this minority of documents, again on condition that they were only used on behalf of the plaintiff in the action and not for the general purposes of the National Council for Civil Liberties because the undertaking expressly applied to them. I myself believe, and certainly the Court of Appeal thought, that he would never have ordered that disclosure if he had known what was going to be done with them.
Again I do not want to use any hard words but I must say one or two things. In the first place, if the amendment is passed I think that it will be a serious blow at the legal profession and at the discovery of documents. I think lay clients will be less willing to make a clean breast of them, and it will be more difficult for the profession to ensure that their clients have been absolutely honest. Secondly, I think that the courts inevitably, having regard to what Miss Harman did in this case, will be much more reluctant to exercise the powers (the extremely valuable powers, in my opinion) which were assumed to themselves in Conway v. Rimmer to override class privilege claims by the Crown.
In other words, two serious blows would be dealt to the administration of justice in this country if this amendment were passed, and it is my duty to tell the House that. First of all this has nothing whatever to do with the reporting of a case; and, secondly, the journalist in question was never accused of contempt of court, and it was not suggested, I think, that he was guilty of it. What was found by the Court of Appeal in that case was that Miss Harman had been guilty of a serious contempt—a civil contempt, not criminal contempt—in that she had broken her promise to the court and disobeyed the order of the court. That is what the court decided.
I do not believe that that is obviously or intrinsically a wrong decision, a silly decision, or any of the epithets that have been lavished upon it. It was the subject of a typically rumbustious judgment by the Master of the Rolls. I must however, say that I agree with the Master of the Rolls when he said, on page 2 of the transcript:
"I wish that people who criticise the decisions of the judges would study the facts first".
I think that this is a fairly commonsense remark, and I do not think that in this case the facts have been fairly presented either to the public or to this House. I do not impute the slightest bad faith to anybody.
I also say that the Court of Appeal, being unanimous, consisted not only of that vivacious character whom we all love so much, whose judgment has been so widely quoted, but also two of the most experienced Lord Justices in the business of judging, namely, Lord Justice Templeman and Lord Justice Dunn, both of whom gave considered judgments on the subject. I think, with respect, that this House would be making a grave mistake if, in the course of considering a Bill which is basically to do with criminal contempt, it sought to overturn in the twinkling of an eye the considered opinion of Mr. Justice Park at first instance, and of the Court of Appeal—a Bill which has nothing whatever to do with the particular subject which is under discussion. It is my duty to say that to the House.
I know that we shall be misrepresented in the press. I know that we shall be criticised in many quarters for taking this view. It is perfectly open to Miss Harman if she thinks she has suffered injustice to go to the House of Lords Appeals Committee and ask for leave to

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appeal. Obviously questions of law of general importance are involved. She has, I suspect, funds at her disposal. If not, she can utilise legal aid.
Lord Elwyn-Jones: My Lords, does the noble and learned Lord have knowledge that she has funds at her disposal?
The Lord Chancellor: My Lords, the National Council of Civil Liberties certainly, I believe, financed the Williams action, and I think would be behind her if—
Noble Lords: It was legal aid.
The Lord Chancellor: What I have said is that if she has not funds at her disposal she can apply for legal aid. The matter is as simple as that. If she has them she has them at her disposal; if she has not she can apply for legal aid.
Lord Elwyn-Jones: My Lords, I am sure that the noble and learned Lord does not want to mislead the House, certainly not intentionally, but the action was legally aided ab initio.
The Lord Chancellor:My Lords, I am obliged to the noble and learned Lord. I ought to have known that. In fact, I did know it at the back of my mind, and I did not intend to mislead the House. I did know it because I read it in the transcript, which I read for the first time today. It was the first time I did know it.
At any rate, those are her rights. She can go to the Appellate Committee through the Appeals Committee if she thinks she has suffered an injustice. I do not know whether they will give her leave or not. It will not rest with me because it is a case which I should think it improper or undesirable for the Lord Chancellor to sit in, but I think that that is the right way of curing this and not by an ill-considered amendment—I am bound to say that I think it is ill-considered—in this Bill, which is not designed for the purpose.
6.15 p.m.
Lord Gifford: My Lords, may I answer some of the points that have been made. First of all, on the point which I think we need to be clear on although it is not very relevant, the question of the funds of Miss Harman. The Williams action was financed by legal aid. Miss Harman's defence to the charge of contempt was not. As I understand it, she has the backing of her employers, the National Council for Civil Liberties, who have been forced to appeal to their well-wishers for funds, which I know to be in very short supply, so that the question of an appeal to the House of Lords of course raises that issue.
May I come to the serious points. What both the noble and learned Lord the Lord Chancellor and my noble friend Lord Mishcon said was that the point of the case was that Miss Harman was found to have broken the undertaking, or promise, which she gave to the court when she received those documents. That is an accurate statement of the court's finding. What was in issue before the court was precisely the extent of that promise. Miss Harman's good faith was accepted
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by the Home Office and by Mr. Justice Park—that she did not appreciate breaking the promise; and what the promise and undertaking implied was the matter previously obscure but which has now been made clear. The amendment would put an end to that obscurity, although it would put an end to it the other way, by stating clearly that the extent of that promise is that it terminates if and to the extent that the documents are read aloud in open court.
As I see it, Miss Harman did what she did in her capacity as Mr. Williams' solicitor. She would have no business talking to anybody if she did not have his authority, which in fact she had. Members of the Bar do not actually have this problem because they can say, if asked by the press for explanation or clarification, "I cannot talk to you. You must talk to my instructing solicitor". Instructing solicitors often have that responsibility; just as a client may talk to the press, so his solicitor may be asked to talk to the press on his behalf and to clarify, explain and inform the press—whether or not they have been in court—as to the issues raised in the case and the evidence led in the case. If the evidence was given orally, there is no bar to telling the press about it, even if it raises confidential matters. Is it to be any different because the evidence takes the form of a document? The document may have been put to witnesses and commented on. Does it then become a matter which can be disclosed without offence? I suggest that the present position is unclear and unsatisfactory and that my amendment would deal with it.
The next issue raised was that of Crown privilege—that the courts would be reluctant to override a claim of Crown privilege if the amendment were accepted. I fail to see that. The matter which the court has to weigh when dealing with a claim for Crown privilege is, among other things, the detriment which might be caused to public government by the disclosure of the documents in open court. It is anticipated that the documents will be made public. That is not why they are disclosed, but part of the process for which they are disclosed—that they may be used in open court—and any lawyer, client and judge must have that in mind.
Then I come to what your Lordships' House should do. Of course I appreciate that the amendment is being put forward within a few days of the Court of Appeal decision. The noble and learned Lord said it would therefore be hasty and ill-considered to take a view. But what I did not hear from him was any indication that he or his department would be examining the issue raised by this case at a suitable time, either during the passage of the Bill or not. If I were told by the noble and learned Lord, "Yes, this matter raises important issues which have to be and will be considered", then I would not wish to press the amendment to a Division. But I have not been told that and, as I understand it, the advice being given by the noble and learned Lord is to vote against it because it is wrong—not that it may be right or wrong and needs consideration, but that it is wrong. In those circumstances, I feel it right, since apparently there is to be no further consideration of the matter, to ask the House to reach a decision on it.
The Lord Chancellor: My Lords, perhaps I might add, with the leave of the House, that I am not going to

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consider it at all until the time for applying to the Appeals Committee has expired. That is absolutely plain. But if the time for the Appeals Committee expires without an application, or if the application is dismissed, or if the appeal is disposed of in other ways, I will then undertake to put it to my department without prejudice to what may come out of it. That I will do.
Lord Elwyn-Jones: My Lords, important consequences arise from the case in regard to the whole question of Crown privilege. It was my privilege as Attorney-General to contest Conway v. Rimmer on behalf of the Crown, and one of the matters of which we were very conscious at that time was the fact that the moment it was decided to waive Crown privilege there was the probability-indeed, the inevitable certainty—that if the document were duly disclosed and read out in open court, there it was; and of course that is one of the factors which should influence the judge's mind in deciding whether or not to waive Crown privilege. In this case he decided that in the interests of justice Crown privilege should be waived, and that gave rise to the great difficulties which have subsequently ensued.
Accordingly, I wonder whether the Lord Chancellor could go further and say that the implications which now become clear from the waiving of Crown privilege—which incidentally I did my best to avoid taking place in Conway v. Rimmer—will be considered in terms of the implications of that case because there is no doubt that there is great concern, not only in Fleet Street but generally, about what appears to be a mess into which the law has got. To avoid the necessity of what can only, in the unhappy circumstances of this debate, result, I am afraid, in not very happy feelings emerging, I hope the Lord Chancellor can go a little further than he has so far gone.
The Lord Chancellor: I thought I had gone as far as I could without consulting colleagues, but I would certainly go as far as this: I shall do nothing whatever until the question of an appeal is disposed of one way or the other, and when that is done I will look at all the implications. There are two quite separate complications to this and there are at least three questions to be considered. One is the narrow question of Crown privilege; one is the broader question of the duty of an officer of the court in relation to discovery as a general rule; and then there is the distinction between a report, which was not at issue in this case, of the proceedings, and the use of a document disclosed in discovery for a purpose which was not a report. It was not critical of the Home Office, and if it had been then it would have been critical of the Home Office under previous management. It was the fact that it was used for a purpose other than a report of the case which may have influenced the minds of the judges. All I can say is that when this question of an appeal is out of the way one way or another, which will be long or short according to what happens, I will put it to my department and discuss it with colleagues, but without any undertaking as to what may emerge.
Lord Gifford: My Lords, I accept the undertaking which the noble and learned Lord has given. I hope the time sequence is such that this matter can be
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considered in another place, and perhaps again therefore in this House, before the Bill passes, but whether or not that be so, I accept that the matter should and will be examined, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 8 [Publication of jury's deliberations]:
6.30 p.m.
Lord Wigoder Lord Wigoder moved Amendment No. 7:
Page 3, line 26, leave out (" subsections (2) and (3)") and insert ("subsection (3)").
The noble Lord said: My Lords, we come to a very different topic, upon which I hope feelings may not run so high. It is the topic of the confidentiality of juryroom deliberations, and it is raised by Clause 8 of the Bill. With the leave of the House, I shall speak to Amendments Nos. 8 and 9 at the same time as I move the paving amendment, No. 7.
This is a topic of considerable importance because I believe that all those who have any part to play in the administration of the criminal law recognise that it is absolutely essential that in the privacy of the jury-room jurors should feel free to say what they like, to express their own views without fear or favour, muddled and confused, as they sometimes are, in the certain knowledge that nothing that they say will at any time be disclosed to any prying person, whether this involves anybody who has taken any part in the case, or who has been in court, or any journalist, academic, or anyone else wishing to discover what has gone on. To many of us who are concerned with the criminal law it seems that once that principle is breached, once jurors realise that there may be made of them inquiry as to what was their conclusion, why they reached it, what influenced them in so doing, once that confidentiality is known no longer to exist, the self-confidence of jurors will diminish and justice may well cease to be done in many cases.
This amendment was moved by the noble Lord, Lord Hutchinson of Lullington, and I at the Committee stage, and I think that it is clear from the reply which was made that perhaps the point that we wanted to put over was not made sufficiently clearly. Therefore I should like to begin by saying that the present position about confidentiality of the juryroom is that it is accepted as desirable and it is imposed by entirely voluntary restraint. There is, it is true, a notice in a juryroom saying that any juror speaking to anybody may be taken off to the Tower of London and beheaded—or some notice of that sort. It is widely regarded as having no legal effect. Nevertheless it is accepted by jurors that they are not to talk about their cases. It is accepted by everybody involved in the case—the legal profession, police officers, court officials, ushers, and so forth—that it is quite wrong during or after a trial to inquire of jurors what has taken place. With conspicuous exceptions, it is accepted by the press and academics that it is quite wrong of them, too, after a trial has been completed to attempt to inquire into the mysterious processes by which a jury have reached their verdict.
As I say, those restraints are entirely voluntary. They are supplemented to a very small extent by existing

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law—but it is a small extent. There is some scope for contempt of court proceedings where at the moment juryroom deliberations are deliberately published, but I think it right to say that almost all the cases and there have been very few in recent years—in which those kind of proceedings have been brought have been unsuccessful. The common law position as to contempt of court in relation to juryroom deliberations is thoroughly unsatisfactory and very limited, if indeed it exists at all. There is also of course the common law offence of attempting to pervert the course of justice, which might be applicable to the more grotesque breaches, but is certainly not applicable to the general run of inquiry of, or incidental conversation with, jurors.
In so far as there is any existing law of contempt of court in relation to juryroom deliberations, it is I think arguable that it is in fact completely replaced by Clause 8 of the Bill. I say that because Clause 6(c) specifically refers to the foregoing provisions of the Bill—Clause 8 is not of course a foregoing provision; it is a subsequent provision—and specifically says that nothing in the foregoing provisions,
"restricts liability for contempt of court in respect of conduct intended to impede or prejudice the administration of justice ".
I think it highly likely that it would be argued on very many occasions that the implication of placing Clause 6 where it is, and Clause 8 after it, is that Clause 8 presents for the first time a definition of what is meant by contempt of court in relation to juryroom deliberations. The effect of that is that if the Bill goes through, we shall for the first time have a statutory definition of contempt of court, side noted "Publication of jury's deliberations".
There are two complaints that I want to make about that position. The immediate result of that will be that it will be assumed by a very large number of people that Clause 8 is the only effective sanction against publication of, or inquiry into, jury deliberations. The result of that in turn will be that all the voluntary restraints that are in existence will crumble away—and will crumble away very rapidly. I think that many of us—I know that the Criminal Bar Association's views were unanimous on this point—feel that the result, the unintended result, of passing the clause in its present form would be that those restraints would wither; that lawyers, police officers, ushers, if not during a trial, certainly immediately after it, would feel entirely free to inquire as to what precisely went on in the jury room. If the trial has resulted in a disagreement, as sometimes happens, the information might be of very material assistance either to the prosecution or the defence at any subsequent trial.
Therefore for that reason alone, to attempt to embark upon a statutory definition which is limited to publication of a jury's deliberations, as Clause 8 is, will be regarded as an open incentive to everybody who does not intend to publish to inquire as they will of jurors as to what went on in the juryroom. We at the Bar would regard that as a disastrous, though wholly unintended, by-product of the clause. That is the first reason why I invite the Government to reconsider the form of Clause 8.
The second reason why I invite the Government to reconsider not only the form, but also the substance,
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of Clause 8 is that the clause specifically authorises for the first time publication of jury discussions, jurors' findings, and jury deliberations, provided that the particular case is not identified In other words, it is an open invitation to anyone who wishes—academics, journalists, reporters—to inquire of jurors, saying, "I have come on behalf of so-and-so. We wish to talk to you about this, that, or the other. "We all know what can happen when anyone is being interviewed over a drink in a bar; and in next to no time a vast amount of information will be given out by jurors as to what has gone on in the juryroom, to the general detriment of the jury process and criminal procedure.
Some investigations will no doubt be bona fide; some will be mala fide. I suspect that the fides will more often be mala than bona because that is the way of it in this situation. The kind of people who will want to write articles will seek to do so after sensational trials, in a desperate attempt to produce some sensational conclusion as to how the jury disagreed among themselves and were eventually swayed by some remark by a particular juror that really should have had no part to play in the case at all; and so on, and so forth. Giving the exemption in that way to inquiry into the juryroom, as Clause 8 does, in my view will eventually have disastrous results and will bring the whole system of jury trial into disrepute.
For those two reasons I venture to think that Clause 8 is very unsatisfactory as it stands, and that the only alternative, and the desirable alternative, is to impose a complete blanket and to say, "Juryroom deliberations are inviolable; they are not to be disclosed to anybody—full stop." Then, if anybody inquires or if any juror discloses, that ought to be a contempt of court in order to preserve the secrecy of the juryroom. I accept, of course, that there are occasions when juries will go home and discuss a case with their wives or their husbands, and nobody in their senses would say that that ought to be a contempt of court. So be it; the mere fact that this may happen on certain occasions in those circumstances is, I think, no reason for encouraging the sort of breaches of juryroom secrecy that are bound to happen if Clause 8 in its present form is passed. I earnestly invite the Government to reconsider this matter in the light of the arguments which were put forward last time and those which have been put forward again today.
Lord Scarman: My Lords, I, too, should like to ask the Government to reconsider Clause 8. I cannot really add very much to what the noble Lord, Lord Wigoder, has said.
Lord Elwyn-Jones: With respect, my Lords, I do not think the noble and learned Lord has put the Question.
The Lord Chancellor: I am sorry, my Lords; I am entirely to blame. I must put the Question first, before the noble and learned Lord addresses the House. I am very grateful. The Question is, That Amendment No. 7 be agreed to?
6.42 p.m.
Lord Scarman: Now decently clothed, I can address your Lordships' House, no longer naked and out of

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order. I support this amendment, and I do so really in the hope that the Government will consider the points that the noble Lord, Lord Wigoder, has made. I have every sympathy with what I believe to be the intention of subsection (3) of the clause—that is to say, that some encouragement, some opportunity, should be given for legitimate research and study of the workings of the jury system—but I very much doubt whether subsection (3) goes far enough to permit worthwhile research, and, if it did, my fear is that the result would be that all sorts of disclosures would come out which harmed the system of jury trial.
I will leave the House with this one consideration. When a jury retires to its room to consider its verdict, it is really exercising its collective mind in private. Of course, a judge, when he decides a case, has at some stage at the conclusion of the evidence and the speeches to exercise his mind. He can do it in private because he does not have to communicate with anyone else; it is a solo performance. When it is a performance by 12 good men and women, then it is bound to have to take place in a room, and there are bound to be communications. They should be as secret at that stage as the processes of judicial decision are in the mind of the judge himself.
The other danger which troubles me is this. Many of our fellow citizens are inarticulate without being unintelligent or lacking in shrewdness. They will have listened to the case and to the summing-up; and they may be quite unable to express themselves effectively. They may be able to express themselves only crudely, and in a way which can be misunderstood. When they come to discuss, however anonymously, what went on in the juryroom, they may be quite unable to give a fair or accurate account, and yet, despite their inarticulateness, they may be possessed of all the intelligence, shrewdness and judgment needed of a juryman. I support this amendment merely because I think Clause 8 as it stands is dangerous, despite its good intentions.
Lord Elwyn-Jones: My Lords, when I first read Clause 8 I confess that my inclination was to support it, because I think there is room for legitimate research into such matters, even, as the deliberations of jurors; and I agree with what has just been said by the noble and learned Lord, Lord Scarman, about that. On the other hand, I confess that the speech of my noble friend Lord Hutchinson (alas!, he is not here) was a powerful statement, and it caused me to think again. Since then I have received a memorandum from the Criminal Bar Association. I do not know whether the noble and learned Lord has seen that document, but, again, it seems to me to be a powerful reinforcement from experienced quarters of the effect that the clause as it stands could have on the jury system.
The memorandum makes two objections, and the noble Lord, Lord Wigoder, has given the House the essence of them. The first is that the clause prohibits only approaches to jurors with a view to publication, and they say:
"We can envisage many other circumstances in which jurors could be approached which would not be covered by the clause. An obvious example would be an approach after a jury have disagreed in an attempt to tailor the defence before the retrial".
Then, more significant is the second objection, I think:
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"Despite the provisions of sub-clause (2) we feel that the enactment of Clause 8 in its present form would result in jurors being approached by journalists and researchers, some genuine, most not"—
some bona and some mala, to turn to more known legal language—
"to an extent which may become intolerable";
and they say that there is a real danger of the sanctity of the juryroom being imperiled, which would of course damage the whole system.
Therefore, I think that this clause needs to be looked at again. There ought not to be any longer, I suppose, any sacred cows in our society. Everything seems to be capable of being put under a microscope and magnifying glass, and there is no reason in principle why there should not be a study of the jury system. But a procedure which would defeat the confidentiality of the juryroom would, I think, be disastrous. It would gravely undermine the administration of justice in the courts and, what is more important, the confidence of the public in it.
6.48 p.m.
Lord Mackay of Clashfern: My Lords, the discussion of this matter at Committee stage has certainly been considered again by my noble and learned friend the Lord Chancellor and our colleagues. The situation as we see it is that Clause 8 is limited to dealing with the mischief identified by the Divisional Court in the New Statesman case, and we intend it to do no more than that. It is not intended to be the only law relating to juryroom secrets. We do not intend to replace the existing law of contempt in relation to the disclosure of juryroom secrets; nor the existing law, so far as it might apply, that the noble Lord, Lord Wigoder, referred to in relation to the protection of the administration of justice in ways other than by the contempt jurisdiction. The various possibilities that were discussed in Committee obviously might give rise to contempt under the existing law, or some of them could give rise to suggestions of gross professional misconduct; and there is nothing that we are seeking to do in Clause 8 which is intended in any way to change the existing law in that respect.
I agree with the point that the noble Lord, Lord Wigoder, made, that a good deal of what happens at the moment is voluntary. It is accepted, although I do not know that the reference to the Tower of London connotes to my mind a particularly voluntary restraint; but, still, in fact I think most people recognise it as being substantially voluntary. Clause 8 is really, in its present formulation, based upon the view that where the voluntary works then, on the whole, it is best not to interfere with it. Let it work on and deal only with the situation which has emerged in the existing law as providing a difficulty—as the New Statesman case pointed out. In that connection, may I mention the point about Clause 6(2), because Clause 6(2) is dealing with the earlier provisions as the noble Lord, Lord Wigoder, pointed out—
Lord Elwyn-Jones: My Lords, is it not Clause 8?
Lord Mackay of Clashfern: My Lords, I am referring at this moment to Clause 6(c). It had been referred to as Clause 6(2):

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"Nothing in the foregoing provisions of this Act…restricts liability for contempt of court in respect of conduct intended to impede or prejudice the administration of justice".
The noble Lord, as I understood him, pointed to the fact that Clause 6 comes before Clause 8 and, therefore, this does not apply to Clause 8 at all. But the point with respect to Clause 6 is that some such provision as Clause 6(c) is required because the foregoing clauses restrict liability for contempt of court. Clauses 2, 3, 4 and 5 are intended to provide defences and, therefore, to innovate upon and restrict the present law of contempt of court. If you do not want these restrictions to apply to a deliberate contempt, you must say so. That is the reason for Clause 6(c).
Clause 8 does not do anything of the kind. It stands on its own. It is not an attempt to restrict the present law of contempt of court. It provides that what is there set out in fact is a contempt of court. That, on the ordinary construction, we suggest means that this is an additional provision, in addition to the existing law.
Lord Mishcon: My Lords, before the noble and learned Lord goes to another point, will he kindly deal with something which is worrying us? Where, in this Bill which is supposed to clarify the law of contempt, you deliberately deal with the question of juries and publications in regard to juries, is it obviously not desirable to cover the matters dealt with by this amendment, which the noble and learned Lord seems to think are desirable but which are now dealt with on a voluntary basis? I did not follow his argument in regard to not including this in this Bill.
Lord Mackay of Clashfern: My Lords, I am sorry. It is my fault if the noble Lord did not follow my argument. The argument that I put forward is that there is an existing law of contempt. We are not attempting to alter that law so far as Clause 8 is concerned except to add to that law a provision which deals with the mischief identified in the New Statesman case. Therefore, there is no reason to say anything about saving the existing law in Clause 8 because it does not purport to do anything except add a new provision dealing with this particular form of contempt. Accordingly, the existing system is unaffected by the provisions of Clause 8 except in so far as this new provision is a provision making contempt of court what is there set out.
We have not attempted to do more than that. The question is whether, by doing that, by a side wind, or by effect, you demolish the existing structure. I think that, in a nutshell, is what is suggested: that by putting in this specific provision in Clause 8 we would demolish the existing structure in consequence. We would suggest that that is not so. We do not demolish the existing structure. We do not in any way interfere with it. We thought it right not to go further than seemed to be necessary to deal with the particular mischief, and not to make inroads on the freedom of the press or anyone else in this connection more than is necessary to deal with the particular mischief. We think that, so long as the particular case is not identified, the system of jury trial is sufficiently meritorious,
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sufficiently good, to stand up for itself to proper investigation, so long as the individual case is not identified.
The matters which have been raised in this discussion, I agree, show that there are important questions involved, and we have been glad to consider the memorandum which the Criminal Bar Association put together; we agree that it raises important questions. We have tried to examine these as best we can in the light of information available to us. It is of some comfort, I think, that the New Law Journal, looking at the various possibilities—because not all the objections are on the lines that the noble Lord has suggested; there are people who think that Clause 8 goes too far already—thought that on the whole, my noble and learned friend the Lord Chancellor, who claimed on the last occasion that Clause 8 was about right, is, in fact, about right; and that it does achieve a reasonable balance.
So our view is that, although the risks are risks to be considered, they are risks which should not lead us to depart from what is proposed in Clause 8 and certainly should not lead us to attempt a very large new structure in this particular area. The matters which have been the subject of discussion show, for example, that the noble Lord, Lord Wigoder's amendment would (as I think he accepted) make contempt incidents which he would not think ought to be treated as such. The juror who goes home and tells his wife, and so on, would be covered by the amendment, but it is not desirable to make that contempt of court. That shows how difficult it is to make a reasonable provision in this circumstance. We think it not right to cover such conduct, which is perfectly reasonable, by prohibitions of this kind, even if the consent of the Attorney-General should be required for the prosecution. There is also the question of whether a restriction as strong as that would not, itself, contravene the Convention on Human Rights. In the whole circumstances, we would suggest that these amendments should not be accepted.
Lord Wigoder: My Lords, I am grateful to the noble and learned Lord the Lord Advocate for that carefully considered reply. I accept that all the Government set out to do in Clause 8 was to achieve a limited objective to deal with the New Statesman decision. I am perturbed (and many of my friends are perturbed) that even that has been done perhaps unwisely in so far as it is now going to open the way for the sort of research and inquiries with a view to publication that we have been talking about. I am more concerned, as was the noble and learned Lord, Lord Scarman, with what we regard as the dangerous and wholly unintended consequences of the Government pursuing their limited objective in this way. They would be consequences which would not be caught, as I understand it, by the existing law.
I take the example of the Criminal Bar Association quoted. Supposing a defendant or his wife spoke to jurors after a disagreement in order to find out what it was that troubled them and whether a particular point might be dealt with more appropriately on the retrial. I do not believe that that could possibly be held to be a contempt of court; nor an attempt to divert the course of justice.

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I am worried that, once this clause is enacted in its present form, then the present voluntary restraints will break down and there will be more and more inquiries of that sort which will, in due course, damage the jury system. Having said that, I do not think that this is an issue which ought to be resolved by the tramp of feet through the Division lobbies. I would hope to succeed in due course by quiet persuasion and, threatening in that way to return to the matter yet again at a later stage in the Bill, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 8 and 9 not moved.]
Clause 11 [Offences of contempt of magistrates' courts]:
7 p.m.
Lord Scarman Lord Scarman moved Amendment No. 10:
Page 5, line 9, leave out ("wilfully") and insert ("intending to do so").
The noble and learned Lord said: My Lords, I shall, with the leave of the House, deal with Amendments Nos. 10 and 11, though I think technically I must speak to Amendment No. 10. They both raise the same point. These amendments are no more than drafting amendments but I hope the House will think they have sufficient importance to be raised at this stage. I move the amendment in order that the Government may consider whether it really is appropriate at the end of the twentieth century to introduce into a new statute dealing with the criminal law the word "wilfully", which an academic commentator in the Criminal Law Review has described as "that old warhorse".
Clause 11 creates a contempt of court committed by anyone who wilfully insults the justices and certain other persons in the magistrates' court or who wilfully interrupts the proceedings of the court or otherwise misbehaves in court. It is to the word "wilfully" and its adjectival sister "wilful" that I shall confine my few remarks. The adverb and the adjective were familiar in statutes creating criminal offences in the 19th century. They caused all manner of difficulty for the judges. Sometimes they were interpreted as meaning no more than "deliberate" or "intentionally". In other statutes they were interpreted as implying a degree of malice or shamefulness.
The judges were at sixes and sevens. Unfortunately, these words have persisted, lingering on into the twentieth century statute law; and they are still causing difficulty. It is a statutory offence if one is guilty of the wilful neglect of a child. In 1898 the Lord Chief Justice of the day, presiding over a divisional court, interpreted wilful neglect of a child in a certain way. His interpretation ruled for almost a century. It ruled until 1981, when the House of Lords, by a majority of three to two, decided that the Lord Chief Justice had been wrong in 1898. Do not blame the judges, my Lords; blame the words that were used.
Why should we perpetuate this word in what we hope will be a very modern statute—most of us hope that the Bill will pass—and in our modern criminal law? Thanks to the study of the criminal law by the academic legal profession since the end of the war, and thanks
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to the work of the Criminal Law Revision Committee and the Law Commission, a new up-to-date vocabulary for the criminal law has been developing. We now do not use (or we try to avoid using) words like "wilful", "malicious" and so forth; using less emotive, perhaps more clinical, words like "intention", "knowledge" and "recklessness".
The Law Commission, in Report No. 89 on the mental element in crime, advocated a standard terminology for modern criminal statutes. The Criminal Law Revision Committee, in their 14th report, strongly supported standardisation of the terms defining mens rea, that is the guilty mind required of an offence. It will be unfortunate if at this stage we maintain in existence such old and untameable warhorses as "wilful" and "wilfully".
I have in my hands an editorial from the Criminal Law Review for February 1981, written by a distinguished academic criminal lawyer. He speculates—probably rightly—that the reason why the word "wilfully" is to be found in this clause is because the equivalent provision for contempt of the county court, which is Section 157 of the County Courts Act 1959, uses the phrase. Of course it does, because that was re-enacting a provision which entered our law as Section 113 of the County Courts Act 1846. That is the whole trouble. We must get away, if we are going to move towards the goal of standardisation and simplicity recommended by the two committees to which I have referred, from the ancient, difficult and now obsolete vocabulary of the 19th century.
It is for those reasons that I ask the Government to reconsider Clause 11—just this one word where it appears twice—and to use simple, modern English either such as I have suggested in this amendment which proposes the words "intending to do so", or, as the Law Commission would prefer, "with intent to do so". I had some discussions with the Law Commission before putting down this amendment, and I have every reason to believe that they would look with favour upon a reconsideration of the place of this word in this clause. I beg to move.
7.7 p.m.
The Lord Chancellor: My Lords, I shall of course be prepared, whatever happens to this amendment, to reflect about this at greater length. But may I just say what I am thinking at the moment about my noble and learned friend's amendment. I agreed with about 99.9 per cent. of what he was saying and I disagreed with about .1 per cent. of it. The trouble was that the 99.9 per cent. I agreed with was his argumentation, and the .1 per cent. was his conclusion. I absolutely agree with him that "maliciously" and "wilfully" ought to be taken out of the criminal statute book—or at any rate interpreted in such a way that one could substitute a more rational formula in both cases.
I very much sympathise with the Law Commission's desire to have a statute at some time to codify the mens rea aspects of the criminal law. It would be a very good idea, although all their particular definitions do not as a matter of fact appeal equally to me. They would have to he carried out under the auspices of the Home Office, because, as the noble and learned Lord on the Opposition Front Bench knows, it is a very

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jealously guarded prerogative of the Home Office to promote changes in criminal law. Lord Chancellors have on those occasions to be seen and not heard. It is a pure fluke I am seen and heard because this Contempt Bill is my Bill. That would therefore be a very good thing.
The old war horse "wilfully" has been gelded this year by the House of Lords itself. It is no longer a war horse but a gelded one, because in the case of Sheppards, to which I think he obliquely referred, of wilful neglect of children, my noble and learned friend Lord Diplock has successfully performed the necessary surgical operation and "wilfully" has been satisfactorily defined, in relation to the neglect of children at any rate, in a way that nobody could complain of. There is no doubt whatever that in my lifetime, and even in the last 15 years since that dreadful case of Smith v. the Director of Public Prosecutions, the judges and particularly the judicial Appellate Committee of the House of Lords have moved very strongly towards a more rational description of mental acts than was current in the more austere days of 1898.
I think it has done a great deal of good. My noble and learned friend, of course, is perfectly right: this textually reproduces a section of an Act of 1959, which textually reproduces a section of an Act of 1946; but the problem that emerges from it is that where I want to produce the same result as the Act of 1959 in relation to county courts I have to use different language. The way to get this thing done properly must be to make a coherent sweep of these mental phrases so that the same language means the same thing whenever and wherever it occurs on the statute book. What my noble and learned friend is really asking me to do is to put in relation to one set of courts one set of language to mean exactly the same thing as is intended in relation to another set of courts and, much worse, to leave intact perhaps the 50 or more uses of the word "wilfully", where they exist, dotted about the criminal code—if I may use that phrase rather laughingly to describe the jungle of the criminal law.
However, I doubt whether it is good drafting practice to do that. I think it is better drafting practice to leave the words identical until we are prepared to deal with them all. As I say, I agree with 99·9 per cent. of what my noble and learned friend is saying, and if he will withdraw this amendment I will certainly reflect upon it again. I know what the Law Commission thinks, both in relation to this amendment and in relation to the coherence of our phraseology relating to mens rea. Whether in fact I shall yield to his blandishments is another matter. I would yield to them in a moment if I could control the whole field, though I would put in a caveat that the word "intent" has also from time to time given rise to considerable judicial discussion, if not difficulty. But to use a different word to mean the same thing as an identically worded statute in a different field of the law is, I would have thought, bad rather than good drafting practice. Having said that, I have gone as far as I can in support of my noble and learned friend.
Lord Morris: My Lords, in supporting the noble and learned Lord, Lord Scarman, in regard to this amendment, specifically as a non-lawyer, as I understand it
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what the noble and learned Lord the Lord Chancellor as a Minister of the Crown is saying in his argument is making yet again another argument by a Minister of the Crown for doing absolutely nothing at all. Unless a start is made in matters like this, nothing ever will happen. I myself am concerned about this. I think the case has been made out quite perfectly and deserves all the support it can get.
Lord Scarman: My Lords, I am very conscious of the point made by the noble Lord, Lord Morris: indeed, it is a echo in a less controversial area of a point made earlier dealing with a new clause before Clause 7 of the Bill. I will leave this matter, if I may, with one question and one very gentle correction, or perhaps even a "broadening of the experience" of the noble and learned Lord the Lord Chancellor. The question is this: Is it really a very serious situation if we have in a 1959 statute that contempt in the county court is wilfully doing this, that or the other and we have in a 1981 statute a provision that someone who insults the justices, intending to do so, is guilty of contempt? If one gets behind the rhetoric and looks at what is proposed in its proper context, is there really any very great danger to drafting practice or to the consistency of the law if the obsolete model still goes on for a bit in 1959 and the modern model, in language we all understand, finds itself in the 1981 statute? That is the question I would certainly ask the Government to consider.
As to broadening my noble and learned friend's experience, he seemed to think that geldings were less dangerous than entire horses. Anyone who has followed, as unsuccessfully as I have, the fortunes of the turf will know that geldings very often come in, to the consternation of all of us, at very long prices. I would love to think that "wilful" is a gelding, but I would not like the noble and learned Lord the Lord Chancellor to stand within the kick of the animal even though it was a gelding!
The Lord Chancellor: My Lords, by leave of the House, I do not think that anything very dreadful would happen if this amendment were accepted, or I would not have spoken as favourably of it as I did. But, speaking with great humility, I feel that one of the functions of the Lord Chancellor is to try not to make the statute book even worse than it is, and although I would shed few tears if two identically worded sections were separated one from the other, meaning the same thing but expressing it in different words, I think it would be a slight pity—I would put it no higher than that—and I think it would be better to leave it alone and deal with it ordinarily.
As regards this question of geldings, I do not bet on horses but I know that the warhorses of old were not geldings. As for an argument in favour of doing nothing, the whole of my Bill is an experiment in trying to do something. I am afraid that I am being rather "the toad under the harrow": if people try to make me do too much I am afraid that I shall lose my Bill. However, I will reflect upon this point, if my noble and learned friend will let me. To tell the truth, I do not feel very strongly about it.
Lord Elwyn-Jones: My Lords, my own feeling, in view of what the noble and learned Lord the Lord Chancellor has said, is to say:
"To horse, to horse, and away!"
Lord Scarman: I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 11 not moved.]
Clause 18 [Interpretation]:
7.19 p.m.
Lord Morris Lord Morris moved Amendment No. 12:
Page 8, line 25, leave out from ("State") to ("and") in line 27.
The noble Lord said: My Lords, this amendment is not a horse, not even a little horse, but a very, very little fish. I believe that the noble and learned Lord the Lord Chancellor will find it a great deal more palatable than the larger fish which was placed before him at an earlier stage of the Bill. It is purely a tidying-up measure which was suggested by my noble friend Lord Renton at the Committee stage; namely, to draw together all the references to proceedings of a tribunal to which the Act of 1921 applies. I shall not go through the argument again, but I think this is a minor improvement in the drafting of the Bill. The tribunals of inquiry under the Act of 1921 are, as your Lordships are well aware, a very special type of hearing. In fact, if I recall rightly, there have been only 16 of the hearings in the 60 years that have passed since 1921. With that, my Lords, I beg to move.
The Lord Chancellor: My Lords, I am very happy to accept this amendment and I think my noble friend has performed a service in advocating the principle underlying it. The House, when in Committee, discussed the matter earlier and my noble friend Lord Renton, who could not be here today, pressed me hard on the principle of the amendment. I said that I would take the draftsman's advice, which I have done, in spite of my noble friend Lord Renton, who rather thought that it was a wicked thing for Lord Chancellors to take the draftsman's advice. The draftsman's advice is that I should accept this amendment, and I may modestly say that I myself had nothing whatever to do with the drafting of it.
On Question, amendment agreed to.
Lord Morris Lord Morris moved Amendment No. 13:
Page 9, line 8, leave out subsection (2).
The noble Lord said: My Lords, this amendment is consequential. I beg to move.
On Question, amendment agreed to.
Lord Morris Lord Morris moved Amendment No. 14:
After Clause 18, insert the following new Clause:
("Tribunals of Inquiry
.—(1) In relation to any tribunal to which the Tribunals of Inquiry (Evidence) Act 1921 applies, and the proceedings of such a tribunal, the provisions of this Act (except subsection (3) of section 9) apply as they apply in relation to courts and legal proceedings; and references to the course of justice or the administration of justice in legal proceedings shall be construed accordingly.
(2) The proceedings of a tribunal established under the said Act shall be treated as active within the meaning of section 2 from the time when the tribunal is appointed until its report is presented to Parliament.").
The noble Lord said: My Lords, this amendment is consequential. I beg to move.
On Question, amendment agreed to.
Schedule 1 [Times when proceedings are active for purposes of section 2]:
7.22 p.m.
Lord Gardiner Lord Gardiner moved Amendment No. 15:
Page 10, leave out lines 23 to 29 and insert—

(" (a) in England and Wales, when the accused person is charged or a summons served;

(b) in Scotland, when the person is publicly charged on petition or otherwise or at the first calling in court of a summary complaint.").

The noble and learned Lord said: My Lords, we had a very good discussion on this amendment at Committee stage, and it is not my intention to repeat the arguments that I then advanced. I pointed out that this is the one point on which everybody concerned is against the Government in departing from the Phillimore Report. When I say "everybody", I mean The Times, the Guardian, the leading serious newspapers, the legal journals, the legal societies, the Law Society, and so on. In reply, the noble and learned Lord the Lord Chancellor, in his usual robust manner which we all enjoy so much, said that I ought to have referred to Sutcliffe's case.
There were two sub judice cases. The first was the case of a man named Tuite who escaped from custody; he has not been seen since and is now believed to be in Ireland. The second was the Sutcliffe case. Of those two, I had on the morning of the Committee stage considered very carefully what Mr. Speaker had ruled as to the application of the sub judice rule. I think we are all agreed that while, in ordinary circumstances, neither case should have been referred to, there is the one exception that, even in detail, cases which are sub judice may be referred to in the context of discussing legislation in Parliament. So we were entitled to refer to either of them.
I thought that, as Mr. Tuite had got away, and as his trial was not at all imminent because nobody knew where he was, I should be safer in discussing that case than the Sutcliffe case. But in his reply, the noble and learned Lord attacked me for not mentioning Sutcliffe. I had not mentioned what The Times said about Sutcliffe. I had not mentioned what The Guardian said about Sutcliffe and, as he said quite rightly, the press behaved disgracefully about the Sutcliffe case.
The reason why I did not, was because I could draw the lesson which I thought ought to be drawn from both cases equally; namely, that each case had been preceded by the police officers in charge of the case summoning a press conference and then making observations which some might have thought to be in contempt of court themselves. The point which I was respectfully making, which applied to both cases, was that to enforce a law you must have the general body of public opinion behind you, if possible, and that I do not think you will ever get a case where you can

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send an editor to prison merely because he has reported something which a senior police officer has said at a press conference called by him.
We remain in very much the same position. The Times, quite rightly, denounced the conduct of the press in the Sutcliffe case. But I thought, if I may respectfully say so, that what the noble and learned Lord said about Sutcliffe—and I am not talking about Sutcliffe—was something of a red herring, as, first, the Government had not decided to jettison Phillimore on the wording of this Part of the Bill because of anything in the Sutcliffe case, because that had been decided a long time ago—
The Lord Chancellor: My Lords, I am reluctant to interrupt, but the point I made was quite different from that. I said that on Second Reading I had treated the matter as very nicely balanced, but that Sutcliffe had enabled me to make up my mind because it was such a startling example that I was right.
Lord Gardiner: My Lords, that, of course, I can understand. The Sutcliffe case itself did not happen because the law as to when strict liability should start was at an earlier place rather than later.
In the last communication of the Law Society—which is not a notoriously Left-Wing body—on this matter, it said:
"We continue to favour the Phillimore proposal. We agree with that Committee's view that the law of contempt, combining strict liability and a summary procedure, should be invoked only where there is"—
and then they quote from Phillimore—
" 'a serious and immediate threat to the administration o justice. This in practice is only likely to arise when the trial is due to take place in the near future'.
"Furthermore, it should also be borne in mind that strict liability is only designed to control the publication of comment which inadvertently causes prejudice or the risk of prejudice. Where the risk is deliberately created, this constitutes contempt regardless of whether strict liability applies or not and this applies to the publication of comment which the publisher knows, or ought to know, to be likely to have this effect, even if not actually intended to do so.
"In paragraph 6 in Part I of this paper, we mentioned the disquiet which had been caused by the decision of the West Yorkshire Police Authority to hold a press conference after an arrest but before a charge was laid in a recent case, and the possibly prejudicial press reports to which this gave rise. It has been suggested that this incident is evidence of the need for strict liability to run from the time of arrest or issue of the warrant instead of the time of the charge or summons.
"Distasteful as the incident and its consequences were, we do not agree this conclusion should be drawn from what happened. It was not the absence of strict liability which allowed these reports to be published. There can be no doubt that all concerned knew that proceedings were 'imminent' at the time of the press conference and that the matter was thus sub judice. It is regrettable that this was not sufficient to dissuade certain newspapers from departing from their usual practice in dealing with such matters, but what the incident showed was that strict liability failed on this occasion as a sanction and not that there is a need for a longer strict liability period than that recommended by Phillimore".
Then they go back again to their original view, that the time should be when the accused is charged or a summons is served, and not the earlier period.
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Of course, this Bill has, in any case, to go to another place, but I hope that the Government will continue to think about this and, possibly, to feel that where every single knowledgeable person takes the view that Phillimore was right, it is conceivable that the Government might be wrong. But unless the noble and learned Lord the Lord Chancellor now tells me that he has changed his mind since the Second Reading of the Bill, I shall later on ask leave to withdraw the amendment. My Lords, I beg to move.
7.29 p.m.
Lord Mackay of Clashfern: My Lords, one way and the other we have been over the arguments about this matter on a number of occasions, both in sittings on this Bill and indeed earlier when various possible dates were under examination. The point about the recent case, to which the noble and learned Lord, Lord Gardiner, referred, is that, so far as we can judge, the matters to which he referred, which he described as objectionable, took place at a time which, if this amendment were to pass, would not be a time to which the strict liability rule would apply, because they took place at the time of arrest. We say that to choose the time of arrest is a very reasonable time to take. It is a time which is likely to be important. It is a time when a relationship with the court is set up and when, in a real sense, it can be said that the proceedings have properly begun in respect of which the protection is to apply. Accordingly, so far at least our view is that the date in this Bill which we have chosen both for England and Wales and for Scotland is correct, but we will certainly continue to consider all that is said on the subject.
Lord Gardiner: My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Fraser of Tullybelton Lord Fraser of Tullybelton had given notice of his intention to move Amendment No. 16:
After Schedule 4, insert the following new Schedule—
("SCHEDULE
INFERIOR COURTS AND TRIBUNALS
Magistrates Courts
County Courts
Coroner's Courts
Courts Martial
Consistory Courts
Lands Tribunals for England and Wales and for Scotland
Employment Appeals Tribunal
Industrial Tribunals for England and Wales and for Scotland.
Any court or tribunal or which the Chairman is, or has the status of, a judge of the High Court in England and Wales, or of the Court of Session in Scotland.").
The Lord Chancellor: My Lords, I take it that Amendment No. 16, standing in the name of the noble and learned Lord, Lord Fraser of Tullybelton, is not moved because it falls with Amendment No. 5.
Lord Elwyn-Jones: My Lords, what the noble and learned Lord has said is absolutely right. That completes the business.

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