Sitting of 16 February 1981

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

    Aircraft Noise
    Mr. Jesse1asked the Secretary of State for Trade what action he intends to take this year to reduce the nuisance from aircraft noise to people living and working near Heathrow.
    The Under Secretary of State for Trade (Mr. Reginald Eyre): There is no short-term solution to this problem, but we shall continue to encourage the progressive introduction of quieter, noise-certificated aircraft and to maintain the wide range of operational controls which are designed to minimise the disturbance caused by aircraft noise.
    Mr. Jessel: Does my hon. Friend accept that it should be Government policy to try to bring about a clear and definite cut in this pestilential nuisance which still causes great distress to large numbers of people? Will he make sure, in particular, that summer night time restrictions are increased from the present seven hours, which are not enough for a normal full night's sleep, and that within those hours no increase is allowed in the numbers of flights?
    Mr. Eyre: Over the years, my hon. Friend has vigorously and effectively represented the interests of his constituents in these matters. I assure him that the Government understand his views and will do everything possible to take them into account commensurate with the proper use of important national assets.
    Mr. Colvin: Is my hon. Friend aware of the enormous contribution by the civil aviation industry to the economy of this country, particularly in invisible exports? Does he appreciate that in the current world recession civil aviation needs further regulations like it needs a hole in the head, especially at a time when aircraft are getting bigger, engines quieter and movements therefore fewer? Will he give an undertaking to discuss these matters carefully with the civil aviation industry before proceeding with any regulations?
    Mr. Eyre: It is necessary that airport authorities and the airlines should be able to make effective use of important assets in the interests of the national economy, but decisions will always be taken against a background of concern for those adversly affected.

    European Community
    Mr. Knoxasked the Secretary of State for Trade what was the surplus or deficit on visible trade with the European Economic Community in January; and how this compared with the position in January 1980.
    The Minister for Trade (Mr. Cecil Parkinson): The figures for January of this year will be published at 3.30 pm today. Since the beginning of 1980, our trade with the European Community has moved from deficit into surplus.
    Mr. Knox: Will my hon. Friend confirm that he expects a healthy improvement in the figures for January 1981 compared with those for January 1980? Will he say by how much exports to our EEC partners have risen since we joined the Community in 1973?
    Mr. Parkinson: I cannot anticipate what the figures to be announced at 3.30 pm will reveal. I can, however,

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    confirm, as my hon. Friend states, that since 1970 our trade with the Community has grown from only 30 per cent. to 40 per cent. of our total trade.
    Mr. Leighton: Is not this rise explained my the increase in our oil exports last year from £1·6 billion to £2·7 billion? Is it not also the case that, due to the recession, we are not importing so much—in other words, that unemployment is working as an effective import control, and that the underlying imbalance in our trade in manufactures has not been affected?
    Mr. Parkinson: The imbalance in our trade in manufactures has been affected. It has been reduced considerably. Last year our exports accounted for 90 per cent. of our imports, as opposed to only 84 per cent. a year previously. Our trade in oil has increased. I hope that the hon. Gentleman will not try to pretend that we should exclude this figure from our balance of payments figures. We are constantly told the hardening of the pound, based on oil, has affected our exports of other items. I hope that, if the hon. Gentleman wishes to make on adjustment for oil, he will also try to make an adjustment to reflect that fact.
    Mr. Teddy Taylor: Does the Minister recall telling me recently that our deficit in manufactures trade with the EEC in 1980 was about £5 million a day? Is he willing to enter into consultations and to undertake a study with his right hon. Friend the Secretary of State for Employment to find out the impact on jobs of a deficit of £5 million a day in manufactures trade?
    Mr. Parkinson: My hon. Friend is right about that figure. However, he should accept, as I am sure that he does, that it represents a reduction of about £2 million a day on the figures of the year before. He should be careful about arguing that if we have a surplus with an area or country that is proof that something is wrong. There are a substantial number of areas in which we run surpluses.
    Mr. John Fraser: If oil exports to the EEC are now running at about £3,000 million a year, does not that cause the Minister of State some concern about the imbalance of manufactures? To what extent is the present value of the pound responsible for this imbalance?
    Mr. Parkinson: The hon. Gentleman probably was not listening. I explained to him that in 1979 our exports of manufactures, excluding oil, were about 84 per cent. of our imports. Last year that figure was 90 per cent. There is an improvement in our exports of manufactures excluding oil.

    Newly Industrialising Countries
    Mr. Chapmanasked the Secretary of State for Trade what is the current state of trade between the United Kingdom and the non-OPEC industrialising countries; and if he is satisfied with the trend in recent years.
    Mr. Kenneth Carlisleasked the Secretary of State for Trade what was the United Kingdom's balance of trade with the newly industrialising countries in 1980.
    The Secretary of State for Trade (Mr. John Biffen): The balance of trade with the new industrialising countries in 1980 resulted in a crude surplus of £396 million. The crude surplus with non-OPEC members within this group
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    was £110 million. In both cases, there was a considerable surplus in trade in manufactured goods, and a deficit in other goods, primarily food and raw materials.
    Mr. Chapman: First, may I welcome my right hon. Friend to his new post? I welcome the figures that he has announced, but do they not again underline the fact that, if we felt minded to try to restrict imports of certain goods from these countries, the retaliatory measures that could be taken against our exports would be more damaging to the United Kingdom than any net benefit from restricting imports?
    Mr. Biffen: I thank my hon. Friend for his kind initial remarks. It is true that this is a substantial and valued market for the United Kingdom. These countries account for about 11 per cent. of our exports and 10 per cent. of our imports. It is advantageous that the trade should proceed by mutually satisfactory arrangements.
    Mr. Carlisle: We welcome the growth of our trade with NICs and the healthy balance of trade that we enjoy with them. Does my right hon. Friend agree that we should do everything possible to encourage this trade not only because it helps to create jobs in Britain but because, by providing a market for goods in Britain, it therefore helps to put into effect the best overseas aid programme possible?
    Mr. Biffen: Yes. I very much accept that argument.
    Mr. Edwin Wainwright: Does this mean that the right hon. Gentleman is happy about the present balance of exports and imports? Will he compare the present position with what was happening years ago? Does he not realise, in spite of his complacency, that we are importing far too many goods while being unable to sell similar goods manufactured in Britain?
    Mr. Biffen: There is a sensitive relationship between what we buy from these countries and what we sell to them. I suspect that the hon. Gentleman has manufactured goods in mind. In that sector we have a substantial surplus. The balance is made up by food and raw materials that we import from them. Surely this is trade that commends itself to all parts of the House.
    Mr. Marlow: Perhaps my right hon. Friend will tell us what effect on trade with the newly industrialised or industrialising countries will follow from restricting our source of agricultural supplies, such as that which has caused the closure of the Tate and Lyle sugar refinery in Liverpool?
    Mr. Biffen: I require notice of such a detailed and fast googly.

    Unsolicited Advertising Material
    Mr. Dubsasked the Secretary of State for Trade what representations he has received about the distribution of unsolicited advertising material through the post.
    The Minister for Consumer Affairs (Mrs. Sally Oppenheim): We receive a number of complaints about such material.
    Mr. Dubs: Does the right hon. Lady accept that there is concern about the way that organisations such as the Reader's Digest manage to assemble lists of names and addresses and combine the right to buy goods with free

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    entry to prize competitions? Is she aware that people are unhappy about such stuff coming through the post? Will she consider responding to the Lindop committee by way of an impartial answer to this problem?
    Mrs. Oppenheim: I must tell the hon. Gentleman that the majority of complaints that we receive about such material are concerned, not about the fact that it has been sent unsolicited, but about the advertising content. Prominent among the complaints that we have received are those about the Reader's Digest. We have received complaints about Leisure Arts, which gave the mistaken impression that the recipients had won something substantial. We have also received complaints about a company called "The Joy of Knowledge", which gave a mistaken impression about education in Britain. It implied that it was giving a £50 voucher. I have referred a number of these complaints to the Advertising Standards Authority. The Lindop committee was not conclusive that unsolicitied mail was disadvantageous and not wanted by the majority. It reached the opposite conclusion. However, we need carefully to watch the advertising content.
    Sir Ronald Bell: Is my right hon. Friend aware that the London office of the EEC Commission is pursuing an intensive advertising compaign to spread the joy of knowledge to many people who do not want to have it?
    Mrs. Oppenheim: I must tell my hon. and learned Friend that so far I have received no complaints about that enterprise.
    Mr. Jessel: Would not it be simplest if the public were to follow the example of Members of Parliament and put quantities of printed material that they do not want into the wastepaper basket?
    Mrs. Oppenheim: That is true of most people. It is where the content of such unsolicited communications is misleading in advertising terms that there is cause for concern.
    Mr. Russell Kerr: Is the right hon. Lady aware that she is being much less forward looking than a previous Conservative Postmaster-General, who threw this concept out of the window and refused to countenance the idea of having unsolicited mail?
    Mrs. Oppenheim: I thank the hon. Gentleman for reminding me of that. However, he will know that a number of committees have considered the issue since the time to which he is referring. We have the Unsolicited Goods and Services Act 1971. I am satisfied that the balance that is struck at present is not unsatisfactory, but we must keep an eye on the content of these communications.

    Monopolies and Mergers Commission
    Mr. Sheermanasked the Secretary of State for Trade what plans he has to improve and strengthen the Monopolies and Mergers Commission.
    Mr. Biffen: The Monopolies and Mergers Commission has been strengthened to perform its new functions under the Competition Act, and I have just appointed an additional deputy chairman. In consultation with the chairman, we shall keep its resources and procedures under review.
    Mr. Sheerman: Is not the right hon. Gentleman concerned that in the recent takeover of Times Newspapers
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    Ltd the commission could not respond in less than 10 to 12 weeks? Murdoch has taken over The Times, and perhaps that will be a lasting and fitting tribute to the new Secretary of State for Trade. Does he not agree that the time scales will have to be improved in future if this body is to be any use?
    Mr. Biffen: The speed with which the commission can work is affected quite substantially by the amount of evidence that it has to consider and the speed with which that evidence is made available. The commission said that it thought that it might take as long as eight weeks to consider the representations put before it in the case of Times Newspapers Ltd. I have no reason to doubt its judgment.
    Mr. Henderson: Will my right hon. Friend consider bringing shipping cartels within the ambit of the antimonopoly legislation, especially in view of recent evidence that British exporters are suffering positive disadvantage compared with their German competitors?
    Mr. Biffen: I take note of my hon. Friend's suggestion. I am sure that he does not expect me to give an immediate answer.
    Mr. Christopher Price: Will the right hon. Gentleman consider the monopoly position of the Press Association, which is a monopoly owned by local monopolies? It has occupied that position since the demise of Extel. Is he aware that I have recently discussed this matter with the Director General of Fair Trading? Will he make urgent inquiries to ascertain whether the Director General is willing to pursue an inquiry so that we can have a free flow of news in this country?
    Mr. Biffen: I shall certainly inquire of the Director General of Fair Trading about the consequences of the correspondence to which the hon. Gentleman refers.
    Mr. Mellor: Is my right hon. Friend aware that there was much support inside and outside the House for his decision not to refer The Times takeover to the Monopolies and Mergers Commission? Does he agree that it is extraordinary that Mr. Murdoch should be subjected to such abuse from the Opposition for protecting hundreds of jobs by taking over a business which currently is losing £13 million a year?
    Mr. Biffen: I recognise that my decision was controversial. I do not complain for one moment about that. I take note of what my hon. Friend so encouragingly says.
    Mr. John Smith: Is the Secretary of State aware that the view just expressed to him is a minority view and that most hon. Members believe that he should have referred the matter to the Commission? Since he substituted for a reference to the Monopolies and Mergers Commission a set of conditions upon the new proprietor of The Times and The Sunday Times, what sanction can he apply to the new proprietor if he breaks those conditions?
    Mr. Biffen: Question No. 16 addresses itself specifically to that matter and I shall deal with it then.

    Air Transport Services (London-Hong Kong)
    Mr. Allan Stewartasked the Secretary of State for Trade what assessment he has made of the effect of the Government's decision to permit the new air transport services on the London-Hong Kong route.
    Mr. Biffen: The travelling public have the benefit of a wider varity of services offered by three airlines and of significantly reduced fares as a consequence of the competition. In the first five months of these services, the number of passengers on the route increased by over 50 per cent. compared with the corresponding period in 1979.
    Mr. Stewart: I am grateful for that information. Does it not prove that the customer has benefited greatly from competition on the route? Would not it be an additional benefit if that competition were created on internal, European routes?
    Mr. Biffen: I am grateful to my hon. Friend for the support he expressed in the first part of his observation. I shall take note of what he says.
    Mr. Carter-Jones: If three airlines provide good competition, why not have four, five, six, seven or eight?
    Mr. Biffen: Laker Airways have been given a licence by the Civil Aviation Authority, but they are frustrated by not being able to get a corresponding licence in Hong Kong.
    Mr. McCrindle: In order to keep a balanced view, will the Secretary of State say whether British Airways, British Caledonian and Cathay Pacific made a profit in the first six months of the open skies policy to Hong Kong? Does the 50 per cent. increase in passengers extend to first class and full economy fare passengers, without a full load of whom no airline can continue to fly at a profit?
    Mr. Biffin: I am grateful to my hon. Friend for suggesting that one should take a balanced view. None of the three airlines operating in intensive competitive conditions has given any indication that it wishes to withdraw from the business.
    Mr. Clinton Davis: Does the Secretary of State agree that originally the independents which sought licences to operate on this route did not seek stop-over rights and that that situation has changed? Will he venture an opinion about why that is so? Does he agree that the only organisation that will suffer as a result is British Airways because they will be required to give something up, whereas the others cannot be expected to do so?
    Mr. Biffen: The hon. Gentleman will appreciate that the stop-over arrangements sought by British Caledonian are subject to an appeal by myself and I cannot make a comment until the appeal has been resolved.
    Mr. Emery: Will my right hon. Friend remember that in the success of increasing the number of passengers to Hong Kong some persons are using the cheaper fares for onward transportation to Australia? Will he bear that in mind when applications are made for increased services to Australia?

    Secretary of State (Visits)
    Mr. Bowen Wellsasked the Secretary of State for Trade whether he will list the countries he has visited since May 1979, the costs of the visits and his estimate of the effects on British trade with with those countries.
    Mr. Biffen: With permission, I will circulate the list of the countries visited and the costs incurred in the Official Report. It is not possible to estimate the precise effects on our trade of most of the visits undertaken since the benefits are likely to be long term.
    Mr. Wells: I thank my right hon. Friend for that answer and look forward to reading the list in the Official Report. Is it true that the Minister for Trade has visited a large number of countries in company with British business men? Has he not thus generated an enormous amount of public interest in British exports, enabled British business men to contact Government people in those countries and so given British exporters a greater opportunity to export British goods?
    Mr. Biffen: My hon. Friend is right. I pay tribute to my hon. Friend the Minister of State, who has been involved in a programme of visits covering practically all the leading 25 export markets with only two or three exceptions.
    Mr. Deakins: Do not such visits help the Minister and his colleagues to appreciate the difficulties facing British exporters? If they serve that useful purpose, will he use his influence with his colleagues to achieve an appropriate change in policies which are hindering British business men overseas?
    Mr. Biffen: I do not have to leave our shores to be made aware of the difficulties experienced by British industry. It is true that such visits give politicians a closer idea of the problems confronting the commercial and trading communities.
    Mr. Waller: Does my right hon. Friend agree that great credit is due to companies which have not sat back in the face of the current recession but which have gone abroad to find new export markets and thereby overcome the recession? Does he agree that the high value of the pound has the advantage, which not all companies have appreciated, of enabling them to keep a marketing presence abroad and to find new markets?
    Mr. Biffen: I agree with the first part of my hon. Friends comment. I agree that the high level of British exports bears testimony to the commercial expertise of companies engaged in exporting. The level of sterling clearly has its advantages and disadvantages to people engaged in exports, depending largely upon the domestic cost structure.
    Following is the list of countries:

    SOS (Trade)—Overseas Visits from May 1979 to Date

    Date

    Countries Visited

    Cost

    John Nott

    Non EEC

    USA, Fiji, Australia,

    13 September–4 October 1979

    New Zealand

    £12,811

    23–28 November 1979

    Iraq, Saudi Arabia

    £6,018

    Japan, Korea,

    18–31 January 1980

    Hong Kong

    £11,945

    7–9 February 1980

    Switzerland

    £573

    20–22 March 1980

    USA

    £3,658

    5–13 May 1980

    Brazil

    £10,808

    7–11 July 1980

    Nigeria

    £5,115

    18–19 September 1980

    France

    £993

    12–15 October 1980

    Greece, Austria

    £2,538

    14–16 December 1980

    Spain

    £1,570*

    5–10 January 1981

    Indonesia

    £4,506*

    EEC

    10 July 1979

    Brussels

    £378

    20 November 1979

    Brussels

    £970

    4 February 1980

    Brussels

    £1,097

    11 June 1979

    Luxembourg

    £1,062

    25 November 1980

    Brussels

    £431*

    Date

    Countries Visited

    Cost

    John Biffen

    Non EEC

    16–23 January 1981

    India

    £8,161*

    * travel costs only available

    Bristol Evening Post and Western Daily Press
    Mr. Palmerasked the Secretary of State for Trade if he will refer the proposal of Associated Newspapers to obtain full control of the Bristol Evening Post and the Western Daily Press to the Monopolies and Mergers Commission.
    Mrs. Sally Oppenheim: The proposed takeover does not require my right hon. Friend's consent under the newspaper merger provisions of the Fair Trading Act 1973, and the question of a reference under those provisions does not arise. The Director General of Fair Trading is, however, making the usual investigations to see if the takeover qualifies for reference under the general merger provisions of the Act. If he finds that it does, he will make his recommendation to my right hon. Friend in the normal way, and my right hon. Friend will announce his decision as soon as possible.
    Mr. Palmer: Does the right hon. Lady appreciate the consternation that her answer will cause to the readers of the papers in Bristol and to the workers in the enterprises? Will she explain why her right hon. Friend has forgotten so soon his once-vaunted belief in free competition?
    Mrs. Oppenheim: I have received no expressions of consternation from any members of the public, so far as I am aware. The law as it stands is the law and this is not a referable reference under the newspaper merger provisions of the Fair Trading Act. If it were, obviously my right hon. Friend would consider it as such. What the hon. Gentleman is asking for is a contravention of the law.
    Mr. Paul Dean: Will my right hon. Friend bear in mind that many people who come from the area served by the two excellent local newspapers value greatly the strong element of local control and management?
    Mrs. Oppenheim: I also come from the area which is covered by the newspapers. I have noted carefully my hon. Friend's view.
    Mr. Christopher Price: Is not a whole new look at the statutory provisions governing newspaper mergers necessary? Does the right hon. Lady agree that in the spirit of the 1973 Act newspapers are special cases and that the House and the Monopolies and Mergers Commission should look carefully at each case? If each case goes through without scrutiny the public will feel that we do not care about the concentration of a monopoly press in Britain.
    Mrs. Oppenheim: Consumer and competition legislation comes under review from time to time in my Department. The matter is one of many that may be looked at when the legislation is reviewed.
    Mr. John Fraser: Why is there not a mandatory reference under section 58, when clearly the newspapers
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    are economically going concerns and they are not controlled by Associated Newspapers, which has only three directors out of eight on the board, and also when on the face of it the combined circulation would fall to be referred under section 58? If the right hon. Lady can convince the House that they are not referable, will she give support to a reference under the general merger provisions of the Fair Trading Act?
    Mrs. Oppenheim: Within the meaning of the Act, Associated Newspapers is a newspaper proprietor in relation to the Bristol Evening Post group, which includes the Western Daily Press. No reference is possible under the Act: where an existing proprietor simply increases his control, although, as I have said, that may be a matter for a general reference by the Director General of Fair Trading under the normal as opposed to the newspaper merger sections of the Act.
    Mr. Fraser: May I tell the right hon. Lady that we take serious objection—
    Mr. Speaker: Order. A supplementary question is not a vehicle for passing information. The hon. Gentleman may ask a question.
    Mr. Fraser: Will the right hon. Lady re-examine the conclusions that she has come to about control in the light of the facts? Does she agree that there is no mathematical rule about whether someone controls a company?
    Mrs. Oppenheim: Associated Newspapers already owns 60 per cent. of the shares of the parent company. The hon. Gentleman will agree that that is tantamount to being in control.

    General Agreement on Tariffs and Trade (Subsidies Code)
    Mr. Hannamasked the Secretary of State for Trade what action he is taking to maximise the effectiveness of the new general agreement on trade subsidies code, especially with regard to loans at belowmarket rates of interest.
    Mr. Parkinson: The Government fully support the GATT agreement on subsidies and countervailing duties. My Department is very ready to look into prima facie cases brought forward by United Kingdom industry regarding subsidies from which its competitors are benefiting and to invoke the mechanisms established in the agreement where appropriate.
    Mr. Hannam: Is my hon. Friend aware that, although it is difficult to produce prima facie evidence, there is increasing evidence of low-interest Government loans in other countries, especially France? Now that the consensus agreement on export credit subsidies has collapsed, will he press GATT to recall the committee responsible for export subsidies to examine the matter urgently?
    Mr. Parkinson: My hon. Friend raises an important matter. I will correct him on one small point of detail. The consensus has not collapsed. The negotiations about changing the basis of the consensus are faltering, but the consensus, as previously agreed, is firmly in place. The Government take the view that a credit race in which the developed countries compete with each other for the right to give away products is in no one's interest. We are pressing hard to get the negotiations under way again.
    Mr. Cryer: Is the Minister aware that it is difficult for industry to produce prima facie evidence, for example, of dumping? Is he further aware of the massive demonstration being staged here today of textile, clothing and footwear workers, who are worried sick about the loss of their jobs under this Government? What do the Government intend to do? Will they merely tell the workers to go back North and to join the ever-lengthening dole queues?
    Mr. Parkinson: The Minister will answer the first part of the hon. Gentleman's question about the GATT. I repeat what I said, with the added proviso that the Department stands ready to help industry to put together a case if evidence of any kind can be produced to show that there are grounds for further investigation. The Government are prepared to work with industry to assemble a case and to help industry to put it.

    Textiles and Clothing
    Mr. Woolmerasked the Secretary of State for Trade what recent assessment he has made of formal and informal trade barriers erected by other countries which are encountered by United Kingdom exporters of textiles and clothing.
    Mr. Biffen: The Government keep all barriers to our textile and clothing exports constantly under review and pursue every appropriate opportunity to get them reduced.
    Mr. Woolmer: Is the Secretary of State aware of the massive demonstration of textile and clothing workers in London and around Westminster today to show their grave concern at the loss of 100,000 jobs in the past 12 months? What response does he expect to give to the report of the Select Committee on Industry and Trade, which drew attention to the huge barriers that our wool textile exports face? What hopes can he give that that barrier will be reduced?
    Mr. Biffen: I am aware of the demonstration. The great anxiety in the wool textile trade is recognised in all parts of the House. The recommendations of the Select Committee covered many matters outside the responsibility of the Department of Trade. In due course, I shall publish our response to the recommendations.
    Mr. Anthony Grant: Will my right hon. Friend confirm that the Government's policy has been to operate under the multi-fibre arrangement negotiated by the previous Government and to improve on it and rectify its defects? Is it therefore not the height of cynicism for the Opposition to complain about that policy?
    Mr. BiffenThat is a trenchant and valid comment. The MFA is bound to be the framework within which we operate, to reconcile not only the interests of textile producers but also those of United Kingdom customers and our wider trade relationships. The agreement is for renegotiation, and we shall take into account all the representations that are likely to be made.
    Mr. Barry Jones: Is the right hon. Gentleman aware that partly because of the barriers a £12 million investment project by Courtaulds, in my constituency has been shelved? Is he also aware that among the many textile workers from my constituency here today there is bitterness about the bad effects on the textile industry, and man-made fibres in particular, of the over-valued pound and high interest rates.
    Mr. Biffen: I am politically a sufficiently near neighbour of the hon. Gentleman to appreciate the serious unemployment problems that he has to contend with. I hope that he will take some comfort from the fact that the United States Adminstration are deregulating their oil prices. I hope that that move will be extended to natural gas to bring about a more equitable relationship in the competitive nature of the respective economies.
    Sir Charles Fletcher-Cooke: Has my right hon. Friend any up-to-date information about the response of the United States to the EEC representations about feedstock and fuel prices, since the Minister of State, Department of Industry, said that he expected it to be sent to Washington early in February?
    Mr. Biffen: I understand that the negotiations are almost at the point of fruition and that, indeed, we may have information tomorrow. I shall make it my responsibility to see that my hon. and learned Friend is informed as soon as I am.
    Mr. John Smith: Is the Secretary of State aware that the effect of feedstock prices has been to increase import penetration in the United Kingdom of polyester filament yarn from 7 per cent. to well over 25 per cent. and that a serious imbalance and disruption is occurring in trade relations in textiles and man-made fibres between the United States and the United Kingdom? Is he further aware that the EEC is a past master at putting such matters aside month after month, and that we have been dealt with in that manner? Will he come back to the House at an early stage with a definite report on what the EEC or the Government intend to do to stop unfair trading by the United States?
    Mr. Biffen: I am well aware of the degree of penetration of the United Kingdom. I am therefore delighted that the United States Administration have deregulated oil prices. As I said, I hope that that will be followed by deregulation of natural gas prices.

    Shipping (River Thames Collision)
    Mr. Guy Barnettasked the Secretary of State for Trade if he will make a statement about the collision which occurred on the River Thames on the evening of Friday 30 January in the vicinity of Greenwich.
    Mr. Eyre: At 1918 hours on Friday 30 January the United Kingdom registered vessel "Blackthorn" and the Panamanian registered vessel "Frederika I" were in collision on the river Thames in dense fog. The "Blackthorn" remained afloat and was subsequently secured, but the "Frederika I" sank shortly after the collision. I am pleased to say that no lives were lost and all crew members survived the experience without injury.
    My Department is carrying out a preliminary inquiry into this casualty, which will be completed as soon as possible.
    Mr. Barnett: May I pay tribute to Mr. Graham Barnard who, as a result of the courage that he showed, was to a large degree responsible for rescuing three of the people who were in the river after the collision? May I also mention the speedy way in which Greenwich district hospital accepted those affected as patients? May I ask that the inquiry be a thorough one to ensure that incidents of

    13
    this kind do not happen again on the river Thames, particularly in that area of the river, where the currents are exceedingly dangerous?
    Mr. Eyre: I should like to associate myself with the hon. Gentleman's tribute to the staff of Greenwich district hospital and to join him in praising the gentleman to whom he referred. I believe that great credit was due to a waterman and a tug skipper who acted with initiative and skill in bad conditions in assisting the crew of the sunken vessel. The hon. Gentleman emphasised the importance of the inquiry, and I agree. When we have had the opportunity to consider the terms of the preliminary inquiry, we shall consider whether a formal investigation should take place.

    Southern Africa Development Co-ordination Conference
    Mr. Hooleyasked the Secretary of State for Trade what are the main exports from the United Kingdom to the countries comprising the Southern Africa Development Co-ordination Conference (SADCC); and what steps are being taken to increase trade with them.
    Mr. Parkinson: Machinery and transport equipment account for more than half the value of our exports to the SADCC countries. Manufactured goods and chemical products are also important. All the British Overseas Trade Board's export services and the resources of our posts are available in support of our trade with these countries.
    Mr. Hooley: Is the Minister aware that those countries between them comprise enormous natural, mineral and agricultural resources and are likely, over the next 10 or 15 years, to become immensely important markets for Britain both in terms of exports and imports? Would it not be a healthy trend as far as possible to move our trade away from South Africa and towards this area?
    Mr. Parkinson: I agree with the first part of the hon. Gentleman's question. These are important markets. They account for £300 million worth of exports at the moment. I believe that the hon. Gentleman's thinking is wrong in the second part of his question. If, as he puts it, our trade was moved away from South Africa, a number of those countries would be adversely affected. What we wish to see is an expansion of our trade with both areas.
    Mr. Robert Taylor: What percentage of our current trade with those countries is directly financed by our own aid programme?
    Mr. Parkinson: If my hon. Friend cares to table a question on that subject, I shall give him the answer. I am afraid that I. cannot give it off the top of my head.

    Trade Trends
    Mr. Deakinsasked the Secretary of State for Trade if he is satisfied with the trend since 1970 for the United Kingdom to have a greater share of its total trade with the European Economic Community and a lesser share with the rest of the world.
    Mr. Parkinson: Such a trend has been evident for some 30 years. However, our membership of the Community, with a market of some 270 million people, has, not surprisingly, led to a quickening in this trend. We welcome an increase in our trade wherever it occurs.
    Mr. Deakins: As the community consists of industrial countries, and the prospect for industrial countries in the foreseeable future is one of much slower growth than in the past, is not this trend to say the least a little unfortunate? Should not our exporters be devoting much more attention to the great potential markets in the rest of the world, particularly in the developing countries where the prospects fro long-term economic growth are much better than in the industrialised countries?
    Mr. Parkinson: I do not think that this is an either-or situation. We are now naturally inside a market of 270 million people with no external tariffs against us. That is a good opportunity for us, operating within a very large home base, to build up our trade. But I see no signs that British industry is neglecting the rest of the world. Indeed, wherever I go in the world, I find British industry extremely active in seeking out business in new markets, and I encourage it in every way that I can.
    Mr. Stokes: Is not one of the side effects of our increasing trade with the EEC that there is more European investment in this country? Is not that in itself a good thing?
    Mr. Parkinson: My hon. Friend is correct.
    Mr. Cryer: Is not the reality that we shifted power away from the United Kingdom Parliament, and that the EEC is lethargic about measures such as anti-dumping legislation, so that implementation of anti-dumping legislation and the multi-fibre arrangement has now moved to the EEC and the Government cannot take independent action? Is not the textile and clothing industries lobby here today a measure of the anxiety about that because of the continued job loss taking place in those industries?
    Mr. Parkinson: I know that the hon. Gentleman is extremely concerned about the state of the textile industry, as are the Government. But it does no good at all to identify the wrong causes of the industry's problems. I must tell the hon. Gentleman frankly that the MFA is administered here. We administer and monitor the quotas, and we ensure that they are enforced. Since we came to office we have strengthened the arrangement in a varity of ways. I therefore do not accept that our membership of the EEC is a source of the textile industry's problems. The MFA, as negotiated by the Government of whom the right hon. Member for Lanarkshire, North (Mr. Smith) was a member, is in place and is doing its job.
    Mr. Squire: Does my hon. Friend accept that, as he has already been criticised by an anti-European for not exporting enough to the EEC and is now being criticised for exporting too much, the chances are that he has it about right?
    Mr. Parkinson: Modesty forbids me from agreeing with my hon. Friend.

    United States of America "Buy American" Policy
    Mr. Shersbyasked the Secretary of State for Trade to what extent the various measures imposed by the United States of America to protect domestic industry known as the Buy American Act constitute an effective non-tariff barrier to British exports; and if he will make a statement.
    Mr. Biffen: The effect of the Buy American Act 1933 on British exports is difficult to quantify because of the wide coverage of the Act. There have been numerous individual complaints from British firms, and successive Governments have made representations to the United States authorities on their behalf.
    Under the GATT Government procurement code, which came into operation on 1 January 1981, the United States have waived "Buy American" provisions for products covered by the code.
    Mr. Shersby: Is my right hon. Friend aware that many British firms, particularly our computer firms, are having difficulty in penetrating the United States market, due to the existence of this statutory code? Will he therefore ensure that when my right hon. Friend the Prime Minister meets President Reagan shortly this item will be on the agenda so that the curious situation which has persisted since the 1930s is reviewed and, one hopes, brought to an end?
    Mr. Biffen: I cannot write the agenda, but I will certainly make sure that my hon. Friend's views are given wider coverage on this matter.
    Mr. Colvin: Will my right hon. Friend confirm that the Buy American Act does not apply to the trade in defence hardware? Will he therefore use his influence to persuade the Americans that the two-way street of reciprocal sales and purchases of defence hardware between the United States and the United Kingdom becomes indeed a two-way street and does not remain very much a one-way street in favour of the United States as it is at present?
    Mr. Biffen: I think that my hon. Friend makes a very pertinent observation.

    Union of Soviet Socialist Republics
    Mr. Neil Thorneasked the Secretary of State for Trade if he is satisfied the United Kingdom trade with the Union of Soviet Socialist Republics does not include components produced by either forced or slave labour.
    Mr. Bendallasked the Secretary of Trade what representations he has received about British products being undercut in price by imported Soviet goods made in part or in whole by forced prison labour.
    Mr. Parkinson: One Member of the House has corresponded with me on this subject. The Government, and I have no doubt all Members of the House, would deplore the sale in this country of products manufactured in forced labour camps. My powers to prohibit imports are limited, but, where justified, anti-dumping action can and will be taken under established procedures, and my Department is ready to advise on those procedures.
    Mr. Thorne: As my hon. Friend agrees with me that it is quite wrong for the West to benefit from the very unfortunate situation of the dissidents—largely Jews and other religious minority groups—in Soviet Russia, does he think that there is anything that the Government could do to lead either Europe or the rest of the world into some system of inspections whereby countries receiving goods from overseas have a right to ensure that the manufacture of those goods is not at the expense of native labour which is grossly underpaid?
    Mr. Parkinson: My hon. Friend shares my distaste for trade in these items. I intend to discuss with my EEC colleagues, informally at first, the possibilities of taking action against this type of trade.

  Overseas Development

    Commonwealth Development Corporation
    Mr. Bowen Wellsasked the Lord Privy Seal whether he has yet received the report on the Commonwealth Development Corporation; and when he will make a statement.
    The Minister for Overseas Development (Mr. Neil Marten): I have now received the report of the group of officials which, with representatives of the CDC, has been reviewing the work of the Commonwealth Development Corporation. I am considering the report. The Government's conclusions on it will be made known to the House as soon as possible.
    Mr. Wells: Will my hon. Friend confirm article which appeared in The Sunday Times on the Commonwealth Development Corporation, which indicated that one of the causes of the report's delay was a foolish and footling argument about whether CDC borrowings in the City and, indeed, overseas—which do not affect this economy—are counted as part of the public sector borrowing requirement? If the CDC cannot borrow from that source because the Treasury's view is upheld, will my hon. Friend consider making additional commitments from the bilateral programme of the ODA?
    Mr. Marten: I will not confirm the report which appeared in The Sunday Times. As to the second part of my hon. Friend's question, we shall consider anything. Many of these factors have already been raised by the chairman of the CDC, Lord Kindersley, but I am afraid that at this stage there is little that I can add to the answer which I have given. The same applies to the Adjournment debate tomorrow night, when I doubt that I shall be able to say more than I have today.
    Mr. Hooley: Is the Minister aware that the CDC has been outstandingly successful not only in development terms but also in commercial terms? Will he use all his influence to expand and not contract its activities?
    Mr. Marten: I entirely agree with the first part of the hon. Gentleman's remarks. I shall certainly bear in mind the question of expanding the CDC's activities as best we can.

    Clean Water and Sanitation (Special United Nations Campaign)
    Mr. Welshasked the Lord Privy Seal what special contribution Her Majesty's Government have made towards the Special United Nations Campaign to bring clean water and sanitation to poor countries.
    Mr. Neil Marten: No special contribution has been made, but we shall continue to finance from the aid programme a wide range of water and sanitation projects, and to provide training and advice.
    Mr. Welsh: Is the Minister aware that Britain would not have achieved the greatness that it has had it not been

    17
    for Chadwick's report last century on clean water and sanitation? However, in the Third world 10 million people and more are dying each year because of lack of clean water and sanitation, and the World Health Organisation points out that more than 80 per cent. of all known diseases in those countries are due to lack of clean water and sanitation. Given those figures will not the Minister give an assurance that he will again try to get some money from the Treasury to help this very good venture in the Third world?
    Mr. Marten: We have already tried, and we are currently engaged on 44 drinking water and sanitation projects in 28 countries. Development aid for current water-related projects amounts to more than £80 million.
    Mr. Cormack: Bearing in mind that this is the centenary of Disraeli's death and that he attached great and real importance to sanitation, will my hon. Friend think again and do something special in this regard to commemorate that great Conservative statesman?
    Mr. Marten: I think of sanitation every morning.
    Mr. Pavitt: Has the Minister taken note of the voluntary efforts by the Women's Co-operative Guild and many other voluntary organisations in respect of the "Buy a bucket of water campaign"? Does not that put to shame the reactions of the Government to the North-South Brandt report, because while voluntary organisations are prepared to take action the Government seem to be lagging behind?
    Mr. Marten: The Brandt report in its North-South approach is, I think, directed both to Governments and people. I commend what the hon. Gentleman said about the women's organisation.
    Mr. Budgen: Will my hon. Friend remember what Peel used to say about the advantages of abolishing the corn laws? Perhaps he will comment upon the proposition that it would be better if we did not dump all this expensively produced food so as to undercut Third world producers, thus preventing them from providing their own sanitation and clean water.
    Mr. Marten: I shall study the analogy contained in that remark.

    India
    Mr. Deakinsasked the Lord Privy Seal why there has been a one-third reduction in United Kingdom bilateral aid to India.
    Mr. Neil Marten: Bilateral aid to India has not been reduced by one-third. Net disbursements in financial years 1978–79 and 1979–80 were £113 million and £98 million respectively, and we hope to provide at least the same amount in 1980–81 as in 1979–80.
    Mr. Deakins: Nevertheless, does not the Minister agree that this was a substantial cut? Before agreeing to it, did he consider the effects of a cut of such a magnitude on the most populous Commenwealth country? If so, why did he allow such a serious cut—albeit, not one-third—to go ahead?
    Mr. Marten: Cuts affected many countries throughout the world, and particular attention was paid to India to which we give a great amount of aid. Britain provides more aid to India than any other bilateral donor and on
    18
    softer terms than most. According to World Bank figures, British aid amounted to 34 per cent. of net bilateral disbursements by a member of the Aid India Consortium in 1979–80, which is a pretty good record, and I know that India appreciates it.
    Mr. Jessel: Is not India, like other Asiatic countries in the Commonwealth, treated less favourably for development aid purposes than Commonwealth countries and others in Africa because under the Common Market Lomé convention, under French influence, a disproportionate amount of aid tends to be steered to Africa to the detriment of Asiatic countries? What can be done to rectify that?
    Mr. Marten: That is not so with regard to our bilateral aid. However, if my hon. Friend is referring to aid under the Community, it is perfectly true that the original Lomé agreement is directed more towards the African countries than towards the Asian countries. That is something that we are constantly trying to massage rather more evenly.
    Mr. Guy Barnett: Do the Government still adhere to the principle laid down by the previous Government of aid to the poorest people in the poorest countries? If so, why did my hon. Friend the Member for Waltham Forest (Mr. Deakins) not receive a more favourable answer on the question on aid to India?
    Mr. Marten: The policy is the same—aid to the poorest. If the hon. Gentleman examines the answer, he will find that it is not so bad as he thinks.

    Overseas Aid
    Mr. Canavanasked the Lord Privy Seal when he expects to meet the United Nations target of 0.7 per cent. gross national product for overseas aid.
    Mr. Neil Marten: As I explained to the hon. Member for Kingston upon Hull, West (Mr. Johnson) on 1 December, we accept in principle the target of 0.7 per cent., but we are not committed to a target date for achieving it. Preliminary estimates suggest that our 1980 oda/GNP ratio will be substantially below the level recorded in 1979. Technical factors, including for example the fact that no promissory notes in respect of the International Development Association were deposited before the end of the calendar year because of a failure by the previous United States Congress to ratify, played an important part in this.
    Mr. Canavan: As the Government plan a reduction of more than 14 per cent. in the overseas aid programme which they inherited from the previous Labour Government, will the Minister at least have the honesty to admit that the Government have now abandoned any intention of meeting the United Nations' target, yet the same Government have such a distorted sense of priorities that they propose to spend possibly up to 10 times the annual overseas aid budget on a replacement for the Polaris missile?
    Mr. Marten: Absolutely not. Our policy of achieving 0.7 per cent. is the same policy as that of the Opposition when they were in Government.
    Mr. Farr: When my hon. Friend is considering what economies he will have to make, will he give the House an undertaking that no economies will be made in aid to

    19
    Zimbabwe, a newly-emergent Commonwealth country that has a great future and which is badly in need of overseas help?
    Mr. Marten: I recognise what lay behind that question, and, while the Government would like to do what they can, it would be risky to give an assurance of that nature. However, I shall bear in mind my hon. Friend's remarks.
    Mr. McElhone: If the Government cannot reach the target of 0.7 per cent. of gross national product, will the Minister reconsider the paltry amount of £75 million that we give in aid to Zimbabwe, in view of the critical situation there and the urgent problem of resettlement?
    Mr. Marten: We constantly think of the problems of that country. A donors' conference will take place towards the end of March. We must wait and see what happens then, particularly in regard to aid from the United Kingdom and other countries.

Times Newspapers
The following questions stood upon the Order Paper:
Mr. Robert Adley: To ask the Secretary of State for Trade, what representations he has received about his decision not to refer to the Monopolies and Mergers Commission the proposed purchase of The Times.
Mr. loan Evans: To ask the Secretary of State for Trade, what representations he has received regarding his decision not to refer the change of ownership of the Sunday Times to the Monopolies Commission; and if he will make a statement.
Mr. Speaker: The Secretary of State has asked my permission to answer questions 16 and 24, and I have given my permission.
The Secretary of State for Trade (Mr. John Biffen): I have received a number of representations on my decision to consent to transfer of the two newspapers without a reference to the Monopolies and Mergers Commission. In view of the continuing interest in this matter, I am today placing in the Library of the House a memorandum setting out the material on which I reached my decision.
Mr. John Smith: Is the Secretary of State aware that the responsibility rests very much on his shoulders, and on the so-called guarantees given by the new proprietor of the organisation with regard to editorial independence and integrity? What sanctions does the Secretary of State have in mind to ensure that the guarantees are observed in the future?
Mr. Biffen: Two of the conditions require changes in the articles of association of the companies concerned in order to safeguard the position of independent national directors and to preserve editorial independence. The enforcement of those conditions will lie essentially with the B shareholders of The Times and independent directors. Any breach of the remaining conditions would be subject to criminal sanctions under the Fair Trading Act 1973.
Mr. Jonathan Aitken: Whatever our past disagreements on the sale of The Times, we are now dealing with a fait accompli. Does not my right hon. Friend agree that we should all wish Mr. Rupert Murdoch and the new management good luck, because they will certainly need it?
Mr. Biffen: That was underhand bowling up to the best Australian standards. I realise that the decision that I took was controversial. By the nature of it, it could not have been otherwise. I am reinforced by the observation of the deputy editor of The Times, who said that these are stronger guarantees than we have ever had. I do not think that any other newspaper in the world has such guarantees.
Mr. Geoffrey Robinson: The right hon. Gentleman will not expect us to welcome the confirmation of his decision, but would it be possible for him to make available detailed financial information, so that the general public unease about the grounds on which he took the decision on The Sunday Times could be dispelled? That would do a great deal to give the sort of
22
start that we would all like to see, in the best of spirits, to this buccaneering piece of entrepreneurship between the press and the Government, in the great tradition of those two organisations, the Tory press barons and Tory Governments? I am sure that if the right hon. Gentleman took it in that spirit and made available the information, it would be welcome in all parts of the House.
Mr. Biffen: The hon. Gentleman made clear his views when we debated this matter, and in that context I appreciate his remarks. There is now available to the House, in the Library, the data that was made available to me and on which I took the decision.
Mr. Peter Emery: Does my right hon. Friend realise that the House will be grateful to him for taking the unusual step of asking permission to answer these questions and for having given an assurance to the Opposition Front Bench?
Is my right hon. Friend aware that he has assisted in open government in allowing the information that was made available to him to be placed in the Library? Is he further aware that that will assist many hon. Members?
Mr. Biffin: I am grateful to my hon. Friend for his comments.
Mr. Peter Bottomley: Will my right hon. Friend take the opportunity, now or at a convenient time in the future, to deal with one of the basic issues concerning would-be buyers and would-be sellers—the fact that the Monopolies and Mergers Commission should be given a reasonable time to report?
Mr. Biffen: My hon. Friend properly identifies a disturbing aspect of the episode. I do not know whether we can adjust our legislation to overcome that problem. I do not wish to make any encouraging comments at this stage, but I take note of my hon. Friend's remarks.
Mr. Hooley: On a point of order, Mr. Speaker. Would it be possible to inquire whether hon. Members who tabled the questions that have just been answered were notified that they would be answered at the end of Question Time?
Mr. Speaker: I expect the Minister thought that those hon. Members assumed that their questions would be answered during Question Time.

STATUTORY INSTRUMENTS, &C.
Ordered,
That the Abortion (Amendment) Regulations 1980 (S.I., 1980, No. 1724) be referred to a Standing Committee on Statutory Instruments.—[Mr. Boscawen.]

BILL PRESENTED
  MOTOR CYCLE CRASH HELMETS (SECULAR PRINCIPLES OBJECTION)
  Sir Ronald Bell, supported by Sir Charles Fletcher-Cooke, Mr. Nick Budgen and Mr. Michael Shersby, presented a Bill to exempt certain persons having objections of principle to compulsion in the matter of wearing motor cycle crash helmets from the provisions of section 32 of the Road Traffic Act 1972: And the same was read the first time; and ordered to be read a Second time upon Friday 6 March, and to be printed. [Bill 69.]

  Adult Education
  3.38 pm
  Mr. Robin Squire: I beg to move,
  That this House, having regard to the importance of adult education in providing opportunities for re-entry into the education system, urges local authorities to make appropriate provision in planning the allocation of resources.
  Anyone who is fortunate enough to top the private Members' ballot is well aware of his good fortune, and he is also aware of the muttered threats about what may befall him if his good fortune is repeated. I hope that I have selected a subject which my hon. Friends will agree has been under-exposed in parliamentary terms and which deserves greater attention, and that many hon. Members will feel able to contribute to this debate.
  On a personal note, I welcome the Under-Secretary of State for Education and Science, who I believe will reply to the debate. He was my Member of Parliament, and I am sure that the lines on his face will disappear by the hour now that I no longer live in his constituency.
  In answer to a short debate on the subject in December, my hon. Friend's predecessor said that the facilities for adult education are part of civilised society. But many aspects of that civilisation are showing signs of strain, and in some cases they are near to collapse.
  The numbers of students involved are impressive. Seventeen per cent, growth in 1978 brought the figures up to more than 2 million. Although there was a decline in 1979 and a further drop in 1980, that can be shown to be almost exclusively the result of a policy that has led to the most prodigious percentage increases in fees for many adult classes throughout the country.
  The Institute of Adult Education published a survey in November 1980 which attracted answers from 98 out of 104 local education authorities. They showed conclusively that where there is a substantial increase in fees there is a corresponding major reduction in enrolments.
  The question of fees is a matter for local education authorities, and quite rightly so. I do not suggest that the matter should be arranged in any other way. But many anomalies are involved. Indeed, the same survey highlighted the fact that no fewer than eight local education authorities were charging higher fees for O-level courses than for non-vocational courses, so there is an obvious area that should be examined by a number of local authorities.
  I recognise that many education authorities make reductions for those in receipt of supplementary benefit, those who are unemployed, and those who are handicapped. But this, with respect, cannot change the position, which is growing, that a considerable number of people who seek adult education are now in danger of being priced out of achieving that aim.
  Fees are not considered in isolation; they follow decisions taken on national expenditure. Here the figures are very illuminating and very depressing. At 1979 prices in England and Wales, we have gone from a position where £52 million was provided in 1975–76 to a position in which, in the current year, £39 million is planned, and there will be a further cut back of £5 million in the following year.
  The Under-Secretary of State for Education and Science, my hon. Friend the Member for Brent, North (Dr. Boyson), put it the other way round:
  24
  "In 1980–81, the amount included in the rate support grant for adult education"—
  he recognised, of course, that that money is not necessarily spent on adult education—
  "was cut by 25 per cent. Over the next three years, the cut will average out at about 33 per cent."—[Official Report, 19 December 1980; Vol. 996, c. 1103.]
  All this is taking place but a few years after the Russell committee reported in 1973. That committee was set up by my right hon. Friend the Prime Minister when she was Secretary of State for Education and Science. It was the first report since the 1919 Smith report on adult education. At that stage, only 1 per cent, of the total educational budget was being devoted to adult education, and it was suggested that in order to meet the demand that figure should be doubled.
  A report that will be coming out in the near future from the Advisory Council for Adult and Continuing Education will show that not only had that figure fallen to 0·6 per cent, of the total budget by 1975–76 but that for the current year it is likely to be down to 0·4 per cent. So much for the report of the Russell committee. Not only has the figure not been doubled; it has been more than halved. That is perhaps not so surprising when I am also advised that the Russell report highlighted several areas that had been mentioned in the 1919 report as still not having had action taken on them.
  I turn from the general to the specific. In a survey on education in Leicestershire—a county with a very good record in education, including adult education—Dr. Hutchinson took the comparison of the expenses between 1974–75, and in particular part-time tutor salaries and fee targets, and compared them with 1979–80, having set off the percentage of such expenditure that was recovered through fees. He showed that whereas in 1974–75 the balance chargeable to rates in that year was £216,000, in 1979–80 it was £26,000. During that time pay rates for part-time teachers had approximately doubled, and the amount required in 1979–80 to maintain a provision equivalent to that in 1974–75 would have been £720,000. That is a measure of the fall—from £720,000 to £26,000. I stress that this is a good education authority.
  Mr. David Mellor: I was intending to mention Leicestershire in my speech. I am glad that my hon. Friend is raising this issue with the Government, because Leicestershire last winter cut its cash grants in half, as well as its funds for the adult literacy scheme. That came within only a week of the Under-Secretary of State for Education and Science, my hon. Friend the Member for Brent, North (Dr. Boyson), stating that
  It is essential that local authorities do not cut so near the bone that we cannot get the situation going again once we put more flesh on."—[Official Report, 16 January 1980; Vol. 976, c. 1840.]
  Mr. Squire: I am very grateful to my hon. Friend for supporting what I am saying. The problem—I suspect that this will come up during the debate—is that whatever we say in this Chamber, and whatever Front Bench spokesmen say, the responsibility still lies with the local authorities. But I do not believe that it is fair to blame them totally, because ultimately they must have the ammunition, the money and the funding to meet the demands made on them.
  Nobody in this House can be unaware of economic restraints, and it is only proper that we should see education paying its share. But in adult education we are

  25
  dealing in figures which perhaps need even more underlining. Graham Mee, in his book "Organisation for Adult Education", spelt it out very succinctly. He said:
  "Taking £100,000 out of the schools budget might mean delaying a building project or cutting back sharply on new textbooks and equipment—the overall result is a marginally less effective service. Take the same amount from adult education budget and you are likely to cripple or even destroy the service."
  We have had increasing evidence that in different parts of the country the spectre of that destruction is apparent. In Nottinghamshire—another county with by no means a poor record—it is estimated that at least 80 per cent, of the adult education services have recently been cut. These figures have not been dreamt up. This is the reality behind the cold statistics of adult education that I gave a moment ago.
  This self-same crisis is also reflected in residential adult colleges. I know that this subject has been raised before by my hon. Friend the Member for Ealing, North (Mr. Greenway), who has taken such a strong and continuing interest in adult education. At the time of the Russell report there were about 33 colleges, which were described then as being insufficient for the needs of the population. Seven of them have been closed in the last 18 months, and I am advised that up to five more are threatened with closure. They are in a peculiarly difficult position in that they are serving a region while being financially accountable to a local authority. It is perhaps inevitable that, relative lack of political thrust which adult education still carries, it is among the first areas to suffer at moments of restraint.
  Standards of teaching must also be regarded as being under threat. The adult education service relies heavily on part-time staff, even more so now, for since 1973 approximately 2,000—or 25 per cent, of the then full-time staff—have been lost from the service. It is harder to train part-time tutors because of the cutbacks and that must inevitably raise in our minds the fears of a further drop in quality.
  It is difficult for part-time tutors to look more than one year ahead in regard to their employment, and any suggestion to full-time staff in adult education that they have a proper career structure would at the present time be greeted with more than an element of derision.
  This has happened, first, as I said a moment ago, because there is an obvious lack of political muscle in adult education. It does not carry the same punch as primary, secondary, university and further education. Secondly, there is obviously no national system. There appear to be about 104 separate authorities which are in many ways operating along their own lines, with a rather restricted amount of co-operation and no central organising or co-ordinating body to handle them. I am sure that this in turn is reflected in the lack of push.
  The public image of adult education is a very distorted one. Most people have heard of the Open University. They may not know that much of the preparatory work for the Open University is carried out at adult education centres. I do not intend to spend a lot of time now in discussing the Open University beyond reaffirming my belief in its value, because I recognise that it has somewhat stronger political clout than the other areas that I am discussing. [Interruption.] If we think that the Open University does not have political clout, we should think back on some recent publicity. I am concerned to emphasise the areas which have not been covered so strongly.
  Mr. Ted Graham: I am grateful to the hon. Member for mentioning the Open University. Is he aware of this contradiction? If it depends on anything the Open University depends upon the ethic of self-help and self-reliance. One would have thought that the Government which he supports would support that. However, graduates and students of that university are now badly off because of the Government's recent insistence that the Open University should take into account an increase of fees this year from £64 to £98 per course.
  Mr. Squire: I respect the hon. Member, who is one of the Open University graduates. He therefore speaks with a particular knowledge of the subject. I shall try not to follow him down that course, which introduces—albeit unwittingly—elements of a party political nature, which I am strongly endeavouring to avoid.
  When we are considering the public image, the other problem is the feeling that adult education deals with cake decorating, bridge classes, basket weaving, and so on. Of course it goes much wider than that. That image overlooks the critically important message, which is the need to bring back into learning those who have lost the art of learning or who have never had that ability. Many people can be brought back only with such classes. We are doing ourselves and adult education a disservice when we try to make facile comparisons between vocational and non-vocational courses, when the prime purpose should be to educate as many people as possible to the limits of their abilities and to encourage them to reach out in whichever way they can. That is the justification for causes which might otherwise seem frivolous.
  Only those who gain from mandatory education—primary and secondary education—can move smoothly into further education. If we do so little for adult education, we find that the people who suffer the first time round are being penalised twice over, as they are not helped back through the only way open to them.
  The overall system is best summed up in an article by John Wilson, the principal of Gravesham adult education centre. He wrote in The Times Higher Education Supplement of 1978:
  "The 'overall picture' shows quite clearly the disturbing direction of adult education today as dictated by elected authorities: that financial returns are increasingly the criterion of viability rather than that of educational need; that the service is increasingly being regarded as a luxury privilege for the better off and that the poorer sections of the population are dropping out except those who are let in freely or at reduced rate as a charitable gesture towards their illiteracy or other disadvantage; that there is little or no commitment by many local authorities or by the Department of Education and Science to the concept of continuing education for all, irrespective of their ability to pay."
  However, while that is taking place we see a changing world in which there is perhaps an even greater need for adult education than ever before, not just because we may face higher structural unemployment but as a result of the advantages and disadvantages of the microchip revolution and all that it entails. However one sets the scene, potentially more people will came back into the adult education system and seek assistance. It is only in further education that one can find not only much greater flexibility but, by any standards, relatively low cost. Some might argue that the cost is scandalously low.
  I challenge any other form of education to be as flexible as adult education. There are many examples, of which I

  27
  shall quote one. The London borough of Barking was approached when a number of Vietnamese refugees came to this country. One month after their arrival in Barking they were taking English classes. That is an impressive speed. Ironically the cost of the classes had to be met by cutting other classes. The Government could give no assistance. However, it was an example of the flexibility that adult education enjoys.
  Last year it was said that the average cost to the State per student was £22. By any standards, that must be the education bargain of the century. In reality, is it not hopelessly disproportionate when it is set against the many hundreds of pounds which we properly accept should be incurred on behalf of a student in almost any other form of education? Adult education effectively enables a big growth in our national skills to be undertaken voluntarily, at minimal cost to the taxpayer.
  There is a growing question in our society of meeting the education needs of women. I am aware that, whilst I may not be challenged on that statement in the Chamber today, I may receive letters in a week's time from those who peruse Hansard. They may say that I am suggesting that there is a inherent difference between men and women, and that that has to stop. There is a difference.
  Mr. J. F. Pawsey: Hear, hear. Vive la différence.
  Mr. Squire: I was not referring merely to that difference.
  The essential difference in education is that most men have access to training, either through their job or, if they are made redundant, through one of the arms of Government or local government, the MSC, and so on. Most women are still working part time, or they are at home as housewives and mothers. Those options are not open to them. If they seek training, retraining or further education, only adult education can meet their needs.
  It has been estimated that by the late 1980s about 25 per cent, of the population will be retired. There may be a massive area of assembled skills waiting to be tapped. Adult education provides an opportunity for those people to be able to use those skills and spread that knowledge, if they so wish. There is a growing necessity for adult education to pick up the tab of educating those who have failed to be properly educated in primary and secondary education. It is depressing but true that the numbers of people requiring education who are wholly or partially illiterate is rising.
  It is right that I should pay tribute to Government policy in this area in providing funds for local education authorities. I wish that I were not appearing to suggest that it was like a beacon on what was otherwise a fairly gloomy, grey picture.
  There is a need for a form of threshold service to set out what adult education needs. That should begin with a statutory definition for adult and continuing education to replace the much-abused, outmoded phraseology of section 41 of the Education Act 1944. It might be modelled on aspects of the Youth and Community Bill. I was one of the sponsors of that ill-fated Bill. My hon. Friend for Sutton and Cheam (Mr. Macfarlane) may remember the Government tabling a clause calling for a comprehensive
  28
  range of facilities to be made available. That would seem an ideal way to adapt and present a similar Bill and a similar clause for adult education. That is what is needed.
  An improved counselling service from the Department of Education and Science is needed. The Secretary of State, addressing the Advisory Council for Adult and Continuing Education in July 1980, said:
  "If a healthy stock of adult and continuing education is to be preserved, from which future developments can grow, authorities need help and advice on how best to deploy their resources."
  That is exactly the point, and I could not put it any better. Adult education currently receives a mere fraction of the advice and information that is passed out to the other sectors of education from the centre. Moreover, at least three different bodies are working in adult education—the National Institute of Adult and Continuing Education and the others that I have mentioned—and no comprehensive picture is emerging. Each is doing good work. Each in its own right is doing what it can with its resources. There is a need to bring them together, and surely the Department of Education and Science is best placed to do that.
  There is a need to reassess the impact of Her Majesty's Inspectorate, which, while covering adult education, could be excused for at present regarding it very much as a junior element of its overall responsibilities.
  To say that there must be much greater use of community buildings is almost to use a catch-phrase, and perhaps in a sense I should apologise for saying it. However, over the next 10 years, with a big growth in the number of buildings that will not be needed for primary and secondary education, and which could previously be considered only in terms of shared use, premises will become available with potentially exclusive use for adult education. It would be wrong—even criminal—to let slip an opportunity here which may not recur for many years.
  I have mentioned the need for training for both part-time and adequate full-time staff. We must pay attention to a fuller implementation of the ILO convention 140 on paid educational leave, which currently is restricted, by and large, to industrial relations courses. I am sure, as happens in other countries, such as France and Germany, that there is greater scope for us to implement this convention.
  We need to end the isolation of adult education from the rest of the education service. It is no matter that the rest of education may have assisted adult education in the past. Perhaps adult education wished to have its isolation. However, there can be little doubt, as we see the effects in financial terms, that it is regarded as a soft option by politicians locally and nationally, and it pays the appropriate price. It must come back into the education system in toto.
  It is not a question of suggesting that a fixed percentage of the budget should be set aside for adult education. In broad terms, the amount of money needed is the amount necessary to secure what I have just described. By these steps we shall emphasise that education is a life-long process—not one that ends at 16 or 18, or after university—and that we have responsibility so to arrange education in this country that those wishing to may slot in at any time in their lives,
  "as easily in the autumn of their years as it was in the spring."
  In 1953 Sir Winston Churchill, addressing the TUC, said:
  "There is perhaps no branch of our vast educational system which should more attract within its particular sphere the aid and encouragement of the State than adult education. I have no doubt

  29
  myself that a man or woman earnestly seeking in grown up life to be guided to wide and suggestive knowledge in its largest and most uplifted sphere will make the best of all pupils."
  In conclusion, I wish to lean to a slightly more romantic quotation, which is from the final sentence of Andre Maurois's biography of Disraeli, when he was described as
  "a symbol of what can be accomplished in a cold and hostile universe by a long youthfulness of heart".
  If we can combine that "long youthfulness of heart" with the thirst for knowledge that adult education can satisfy we shall bring the richest of legacies to all our people.
  4.4 pm
  Mr. A. J. Beith: The hon. Member for Hornchurch (Mr. Squire) has done the House a double service, first, by introducing for debate the subject of adult education. Many educational subjects cry out for debate, and this is one of them. There are others, such as the creation of a national body for higher education, that should be brought before the House. The hon. Member is right to have presented adult education today.
  The hon. Member's second service, in an excellent contribution, was to give a full account of the needs of adult education. I hope that he will accept it as a compliment when I say that he could have made his speech from the Liberal Bench with, I hope, greater approval than may be forthcoming from other parts of the House. His comments clearly commanded assent on both sides. I hope that those of his hon. Friends who are inclined to be more scornful of adult education will read his speech in Hansard tomorrow—since they have not been here this afternoon to hear it—and recognise its worth.
  We on the Liberal Bench have a particular concern for adult education and for continuing education, because we see it as essential to a society in which people ought to be given the opportunity to make decisions, whether through the democratic processes in the community or, in their places of work, through wider democratic participation. The process of widening the scope of decision-taking clearly requires wider education. We have that concern also because we want to enhance the opportunities available to people, and that cannot be done without widening the education that is available to them.
  We believe in adult and continuing education because it is manifest that people often discover how great is their need of education when they have had some experience of work. People who may well not have got the best from their school years can often get a great deal out of later educational opportunities. As someone who taught in university and in adult education, my experience was that the highest motivation was often to be found in those who had been at work and had recognised what they needed. They would put to shame many of those who came into higher education at the age of 18 simply because that was where the escalator led them and who had no great commitment to the educational course upon which they were embarked.
  We also believe that adult and continuing education is vital because of the nature of change in society—particularly technological change, which calls constantly for new skills in work, for the updating of skills, for changes of job and, therefore, for complete changes of educational need, and which will create a great deal more leisure time and time in retirement.
  30
  One of the problems facing our society is how to distribute that time so that it does not result in one section of the community having no gainful employment and no feeling of serving the community while the other section seems to have the opportunity to work as hard as it likes, with as much overtime as possible. That is a problem that we have yet to solve. Clearly, the nature of technological change is likely to lead to more free time being available to people, and we want to see that time used in adult education. That clearly requires access for adults to the education system.
  A number of points worry me about that access and the current limitations on it. Increases in adult education fees are clearly having a severe impact. I am not one of those who argue that all adult education courses must have rock-bottom fees, and I recognise that it is appropriate that students should make a reasonable contribution to many kinds of courses. However, in the past year or so, with local authority cuts, many authorities, while increasing fees heavily, have ceased to provide remission of fees for those on low incomes or for the handicapped. Clearly the rise in Open University fees, much higher than the current rate of inflation, will place a barrier at the gates of the Open University to many people who would otherwise have benefited from it.
  Mr. Graham: Will the hon. Gentleman take on board that at the last meeting of the council of the Open University it was reported that 2,000 students who were expected to have enrolled and who would have taken courses in 1981 had decided, because of the increase in fees, not to take them? That is the situation this year, and it will get worse.
  Mr. Beith: That is confirmation of the fears of many of us about the barrier erected by the new fees.
  On the question that goes wider than money, I am worried about the rigidity of a system that makes it relatively easy for people of 18 to get higher education, while making it extremely difficult to get it later in life. There have been many occasions when I should have liked to say to an 18-year-old "Do not worry. You do not need to go to university if you do not feel ready for it. Get a job, and later you can take the opportunity, through adult education and greater access to university, to get what you then find you need." I would not, however, say that to an 18-year-old person. It would be dishonest to do so, because his chance of getting what he wants at 18 is so much greater than it would be later in life. The possibility of his re-entering the education system is reduced later in life, when the financial barriers are so much greater. That is clearly something that we have to change.
  Adult education has a notable history in Britain, and many pioneers are associated with it. That has brought about a wide disparity of bodies providing it. Those involved include local authority provision in colleges and local schools and community centres, university extramural departments, and the regular departments of universities which provide part-time courses for adults. There are institutions, such as Birkbeck college, through which many have obtained degrees after part-time study over many years, the Open University, the WEA and many other voluntary agencies, which receive public support. Adult education is provided through the Armed Services, industrial training, special Government programmes, such as those of the Manpower Services Commission and the

  31
  adult literacy programme, the broadcasting authorities, and private institutions such as correspondence colleges and language schools, which play a larger part than is often recognised.
  Because the range of bodies is so wide there is a diverse interlocking of factors, such as grants and finance, which affect students. There are grants to institutions and voluntary bodies. There are grants to students, assistance such as paid leave, day release, fees and the remission of fees, recoupment between one local authority and another, and rate support grant. All these different financial provisions interlock. There is a danger that at a time of general cuts the whole edifice could crumble away. It is a fairly delicately balanced system, in which the items that I have mentioned, such as remission of fees and recoupment between authorities through the rate support grant and grants made to voluntary bodies, are related one to another. If one starts removing or reducing substantially one or another of those items, the whole house of cards can come down.
  Inevitably, in present circumstances we must lay particular emphasis on the role of the central Government and local authorities and their financial responsibilities. But perhaps we should consider the position of local authorities. The impact of cuts is clearly heavy in the schools. The report of the findings of the inspectors of education, published last week, before the latest round of cuts, is severely critical of what is happening in schools because of the cuts.
  The reaction of local authorities will necessarily be to concentrate efforts further in schools, for three reasons. First, their statutory obligations towards the schools are more precisely set out, are more familiar, and are more often repeated than the limited statutory obligations that they have towards adult education in the 1944 Education Act, which cannot be ignored—as I hope those few local authorities that attempted to wipe out adult education altogether have now found. There is no doubt that the nature to the obligations in the schools is such that in present circumstances local authorities will concentrate on them.
  Secondly, there is greater public pressure towards maintaining standards in the schools than in higher education. Parental pressure, rightly, is concentrated on achieving higher standards in schools.
  Thirdly, it is clearly easier to make rapid cuts in adult education than it is in the school system. In many cases courses are organised on a year-to-year basis, the tutors are often part-time, as has been pointed out, and a local authority trying to cut its budget finds it all too easy to drop a whole range of adult courses rather than to make further cuts in the programme, which it is anxious not to do.
  Mr. Mellor: I agree with the point made by the hon. Member for Berwick-upon-Tweed (Mr. Beith), but I wonder why he accepts so readily the argument that standards in schools depend and rise according to the amount of money spent. He has quoted one inspectorate report. I shall quote another on the ILEA which, if anything, proves the contrary.
  Mr. Beith: I do not think that I shall enter into the argument about what has happened within the ILEA, except to say that although it is possible to waste money it is also possible to face, as the Inner London Education
  32
  Authority does, very severe problems in some of its inner city areas. There is no doubt from both the report of the inspectors of education and the comments of the chief inspector of education, when she appeared before a Select Committee, that the impact of present cuts on authorities that have no record of being profligate or of over-spending is to reduce educational standards. The Government can no longer deny that that is the effect. I am not seeking to enter a debate upon that, except to say that it can be demonstrated quite objectively that in response to that situation most local authorities will concentrate their efforts on holding together their commitment to the schools and that adult education will therefore tend to suffer.
  Mr. Phillip Whitehead: As the hon. Member for Berwick-upon-Tweed (Mr. Beith) has referred to the inspectorate's report published on Friday, no doubt he will go on to say that it was not only critical of the standards in schools—with the possible effects that he has mentioned—but that it said specifically that adult education remained the area most seriously affected by expenditure cuts. The criticism is there already.
  Mr. Beith: I intended to mention that reference, although I, like many hon. Members, have seen only the newspaper reports and extracts of some of these comments. They are clearly comments of inspectors deeply worried about what will happen. The comment that is quoted in the press is that positive changes of policy will be required if the tendencies that they see are not to become very serious. They call for positive commitments. Adult education is obviously one of the areas in which those positive commitments must be made.
  The Government have rested much of their case for education cuts on two grounds. The first is falling rolls. I remain of the view that falling rolls, in so far as they enable some savings in expenditure, present an opportunity, which we must not miss, for education standards to be improved. That opportunity will not be presented again. Education Ministers must resist the desire of other Departments to prosper at the expense of falling rolls in education. So much needs doing in education, which they should know.
  The second part of the Government's case for education cuts concerns the economic needs of the nation. The adult education case cries out for investment on behalf of the economic needs of the nation. The country cannot prosper unless we develop an adaptability to changes of work and skills, and an ability to come to terms with change. None of those can be secured unless we have an adult education system that is readily accessible to people and from which they can gain. At the moment, we do not have that, although we have much of the basis. It requires a commitment on the part of the Government if we are to have it.
  4.8 pm
  Mr. William Shelton: So far I am in general agreement with both the hon. Member for Berwick-upon-Tweed (Mr. Beith) and my hon. Friend the Member for Hornchurch (Mr. Squire). I was interested in a phrase that the hon. Member for Berwick-upon-Tweed used, namely, that education gives widening decisions. I entirely agree with that. Choice must depend upon knowledge. I raise an extraneous point because it is for that

  33
  reason that I have always supported the publication of examination results, because unless parents know as much as possible about a school there must be a limitation upon the choice that they can make. There must otherwise be a lottery. I agree with some other remarks that the hon. Member made, to which I shall return.
  First, I congratulate my hon. Friend the Member for Hornchurch on having raised this subject. I was taken aback by some of the figures that he quoted. I noted that at the time of the Russell report about 1 per cent, of the total education budget was spent on adult education. In 1975–76 it was about 0·6 per cent, and now it is probably less, about 0·4 per cent. Over the last 30 years the percentage of the gross national product spent on education in total has doubled, and the amount spent in real terms has probably doubled. The drop in percentage figures in real terms is therefore probably not as dramatic as these percentages might indicate. Nevertheless, it is dramatic.
  I know that my hon. Friend the Under-Secretary of State and the Government are under cost pressure. We know from the recent report from Her Majesty's Inspectorate that education is under cost pressure. But, as in all these matters in politics—indeed, in businesses and in life—it is a matter of striking the right balance. I am sure that my hon. Friend the Member for Hornchurch is asking for the needle to go not from 0 to 10, but, more probably, from 4 to 5 or from 5 to 6 or whatever it might be. I think that the balance should be looked at. I know about the problems of buying enough books for schools. I think that if we had to choose between books and adult education, we should should choose books. However, there are other ways of slightly moving the needle.
  I appreciated the suggestion put forward by my hon. Friend the Member for Hornchurch that there should be a statutory definition of adult education. It never occurred to me before that there was not one. But, reflecting on it, there is no statutory definition. This leads to a degree of ambiguity among people when discussing adult education.
  I think that adult education can be separated into three categories: first, leisure; secondly, literacy and numeracy; and, thirdly, what might be described as work-orientated adult education.
  On the leisure side I must declare a certain family interest. My wife attends a sewing class. I asked how much the course cost her. It is costing her much less than I suspect it costs the country. I would find it difficult, in this time of world recession, to complain bitterly that the country is not subsidising my wife's sewing class to a greater extent. I know that the wives of other hon. Members are similarly being subsidised. After reading the most recent HMI report on education I would find it difficult to make an impassioned plea that the leisure side of adult education should be further subsidised by the taxpayer.
  Mr. Clive Soley: If people are already paying via rates and taxes and we put up the direct price, we cut out the poorer sections of the community who make use of adult education and they end up subsidising the richer people who continue to attend these classes. Is not that the problem?
  Mr. Shelton: Yes, I accept that point. However, most councils make special help available for old-age pensioners and the less well-off members of the
  34
  community. That is only right. To some extent, that meets the hon. Gentleman's point. In London old-age pensioners pay a lower fee than others for adult education classes.
  Mr. Gwilym Roberts: Does the hon. Gentleman accept that his wife's sewing class is providing a useful leisure activity also for old-age pensioners and other groups? As class numbers fall, classes will be abandoned. Therefore, everyone's opportunity to attend sewing classes will be removed.
  Mr. Shelton: Yes. I am not sure how productive my wife is. I think that she has made a skirt in the last year. However, she enjoys attending the class, where she meets and makes friends. I do not wish to poke fun at or to cast aspersions on the leisure aspects of adult education. I know that they give a great deal of happiness to many people.
  This is a matter of balance. I do not suggest that fees should be increased. However, I should find it difficult to make a strong case for greater subsidies or lower fees for that aspect which I have arbitrarily called the leisure side of adult education.
  Mr. Harry Greenway: My hon. Friend implied that his wife's productivity was very low. Of course, he is the judge of that. However, does he agree that for some people the production of a skirt in two years would be a superb achievement? Does he agree that such people gain enormously from adult education?
  Mr. Shelton: I entirely agree with my hon. Friend. I referred to my wife. I hope that she does not read at least this issue of Hansard.
  Mr. Greenway: I do not want to get my hon. Friend into trouble.
  Mr. Shelton: I have no wish to denigrate what many people are doing on the leisure side. Because of the economic pressures which are resting so heavily upon our education service—I have read only newspaper comments on the HMI report—I make a distinction in my mind between what I have arbitrarily called leisure activities and literacy and numeracy and the more work-orientated side of adult education.
  Mr. Derek Foster: The hon. Gentleman's argument, taken by itself, is valid, but does he not consider that his wife's sewing class or someone else's macrame or embroidery class is part of the whole programme? Within the location, whether it be a skillcentre or an adult education centre, there is an element of cross-subsidisation. If we remove those elements of the programme which the hon. Gentleman is suggesting may be of the least value, the whole infrastructure of adult education may be in danger of crumbling. Is that not the argument?
  Mr. Shelton: I understand what the hon. Gentleman is saying. I confess that I do not know the answer. I do not know to what extent the different courses or classes stand or fall by themselves in terms of cost and income or to what extent there is cross-subsidisation. Perhaps the Minister will mention this aspect when he replies to the debate. I accept that there must be some cross-subsidisation, but it does not move me from my principal argument that there is a distinction between these three types of enterprise in adult education.
  Literacy is a subject about which I feel most passionately. I am sure that all hon. Members who have

  35
  had the opportunity of talking to someone who is illiterate and innumerate will agree with me on this matter. Some time ago I visited some adult education classes. I chatted to a man who was studying reading and writing because he was illiterate and innumerate. I asked him "Why are you doing this? Why do you wish to learn to read and write?" I suppose he was in his thirties. He replied "I want to get a job with my cousin who has a cafe. I want to work in the cafe. My cousin told me that if I could read and write, I could work in the cafe." I said "If he owns the caf·, why cannot he employ you, even though you cannot read and write?" He looked at me and said "I cannot read the menu and I cannot add up the bill".
  It came home to me then that a person who is illiterate and innumerate suffers from the kind of handicap from which one might suffer if one were blind, deaf or dumb. He lives in a different world from the world of those of us who have all our senses. Literacy and numeracy are almost a fifth—or perhaps sixth—sense. It is a crime to allow any child who has the mental ability to read or write to leave school illiterate or innumerate. I feel very strongly about this. Therefore, I abhor any reduction in money spent on teaching people to read and write who wish and have the capability to learn to do so.
  It is more than what we usually mean by deprivation; it is almost a deprivation of one of the senses. A distinction must be made between funds that are allocated for what I call leisure activities and what I call the literacy and numeracy activities of adult education. I am sure that there is general agreement in that regard. If there were a statutory definition of adult education, it might become clear that there should be levels of priority. Perhaps this is what I am asking for.
  The third area is what I shall call work-orientated leisure, and here I agree with the hon. Member for Berwick-upon-Tweed. It has become apparent during the last 100 or 200 years since the beginning of the Industrial Revolution that those who say that new technology destroys jobs are profoundly wrong, in the large sense. Yet that is what people say. The ostlers who were put out of business in the last century by the invention and development of the steam engine were in a very small minority compared with those who found jobs in building the new railroads, building the new steam engines, digging the coal for them and running the system. Technology creates far more jobs than it destroys.
  New technology will not necessarily create more leisure. There may be more choice of leisure if, during the remainder of this decade and the first part of the next, the standard of living rises to such an extent—I hope that it does—that people can choose voluntarily to forgo a certain increased standard of living because they have sufficient already and spend more on leisure. In that case, of course, there will be more leisure. However, I do not believe that people will be forced to do that because of lack of job opportunities. One has only to look at the unfulfilled demand that already exists in the world. At Question Time, aid to India was mentioned, and nearer home is the unfulfilled demand in this country. It is highly improbable that in the next 100 years we shall have fulfilled all demand without technology and that people will be obliged to accept more leisure than they require. If that does happen, it will be because of bad organisation, or a fault in the system.
  36
  I see an increasing galaxy of jobs springing from the new technology. It started only in the last decade. Look how far it has taken us already. By the end of the century and the first quarter of the next century there will be jobs as undreamt of today as the job of a television technician was 50 years ago. I am profoundly optimistic about the future of jobs in this country springing from the new technology.
  I recently read a report about what is happening in the United States. It said that the average working man there has three different trades in his lifetime. I do not know what the situation is here, but I should be very surprised if the average Englishman had more than 1·2, 1·3 or 1·4 different trades in his lifetime. In the States it is already three, and we shall have to move in that direction. This is the burden of what I am saying.
  On the eastern seaboard of the United States—a traditionally declining area of American manufacturing industry, although States such as Maine and New Hampshire are attracting as much new technology as they can—between 20 per cent, and 30 per cent, of the companies go out of business either through inefficiency or because their products have been made redundant in the lifetimes of their working force. More jobs are recreated in different spheres of activity by the products that made the earlier products redundant.
  If we are moving in that direction—and whether we like it or not we must do so, because we are a country of high labour costs—it is inevitable that over the next 20, 30 or 40 years we shall lose a great many manual jobs. People who have no skills will, unhappily, find themselves with involuntary leisure thrust upon them. However, the gate will be open to the people with skills.
  That brings me back to work-orientated types of adult education. I am not talking about skill training. Here I must congratulate the Government on the funds and organisations that they have put into retraining facilities. If there is one word that will open the door to the new technological future, it must be retraining. People will lose their jobs two or three times in a working lifetime in this country, as in the United States, and they will need and want to be retrained for the new jobs that develop. Any Government who do not take action in this regard will fail in their duty towards their citizens who, through no fault of their own, will find themselves in redundant manual jobs or working in companies whose products have been made obsolete by the new products that are coming along. Retraining is, therefore, vital. More is being done now than previously, but still more needs to be done.
  I do not suggest that adult education should be a form of retraining for the technological age, but a lack of education is a barrier to retraining in skills, at least to some extent. I am sure that it is more difficult for a person who lacks education to be offered and to accept retraining than it is for someone who has reached a reasonable and acceptable standard of education. Many of our citizens are tethered in areas of high unemployment by the fact that they live in council houses and are therefore sacrificial victims of the council house regulations. People who have not achieved a certain level of education, sometimes through no fault of their own, are equally hindered in moving towards training in new jobs and new skills. As much as anything else, it is almost an attitude of mind. It is a matter of wider choice and knowledge.
  Mr. Sydney Bidwell: Can British private enterprise be trusted to engage in the volume of new training that will be necessary according to the vision that the hon. Gentleman has sketched?
  Mr. Shelton: I wish that I could answer that question with confidence. I honestly do not know. I am not sure to what extent what we are talking about, and what I have been saying—which is common and accepted knowledge to hon. Members present—is generally recognised. If one is running a business, and especially if one is experiencing hard times and it is not a very big business, it is very difficult to lift one's eyes and look to the future. One finds it much easier to get on with raising enough money for the payroll at the end of the month. I hope that British business will rise to the challenge, and I hope, too, that any British Government will encourage it, because this matter is so important.
  Therefore, on the three areas of adult education on which I have touched—leisure, literacy and work training—I draw a distinction between them. Of immediate and profound concern is training for literacy and numeracy. Also of profound importance for the future of this country is the need to look to adult education, which will enable people to grasp the opportunities for retraining when they are presented to them.
  4.41 pm
  Mr. Gwilym Roberts: I congratulate the hon. Member for Hornchurch (Mr. Squire) on bringing this extremely important matter before the House. As he said, until the late 1970s there was continual growth in adult education. That growth in supply was in response to a growing demand for it. As I see it, that was perhaps a reflection of the increasing complexity of our lives.
  The hon. Gentleman will forgive me if some of my later remarks seem slightly political. I accept that the problems did not start with the present Government. In the latter years of the Labour Government problems were already cropping up in adult education. Course fees were already increasing to what I would regard as unacceptable levels. Numbers on some courses were already falling. One or two courses had been eliminated because of falling numbers.
  However, whatever problems existed then have been dwarfed by the vicious attacks of the present Government on the whole education sector. There is little doubt that when the whole of education is being besieged, as the hon. Member for Berwick-upon-Tweed (Mr. Beith) put it so eloquently, it is always held that the mandatory sector must come first, and the non-mandatory sector tends to suffer.
  The present attack on adult education is particularly unfortunate, because, for various reasons, there is a need for a vast increase in this area. There is increasing complexity in both work and leisure. In spite of what the hon. Member for Streatham (Mr. Shelton) said about technology, there is no doubt that in the foreseeable future—all hon. Members must agree about this if they are honest—the average number of hours of work per individual will fall. Thus, there must be increased leisure. One of the great problems will be to make better use of that leisure. We have problems with early retirements and training for retirement, all these things call for adult education.
  In addition to that, there is the need to retrain people several times during their lifetime. It has been said that
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  adult education today is a life process and that that is becoming truer as the years pass. For all these reasons, it is particularly unfortunate that we face a devastating attack on the structure of adult education.
  I should like to quote one or two figures. The Government's expenditure White Paper of March 1980 included a planned reduction of £15 million in expenditure on adult education. That is more than 30 per cent, of the total expenditure on it. In addition, we have had the rate support grant settlement and, again, further impacts on the educational sector. Even on the question of school transport there is talk of clawing back some of the money in some way. All these things must have their impact on the non-mandatory sector.
  Mr. Mellor: I am sad that the hon. Gentleman is bringing party politics into this matter. Did he vote against his Government when, between 1976–77 and 1977–78, they cut education spending by £351 million in one year? That cut was larger than anything that the present Government have done in one year, and it had a considerable effect on adult education, as on everything else. If he did not vote so, should he not confine himself to making the point that some of us are making—namely, that too much is being done in adult education—without being just a little hypocritical about the Government?
  Mr. Roberts: I do not think that it is a matter of hypocrisy at all. I was critical of my Government during that period. On many occasions, although I am not sure about this issue, I voted against my Government on various issues.
  We must be realistic about this matter. At present, for doctrinaire reasons, we have from the present Government a global attack on public expenditure and a devastating attack on adult education in particular. The situation is such that a number of education authorities are cutting out adult education completely or are pruning it down to a very small rump. There are communities, particularly rural ones, that have been deprived of any possibility of adult education. About 85 per cent, of adult education is still in the hands of LEAs, and these are subject to the impact of the Government's expenditure policies.
  As many hon. Members know, this attack is leading to considerable difficulties for those employed in adult education. Large numbers of part-time staff, and quite a number of full-time staff too, have already been made redundant. I am told that Leicestershire has declared redundant all its adult education staff and that a number of other local authorities, predominantly Tory-controlled have wiped out their adult education provision.
  It will be difficult for adult education to recover from the damage that the Government's policies are doing to its whole structure. Some of the fundamentals of adult education are in danger of being destroyed. There is need for a change of heart by the Government. Ministers must fight for the education corner, and particularly the post-16 corner of education. They have to face the budget policies being imposed on them.
  We need also to look beyond the present difficulties. I agree entirely with the hon. Member for Hornchurch that the greatest need is to begin with some statutory definition of adult education. Section 41(b) of the 1944 Act is pretty airy-fairy and means very little. I suggest the type of definition that is supported by those who have expertise in this sphere. It is suggested that the Act should be amended

  39
  in such a way that it would be the duty of every local education authority to secure out of public funds provision for its area of adequate facilities for further adult and continuing education, full-time and part-time, for people over compulsory school age, including provision of facilities for vocational, general, cultural, recreational, social and political education for all those who are willing and able to profit by such education, and to meet the needs of individuals and the community.
  There is a need for a much wider statement of the role of adult education. Everything depends, in the end, on the will not only of the present Government, but of their successors. This means the will to ensure that adult education plays a vital role in the community. I ask the Minister to stand firm in the present difficulties and to examine the need to define adult education in the manner that I have proposed. There must be the will by the Government and their successors to ensure that adult education has a worthwhile share of national expenditure. There has been reference to the use of buildings and resources. All these matters come into the reckoning. The great need is the will of the Government and of local education authorities to provide what is necessary.
  4.53 pm
  Mr. Robert Rhodes James: I am glad that the hon. Member for Cannock (Mr. Roberts) emphasised the fact that the problems we are debating did not begin in May 1979. I take the point further. The dilemma in which we find ourselves—it is not confined to adult education—lies in the fact that a succession of Governments since 1944 have failed to understand, or begun to think, what is the strategy of the educational system as a whole.
  Although welcoming, in many respects, the debate proposed by my hon. Friend the Member for Hornchurch (Mr. Squire), I must say that in some respects I regret it. One of the deep-seated problems in education is that competition for priorities has reached the point where people become obsessed by one area or another. I am my party's liaison officer for higher and further education. I endeavoured to make clear, in a recent speech at Coventry to the National Union of Students, that I look at further and higher education in the context of the system as a whole and not as a specialised and privileged part of the system.
  I welcome the debate in another sense. I hope that hon. Members will try to take the subject wider than merely that of adult education. We have 3 million adult illiterates in this country, which is a fairly sombre commentary on the system as a whole. I recognise that not all of them have been through the British education system. It is, neverthless, an alarming and disturbing statistic. The figure for innumerates is, of course, unknown. From my experience, I suspect that it is very large.
  We are faced in adult education with the remedial task of trying to rectify the inadequacies of certain schools and certain areas. One danger, of which all hon. Members are aware, is to make too wild generalisations about the education system as a whole. We know certain schools in our constituencies that are particularly good and those that are inadequate. In the country as a whole the problem becomes magnified.
  We must accept the increasingly important remedial role for adult education. It is, however, only a short-term
  40
  measure. It is not the solution to the real problem. The real problem lies in the uneven quality of standards within the State education system. Concern about cuts in education, however inescapable and necessary, is not confined to one side of the House.
  My hon. Friend the Member for Hornchurch referred to retraining and the Government's important contribution towards that aim. Another aspect of adult education lies much more in the area of voluntary retraining. This would involve people who, recognising their own inadequacies or the future of their particular speciality and industry, would wish voluntarily to take up a new skill before a situation developed that could lead to their becoming redundant.
  Voluntary retraining would also include increased specialisation for those who wished to become more specialised in the work in which they were already engaged. Those are exactly the people whom the Government and the State should be assisting as much as possible. I recognise that this proposal goes beyond existing retraining schemes. I believe, however, that it gives adult education particular significance at a time of recession and profound social problems.
  A category which, slightly to my surprise, has not been mentioned is disabled people. It tends often to be thought that disabled people are disabled from birth until death. The vast majority of disabled people are disabled during their lifetime or during their working life either through illness or accident. It is in this area, during the International Year of Disabled People, that adult education becomes especially important both as remedial education and for retraining.
  With certain glittering exceptions, higher education and further education appear relatively low in local education authorities' priorities. Far fewer people are involved. They are less politically popular. The money, it is often felt, could be used in other areas. Cambridge is a university city. It also possesses, however, a college of further education and the Cambridge technical college. I spend more time and effort on those two than on the university, which does not face problems of similar magnitude. My hon. Friend the Under-Secretary of State knows these problems only too well.
  It is absurd that there should be such a difference between the amount of grant given to a student at one institution compared with another, the degree of financial support, the overlapping that occurs increasingly between polytechnics and universities and the increasing confusion about the roles of the three separate parts of the further education system.
  Like the hon. Member for Berwick-upon-Tweed (Mr. Beith), I am one of the few in this place who has served in higher education. After the sad death of John Mackintosh, I think that I am the only hon. Member entitled to call himself "professor", although I do not do so. I wish to emphasise strongly what the hon. Gentleman said about mature students. I have had responsibility for a number of them, but I shall not refer to individuals. If we regard mature students as a whole, their motivation is intense and the number who fail to complete a course is virtually nil. The standard that they reach is very high. For teachers, they make a refreshing contrast to certain other categories of student who take the whole thing for granted and regard it as a sort of birthright. We should encourage the mature student as much as is humanly possible.

  41
  I agree with what has been said about the Open University. I was honoured to be its guest at the recent degree ceremony. I support the Government's initiative for the Open tech.
  In the debate there has been no reference to Northern Ireland. If any area in Britain is in profound need of further adult education and mature education and retraining, it is Northern Ireland. It often surprises me that when the House debates subjects of this sort Northern Ireland Members do not attend and Northern Ireland is not mentioned. It seems as if Northern Ireland has only its problems and that we have only ours. Northern Ireland higher education is linked closely with higher education in the rest of the United Kingdom, and any differences are matters only of degree.
  I am worried increasingly by the difference in opportunity available to individuals who happen to live in different counties when it comes to the award of discretionary grants. There are certain counties—I am sorry to say that Cambridgeshire is one of them—where it is becoming almost impossible to get a discretionary grant.
  There is a serious anomaly about law degrees. One can obtain a grant for three years but not for the fourth year. That seems absurd. If we are investing public money in a course we are not investing in only three-quarters of it.
  As the House knows, I am strongly opposed to any proposal to replace first-degree grants with loans. However, there is an area in which supplemental loans could be introduced for certain categories of adult education and subsequent courses. In my experience, the amount of money involved in many instances would not be very great. There would be no considerable problem about repayment, Such a scheme would remove part of the dilemma but the principal part would remain, namely, discretionary grants.
  A subject that is close to my heart is the need to bring industry business and commerce much closer to higher education. In Cambridge I am doing all that I can to initiate serious discussions and links, which have been developing and which will develop further. It is an initiative that could be a model for a much wider involvement of industry and commerce in higher education.
  At present industry regards the education system merely as a provider of finished products which it can take and look after. It should be much more concerned with and involved in the system instead of merely complaining when the results are not entirely to its satisfaction.
  I warmly commend the motion.
  5.4 pm
  Mr. Derek Foster: I am glad to take up the remarks of the hon. Member for Cambridge (Mr. Rhodes James). I, too, wish to congratulate the hon. Member for Hornchurch (Mr. Squire) on introducing this topic and on his great understanding of the problems of adult education. My hon. Friends and, for all I know, many Conservative members, are interested in the topic because of the need to spread education opportunity very much further.
  It seems that if there is to be a great leap forward in the spread of education opportunity, it is likely to come in the education of 16 to 19-year-olds. That is one reason why I have of late been pressing the Under-Secretary of State to take a much greater interest in the youth opportunities programme. It seems that his Department is seriously
  42
  neglecting the great opportunities that are there for it to play a full part in developing curricula. If the great leap forward is not to be in the 16 to 19 group, it will be in adult and continuing education.
  It has been said by many hon. Members that there are many who do not discover their abilities and the possibilities for themselves until later in life when they have begun to work or when they assume the responsibilities of a family. Sometimes at that stage a career suddenly begins to open up to them. The tragedy for so many is that when that occurs the doors to further adult and higher education are effectively closed. We must realise that the concept of higher education beginning, inevitably, at 18 is outdated. We should consider a much more varied pattern of entry into further and higher education. We should make it much easier to pass through the doors of adult and further education at whatever age is most convenient and useful to the individual.
  It is important that people have the correct motivation to enable them to benefit greatly from their educational experience. There are many who would dearly love to spend just one year removed from their place of work—provided that they did not lose any income—so that they would be enabled to pursue their own interests or to further their careers. When they returned to their jobs they would be able to undertake them much more efficiently and to much greater benefit to themselves, their families and the community.
  I have been delighted to hear many of the comments that have been made about adult education. However, it strikes me forcefully that we cannot mouth beautiful sentiments about adult education and at the same time vote for a severe reduction in the resources to be made available for it. It is impossible to leave party politics out of this issue just as it is impossible to do so when discussing other issues where resources are necessary.
  Before I entered this place I had a measure of responsibility for administering adult education. I learnt only too painfully that perhaps nowhere in the country did an education authority devote more than 1 per cent. of its resources to adult education. In many instances it was considerably less. Primary and secondary education and further education had a much greater share of the resources, and much greater political clout.
  When it comes to deciding upon an education budget, especially in an atmosphere of retrenchment, there is a good deal of hassle. That applies to local education authorities as well as to the Government. At such times the areas that are most vulnerable suffer the most. It is a fact that most adult education courses are staffed by part-time workers, and for that reason alone they are much more vulnerable. It is easier to make part-time staff redundant than it is to make full-time staff redundant.
  Adult education takes place in community centres, school complexes on colleges of further education. I am in favour of a more intensive use of school buildings. It makes sense when community buildings are restricted. However, it is expensive to use school buildings more intensively. Does anybody think of the extra caretaking costs or the extra cleaning costs, the extra heating and lighting costs, or the extra staffing costs? About five or six years ago I discovered that in my area it was costing about £150,000 a year just to use our school buildings more intensively. Let us not imagine that school buildings can be used more extensively without substantial extra cost,

  43
  which has to be borne by a local education authority. Let us not imagine that we can achieve an extended provision on the cheap.
  I agree that we must consider our priorities in adult education. Who can deny that basic adult education—by which I mean adult literacy and numeracy—must be given the greatest priority? In the past few years I have been delighted to see the greater resources being devoted to literacy and numeracy. I am particularly pleased that volunteers have been used to good effect. I am not the type of Socialist who believes that there can be a spread of public services only by full-time staffing. There is a place for volunteers in the extension of such services. However, let it not be thought that volunteers can be used without cost.
  Volunteers have to be properly supervised and trained and brought within a solid framework. Let it not be thought that it is possible to extend adult literacy and numeracy teaching much further entirely by the use of volunteers. They have a role, but a cost is involved in the use of properly trained staff to train and supervise volunteers.
  The education of the disadvantaged, particularly of the disabled, must be given greater priority. Do we ever consider the extra cost of providing access to education buildings? When we surveyed the access to buildings for the disabled in my authority's area I was appalled at how much it would cost to enable equipment and premises to be used by the disabled in schools and colleges of further education. Let us not fool ourselves that we can make progress on the cheap.
  I turn to the question of paid educational leave. This is the only way to expand adult education in the foreseeable future. There is a proliferation of agencies, even though local education authorities account for 85 per cent. of provision. We need a strong underlying structure, involving an advisory service and a means of access and entry for large numbers of people. Without those three improvements we cannot make the necessary leap forward in adult education.
  When somebody considers embarking upon a course he encounters a proliferation of agencies and an even greater proliferation of courses. People who would not be seen dead in an education institution find the problems formidable. People in the priority groups must be encouraged to gain access to the system.
  There is a need for an advisory service such as that provided by some forward-looking authorities, often in cooperation with the Open University, in some parts of the country. Until people are guided through the multitude of agencies and courses and given good sound advice about the best course for them, we shall not make much progress. Until there is easier entry, and until we can ensure that people are not prevented from taking a course that is just right for them because they do not have the requisite number of A-levels or other qualifications, we shall create hurdles that are insuperable for many people.
  We should make it possible for people to go from agency to agency and from one module of a course to another, gathering credits, in a similar way to that used by the Open University, but within a wider framework. People feel that a qualification at the end of a course is well worth working for. It enables them to take the next step and to progress further in the course of instruction. Some
  44
  such system of accreditation should be considered. It will be difficult, but it is necessary if we are to create a firm structure.
  I turn to the question of the community college or school. This idea has fallen out of favour lately. There is a strong feeling that the comprehensive school, college of further education, or both, can provide an important educational resource for the whole community. It is possible to give people of all ages within that school or college the whole range of educational, leisure and recreational experience. That is particularly important for working-class communities when the cost of public transport is important.
  In many areas the cost of public transport is becoming prohibitive. Leisure activities are often concentrated in town centres a long way from centres of population. It is possible to devise a system that is properly supervised. It is important to have proper supervision, otherwise costly equipment and premises will not be available. Without responsible supervision it is ludicrous to expect that the doors of schools will be thrown open and that the population will be invited in to take part in leisure or educational activities. With proper supervision and staffing, and by ensuring that caretaking, cleaning and so on are taken care of, we can use our valuable educational resources in schools and colleges much more intensively and productively for the benefit of the whole community—but I repeat the warning that it will cost money.
  I am delighted to have been able to participate in the debate. I repeat that we need more resources. I hope that the Minister will take my lecture to heart. We cannot make progress without an initiative from his Department. I do not mean only that it should issue guidance fo local education authorities, which are working under great difficulties. Progress cannot be made without some extra resources.
  5.20 pm
  Mr. David Mellor: The debate is bringing forth a chorus of praise for my hon. Friend the Member for Hornchurch (Mr. Squire). Had it not been for his good fortune in being drawn first in the ballot and his good sense in choosing this subject, we should not have had the opportunity to debate adult education. I welcome the way in which my hon. Friend introduced the motion. Before coming to the House my hon. Friend was leader of the London borough of Sutton council and played his part in administering an education service. He speaks with authority on the topic, which involves the powers of Government and local authorities. The House is fortunate that in the recent intake there was someone as experienced in the ways of local government as he is.
  Adult education is a Cinderella subject. That is surprising. With the numbers involved in adult education, one would think that it should have more political clout. My constituency lies within the Inner London Education Authority area. In 1979, in the area there were 347,500 children of school age—that is, from 5 years to 16 years—and 254,000 adults involved in adult education. The numbers are similar. There are not many hon. Members in the Chamber for this debate. For a debate on secondary education, two or three times as many would attend.
  The lack of interest is one reason why adult education is being unnecessarily singled out for cuts. That fact

  45
  emerges crisply from the debate. Coming from Wandsworth, I am well aware of the difficulties of local authorities in making ends meet. The Opposition could not resist the temptation to blame the situation on Government cuts. We are in the House to be realistic. Until our economy revives, we must work within the constraints of falling expenditure. Under the previous Government there was a dramatic fall in expenditure of £351 million between 1976–77 and 1977–78. Under this Government there has been a steady fall and it is projected to continue through to 1984. Underlying the remarks of the hon. Member for Bishop Auckland (Mr. Foster) appeared to be the assumption that the situation could be changed by a change of Government. That is nonsense. Any Government will be bound by the constraints.
  The message of the debate is that if the will exists there is room even within a falling budget for better provision to be made for adult education. Where increasing aid is beneficial it can be found even from a declining budget. The Government have decided to increase the money available to the adult literacy unit by £200,000 in real terms. That is a sign of the Government's continuing interest in that crucial problem.
  It is sad that the Russell report of 1973 is yet another report from a Royal Commission set up by Government that lies mouldering on the shelves for ever and a day. It recommended that 2 per cent. of local authority educational expenditure should be on adult education. I know of only one local authority where that is so. Most started the present round of savings on the assumption of spending only 1 per cent. on adult education.
  People should pay realistic charges for the classes that they attend. Much as I admire the hon. Member for Edmonton (Mr. Graham), I do not agree that after several years without any increase the increase in Open University fees is discreditable. It is perfectly reasonable. However, there is a limit. Some local authorities have gone far too far in increasing the charges that they seek to levy. I believe that Cambridgeshire has even required some of its courses to make a 25 per cent. profit. That is utterly wrong. The latest statistics indicate that 20 per cent. of local authorities—and the number is growing—are seeking to make the costs of all their adult education classes balance. On the face of it, that is attractive, but it fails to recognise that many of those who most need adult education are least able to pay for it.
  I do not understand why balancing costs in that respect is so popular. To their shame, three local authorities suspended adult education in 1979–80, but they would not have dreamt of cutting public libraries. What is the difference between going to a public library to improve one's education and seeking to enrol in a course for the same purpose? A reasonable contribution to the price of the course should be made by those who participate in adult education, but the cost should not reflect the belief that the only basis on which the course can be run is if it is self-financing adult education courses should have an element of community financing, in the same way as libraries. I am sad that that obvious distinction has passed unrecognised by many otherwise sensible local authorities.
  Another reason why adult education has been a popular area for local authority saving is that there appears to be no statutory obligation to provide it. The Education Act 1944, because of the length of time that it has lasted, is held in high esteem. However, the closer that a lawyer
  46
  looks at what it says about adult education, the more confused he is when seeking to see what obligation it places on the local authority.
  Section 1 of the Act provides that the Minister has a
  "duty … to promote the education of the people of England and Wales … and to secure the effective execution by local authorities, under his control and direction, of the national policy for providing a varied and comprehensive educational service in every area"
  That is further defined in other sections. Section 7 describes "three progressive stages" of primary, secondary and further education. It also imposes a general duty, this time on local education authorities, by providing that
  "it shall be the duty of the local education authority for every area, so far as their powers extend, to contribute towards the spiritual, moral, mental and physical development of the community by securing that efficient education throughout those stages shall be available to meet the needs of the population of their area."
  The use of the words "the community" and
  "the population of their area"
  might lead one to suppose that the draftsmen of that Act had in mind education in the broadest sense. But that is not how it appears to have been understood. It is a source of sadness to me that there has been no definitive court case to determine precisely what the duties of a local authority are, particularly having regard to some of the actions that have been taken recently.
  Mr. Whitehead: I am following the hon. Gentleman's argument with great attention. I think that he is taking the interpretation of section 7 contained in the Russell report. As a lawyer, would he say that Humberside, for example, was in breach of the Act?
  Mr. Mellor: The hon. Gentleman is quite right to say that I have used as my starting point paragraphs 156 to 158 of the Russell report. Having cast my eye over that—I shall not weary the House with the details—I had intended to go on to consider section 41 of the Act, and how far section 42(2) detracts from the provisions of section 41. I believe that it is an open question, but I cannot imagine that it was ever the intention that it should be left as open as it is. I believe that it is genuinely what the sports commentators would call a "fifty-fifty ball".
  There was a good deal of sabre-rattling last year about this, and one would have liked to see some attempt to have the matter properly examined. I agree, however, with paragraph 158 of the Russell report which, as the hon. Gentleman knows, indicated that the committee was surprised, but nevertheless had to accept, that it might not be unlawful for local authorities
  "to suspend their adult education altogether."
  The committee had in mind the occasion when this happened in 1968. I recommend that year to those who believe that there is a party aspect to this, because we all know who was in power in 1968. It came back to haunt us in 1979–80.
  I believe that it would be useful, perhaps imperative, for the Government to look again at the provisions of the 1944 Act to see whether there should be a wider definition of education than is provided in that Act and an obligation upon local authorities to provide adult education.
  I say that for the following reason. The Under-Secretary of State for Education and Science—my hon. Friend the Member for Brent, North (Dr. Boyson)—who is now present, has spoken with great eloquence on this subject in the House. He knows the high regard in which I hold him. Before taking on his present burdens of office, he

  47
  spoke on many occasions of the crucial importance of people being able to come back into education. A large number of people either fail to recognise the importance of education at the time when it is made available to them, or feel the imperative need to broaden their education even if they took up what was on offer at the time when they were within the education system.
  In the latter category, I think particularly of language studies. As recently as 15 years ago, when I was still at school, the British grammar school did not bother too much about languages: foreigners always spoke English, so why should we worry? One of the great advantages of the increase in Continental travel has been that people have suddenly become aware of the need to speak at least one other language. In my view, one of the great triumphs of adult education is that it has met that need, not necessarily by academic teaching of languages, but by teaching based upon the need to be comprehended when one goes abroad.
  My hon. Friend the Under-Secretary of State has spoken on this subject in at least two Adjournment debates. In one of them, he said something with which I think we should all agree:
  "It is essential that local authorities do not cut so near the bone that we cannot get the situation going again once we put more flesh on."—[Official Report, 16 January 1980; Vol. 976, c. 1840.]
  The tragedy is that within a few days of his saying that Leicestershire halved its cash grants as well as its funds for the adult literacy scheme, and other local authorities followed suit, taking decisions which I believe went far further than the situation warranted. In my view, even with the shrinking budget, there is no need for such dramatic savings to be made in adult education.
  In view of the clear indication given by my hon. Friend the Under-Secretary of State—which I hope my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane), the other Under-Secretary of State for Education and Science, will also give—that the Government also believe that it is not necessary for savings to be made on such a scale, one must ask the Government whether it is time to look again at the amount of control that the Government exercise over what local authorities do in adult education.
  One appreciates, of course, that local authorities must be left with some power to decide certain things locally. One also appreciates that they are answerable to their electors in the same way as we are. But is there not a terrible gap in our educational law as a result of the identifiable gap in the 1944 Act; and is not that the real reason why adult education is always the first thing that a local authority wishing to save money easily will cut? If this debate serves no other purpose, the fact that that has been brought home in my view justifies the very wise decision that my hon. Friend the Member for Hornchurch has made.
  5.37 pm
  Mr. Clive Soley: A month or two ago a group of London Labour Members discussed the possibility of raising in the House the question of adult education. The hon. Member for Hornchurch (Mr. Squire) has beaten us to the draw, and I congratulate him. He has tabled the motion in terms that I find attractive, although I hope that he will not consider it nitpicking if I say that
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  I share the view of my hon. Friend the Member for Bishop Aukland (Mr. Foster) that we need a structure that must come from the Government and not just from the local authorities. Nevertheless, this debate is necessary and long overdue, and I am glad to participate in it.
  It has been said several times today that education is a lifelong process. That has become something of a cliché but it is an important one, which we need to consider in more detail. One of the reasons why it is a cliche' is that, having said it, we go on to think about education as taking place between the ages of 5 and 16 or, alternatively, between the age of 5 and the early twenties, when a person goes to university. We must get away from that and think far more about the periods on either side. The under-fives constitute another area of concern, which should be debated on another occasion. On this occasion we are thinking of those who left school before university or who have failed the system in one way or another.
  Having said that, I should perhaps declare an interest. I am a product of adult education. I hope that that will not put the Government off making a generous response today. I suspect that a number of hon. Members on both sides of the House—certainly I know of a number of Opposition Members—left school early and wandered through a wide variety of experiences wondering what those places called universities really were, and what happened when one went to them. I left school at the age of 15, from the lowest form possible in a secondary modern school.
  This is important, because it gives an indication of how people feel on this subject and how they struggle later on. I continued going to night school simply because I had been told that education was a good thing. Until the age of 21 or 22, I failed every examination bar one. After that, I passed every examination bar one or two. My education included an honours degree and a diploma at another university. That may say something about our examination system, about the problems of late development, or about the structure of our education institutions. I am not sure.
  I remember receiving the little cards telling me of my O-level failures. This was about 25 years ago. A little form came back, marking the result from 1 to 10—I being absolutely marvellous and the best possible result, and 10 meaning total failure. I always got 10, particularly for history, although on one or two notable occasions I rose to 9. I then discovered that the examiners did not really want to know the names of the kings and queens of England, or of the battleship that went to Agadir in 1911. I remember agonising, in one examination, over the question whether it was HMS "Leopard" or HMS "Tiger".
  I suddenly discovered that more subtle things were required in examinations. Having discovered that key, I suddenly found that passing examinations was not so difficult after all, and that it was something that could be achieved. However, it indicates the difficulty of doing so, particularly if one is working at the same time, and even more so if one is working, as I was at the time, in casual employment that requires working long hours into the evening and at weekends. As a result, one's opportunity to study is greatly reduced.
  The question of access to adult education is vital. As well as that, there is a great deal of variation in the form of education. In recent years I have had contact with people from the TOPS course on adult literacy, and even with those who I believe are called outreach workers, who

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  go into the community and set up their classes in specific areas. The people involved in those schemes are doing good work. The Open University is another example.
  I want to refer to a few courses that struck me as particularly important. I was struck by the importance of "drop-in numeracy", as I believe it is called, which is often provided for people who need to brush up their mathematics for the TOPS course. These classes are provided in my area by the Addison institute and the Hammersmith college. They are useful for people who need basic training before they can undertake other education. It goes without saying that literacy and English as a second language are also vital.
  Another course that is increasingly important—I believe that it is run by the Lambeth adult education institute—teaches job-finding skills. I remember that when I worked as a probation officer, many young people were totally unaware how to present themselves at an interview. Quite often they were unable to use the telephone effectively in order to set up the interview in the first instance. We are fundamentally wrong to dismiss these as academic or unimportant classes, because they are important and basic to a large percentage of the community.
  Another course, increasingly important in the light of the current economic situation, is concerned with becoming self-employed. The course is run by the Addison institute. It is not easy to become self-employed. It is full of pitfalls and traps for the unwary. If one is unsuccessful, one gets into considerable financial difficulty with the tax authorities, social security people, and a whole range of other people. Here again, some skill is necessary, and it can be taught.
  Courses in leisure activities are also important. Some people say that these are not necessary, but people now live much longer than they used to and they are often much fitter. When one considers their problems in adjusting to retirement, one appreciates that it is not easy for them. One often finds such people becoming a charge on the State, whereas if the money were put into education in the first place—particularly into courses on leisure activities and on how to use one's retirement—we could head off many of the problems that elderly people face. At present, retirement is often accompanied by a feeling of being thrown on the scrap heap, and that one's working life is over. It should not be like that. It is not necessary for it to be like that. Adult education has an important part to play in that respect.
  There are also fresh start courses, which are offered in a couple of places in London and elsewhere. After years of work, a person may need to reacquire basic study skills. They can be taught, and are taught. Those are some of the areas that I think of as being particularly important.
  The hon. Member for Putney (Mr. Mellor) spoke about subsidising and payment. I must emphasise the fact that we all pay for education out of rates and taxes. The problem of putting up the price is that we deter entry, particularly for people on low incomes, even through the people who are deterred continue to subsidise those on high incomes who continue to take the courses. Obviously, a balance must be struck. In respect of many of the courses for the less skilled and less able people in our community, my view is that the entry bar and cost should be minimal. Such people should not be asked to
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  indulge in the worst form of subsidising known to us—the poor subsidising the rich, which is what often happens at present.
  I turn to the problem of unemployment. It is my view and the view of many others that a great part of our present unemployment problem is due to the Government's economic policies. The Government would no doubt dispute that. However, I leave that argument to one side, because I accept that another large part of the unemployment problem would exist regardless of who now governed the country. We now have an unemployment problem precisely because we do not have control of our economic structure, and to some extent our economic future is out of our hands. Therefore, there would be an unemployment problem regardless of the economic polcies that are pursued.
  The crucial question is what we do to soak up that unemployment. It is not just a matter of creating new industries, although that is important. It is also about education. When I consider our economic problems 1 am struck by the comparison with West Germany and Japan. Indeed, the comaparison can go much deeper. Both those countries have spent more on education in the past than we have done. That is particularly important in view of their development as great economic Powers.
  A number of Conservative Members have argued that we cannot afford to put the money into education. That is not strictly true. As always in politics, there is a question of choice. I do not wish to go too far into the argument, if we compare education and defence, the Government would say that we must spend the money on defence in order to safeguard the country. On that argument, they would justify the spending of £5,000 million on the Trident missile. I do not agree. I happen to believe that the Trident missile will endanger peace rather than preserve it. But that is another question. What is not at question is the fact that that money could be used for other purposes.
  I suggest that education is almost as crucial as defence; indeed, it may be more crucial. If we do not guarantee continuing rising education standards, sooner of later we shall decline as a relatively powerful nation State. There are no "ifs" or "buts" about that, especially if we do not catch up with other countries that are spending more on education than we are. We must ask whether we can afford not to spend more on education. My answer is "No, we cannot". It is one of those areas, like housing, which has a hidden-opportunity cost. If we do not spend money on it there is a cost of not doing so, and although we cannot measure it we should never underestimate it. It is vital.
  In the long run, we must set our sights rather higher than our current economic difficulties. We must set our sights on the day when people are able easily to leave a job and go into full-time paid education for a number of years. I believe that we are entering the age when it will be fatal to assume that a person will leave school, sooner or later get a job, and stay in it for the rest of his life. We must put those days behind us. That means that there must be access to adult education at a variety of times during one's life.
  We should make that very much easier to achieve, and that requires an economic input. I am not saying that it can be done tomorrow morning, but we ought to start planning for it. There will always be declining industries. It will be far easier to deal with people who lose their jobs if we are able to offer something more than redundancy payments and the prospect of the dole queue. One of the things that

  51
  we should be able to offer is education, which should be paid for at a rate that is not significantly lower than what the family has come to expect.
  It may be argued that that dream is a long way off, but my counter is that it must not be a long way off, because if we are really moving into an age in which high technology results in this sort of turnover, there will be areas in which industry is declining and in which no alternative jobs are popping up quickly enough, as a result of which there will be large pockets of unemployment.
  The Government and the Conservative Party must face the social disturbance, stress and, eventually, the social breakdown that unemployment causes. They have always said that inflation is Enemy No. 1 because it destroys society. I agree that inflation can destroy society, but so can unemployment. If the present rate of unemployment continues, and if it is combined with other factors such as relatively high inflation, the Government will be in serious trouble very soon.
  In the longer term we can soak up some of the problems by adult education. As my hon Friend the Member for Bishop Auckland said, Government action is required and not simply requests to local authorities to do more, particularly when they are being told to cut back generally. I ask for a structured response to these problems from the Government, and preferably a section within the Department that recognises the importance of adult education and gives it the power, weight and clout that it needs.
  People must have the freedom to choose courses. That is particularly important, because it is difficult to justify telling people what courses they can or cannot take. It was said earlier that sewing classes were a luxury. What is a luxury depends very much on a person's situation. They may not be such a luxury to a person who is handicapped or isolated in the home. Adult education for the handicapped is important.
  I ask the Government to make a full and positive response to the report of the Advisory Council for Adult and Continuing Education. If we can get the structure right we can build on it, our dreams will become reality, and we can move to different types of education throughout our lives. The college that enable me to get out of the trap of not having an education was the new Battle Abbey college, in Midlothian, Scotland. During the early 1960s it took students at the ages of 65 and 70. I do not know whether it still does so, but that was a positive step, and something that should be more widely and readily available.
  5.53 pm
  Mr. Harry Greenway: There is an unfortunate tendency—at times it has been observable in this debate—to equate adult education almost exclusively with remedial or basic education for those who did not attain a satisfactory grasp of the basic subjects at school. Such a view is false to the true philosophy of adult education, and diminishes its value.
  The true philosophy of adult education is that education is most valuable when it is sought voluntarily by men and women who have attained adult status, who are living independently and making an adult contribution to society, but who choose to devote effort in their free time to study or to the pursuit of a skill. That study or skill may be
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  practised at a very high level. For instance, in London, where for many years I have been both a teacher and student in the splendid ILEA adult education organisation, with its 300,000 adult students, the literary institutes specialise in study at an advanced level. It is particularly fitting that I should mention in this Palace of Westminster that the new stained glass windows in the Lord Chancellor's State Room were designed and made by the students in the stained glass class of the City literary institute in Drury Lane, working under their tutor, Amal Ghosh.
  On 25 February students from the music classes at the same City literary institute will give the evening concert in the Purcell Room on the South Bank. Their performance will be judged by the criteria that are used to judge any performance in that distinguished concert hall.
  Morley college, in Westminster Bridge Road, is an adult education literary institute, and I need not speak of its reputation as one of the great centres of English music. Its work in the arts and humanities is serious and important enough to attract tutors of the calibre of Margaret Drabble, the novelist, and Maggi Hambling, the resident artist in the National Gallery. The ceramics circle of Morley college, formed of students from the ceramic classes, is one of the leading learned societies in that area, attracting experts from all over the world to its seminars.
  The Mary Ward centre in Bloomsbury is another adult literary institute, which distinguishes itself by a high level of involvement in its local community. For example, it conducts a legal advice centre which employs three solicitors full-time, assisted by the advice of 20 barristers. On the basis of the experience gained in the centre, seminars and courses are conducted which are invaluable to people working in the community. But one can get more than legal advice from the Mary Ward centre. One can learn to play the pipes, learn Sanskrit or study a whole range of skills and subjects.
  We must not make the mistake of imagining that the student bodies of the literary institutes are composed of the educational elite. Students range over the whole socio-economic spectrum. There may be many students in the institute who left school at 14 or 12, just as—it may be surprising to learn—there may be an occasional company director in the literacy class or the occasional graduate in the spelling class.
  In case some people still have a prejudice at the backs of their minds that adult education should concentrate solely on the plight of the educationally disadvantaged, I should like to point out two facts. First, the special approaches to the teaching of adults learned in the "mainstream" of education have been the basis of recent successes in the development of techniques of adult remedial or basic education. Secondly, it is more dignified for adults in need of basic education to attend for study in adult centres where busy crowds of adults throng to study the whole range of adult interests.
  A major problem in providing continuing education, particularly if it is directed towards a national audience and involves distance learning techniques, is the provision of the working capital to finance the preparatory work.
  I commend the proposed series of nationwide training programmes on health and productivity for livestock producers and other animal owners, in which the professional expertise of the Royal Veterinary College, in collaboration with two other university veterinary schools, veterinary and agricultural organisations and local

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  agricultural institutions is to be combined with the educational technology pioneered by the Open University. Substantial basic support has been provided by trusts, the veterinary profession and industry, and overall the series is expected to be self-supporting. This venture is a classic example of initiative and of collaboration between institutions and organisations to meet a national economic need. However, it is costly and each programme has to be prepared over a period of one and a half to two years before the extent of enrolment is known or any fee income is received. A pump-priming grant to provide some of that working capital is therefore essential.
  In this House we have an all-party committee on adult education, of which I have the honour to be chairman. Since its inception about 14 months ago our committee has dealt with all areas of adult education. We have been particulary impressed by the need to provide adult education across the community, to look after the needs of pensioners and to make provision for the unemployed. I speak personally and strongly in saying that school buildings that become disused because of falling rolls could become centres for adult education and learning, either basic or advanced. I should like to see that.
  I repeat a suggestion that I have made, that vouchers should be available through the Exchequer, via the Post Office, to the unemployed so that, at no cost to themselves they may go to adult education classes. For the long-term unemployed in particular, surely their one hope could be to get into an adult education class where they could be motivated to work, to study, to enjoy their lives, and to regain that self-dignity which can so easily go with unemployment.
  Aids to illiterates and innumerates are essential. I have in mind the example of a man who was an assistant schoolkeeper at my school before I came to this House. He was a very fine man and worked well but he was refused long-term employment because he could not read and write and therefore cope with the desk work that went with the job of being an assistant schoolkeeper. In mentioning that very sad case, I call for a greater understanding of illiterates on the part of employers. They should not expect of illiterates work that they cannot do, and thus deprive them of their livelihood.
  It has been in many ways a tragic year for adult education, with fees going up on average by 33 per cent. Enrolments this year are 10 to 12 per cent. down on last year. Some authorities have put up fees by as much as 68 per cent. In other cases, fees have gone up by only 10 per cent. But the average has been 33 per cent and it has been a severe factor in the curtailment of the numbers of people attending adult education classes. The numbers have fallen by 11 per cent. this year. They fell by 10 per cent. In the previous year. The fall is likely to continue, to the detriment of the adult population of this country.
  It is essential to keep open, if possible, residential adult education centres, which provide for people across the whole country. They are centres of excellence and of hope in the lives of people. Without such centres, many lives would be severely diminished.
  The rate support grant provided £32 million for adult education this year, as against £45 million last year. That is a severe cut. The average expenditure by local authorities on adult education at the beginning of the year was 0·66 per cent. It is now down to 0·40 per cent. That is a statistic that speaks for itself.
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  Like many other hon. Members who have spoken in the debate, I have a deep and sincere determination to see adult education survive and go forward to meet the broad needs of the community. I should like to complete the quotation that was so rightly brought before the House by my hon. Friend the Member for Hornchurch (Mr. Squire) from Sir Winston Churchill. The quotation ends:
  "The appetite of adults to be shown the foundation and processes of thought will never be denied by a British Administration cherishing the continuity of our island life."
  No Administration cherishes our island life more deeply and dearly than the present one, and I commend to the Government those words of Sir Winston Churchill.
  6.3 pm
  Mr. J. F. Pawsey: I commence by adding my congratulations to those already heaped upon the head of my hon. Friend the Member for Hornchurch (Mr. Squire). He has selected a particularly important issue and has covered all the broad headings.
  I see adult education as possessing three main strands: first, remedial; secondly, liberal studies; thirdly, retraining—that is, retraining for industry and commerce.
  With regard to the remedial side, there are in Britain today, according to the Advisory Council for Adult and Continuing Education, about 3 million adults in need of basic educaional skills—that is, 3 million of our fellow countrymen requiring additional education. The social isolation of any man or woman who cannot read or write to any real degree is difficult for us in this Chamber to comprehend, but it is a problem that is all too real for those who teach in the adult literacy classes.
  The second strand, liberal studies, leads perhaps to greater misconception than is found in almost any othe area, but it is a fundamental mistake to imagine that liberal studies are always or necessarily frivolous. They are nor. all of the corn-dolly-making or help-improve-your-bridge-playing type. Very often these courses provide a real lifeline for the old. They genuinely improve the quality of life. They provide new horizons and broaden the mind. Indeed, the variety and depth of the courses are equalled only by the variety of those who participate in them.
  All these courses help to develop individual and latent skills. The courses come into their own particularly for those who have just retired, those who have become unemployed or those who, for whatever reason, are taking forced leisure.
  With regard to the third strand—retraining—I believe that further and higher education should be responsible for producing the new survival techniques for Britain—the new techniques OSC which can take over where the old left off. It should be the job of the colleges, of the polytechnics and of the universities to apply part of their minds and part of their resources to the problems that are encountered by local industry.
  I have spent all my life in industry. I have worked on the shop floor, and I work in the boardroom. I can say with absolute conviction that over recent years education has moved away from the needs of industry. The bond that used to exist between education and industry has been severed. If education and industry are worlds apart, I accept that there are faults on each side. The educators should remember that they are responsible for services that are financed out of local rates and out of local taxation. They have a clear duty to see that the public get value for money.

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  This does not stop at producing students who are experts, for example, in the latest industrial design. Educators are in an ideal position to carry out consultancy work for local companies. They should attract contracts and use their specialist skills to solve industrial problems and develop new ideas. Industry should tell local education authorities what exactly it feels is wrong with the present system, and above all what it requires. If local companies want new schools for their employees, they should ensure that the local college or the local polytechnic has the understanding or the means to provide the courses.
  Here I mention a Rugby proverb which has recently been invented. I shall acknowledge the author in due course. If industry makes a profit it must sponsor the profit makers. That is almost like one of the sayings of Chairman Mao. But the Department of Education and Science's consultative paper on adult and continuing education somewhat delicately refers to this as a "retention of fee income" I hope that when my hon. Friend replies to the debate he will perhaps not be quite so mealy-mouthed and will not be afraid to use that magic word "profit".
  What is needed is a better input from industry into education. Here I speak as a director of several companies ranging across engineering, marketing and finance. We should set out to train people for the world as it is and as it will be, and not for how it was or how we should like it to be.
  A new sense of realism is required, and that new sense of realism should reflect our present straitened circumstances. We must surely appreciate, on each side of the Chamber, that finance is becoming extremely tight. Most Members will agree that education does not reach down deeply enough into industry. Fortunately, attitudes are changing, and here I refer briefly to an exciiting development that is taking place within my own constituency.
  Warwickshire county council, in conjunction with local industry—which has funded the experiment by £24,000 over two years—has formed a schools-industry liaison group. The group has a full-time director whose job it is to bring schools and industry together in order to promote a better and a closer understanding of each other's point of view.
  However, I ask my hon. Friend to consider a different perspective on the whole subject of the debate. Is it not rigidity in education that causes us to look for opportunities for re-entry? Does it not strike my hon. Friend as unwise that we have closed and locked the door so firmly behind those who have completed their initial studies in universities, polytechnics and so on? Education should be a process of evolution that should continue throughout life, and the problem should not be how to enter education, but how to leave it. Those who leave our educational establishments should have guidance on how colleges can continue to help them throughout their working lives.
  If my hon. Friend requires a slogan for his campaign, perhaps I may suggest one—Education is for life and life is for education.
  6.11 pm
  Dr. Keith Hampson: Several hon. Members have talked about the way in which local authorities have cut back, sadly, on their adult provision. However, adult
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  provision does not rest only in the hands of local education authorites. As some of my hon. Friends have mentioned, there is a murkiness about the statutory requirements for adult and higher education and the relationship between adult, higher and further education.
  Local authorities cut back early on adult education in difficult times largely because of the image of adult education—the flower-arranging sort of image. Today the vital importance of adult and continuing education for the economic future of this country has emerged. It is education for those who missed the opportunities at school or who were ill-motivated. It is their second chance. Because of rapidly changing skills, we also need more opportunities for people to retrain.
  In all Western economies, including the Australian economy, there is a falling off of the take-up of higher education at sixth form level, partly no doubt because of the economic difficulties in getting a job. That means that later on those people build up an increasing demand for courses, and to learn the skills, which they missed by not going to university. Those who are locked into jobs—possibly disappearing jobs—but who did not have the advantage of higher education, are under increasing pressure to gain qualifications to compete with the new generations coming through the educational system with higher qualifications. Therefore, there are powerful pressures on potential demand. It is vital to the economic prospects of this country that we see in adult and continuing education the means of tapping the potential of our citizens and developing the skills and qualifications that we need.
  In our secondary schools there is now a bulge in the birth rate which will feed through the system. It is pertinent that the year 2000 is the year when that bulge comes through to middle age. The 40–45 age group will be at its peak in the year 2000. At its most productive time of life, that group will find there is a shortage of jobs. They will need to be retrained to gain the necessary skills.
  However, at the same time the birth rate will have tailed off dramatically—by a quarter in a decade. It will leave the capacity in higher education to meet that demand, provided that we now set about producing a strategy. It must be a strategy of flexibility and of a co-ordinated joint approach—for example, co-ordination with the Department of Employment, which, in the TOPS programme, has one of the most pragmatic and useful ways of extending adult educational opportunities.
  The universities have not been effectively considered today. They have the most resources in the system. It is important that the "poor neighbour" element of the university extra-mural departments, or adult and continuing education departments—is brought into greater prominence. When there is pressure on the universities because of a shortage of resources, there is an opportunity to offer a carrot: that if they adapt themselves and direct their attention to this key work, resources will be provided for them if necessary. The universities are vital to the area of adult and continuing education. We must give more weight in our allocation of resources to them at the expense—if necessary of our school system and the mainstream higher education system.
  As the extra-mural adult departments are direct-grant funded—the only direct-grant DES-funded part of our autonomous higher education system—the Department can funnel some of its allocation to the universities not through the University Grants Committee, but direct into

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  these departments so that they become "brokers". They can be used within the university to draw on the talents of all other departments and their staff, so that the appropriate courses are put on for the adults and firms in the community.
  The essence of adult continuing education is that it is primarily vocational. In the United States and Australia, for example, in the 1970s there was a surge of adult and mature students. That was the key to the growth of their system and has no equivalent in this country. Older people have wanted occupationally geared courses.
  Adult courses must be vocational, locally geared and in many cases part-time. We have lacked a strategy on all those fronts in this country.
  The model is the Open University, where, for relatively small sums of money, the tutors have been prepared to go out to teach in other colleges, schools, church halls and a variety of other places. We should use that model for the entire adult area. We shall also face a rundown in the demand for the existing colleges of higher education. Their capacity, their buildings and facilities could be used for adult learning, possibly drawing on the staff from nearby universities, polytechnics and colleges, for they all tend to coincide in belts across the country. There must be a flexibility and a joint use of resources on a scale that we have not seen before.
  I hope that the Under-Secretary will give an assurance that, because of the urgency of this task and the looming importance of the year 2000, his planning unit in the DES will concentrate on how to develop a proper strategy to use existing resources. It is not a matter calling for huge dollops of extra cash from the Treasury. The Government should channel the resources and energies already in our higher and further education system to the needs of adult and continuing education.
  6.18 pm
  Mr. Phillip Whitehead: Like the hon. Member for Ripon (Dr. Hampson) and most other hon. Members who have spoken, I support the argument for giving a greater priority for continuing and adult education. I heed the warnings of the hon. Member for Cambridge (Mr. Rhodes James) and other hon. Members who have warned against beating the drum for this priority to the disadvantage of other sections of the education system.
  We are indebted to the hon. Member for Hornchurch (Mr. Squire) for the way in which he introduced the motion, his exposition, and the tenor of the debate. It has not been a particularly partisan debate, but in every contribution it has been thoughtful.
  In the past we have had some Adjournment debates on the subject, many of them initiated by the hon. Member for Ealing, North (Mr. Greenway) and replied to by the hon. Member for Brent, North (Dr. Boyson), who then had ministerial responsibility for this matter. They did not get us very far—about as far as the distance from Ealing, North to Brent, North. That is probably not the fault of either the hon. Gentleman or the Minister. It is a fact—this has been central to many of the complaints raised—that exhortation from the DES has often been ignored by local authorities, which, because of the financial and political pressures under which they have been placed have seen a soft option in the cutting of adult education. It is to that sad story that I must turn.
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  No one should be in any doubt that when we talk about continuing adult education, the emphasis is on the word "education". One or two hon. Members have suggested that it was a leisure activity, which was a kind of frill, which should be snipped away, together with the sewing classes that an hon. Member's wife attended, but I believe that we are talking about the emphasis on education for life, and throughout life. I declare my interest and bias in that direction, as my wife has just graduated from the Open University, as my secretary was retrained by TOPs, and as I have the background of lecturer for the Workers' Educational Association. I would not need persuasion in that element of continuing training and retraining.
  Everyone has been agreed on the extent to which literacy and programmes for the disabled should be given priority in adult education. What is more at issue is the crisis of morale in the whole education service as a result of the cuts. As has been mentioned in Adjournment debates, the effects start near the base line. The cuts have been made not from a position of relative affluence but from Britain's position within the EEC, much nearer the bottom than the top of the scale. This has happened in a society in which comparatively few people have access to higher education and the relatively privileged circumstances that higher education brings and that have in some ways increased the inequalities in our society.
  Adult education and, most profoundly, the Open University have in recent years made a gallant attempt, against the odds, to rectify the situation. Many hon. Members have mentioned the anatomical exercise in metaphor by the hon. Member for Brent, North about cutting too near the bone. The Government are cracking open the marrow bones in the part of the world that I represent. Adult education is in a serious position, and an over-emphasis on cuts or on privatisation within the financing of the system can only make matters worse.
  Last Friday the report of Her Majesty's Inspectorate for 1980-81 was published. It does not seem to be available to hon. Members in the Vote Office. It was published at 3 o'clock on Friday afternoon, after we had left for the weekend. At that time it was not so easy to comment upon it. However, I have since been able to secure a copy. I refer the Minister to paragraph 70, which states, of further education:
  "Adult education remains the area most seriously affected by expenditure reductions. Forty-nine authorities have further reduced their allocations for general adult education. Of these authorities nine are in the lower level baseline group. No examples of increase have been recorded. There continue to be overall reductions and concentrations of programme throughout the country".
  One point that particularly concerned me and I found elsewhere in the report—it is a matter to which I shall return on the question of Open University applications, which we should also be considering—was the degree to which that fall-off in part-time courses in particular came from
  "those areas traditionally associated with heavy industry"—
  and traditionally associated also, at the moment, with the industrial recession.
  When the Minister appeared before the Select Committee before Christmas—I was there to listen to him—he talked about that reduction being demand-led. He spoke about people coming forward for non-advanced further education courses. I am not so sure. If we examine the statements that the Government made last March, in

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  reply to various protestations from both sides of the House, we see that the Secretary of State's expectations that the expenditure reductions
  "can be achieved by an increase in fees rather than a reduction in the number of adults benefiting from provision"—[Official Report, 10 June 1980; Vol. 986 c. 117.]
  has not been fulfilled in the event.
  It seems to me—and figures are emerging that will demonstrate this beyond peradventure—that there is now a major fall-off in provision and, therefore, also in applications, leading to a fall-off in fulfilment, also. This is happening in a society in which employment is reaching 2·5 million—a society that is facing the probability of deeply rooted, structural unemployment for many years to come, irrespective of which party is in power. That seems to me to indicate that we should, as a matter of priority, consider continuing education as a way of rectifying what will be a dramatic problem for our society, whatever happens.
  The reductions that were made last March—some of them in rather a panic—have cut a swathe through further education. Humberside announced the suspension of all non-vocational classes. West Glamorgan cut its provision by 60 per cent. Hampshire suspended all evening classes for three months. The examples of Cambridgeshire, Norfolk and East Sussex have already been mentioned. All of those examples have decimated the service in many parts of the country. Like the hon. Member for Putney (Mr. Mellor), I seriously query whether the action of an authority such as Humberside was legal in the terms of sections 7,41 and 42 of the 1944 Act.
  The latest figures from the National Institute of Adult Education, derived from its fees survey, carried out last October and November, although showing an enormous variation in the range of movement of those fees from an increase of 225 per cent. to a decrease of 36 per cent., indicated a mean increase of 51 per cent. The change in the number of students also varied, but the mean figure was a decrease of 11 per cent. Those figures have become available to us only during the past few days, but they indicate the way in which we are now moving as a consequence of the cuts. I am not yet used to speaking from the Opposition Front Bench. My experience is as a constituency Member of the Back Benches, and in that context I should remark that the East Midlands figures are particularly devastating to me, since I was involved with the WEA in that area.
  Mr. Gwilym Roberts: My hon. Friend mentioned the 11 per cent. fall in one year. Does he agree that the process is self-generating and that it is likely that in the current year the fall-off will be very much larger?
  Mr. Whitehead: My hon. Friend makes my point for me. The process is cumulative and the position will become worse over the next year. The figures are already showing that. In Nottinghamshire an area close to my heart, courses are down by 70 per cent. on the 1975
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  figures. Lincolnshire has halved its residential accommodation and cut its teacher training centres, and enrolment is now down by almost 25 per cent. In Derbyshire, where I live, there has been the early retirement of five full-time teachers and a heavy increase in the fees for old-age pensioners, as well as for other people. Leicestershire has already been referred to. There the community colleges, to which hon. Members have tonight rightly paid tribute, are now under threat.
  There is no saying how matters will move in the immediate future. We are not considering merely the inevitable consequences of the expenditure White Paper of March 1980, as they have worked through; we are talking about a further reduction in education expenditure, which the Secretary of State has conceded will take place over the coming year, with the assumed savings in school transport having to be found elsewhere in the education budget. Everyone fears that these cuts will also filter through into the standard of services in adult education.
  Mr. Greenway: Will the hon. Gentleman give way?
  Mr. Whitehead: I will not give way. I delayed the start of my speech to allow three Conservative Members and the hon. Gentleman to speak, and I must press ahead.
  I have mentioned my WEA antecedents. That leads me on to the question of the position of the responsible bodies—the university extra-mural departments and the association itself. In many areas the LEA funding of those bodies has suffered heavy cuts. The recent report from the WEA showed the deficits were looming in the areas most affected by the recession. Those areas are Scotland, the North-West, North Yorkshire and the West Midlands. That indicates that a North-South divide is beginning to be created in this subject.
  I turn next to the Open University. I have seen in the life of my family and of my wife the enormous increase in confidence and, therefore, in job potential, that results from a successful Open University course for people who failed the 11-plus and previously regarded themselves as educational drop-outs. The latest survey by Professor Naomi McIntosh and others at the Open University suggests that four out of five graduates believe that they have benefited from their courses personally and in terms of their jobs.
  The problem with Open University is that the increase in fees of 46 per cent. over the past year will seriously affect the number of applications and admissions. The hon. Member for Putney was rather too complacent, in an otherwise good speech, when he suggested that the Open University should take such increases of fees in its stride. The fact is that those increases are being levied upon people having to pay for their own education. Unlike other students, they are not in the position where they are made to carry up to only 20 per cent. of the total cost of expenditure, which I believe is the figure that the Department of Education and Science is looking for. With the latest increases that figure has been raised from about 10 per cent. to 12½ per cent. I do not think that we should move down that road when we consider the damage that is being done to the intake of the Open University.
  Last Wednesday I visited Milton Keynes and talked about its problems with a number of those responsible for admissions. Taking this week with the equivalent week in 1980, applications for the Open University are 2,400 down. There has been an 18 per cent. drop in applications

  61
  from the North of England. There has been a 9 per cent. increase in applications from the South. But this is the North-South divide; the declining northern industry against the still relatively affluent southlands, to which I have referred.
  It would be extremely serious if there were now to be a disincentive for those from the declining northern areas, where retraining is particularly necessary should the opportunities presented by, for example, the Open University courses be taken from them because the fees increase has forced the numbers down. It is also true that more people from the South than from the North are taking up the places offered.
  We should have a better basis for funding the Open University. I do not have time now to go into that, but I mention it in shorthand terms to the Minister. The whole House is still waiting for a proper response from the Department about the criticisms of the present funding of the Open University that were made in the report of the Select Committee on Education, Science and Arts. It would seem to be almost impossible for the Open University to budget for the sort of programmes needed for the next few years, particularly in building up courses in science and technology, if it is being given a grant only on an annual basis and is being told only some way into the financial year what money it can have and how it may use it.
  All that is damaging the adult education system. The Secretary of State has time and again said that:
  "cuts can be achieved without affecting the standard of education in our classrooms."
  I do not believe that that is so in adult education.
  We have now seen a devastation of the services available. Taking the three distinctions made by the hon. Member for Rugby (Mr. Pawsey), I see that as applying equally to the three categories he mentioned. Training for leisure, which has been somewhat disparagingly referred to in the debate, is now as important as more strictly vocational training, or the training of particularly disadvantaged groups who may now be singled out for favoured treatment in the overall depression and gloom. In the near future we shall have to face a society in which many peoply will be asked to accept early retirement and redundancy, with the implications of retraining and all the pressures involved in that, knowing that unless they can gain access to further education their lives, and not just their prospects, will wither on the vine. All hon. Members have a responsibility to see that that does not happen.
  The questions that I should like to put to the Minister are essentially related to the problems that I have tried to outline and the failure of successive Administrations to make sufficiently firm provision by updating the 1944 Act to put further education on a statutory basis. That would mean an amendment of the misleading phraseology of section 41(b), with its references to leisure time, organised cultural training, and so on. We should have a comprehensive definition of adult and continuing education.
  My hon. Friend the Member for Cannock (Mr. Roberts) referred to the possible new amendment that the National Association of Teachers in Further and Higher Education, among others, is discussing. Although it is not for us to consider what the precise form of the amendment should be, it is clear that the exhortation from well-intentioned Ministers has counted for very little with many of the local education authorities when cuts have been made.
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  During the Adjournment debate to which I listened before Christmas, the hon. Member for Brent, North assured his hon. Friend the Member for Ealing, North that his remarks about old-age pensioners would be taken seriously. Numbers of local education authorities and further education bodies are still charging full rates for old-age pensioners. There are many, such as mine in Derbyshire, which have put up the rates for old-age pensioners from one-third to one-half of the full fee. The full fee has also greatly increased. That sort of thing can happen. More importantly, we can see a whole range of cuts being made in services by various organisations where the Department is unable to do much about it. It was unable to raise a finger, had it wished to do so, in the case of Humberside. There should be a better definition in the legislation. Baroness Young was asked about this matter.
  In another place, in a recent debate on education, She said;
  "Section 41 of the Education Act 1944 gives every local authority the duty of securing, in accordance with the schemes of further education or at county colleges, the provision for its area and adequate facilities for further education".
  She went on:
  "It does not seem to me that in the present position any local authority can be said to be breaking their statutory obligations".— [Official Report, House of Lords, Vol. 405, c. 1156.]
  I could give her the names of three or four. The conclusion that I draw is either that she does not understand the statutory obligations or that the statutory obligations need to be changed. I do not mind which interpretation we take, but I would settle for the latter.
  The first question that I want to put to the Minister is whether, as his hon. Friends and many Labour Members have suggested, he sees a need to tighten up those sections of the 1944 Act.
  Secondly, in the light of the recent cuts in rate support grants, does he propose to announce as a general principle that there will be an exemption, in DES funding at least, of the adult education system from further cuts in the financial year 1981–82.
  As the hon. Member for Ripon suggested, it is possible for the Department through the direction that it applies to the funds under its control, to make an impact upon further education which, thus far, it has not done. I should like an undertaking on that basis.
  Further, I should like to ask about the funding of the Open University in the middle term, and whether further increases in Open University fees are proposed for the next financial year. It is the Open University's feeling, as it is mine, that the second round of cuts hurts much more than the first and will increase and aggravate the trends to which I have referred.
  Lastly, there are the institutions. I have mentioned the WEA. What will happen to the growing financial crisis in the WEA? The WEA deficits are growing to the point where in many areas they are equivalent to the funds in hand and the resources. What will happen to the organisation thereafter? Since the 1960s the proportion of support that the WEA has received from local education authorities has steadily and consistently fallen. In the present climate of attrition, the WEA is in an extremely serious financial plight. I should like to hear the Minister's suggestions.
  In a few minutes I have tried to indicate that we face a double divide in adult education. In one sense the divide has been coming upon us for some time. It was identified

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  in a book by Mee and Wiltshire some years ago, during the Labour Government, when they referred to a threat to the adult education system which they put thus:
  "There is a real danger that adult education may be split into two segments: a heavily subsidised compensatory service for the conspicuously disadvantaged and an unsubsidised, and therefore highly priced, leisure service for the well off."
  We have moved a few steps towards that division.
  I have tried to indicate two other divisions. The first is the division between those who can pay and those who cannot. That should not be the principle of access to adult education. The second is the division between the North and the South, which in this way, as in so many other ways under this Government, is dividing us into two nations today.
  6.40 pm
  The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): I congratulate the hon. Member for Derby, North (Mr. Whitehead) on what I think I am right in saying is his maiden speech at the Opposition Dispatch Box. The hon. Gentleman brings a degree of sincerity and understanding to these affairs, particularly the post-16 aspect, and the whole House will be grateful for his comments.
  I echo the hon. Gentleman's sentiments to my hon. Friend the Member for Hornchurch (Mr. Squire). If I may introduce a degree of parochial interest, I am sorry that he is moving out of my constituency. However, I am happy that he will be staying as a councillor and that he will be returned as the Member for Hornchurch at the next election.
  I hope that hon. Members on both sides will understand fully if I am unable to respond to all the points that have been made today, but I undertake to go through the debate tomorrow, or the day after, with my staff to ensure that some of those points are answered.
  This, as many hon. Members have said, has been a constructive debate. Generally, surprisingly, it has been remarkably free of partisan feeling, and I am grateful for that. I think that there is genuine all-party concern about the infrastructure that we have created for ourselves in adult and continuing education. Indeed, those of us who have been closely associated with these matters in recent years might consider that the whole of the education world has created for itself a difficult infrastructure of bodies and organisations.
  The hon. Member for Derby, North referred to Her Majesty's Inspector's report. I should like to clear up a misunderstanding. Some hon. Members referred to the report on the effects on education services in England of local authority expenditure policies in 1980–81. The draft of the document was sent to the ESGE at the end of last week for its comments and at the same time, consistent with the undertaking given by my right hon. and learned Friend, copies were made available to the Select Committee on Education, Science and Arts. I have also asked that a number of copies be placed in the Library of the House, in view of the interest expressed by those who have spoken in the debate. The final version of the report will be published next week after there has been an opportunity for comments by the ESGE to be considered by the inspectorate. Copies of the final version will be made available through the Vote Office as soon as the report is published.
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  We have had a wide-ranging debate. Adult education, in general, covers an enormous range. It is difficult to be too specific. However, I am pleased that the subject has been raised on previous occasions by my hon. Friends the Members for Loughborough (Mr. Dorrell) and for Ealing, North (Mr. Greenway). I should like to pick out some of the points made today by hon. Members on both sides.
  My hon. Friend the Member for Cambridge (Mr. Rhodes James) mentioned that it is a sad fact that a proportion—far too high a proportion—of this country's adult population lack even the most basic educational skills which we would normally expect pupils to have acquired before they leave school. What is worse, despite our best efforts, this group, which may have missed, or been unable to take full advantage of, educational opportunities at an earlier stage, is constantly being augmented by current school leavers. The hon. Member for Hammersmith, North (Mr. Soley) touched on his experience in this area.
  Of these skills, the one first identified was illiteracy. One of the success stories of adult education in recent years—it has been referred to by hon. Members on both sides—has been the drive to remedy this lack of skill. About 70,000 people each year have re-entered education to receive help to enable them to attain this skill. I hope that this will acknowledge one point mentioned by my hon. Friend the Member for Hornchurch. It has certainly enabled people to attain the most basic skills without which they could not function adequately in our society and would have difficulty in even stepping on to, let alone proceeding up, the educational ladder.
  If there is an element of gloom among some Opposition Members, we must acknowledge the tremendous work done by the adult education service throughout the country, whatever the financial problems facing the United Kingdom, and indeed most Western countries, at the moment. Work with adult illiterates uncovered a wide range of other basic educational skills which needed to be developed not only to provide a springboard for entry to further education, but to enable people to cope with everyday life, and particularly to apply for or remain in employment. The Advisory Council for Adult and Continuing Education drew attention to these points in its report "A Strategy for the Basic Education for Adults".
  A number of hon. Members have referred to the cuts in expenditure. It is worth putting on record that some authorities have proposed very stringent measures. However, so far as I am aware, no authority has ceased completely to provide for adult education, nor made all staff redundant. The pressure of public opinion has caused authorities to revise their plans and to retain some base. It is certainly right for me to repeat words which my hon. Friend has quoted on previous occasions in Adjournment debates. Local authorities have to plan in a consistent way. They have to look at every responsibility within the education service and not take the scalpel immediately without looking at the all-important adult education.
  The opportunities for re-entry into the education system provided by adult education at basic levels and for vocational purposes do not represent the complete picture. Much of adult education is concerned with personal fulfilment, and it provides opportunities at all levels for people to take up education again, to pursue interests started at school or to develop new ones, whether in the

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  creative arts, practical hobbies, intellectual or physical pursuits. The range offered by adult education is immense in terms of both subjects and level.
  A number of hon. Members referred to open and distance learning and to the Open University. I want briefly to refer to those aspects. I suppose it is inevitable that more use can be made of broadcasting and distance learning techniques. I should think that the hon. Member for Derby, North, with his experience before he entered the House, would be able to bring some experience to bear on this subject.
  I believe that the fourth television channel offers a golden opportunity for many people to be drawn into further adult education in the home. An independent fourth channel should offer opportunities to expand the provision of education to a very wide audience. I hope that it will exploit the possibilities as fully as possible, co-ordinating carefully, where appropriate, with employers, local voluntary organisations, and so on, so that the most effective use is made of broadcast material, and that students, teachers and employers will be prepared to exploit these additional opportunities.
  My hon. Friend the Member for Ealing, North referred to the role of the voluntary sector. Voluntary bodies, such as community associations, women's institutes and the Workers Educational Association—I shall come to that later—and a myriad of other associations and clubs have much to offer in adult education. Their flexibility and responsiveness to need can be very valuable, and their work can help many that the local education authority cannot easily reach or afford to cater for. While they are not a cheap alternative to local education authority provision, I believe that the work of the voluntary bodies needs to be effectively co-ordinated. They often rely on local education authorities for accommodation and other facilities, for essential training of staff and for financial support.
  Several hon. Members referred to the statutory basis and whether we envisage any amendment to the 1944 Act. The Act refers only in general terms to the provision of adequate facilities, but there is no generally accepted minimum standard for adult education provision. It is for local authorities, in the light of their own detailed knowledge, to determine that level of provision.
  The whole legal basis for further education was mentioned by a number of hon. Members—in particular, the hon. Member for Cannock (Mr. Roberts) and my hon. Friend the Member for Ripon (Dr. Hampson). Following the Government's response to the Warnock report, an integral part of my Department's functions is to review the role and legal basis for further education, which includes adult education. I hope that that will answer one of the questions that have been posed today.
  I must issue a word of caution. There are dangers in attempting to provide too exhaustive a list of aspects of adult education. It is developing at such a rate that such a list could become rigid, inflexible and limiting. Hon. Gentlemen should understand that the definition of a minimum could give rise to reduced rather than to increased provision. We are prepared to consider in detail the whole legal basis of further education, including adult education, but it is too early for me to indicate today what the likely outcome will be.
  I want to say a word about the Government's role. My right hon. and learned Friend and my hon Friend have indicated in speeches in this Chamber and elsewhere some
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  of the resources on which LEAs can draw in providing adult education. They have pointed to the need to co-ordinate those resources effectively to provide a healthy base, capable of growth to meet the many educational needs, known and still being identified, of adults in this country.
  We are continuing to fund the Advisory Council for Adult and Continuing Education for a further three years in order to complete the important twin remits of comsidering the most effective deployment of resources available for this area and of developing policies for its future development. If we are to progress, we shall have to adopt priorities. That does not mean that we ignore other areas; we are simply trying to be practical. However desirable many aspects of adult and continuing education may be, priority in allocating resources at a time when the country is in urgent need of economic recovery is bound to be given to those areas of adult education that are particularly relevant to employment. I hope that what I am saying will strike a chord with the many hon. Gentlemen who have mentioned the matter today.
  Priority must be given to acquiring literacy and basic skills, and we have indicated that clearly by our continued support and stimulus for developments through a Government-financed central agency. The Government have already funded the important work of the Adult Literacy Resource Agency and the Adult Literacy Unit. The Adult Literacy Unit ceased to operate in March 1980. Excellent work has been done by both bodies, but it is clear that they and the work that they have stimulated have by no means cleared the problem.
  A conservative estimate suggests that there are about 2 million adult illiterates, and this number is fuelled continuously by illiterate school leavers. Up to 70,000 a year now receive tuition, but many drop in and out of class over a period of years, so it is impossible to calculate a cumulative total of people who have been helped to overcome the problem.
  There is much still to do. Therefore, we are continuing to give some central support. The work in this respect has helped to identify a wide range of basic education which stemmed from it and needed to be developed. Illiterates need further help after learning to read and write to enable them plug into further educational opportunities and to cope with the complexities of our society. Otherwise, they are left dangling without further support.
  The report of the Advisory Council for Adult and Continuing Education identified a wide range of different groups—ethnic minorities, the handicapped, prisoners, ex-offenders—for different stages of life when faced with particular problems—adolescence, new parenthood, preretirement—and for different skills and purposes—mathematical and number and life skills, including domestic management, work-related knowledge and knowledge of the main governmental and social agencies. There is a need to continue work in literacy and to expand it into related areas. At least 3 million are in need of help in these areas.
  The Adult Literacy and Basic Skills Unit builds on the foundations and expertise of the Adult Literacy Unit. I am happy to say that we have set up that unit. It provides a central focus for work in literacy, numeracy and related basic skills. It sponsors basic development projects in collaboration with both voluntary and statutory bodies and helps innovation by providing new methods, materials, approaches and clients, and so on. It helps to develop

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  teaching materials. It provides a consultancy and advice service. It helps to develop publicity and recruitment methods to attract students in need. It also stimulates and. provides teacher training in this field. That is an important requirement. Finally, it publishes information, handbooks, news letters to assist in training, and it raises the quality of provision and keeps individual workers in touch with developments.
  The importance that we attach to this unit indicates the support that we seek to give to adult education generally. We propose to maintain in real terms the present level of funding for the responsible bodies—WEA districts and the university extra-mural departments. The work done is comparatively small, but it is an integral part of the provision for adult education locally. We hope also to maintain in real terms the level of funding for national associations, such as the National Institute for Adult Education, and to continue with support for bodies such as the National Federation of Townswomen's Guilds and the National Federation of Women's Institutes, both of which contribute in this area.
  Many matters were raised during the debate. I apologise if I have not dealt with some of them, but time is the problem. I undertake to write to those hon. Gentlemen who raised important matters.
  I believe that we have recognised the potential contribution of distance learning that I mentioned earlier. Many hon. Members referred to the role of the Open University. Clearly, the Open University makes an important contribution to continuing education, and it still receives funding of about 87–5 per cent. from Government funds. It is important in three ways. First, it is a second chance institution of higher education. There were nearly 61,000 registered undergraduate students in 1979, and 5,400 graduated in 1979, bringing the grand total of graduates since its inception to about 39,000. Out of more than 58,000 students following undergraduate courses in 1979, about 74 per cent. had no formal academic qualifications, 13 per. had completed their full-time education at the age 15 or under, and 18 per cent. at 16.
  The second importance of the Open University is as a provider of vocational post-experience courses, both on its own and in collaboration with others. Its third importance is as an innovator of educational technology and as a centre of expertise in multi-media distance learning and teaching techniques.
  The hon. Member for Derby, North asked about future funding of the Open University. I undertake to write to him on this and the related questions that he asked. Certainly, I can give no commitment now.
  On the subject of the rate support grant for 1981–82, the hon. Gentleman would not expect me to give him a reply from the Dispatch Box this evening and say what we might speculate about. However, I have taken note of what he said, and I shall make sure that he receives a form of acknowledgement. He may not be very happy with the acknowledgement, but I shall ensure that he receives some information from my Department.
  Mr. Whitehead: One thing should be put on record today, and that is whether or not the Minister was shaken by the figure that I gave of the falling off in applications for the Open University.
  Mr. Macfarlane: We had a recent Adjournment debate on that matter, and I do not want to go over old ground. I take the point that the hon. Gentleman makes. Our policy is to ensure that the heavy continuing public investment in the Open University—about £45½ million in 1980—is fully utilised in the national interest. Its post-experience course programme is regarded as the major growth area for exploitation by all concerned with vocational updating and retraining.
  Another matter that was dealt with by hon. Members on both sides was our paper on "Continuing Education: post-experience vocational provision for those in employment". It is a matter about which many hon. Gentlemen feel deeply, and I share their anxiety about the need to develop and design vocational provision. That paper put forward for discussion a course of action designed to facilitate a more widespread response to the needs of industry. My hon. Friend the Member for Rugby (Mr. Pawsey) mentioned this, and I am grateful to him for what he said. That paper put forward a widespread response to the needs of industry and commerce for updating and refresher work, and for the acquisition of new skills—whether technical, technological or managerial—that are needed to cope with different responsibilities in a company or firm.
  Despite all the problems, the Government have been accused of not doing enough for adult education. But neither we nor the local education authorities can succeed alone in securing the future of adult education. It requires a change of attitude among all potential students, employers, providers and teachers if any significant progress is to be achieved. I acknowledge the important role that all employers have to play. The role of industry, business and commerce must wake up to the fast-changing pattern of need for retraining, perhaps once, twice or three times in the lifetime of people who left school and education 15 years ago.
  I am convinced that there is much that has been successful in recent years, but I urge the House to understand the complex infrastructure through which the Department of Education and Science has, understandably, to work. The 1944 Act devolved powers to the 105 local education authorities. Somehow, my Department, working with all those interested bodies, must come to some detailed arrangement whereby we can work together. It is too important a subject to be left to one group. It is, however, the most complex and diverse of all sectors of education. I think that Opposition Members will understand that. There is no one solution, and there is no panacea. We are faced with the need to expand, strengthen and improve the service at a time of severe economic constraint—
  It being Seven o'clock, the debate stood adjourned.

Orders of the Day

  Gas Levy Bill
  Order for Second Reading read.
  7 pm
  The Secretary of State for Energy (Mr. David Howell): I beg to move. That the Bill be now read a Second time.
  The House will recall that on 8 May last year I announced that the Government had decided in principle to impose a levy on the British Gas Corporation in respect of gas purchased from the United Kingdom continental shelf and sold to the corporation under contracts which were not subject to petroleum revenue tax. I should like to explain the background to that decision.
  Natural gas was first discovered under the North Sea in 1965. The Gas Council and its successor, the British Gas Corporation, contracted to buy gas from the newly discovered fields, first in the southern basin, off the coast of East Anglia, and later from more northerly waters. Virtually all the gas that at present comes ashore from the United Kingdom continental shelf is supplied to the British Gas Corporation by the producers under long-term contracts signed before the oil price explosion of 1973–74, let alone the oil price explosion of 1979–80. In consequence, the prices currently paid for gas from these fields reflect the prices and the escalation clauses agreed upon in a quite different era of cheap energy which no longer exists and which I do not believe will return.
  In fact, the average basic cost to British Gas of all its gas purchases in the current financial year will be about 8p a therm. That is a figure which includes the much more expensive northern basin gas and Norwegian imports. Eight pence a therm as the average cost of gas has to be compared with prices more, and in some cases considerably more, than double this figure now being not merely sought but achieved by producers for new supplies or renegotiated contracts in recent international deals. That these much higher prices are being charged, together with provisions that they should be raised substantially further in line with subsequent oil price increases, is a reflection of the massive demand for gas supplies by the European utilities that are scrambling to acquire them from the North Sea and are prepared to pay these very much higher prices.
  So cheap gas is a rapidly declining asset. New supplies from the more distant northern waters will cost anything up to 10 times—1,000 per cent.— the prices originally paid for gas under the old contracts from the southern basin of the North Sea. Prices must reflect the costs of supply on a continuing basis. Any company which ignored that principle would go out of business. If we do not follow that principle for pricing our gas, we run a number of very serious risks, details of which I should like to share with the House.
  Mr. Frank Haynes: On the question of the clawback over the three-year period, as stated in the Bill, will the Secretary of State indicate clearly where the money will go? Bearing in mind the amount of money that the consumer is expected to pay and that that money will not be left for the industry to expand to provide the proper
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  service, where will the £1,300 million mentioned in the Bill be going? What will the Government be doing with this money which is to be clawed back from consumers?
  Mr. Howell: Perhaps it was a mistake to give way at that point, because I shall be covering in great detail the whole position posed by the Bill and meeting some of the hon. Gentleman's questions.
  Unless we follow this principle for pricing our gas, we run very serious risks. The first risk is that demand will grow more rapidly than supply, so that industry could again find itself short of gas, as it did two winters ago.
  Mr. Haynes: On a point of order, Mr. Deputy Speaker.[Interruption.] What is all the bawling for?
  I asked a specific question of the Secretary of State, Mr. Deputy Speaker. I am entitled to ask a question. I accept the reaction from the Conservative Benches, but surely I should be told, for the benefit of the people of this nation, where the money is going. They are entitled to know that.
  Mr. Deputy Speaker (Mr. Richard Crawshaw): The hon. Gentleman is obviously entitled to intervene and to ask a question, but the Minister has hardly started his speech on the Bill. He has not really started to explain the Bill.
  Mr. Howell: The hon. Member is also entitled to an answer. Perhaps he will show a little patience and courtesy.
  Secondly, consumers will switch to gas, based on a thoroughly misleading belief about price, only to find—this is the danger—that in the following years the price of gas will jump by percentages that make anything that we have experienced so far look small—difficult though that may be. Thirdly, meanwhile, new gas supplies will obviously not be forthcoming, because the price will not be there to attract the new reservoirs to be opened and invested in. Finally, we run the risk of wasting what is available because the price does not reflect the gas's true value.
  That final point was put very clearly, and rather well, in the Labour Government's Green Paper on energy prices, in which they set out clearly the obvious proposition that the gas industry's prices
  "need to be related to the expected cost of future supplies, rather than to its historic costs."
  They went on to say that this could give rise to large surpluses—as indeed it is doing—and that decisions would be needed on the use to which these surpluses should be put, although they were not able to get around to making those decisions.
  It was considerations of this kind which lay behind the Government's decision a year ago to set the British Gas Corporation a new three-year financial target. The target was based on the corporation's and the Government's belief in charging prices based on sensible economic principles—or, at least, moving towards them. For domestic gas the plan was, and is, to move towards the economic level at the rate of 10 per cent. a year, over and above the rate of inflation. For industrial gas the target is founded on the corporation's own policy of selling gas to industrial consumers at prices broadly related to those of the competing oil products.
  As I have indicated from the Green Paper as well as in what I have said today, it was always recognised that the effect of this policy of economic pricing was bound to result in a period of big windfall profits accruing to British

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  Gas. This is because it continues to benefit from supplies of gas from the southern basin on contracts negotiated on terms and at prices agreed many years ago. Last year the corporation's pre-tax profits were £425 million. Within a year or two, they would be, without the approval of the House for this Bill, over £1,000 million—well in excess of the corporation's current needs, even given the very substantial capital investment programme now under way.
  The purpose of the proposed gas levy is to transfer this windfall profit from the corporation to the Exchequer so that the Government and this House are then free to debate and decide where the benefits should go. In a similar way, our oil taxation regime is intended to remove the windfall gain resulting from rising international oil prices from the producers for the benefit of the community generally. By removal of the unearned windfall, the corporation will be left in a more normal commercial situation. This will help to encourage it to maintain standards of efficiency which would otherwise have been at risk.
  Mr. T. H. H. Skeet: I have been following my right hon. Friend's argument. He wants a transfer from the British Gas Corporation to the Treasury. Why does he not do it in the Finance Bill? We could then have killed two birds with one stone. Why have two Bills?
  Mr. Howell: I shall explain later, when discussing the impact on the British Gas Cororation, that this is not a tax on profits. It is a levy on costs. I shall explain the pattern by which that is achieved.
  The Bill proposes a levy on the British Gas Corporation's purchases of gas that are at present exempt from petroleum revenue tax. This tax was introduced under the Oil Taxation Act 1975. Section 10 of that Act exempted from PRT gas sold to the corporation under contracts made before the end of June 1975. The reason for this exemption was, in essence, that the price and escalation provisions of those contracts prevented any substantial windfall gain accruing to the producers. Instead, the windfall resulting from rising energy prices in respect of exempt gas has accrued, and is accruing, to the British Gas Corporation. It is clearly appropriate for the levy to be restricted to the corporation's purchases of gas from reservoirs in the United Kingdom continental shelf under contracts not subject to PRT.
  By imposing the levy on the corporation in respect of gas taken under old contracts, we avoid both introducing a new tax regime on the producers and disturbing existing contractual relationships.
  I have indicated, in responding to my hon. Friend's intervention, that the gas levy is not a crude profits tax. Taxing profits at a high rate could act as a disincentive to efficiency and could encourage extravagance in expenditure. The levy is a charge on the corporation's gas purchases, fixed for three years ahead to cover the period of the current financial target and limited to PRT-exempt gas. Such gas at present comprises the bulk of the corporation's supplies, but by the early years of the next decade this proportion will have fallen very considerably. So the impact of the levy on PRT-exempt gas will decline as this cheap gas runs out.
  Let me make it clear, too, that the levy will make no difference to what happens to prices. The rates of the levy specified in the Bill have been set to be consistent with the pricing policy that I outlined earlier. Although, as the
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  preamble indicates, the Bill takes the form of a Ways and Means measure, intended to make an addition to the public revenue, in reality neither the purpose nor the effect of the Bill would be to draw additional moneys into the public sector, only into the Exchequer. In the absence of the gas levy, the corporation's surplus cash would continue to be deposited with the national loans fund and would continue to bear interest. For the reasons I have already indicated, it would be wrong to allow such surpluses to continue to accumulate. I think that that was recognised in the Green Paper to which I have referred. The effect of the Bill will be to transfer these cash surpluses from the corporation permanently to the Exchequer.
  Mr. Dick Douglas: In view of the length of time that the Secretary of State proposes that the levy should run—three years—what is his estimate of the length of life of the contracts which might be applicable to the levy in future years? How long will they have to run?
  Mr. Howell: They will run down at different speeds. If it helps the hon. Gentleman, we would move from about two-thirds of our gas from the tax-exempt contracts down to less than 40 per cent. in the next eight or nine years.
  I should now like to turn to the Bill itself. Clause 1 provides, in effect that for the current year, 1980–81, and subsequent years a levy shall be payable in respect of gas purchased by the corporation from gas fields or reservoirs on the United Kingdom continental shelf under contracts which are at present not subject to PRT.
  Clause 2 specifies the rate of the levy for the three financial years 1980–81 to 1982–83. This is specified at lp, 3p and 5p per therm for each of those three years. A rising rate of levy is consistent with the movement towards economic prices in the domestic sector and with likely movements in oil prices. On the basis of the most recent financial forecasts of the BGC, the amounts of levy payable are expected to be about £130 million in 1980–81, £420 million in 1981–82 and £750 million in 1982–83. Post-levy profits in the current year are forecast to be in the region of £300 million with expectation of similar outturns in the following years.
  The precise rate of the levy inevitably contains an element of judgment. The rates proposed in the Bill represent a sensible balance, reflecting the need both to remove windfall gains from British Gas while enabling the corporation to operate viably in a commercial context.
  Clause 2 enables me, with the approval of the Treasury, to vary by order, subject to affirmative resolution of this House, the rates of levy set out in the Bill. This power is a precaution against unexpected changes in circumstances, while recognising the merits of leaving the levy unchanged so far as possible so that British Gas can have a settled financial framework within which to work. This framework comprises the financial target and the levy, both currently proposed for the three-year period 1980–81 to 1982–83.
  For subsequent years, the intention is that the rate of levy should be specified by order, again subject to affirmative resolution. No decisions have been taken in respect of the rate of levy appropriate for subsequent periods.
  Clause 3 deals with the manner and timing of payments of the levy. We intend that quarterly instalments should be paid in arrears.

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  Clause 4 covers the situation where gas is extracted and charged for levy or for PRT, and then stored in a PRT-exempt reservoir. The aim here is to ensure that no stored gas should be "double-charged".
  Clause 5 deals with measuring and testing equipment. The intention in general is that, where British Gas is purchasing gas at arm's length from producers, the levy will be based on the corporation's audited returns. But where the corporation or one of its own subsidiaries is responsible for producing gas liable to the levy, it may be necessary to specify and examine the metering equipment used to measure the number of therms of gas taken. Clause 5 provides the necessary powers.
  Clause 6 specifies that the sums received by the Secretary of State in respect of the levy shall be paid into the Consolidated Fund. An account, certified by the Comptroller and Auditor General, shall be laid before Parliament each year.
  That is the detail of the clause. I turn now to the effect of the levy on the financial position of the British Gas Corporation. This is obviously important. When I announced our intention to impose the levy, I said that the corporation's three-year financial target would be modified to compensate for it so that there would be no effect on gas prices. As I announced last week, in a written reply to my hon. Friend the Member for Derbyshire, South-East (Mr. Rost), I have agreed with British Gas a revised finacial target, expressed as an average annual rate of return to be achieved over the period April 1980 to March 1983, of 3½ percent. on net assets valued at current cost. This target is related to current cost operating profit after taking account of depreciation but before interest and tax. This revised target, which is subject to passage of this Bill, reflects the forecast effects of the proposed rates of levy and of the new current cost accounting standard on the target of 9 per cent. that was set on 16 January 1980.
  A return of 3½ per cent. on revalued assets would be appropriate, in the Government's view, for an industry such as British Gas, taking into account the nature of the business and the sort of return made by industry generally, both in the past and at present.
  The corporation's post-levy profits over the three-year period, together with the provision for depreciation, should be sufficient to finance its current major capital investment programme which is currently under way, aimed at improving gas supplies to industrial and domestic consumers and providing secure supplies to more of those seeking them.
  To conclude, let me state again the main elements of the policy behind the Bill. First, the Government believe, as does the industry, as do those outside who have examined the matter, and as did the Labour Government, that the aim should be for prices to be economic. That means that prices must reflect: the costs of bringing forward new supplies, not the costs of old supplies under historically cheap contracts. Only in this way will supply and demand be kept in reasonable balance and sensible investment and consumption decisions be made. Cheap gas is no use if there is no gas to be cheap and if industry and jobs go begging.
  Second, this approach, incidentally, results in big windfall gains accruing to the British Gas Corporation. It makes no sense that these gains should be held in reserve solely for the ultimate use of the corporation. It makes every sense that they should be at the disposal of the Exchequer.
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  Third, the proposed gas levy on PRT-exempted gas is a simple, efficient and appropriate means for removing the windfall gain for the benefit of the nation as a whole and without affecting gas prices.
  7.20 pm
  Mr. Merlyn Rees: We are grateful to the Secretary of State for explaining the technical clauses.. It is only in the past two or three months that I have moved into an economic-industrial sector. I have visited and listened but talked very little to those involved in the energy industry outside the House. I must report a sense of frustration. Energy matters are discussed in symposia throughout Britain, but rarely on the Floor of the House. For example, everyone except the House is talking about the problems of the coal industry.
  I shall relate some general matters to what arises from the Bill. The right hon. Gentleman talked about investment. He said that the money within the charge of the British Gas Corporation was for the purpose of investment, but we have heard little about investment. It has been mentioned purely in Gladstonian revenue terms. The right hon. Gentleman talked about the Green Paper of the Labour Government, which observed that there would be surpluses. That paper discussed the uses to which the money would be put. The right hon. Gentleman said that the House would be free to debate the uses to which the money should be put. That is an issue that should be discussed during the debate.
  I take up the procedural matter that was raised by the hon. Member for Bedford (Mr. Skeet). A Ways and Means motion was resolved on 3–4 February. I presume that that was done because of the Budget-taxation nature of the proposals. The moneys went into the Consolidated Fund with all the other moneys that go into that fund. I understood that the resolution was unamendable, by its very nature. I hope that that procedure will not prevent us from discussing and trying to amend the nature of the levy and the amount of the money.
  The gas industry is most successful. It has transformed itself. It is highly productive. In the short time that I have been involved in energy matters there have been great changes. Those involved in the corporation are proud of their industry, as people always are when they are in a successful industry. However, it is an industry that will have to be ready to find alternative supplies and alternative sources of gas in future.
  If the corporation were a joint stock limited liability company, having to look forward five, 10, 15 or 20 years in determining its financial policy, it would have to put aside money for the long-term future. It is a nationalised monopoly and it has to adopt the same approach. We say that it will be about 20 years—I do not know whether the estimate is right—before the gas industry will have to find alternative supplies in the United Kingdom. It is necessary to engage in research now. Are there sufficient moneys in the corporation to enable the necessary fundamental research and development to take place, when account is taken of the moneys that will be taken from it by the levy?
  Mr. Tim Eggar: Does the right hon. Gentleman use the same argument when he discusses PRT on oil companies?
  Mr. Rees: I do not. I understand the hon. Gentleman's argument. When an oil company is arguing with the

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  Government about the rate of PRT, I, for one, would consider more sympathetically its representations if they were based on ploughing back profits for the future rather than distributed profits. It is perfectly proper for a company to think of the long-term future.
  The annual report refers to that. It refers to coal gasification and a development centre on the North-East Coast and another at Killingholme, on Humberside. Are there enough resources for the corporation to do its job properly? The money for future projects will have to come from profits, namely, the surplus within industry. Whatever else economic history shows, it shows that industrial capital is its own progenitor. I want to be sure that the corporation has sufficient reserves to undertake the task that it has to meet in the next decade. If the levy makes it more difficult for the corporation to do that, we should all be concerned.
  In another place on 22 October we were reminded by Lord Strathcona that the profits of the corporation are needed
  "to finance the very substantial British Gas capital programme which is around £4,000 million over the next four years."
  Has the levy taken that into account, despite the fact that it is an equation that uses the former cash limit? Lord Strathcona observed that the programme
  "is aimed at strengthening the gas transmission, distribution and storage system and bringing ashore some of the expensive additional supplies."—[Official Report, House of Lords, 22 October 1981; Vol. 413, c. 2034.]
  I read the report of the Select Committee on European Matters—the Select Committee of another place—that was printed on 16 December. I was interested to read that Lord Kearton argued that not enough drilling was being done to determine the extent of gas reserves, which he thought were being underestimated. If the reserves of money capital are not available to the corporation because they have been taken by the Governmentc the corporation will have to return to borrowing. At present it is earning such surpluses that the Government consider that it is proper to take part of them. What will happen when it needs to borrow? When that happens it will be said, on a political level, "Here is another industry asking for money". What will be said if it asks for subsidies?
  Mr. Skeet: It will be self-financing.
  Mr. Rees: If that is so, and the money is raised elsewhere, that is one thing, but I am entitled to ask whether the levy that is placed on the corporation will have an effect on future financing. The 1979–80 accounts show quite clearly that the corporation's total profit was £466·3 million. The accounts explain that the corporation met its financial target, and refer to the Secretary of State's words about future cash limits.
  One part of the financial and economic framework within which the corporation operates, as with other nationalised industries, is the external financial limit. All outstanding financial advances were repaid early in 1980. It is said in the accounts that the Government required the corporation to repay a further £190 million, thereby increasing the external financial limit for 1979–80 to minus £499 million. It is explained that two-thirds of the £190 million originated from internal sources and that some areas of planned expenditure had to be deferred. Was that necessary capital investment that had to be deferred, and does it affect the long-term position of the corporation?
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  The price increases a year or two ago were investigated by the Price Commission. The corporation's proposals were approved. What about Government policy? In general, the Government say that they are non-interventionist, but with the corporation they are interventionist. The report states:
  "While details of the tariff changes necessary to achieve the financial target for the three years April 1980 to March 1983 are a matter for British Gas, the Government has informed the Corporation that it had in mind the importance of correcting the underpricing of domestic gas and of narrowing the gap between the price to the domestic consumer and that to industry. The Secretary of State stated, in connection with his announcement of the new financial target, that the Government expected domestic gas prices to increase in 1980–81 by 10 per cent. over and above the rate of inflation, followed by comparable real increases in the following two years."
  The report spells out the increases that follow.
  Soon, by Government fiat the price of gas will go up again. In The Times on Saturday the Government announced that April's increase will be the third in 12 months, and that domestic prices will rise by about 15 per cent. from April, with a further 10 percent. increase from October.
  The total 25 per cent. increase is a Government decision. It must be justified at a time of recession. What is done in the upturn from the slump or in the normal boom and slump which seems to have disappeared, is one matter. If prices are increased in a classical slump, less money is available to the community for the necessary reflation. In the context of the Bill, profits will rise, and that is Government policy. I listened to the Prime Minister on the Brian Walden show on 1 February, talking about monopolies. She said that even the nationalised industries could not continue to put up prices. In this instance the Government are putting up prices.
  The moneys for the levy are to be paid into the Consolidated Fund. It is incredible that moneys paid to the Government from productive industry should be treated as pure revenue, in the old-fashioned sense of the term. It works both ways. It is also incredible that loans to industry should come from the Consolidated Fund. It is not the vehicle for the judgments involved. The source is suspect in that respect.
  Government Members talk often of the judgments that have to be made about whether money in the private sector should be used. I understand their thoughts. They talk about the return on capital and its relationship to the rate of interest and the minimum lending rate. When money comes out of the Consolidated Fund, or goes into it, it is not a source of revenue, nor is it where the money should go when right judgments have to be made.
  That is relevant to the Bill, because of the nature of the legislative process. The money is to go into the Consolidated Fund, with everything else. At least the Consolidated Fund should be divided into two, so that the division is clear. It should be clear in the Budget which money has come from industry and which has gone to industry. The money received from industry, including North Sea oil, should be paid into an investment account. We can argue at some other time whether that should involve an investment bank. The name matters, because judgments have to be made about the use of the money and about the benefit that it brings to the nation in the long term.
  There is concern about the treatment of nationalised industries' money, whether the payments are in or out.

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  There is talk of subsidisation, which is the wrong approach to investment industries, which, by their nature, cannot be treated as though they are normal types of company.
  I turn to the question of cash limits. The money that is to go into the Consolidated Fund is taken out of the cash limit—the external finance limit. It has to be adjusted to take the levy into account. Sir Leslie Murphy, amongst others, has talked recently about the problem and the effect of cash limits on nationalised industries. He said that there had been a catastrophic effect on capital formation in the public sector, and that the justification was to reduce the public sector borrowing requirement.
  Time and again in recent weeks, people that I have met in industry—people not of my political persuasion—have questioned the public sector borrowing requirement and the treating of investment in industry as if it were normal expenditure by the Government. In an article in The Guardian, Sir Leslie said:
  "In fact, all nationalised industries are in need of huge capital expenditure. The argument for the cuts is, of course, to reduce the Public Sector Borrowing Requirement; but it seems nonsensical to lump together revenue items, such as social security payments, and capital expenditure on wealth producing assets for purposes of arriving at PSBR.
  Mr. Peter Rost: I am in sympathy with the right hon. Gentleman's argument, but does he agree that there is a difficulty in drawing the line between revenue expenditure and capital expenditure in relation to spending Government money? For example, how would he categorise the support that the Government have given to the British Steel Corporation and British Leyland? Is that capital expenditure, social security, or subsidy?
  Mr. Rees: It is right to question what proportion of Government money is investment, in the classical sense, to keep the motor car industry going. Investment in the British Steel Corporation is almost entirely in order to maintain an investment industry. There is a need for investment in such industries. I do not pretend to be an accountant, but to put the levies in the Consolidated Fund is the wrong approach.
  In the short debate that we had recently the Minister said of the levy:
  "It will not affect the pricing policy of the corporation."— [Official Report, 3 February 1981, Vol. 998, col. 261.]
  That appears not to be the view of the corporation. In its view the implementation of the levy will lead to an increase after five years. I hesitate to say that it will be 5p, although that figure goes round in my mind. What I am sure is that the chairman in his report to the employees said
  "It is inevitable that this new tax will lead to higher gas prices within the next few years."
  The Minister the other night and the Secretary of State today said that it will not increase prices, but the chairman of the Gas Corporation thought differently in the document sent to workers.
  In June 1980 the cash limit was 9 per cent. and prices were to go up. The cash limit has changed twice since then. It was announced on 4 February that from April 1980 to March 1983 the revised financial target was 3½ percent. on net assets valued on the new current cost basis, which was introduced since the first cash limit was set. The revision reflects the forecast effects of the proposed rates of levy and of the new current cost occounting. What happens if, after three years, the levy is still there? Surely it is a cost to the corporation that will affect prices.
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  I did not understand the Secretary of State's reply about the length of contracts. The question referred to a period of three years. The Secretary of State mentioned seven, eight or nine years. We must be clear. The Government say one thing and the British Gas Corporation another.
  The Bill is about the financing of the corporation. It is a tax measure that affects the amount of money available for all the purposes for which an industrial concern needs money. It also, therefore, affects prices. On Friday I met representatives of the chamber of commerce for Yorkshire and Humberside. They brought to my notice a document called "Utility Newsbriefs", with the headline:
  "British firms still pay top world prices for natural gas."
  The Government and the CBI take different views of gas prices in different parts of the world. A task force is to report on the matter just before or just after the Budget. It may make a recommendation on energy prices. By this measure we are taking over£l billion from the British Gas Corporation over the next three years, which will leave it precious little room for freedom of action.
  The levy can be paid only because the corporation raises charges. The representatives of the chambers of commerce also state that it is common ground not only that our industry pays more for its energy supplies than our overseas competitors but that the corporation is secretly negotiating large gas contracts. A user will negotiate a contract believing that he has done well. Months later he may discover that someone else in the area has paid a good deal less. They argue that contract prices in such nationalised industries should be generally known.
  The money from the corporation will go to the Consolidated Fund. What about the finance for the £700 million pipeline? A consortium is involved. The corporation recently stated that onshore and offshore work was proceeding according to schedule. The aim is to have the first gas ashore by 1983–84. It has been put to me that if the matter had been left to the corporation to handle out of its own pocket the system would have been in operation much sooner, and time would not have been wasted on negotiations with the Scottish banks.
  Finally, Northern Ireland, which is part of the United Kingdom, has a fragmented gas industry. It had not been associated with the nationalised corporations for 40 years or more. Who will pay for a gas system to be developed in Northern Ireland, whether it comes from Kinsale in the South or across St. George's channel or the Irish sea? I presume that the money will come from the Consolidated Fund and will be a direct charge on the Exchequer. I do not believe that such a development in Northern Ireland would be undertaken by an entrepreneur. What is the Government's view on financing the new gas industry in Northern Ireland?
  On paper the Bill is a simple transaction, but it is not so simple when it comes to pricing. The British Gas Corporation says one thing and the Government another. I have raised wider issues, such as the pricing policy of nationalised industries. The time has come to reconsider the policy. The Government have given no convincing answers to justify putting the money into the Consolidated Fund. Capital investment in the corporation is far too low, which adds to the general industrial depression. The nationalised industries should take the lead in pulling us out of the depression.
  The technicalities of the Bill are impeccable, but during the later stages of the Bill we must probe the Government's actions. We should use the Bill as a vehicle for wider

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  discussion about the financial organisation of the nationalised industries, particularly as it affects the PSBR and the Consolidated Fund. We should not vote against the Bill on its technicalities. It is a small technical Bill, but it enables us to probe the Government's views on much more important matters. In the past 10 or 15 years, under both Governments, we have not got the policy right. We should use this Bill to get it right. The money should not be paid into the Consolidated Fund. It is not merely revenue; it is money for investment that may have to be used in a wide variety of industries in the months and years to come.
  Mr. Albert Roberts: Does my right hon. Friend agree that some of the money could be used to electrify British Railways, which would stimulate industry and mean that over the next 20 years our railway system could become dependent on electricity from coal?
  Mr. Rees: That would be a reasonable and sensible investment policy. However, I should be much happier if we had an investment account, so that when such judgments were made the money would be available.
  Mr. Skeet: The right hon. Gentleman made a very good point about a separate investment fund. I have been pursuing that argument for a long time. The right hon. Gentleman will recollect that his own Government talked about this but never got around to establishing the fund. The Treasury was in control and would not allow them to do so. Is the right hon. Gentleman suggesting, as part of the policy of the current Labour Party—the one to which he belongs—the establishment of a separate investment fund for North Sea assets?
  Mr. Rees: I think that that is the sensible thing to do. I believe that it is what will be done, and that changes will be made towards it long before there is a change of Government. The fact that a Government went in a certain direction, whether because of the Treasury or for whatever reason, does not matter very much. I think that this is a change that ought to be made. It is in that sense, and not on the technicalities, that, on behalf of the Opposition, I put it forward tonight as one of the major reasons why I believe that we should vote against the Bill.
  7.51 pm
  Sir Hugh Fraser: My hon. Friend the Under-Secretary will have to respond to a number of questions when he replies to the debate. The first is why the Bill was not brought forward as part of the Budget, since it is essentially a taxation Bill on an industry. I, personally, am opposed to all windfall or retroactive taxes. I believe that they are bad for investment, set up a bad relationship between the investor and the Government and can cause breaches of trust.
  I know that the powers of my right hon. Friend the Secretary of State are not dissimilar to those of Mr. Rockefeller at the height of Standard Oil. He controls all that he sees. He controls the North Sea. He controls the coal mines. He is the czar of energy. Yet he has feet of clay, because the props are always being chipped away from under him by the Treasury, and by the trade unions as well. This is a serious point. The Treasury is here intervening wrongfully, I believe, because there are far more serious energy problems to be faced.
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  The Minister referred to the future. It is only fair to refer to two matters which need to be more properly developed than they have been so far. One is North Sea oil. Last year saw the lowest number of drillings for oil since 1973. The other is the North Sea gas pipeline. I believe that those are the two most important investments that this country can make. My right hon. Friend is the mastermind of these affairs. But what happens? Only two months ago the Treasury, because it gets its sums wrong by an average of 50 per cent., rushed at the oil companies asking for £1,000 million more. That does not exactly encourage the oil companies to go ahead with the necessary drilling programmes.
  Will the Bill be helpful in the major investment that British Gas and the British nation must make in establishing the North Sea gas pipeline, which will prevent hundreds of millions of cubic feet of gas from being burnt off to nothing? That is the biggest and most important investment that my right hon. Friend should undertake—in addition, of course, to the gas pipeline to Northern Ireland. These are matters of great importance and I question very much whether the correct way of dealing with the energy industries is for my right hon. Friend to allow himself to be treated as a footstool and to be trampled upon by the Treasury. Unfortunately, we see this again and again. When the Treasury makes mistakes, it lashes out in all directions trying to scoop in everything that it can. This is where my right hon. Friend must really fight a proper action.
  I agree with the right hon. Member for Leeds, South (Mr. Rees) in drawing attention to the views of the Gas Corporation. That is a very able body, which has done a wonderful technical job. The corporation makes it quite clear that in its view the proposed levy of £1,300 million over three years will eventually put up the price of gas to the consumer. That is my first main objection. As I have said, I am opposed to windfall and retroactive taxes.
  Another aspect must be questioned. I am proud to have in my constituency both Wedgwood and Comings, which is an important glass manufacturer. I must question whether, at a time when unemployment is rising faster in the West Midlands than anywhere else, it is proper to impose a burden on the gas industry, especially when in most instances our prices are considerably higher than those in competitive countries. I therefore question very much the policies put forward by my right hon. Friend in relation to gas.
  I believe that it is perfectly proper, although it has never popular, to bring domestic prices more into line with industrial prices. One of the great problems of this country over the past 40 or 50 years since I have been in the House is that the consumer has been subsidised by industry, whether in relation to electricity, gas or coal. Unpalatable though it may be, and faced with mounting unemployment and export problems, and with unfair competition from the United States where chemical processing is infinitely cheaper because of its cheaper gas, I am sure that the time has come for the Government to consider using these windfall profits and this unearned income to get the furnaces of British industry going again.
  I do not wish to see the 1,300 million put into reducing the domestic tariff. We can all switch on, and we can be encouraged to switch off unnecessary gas. That is not so for industry. The potteries, the glass manufacturers and the

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  steel industry need a continuous supply. In my view, that supply is too expensive here compared with that of our rivals.
  There has been an investigation by a powerful, rather secretive committee. If one rings up, one is told that it cannot give the information. The information has been given to this great Government committee. I believe it is called a task force. Perhaps it has hats and helmets and assault troops. More likely, perhaps, it is a lot of dreary old men stuck in an office. If one rings up this great assault force and asks for the figures, one finds that they cannot be given.
  Fortunately, however, I have one or two figures that are worth giving to the House in relation to the competitive situation. First, in the glasshouse industry, which some of my hon. Friends know about, the Dutch are giving a 40 per cent. subsidy. Indeed, our growers are dragging them before the great justices of the European Court. The glass industry has a variety of processes, but I know that in respect of identical processes such as heavy melting of glass, the price of energy for Cornings is 24·7p per therm in Staffordshire. In France it is 19·3p per therm for precisely the same activity. That is a difference of about 20 to 25 per cent.
  I now take the figures from the British Pottery Manufacturing Association. German potters have gas costs that are 10 per cent. cheaper than the price at which British companies must purchase it. Those are serious figures. If the Government want to pump prime a recovery in certain industries, to bring these international costs into line is surely the way in which it should be done.
  Gas costs in the glass industry are about 6 per cent. of total costs. The cost in pottery manufacture is rather higher. In the sanitary and tile sectors of the industry, gas supplies amount to 13 percent. of their costs. The average for the pottery industry as a whole is about 9 per cent. Potteries use between £15 million and £18 million worth of gas each year. A price reduction of 10 per cent. would make a tremendous difference to jobs, profitability and competition overseas. That is where some of this money should go, instead of flowing into the maw of the Treasury.
  I hope that what should have happened on the previous Budget day will happen on the next one, namely, that the Government will make some concessions. They should make concessions on their calculation of the price of oil—£8 which is not put into European prices—and above all make concessions so that gas prices for industry and heavy users are reduced and brought into line with those in Europe. Unless that happens, I must warn the Government that I shall be forced to vote against the Bill when it comes back to the House.
  8.2 pm
  Mr. J. Enoch Powell: As I indicated when the House considered the Ways and Means resolution on which this Bill is founded, my hon. Friends and I could not possibly support a measure which raises from the gas industry sums hugely greater than would be necessary to embody Northern Ireland integrally into the gas and energy economy of the United Kingdom.
  Before I turn to that more domestic matter, I should like to make some general comments on the Bill, which in this sense I find to be a jewel of a Bill, in that like a cut
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  diamond, as one moves it around in the light, new and ever newer financial facets present themselves to our contemplation.
  At the outset, I must say that I could not share the enthusiasm of the right hon. Member for Leeds, South (Mr. Rees) for reversing the principle of the Consolidated Fund, which we owe to the Younger Pitt. I do not believe that there can result anything but confusion in national finance from dismantling or sub-dividing the Consolidated Fund. There was a moment when the right hon. Gentleman was perilously near hitting the trail towards a road fund, thereby entering that financial quagmire known as an assigned revenue, and sure enough, as he trembled upon the brink, Nemesis appeared in the person of his hon. Friend the Member for Normanton (Mr. Roberts), who, hearing that there was to be a fund for investment, said "Well, we could do with that on the railways as well".
  There simply is no reason why the application of a particular revenue should be related to the source from which that revenue is raised. At this end of the century, I should have hoped we would not need to go through the old, long and bitter adventure of the road fund, from which that lesson at least should have been learnt.
  The Secretary of State was anxious to say that this was not a taxation measure. Indeed, said he, the Government would have been just as well off without this measure. That was a remarkable and significant admission. He said that if these funds are not raised by the levy, they would go to the national loans fund; in other words, the British Gas Corporation would lend them to the Government. Therefore, the Government are no better or worse off in total as a result of this levy than they would be had the Bill not been introduced.
  There is an interesting facet to that which I should be surprised accounting to find was absent from the mind of the Treasury. After a bit, one learns the way in which the Treasury mind moves. The Treasury mind is much directed towards the size of the PSBR. If one can convert an item from borrowing into revenue, one will of course reduce the PSBR—hooray, hooray—and that among other things is a device whereby that daunting total can be lessened.
  The Under-Secretary of State for Energy (Mr. Norman Lamont)indicated dissent.
  Mr. Powell: The Minister shakes his head, but that is what the Secretary of State said. He said that this sum, if not raised and attributed to revenue by this levy, would have been lent to the Government and so have gone to meet the PSBR.
  Mr. Skeet: I am obliged to the right hon. Gentleman for giving way. How is it possible, if it goes to the national loans fund, that it can only be by agreement with the industry in question? This is not an industry which can be given a specific direction. If it were, the chairman could be directed, but he cannot be so directed.
  Mr. Powell: I follow the hon. Gentleman's point. Indeed, it was exactly what I was coming to. The Government's conviction that these huge sums would in any case have had to be loaned to the national loans commissioners was based upon their conviction that the British Gas Corporation would not wish to spend them, or would not be allowed to spend them, upon capital investment. Thus, the whole proposition depends upon a

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  foregone decision as to the investment programme of the corporation, an assumption that the British Gas Corporation will not invest more than can be covered by the £300 million per annum which it is estimated it will retain. This is merely financial hocus-pocus and the shift of a huge sum of money over three years from one superscription in the national accounts to another superscription.
  I turn to consider that underlying assumption regarding the £300 million per annum which will remain to the corporation for use, among other things, for or towards its new investment. Turn the Bill through another angle and it becomes a study in monopoly. This huge sum, of which the House is partially disposing tonight in the Bill, is a producer surplus which has accrued, and could only accrue, because of the monopoly character of the British Gas Corporation.
  It is instructive for a moment to consider what the position would have been in the absence of that monopoly. In that case, the fact that the raw material of the gas industry was so much more cheaply available than other raw materials would have produced intense competition in the promotion and expansion of this form of energy at the expense of others. It would also have produced intense competition in the exploitation of the sources of gas. Indeed, as was said at an earlier stage of the debate, there would have been more drilling in those different circumstances.
  Mr. Eggar: Would it not also have led to the Government of the day imposing very heavy taxes on the people producing the gas and developing it from the North Sea?
  Mr. Powell: No, because that makes an assumption about what those producing the gas would have done with the surplus. If they had reinvested that surplus in the course of the more intense competition that I have posed, only a fraction of the additional surplus would have gone to revenue.
  Mr. Eggar: While the right hon. Gentleman may be right, will he point to the instances in the North Sea with regard to the oil industry where that has happened? Will he also point to other areas where what he said would happen has happened?
  Mr. Douglas: Prices.
  Mr. Powell: I shall come to the question of prices in a moment; I had anticipated the intervention of the hon. Gentleman.
  To the hon. Member for Enfield, North (Mr. Eggar) I say that we are comparing the size of a producer surplus in one set of circumstances with that in another. If there had been a monopoly in the supply of oil, as there is in the supply of gas, there would have a been a much larger producer surplus to be disposed of by the oil industry.
  So, in effect, we are seeing the consequences of monopoly in the distortion that it has imposed upon what otherwise would have been the pattern both of investment and consumption. The Government say—I have on the record an epistolary debate with the Secretary of State on this subject—that they have engaged in economic pricing of the gas industry and that gas prices have been drawn up towards the level at which they approach the marginal cost
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  of alternative sources of energy. Even there, a fallacy is fed into the consideration; for the marginal unit cost of a particular form of energy varies with the volume of production and consumption of that type of energy. The nationalised status of the energy industries has resulted in a complete distortion and unreality in the marginal costs that fall to be compared, so that an inescapable argument in a circle underlies the pricing policy that the Government are imposing on the gas industry—a consequence, in turn, of the monopoly in most of the energy industries, and particularly in this one, the gas industry.
  There is thus a great deal to be learnt from study of the implications that lie behind this apparently innocent and, as the right hon. Member for Leeds, South said, technically impeccable Bill.
  I turn now to more domestic matters. There has not yet been a proper open public debate and discussion, either inside or outside the House, on the comparative economics of bringing Northern Ireland into the gas economy of the United Kingdom or liquidating the gas industry of the Province—which is the Government's present policy—or alternatively linking Northern Ireland to the energy economy of the Irish Republic. Obviously there are political aspects; but the economic aspects have not been properly displayed or argued either inside or outside the House. No doubt that is why the Economic Council for Northern Ireland and Coopers and Lybrand are in profound disagreement with the conclusions upon which the Government based their decision to write off the gas industry in Northern Ireland and abjure the prospect of linking it with the mainland.
  Against that background, a background in which nothing would do more to maintain and revive employment and economic activity within the Province than a reduction in the real cost of energy, we are presented with a Bill by means of which there will be transferred to the general purposes of the State annual sums of money rising over three years from £130 million to £750 million. The figure that we are talking about in deliberating upon a gas link with Northern Ireland is about £100 million. That is the approximate capital investment, little more than peanuts in comparison with the accrued surplus of the gas industry of Great Britain that the Government have decided will not be required for investment purposes.
  The right hon. Member for Leeds, South is right in saying that we are taking an economic decision—an investment decision—by omission. My hon. Friends and I believe that if that decision is to be taken, it should be taken openly, upon the basis of the full facts and debated; and that contention is strengthened in our minds by a Bill of this sort, illustrating the huge surpluses with which, particularly in the context of gas, the nation is dealing.
  My hon. Friends and I would deserve not to be allowed to go home if, having registered the case and the complaint of the Province, we did not vote against the Bill tonight.
  8.17 pm
  Mr. Peter Rost: It is with some humility and trepidation that I follow the right hon. Member for Down, South (Mr. Powell). I support his argument that the State gas monopoly has distorted the market and the marginal cost. The State monopoly has distorted the market by holding down the price of gas to a level where the exploration and development of new resources have been made uneconomic and so far below

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  the free market price that could now be obtained if producers were in a position to obtain the best market price—which is much higher, particularly in Europe. For that reason, I support the Bill.
  My constituents ask angrily why the Government should have to tax gas. Whatever fineness we put on it, this is a tax, a royalty. My constituents do not understand. They may accept, reluctantly, that we have to tax gambling, drink, tobacco and even dog licences, but they wonder why such an essential commodity as heat should be subjected to a tax by a Conservative Government, of all Governments. We can reply—as some hon. Members perhaps do—by saying that we need the tax because we must have the revenue. We can say "Why should we not tax gas when we tax almost everything else, including the essentials of living, such as earnings, and when we impose VAT on most commodities? We even tax employment, petrol and North Sea oil, so why should we not tax gas?"
  Such a simplistic answer is not reassuring to my annoyed constituents, particularly those who cannot afford adequate levels of heating at these prices, let alone those that they will undoubtedly have to pay in the years to come. In view of the existing profits of British Gas and the forecast of higher profits, they find it difficult to understand why a tax, royalty or levy shoud be imposed. They also believe that we are taxed highly enough already.
  I understand those complaints and sympathise with them, but despite that I have no reservations about wholeheartedly supporting the Bill. I congratulate the Government on tackling courageously policies that will lead to realistic energy pricing. Indeed, I shall try to present an argument that it is the failure of previous Governments to tackle this unpopular policy that has acted against the best interests of consumers in this country. Industrial as well as domestic consumers feel angry because misguided politicians have in the past deliberately led us to believe that gas would be cheap and plentiful, as if tomorrow would never come. Now, having realised that tomorrow is on its way, politicians are too gutless—or have been until the present Government took office—to warn the nation that realistic energy pricing in an increasing area of finite gas resources has to come.
  It is quite understandable, therefore, that the gas consumer should now feel cheated, just as the electricity consumer has felt conned by politicians who in the 1960s deliberately subsidised electricity prices by subsidising coal, by subsidising the construction of power stations, and by persuading the consumer to install all-electric central heating and off-peak storage heating because at that time it appeared to be the cheapest form of fuel. Those consumers feel cheated because thay can no longer afford to switch on their electric heating appliances now that the world price of energy has had to assert itself in electricity prices.
  I believe that gas consumers will feel just as aggrieved as, for example, the American public feel aggrieved now because politicians in America have deliberately tried to hold down domestic oil and gas prices below world prices, pretending that the rest of the world did not exist. The holding down of those prices has encouraged the importation of more oil because it has discouraged conservation and discouraged the development of indigenous oil and gas, and alternative energy policies.
  The result of that disastrous policy can be seen in the declining value of the dollar over the past two years, the importation of inflation, and a recession that has
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  rebounded on the rest of the world. Moreover, because the Americans have become increasingly dependent upon imported oil, and because they have held down the indigenous price of the product they have contributed to the world rise in oil prices by underwriting and supporting the OPEC price, simply because they are dependent upon importing so much from the OPEC countries.
  I have used that as an example—just as I have used the example of our subsidisation of electricity prices in the 1960s—to illustrate my case that we are in danger of making the same mistake over North Sea gas unless we now do as the Government are courageously proposing to do.
  We must get across to the public that the gas from which we are at present benefiting as consumers comes from the early contracts that were obtained because British Gas was given a State monopoly as a sole buyer. The early contracts in the southern North Sea basin were obtained at screwed down prices which are now so unrealistic that there has been practically no development of new gas resources. The result of that low-pricing long-term contract was that British Gas could not fail to make huge profits and could not fail to over-exploit its marker. Anyone who was not an absolute idiot sought to join the scramble for North Sea gas.
  The market has now become over-developed, as any market will if the product is sold at half the price of alternative products. The ludicrous position has arisen that we have now so over-developed the market and so discouraged the development of new gas reserves that we are having to import our gas from Norway at five times the price that we are paying our suppliers in the southern North Sea basin, and we are even scrambling to buy more from Norway to meet the growing demand.
  These southern North Sea basin fields will soon be exhausted, and as more expensive reserves have to be brought in the gas price must rise very much more steeply than it is rising now—unless we are to do without it or to have rationing. I am sure that that would not appeal to those of us who believe in a free market economy. Therefore, we must warn the consumer now that he will have to pay the long-run marginal cost of gas if he is to have that gas. If we do not warn the consumer now and start charging a price that is related to the expected cost of future supplies, the consumer will not simply feel real hardship, but will feel just as cheated as did those consumers who installed all-electric central heating in the 1960s.
  I therefore maintain that it must be in the consumers' interest that we tax the present exceptional profits that British Gas is still making from those cheap contracts, and regard them as windfall profits, in order to smooth out the inevitable price rises that will come as the more expensive gas becomes an increasingly large proportion of the gas consumed. This is the only way in which we can fairly distribute the benefits of that North Sea windfall gas to the nation as a whole.
  I argue further that the holding down of the gas price because of the artificial monopoly position has already harmed the nation and the consumer. It has, for example. undermined the development of more efficient energy systems. I refer, as one example, to the development of combined heat and power and district heating in this country. It is because the electricity industry was subsidised in the 1960s and because gas has been under-priced in the 1970s that any scheme that might have been

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  economically viable for the use of hot water from our existing power stations has not proved economic. Feasibility studies that have been done over the years have shown that there is not much point in using that hot water. We might just as well go on throwing it away into the rivers, simply because gas has been under-priced and electricity has been subsidised.
  Compare that position with what has happened on the Continent, where, increasingly, a heat grid has been developed and where whole cities are heated by hot water, relatively cheaply. That is the sort of energy that we throw away. We have an example of how well-meaning and well-intentioned but muddle-minded politicians have so meddled in the energy market that they have worked against the consumers' best interests, Whereas consumers in other countries are benefiting from cheap heat in their homes, we have virtually no district heating and no combined heat and power in this country.
  This is the direct result of the distortion of energy pricing. The countries on the Continent have had to pay the world price for oil and gas, and therefore it has proved to be economic to use the hot water from power stations—hot water that we throw away—and channel it into cities and use it for heating. We have not gone along that road because of our do-gooding politicians and their feeble attitude to doing what might prove unpopular. In pursuing that policy they have harmed the consumer and deprived millions of the heat that they could have had, which is now available to consumers on the Continent. In doing that we have also wasted vast amounts of precious energy and capital resources.
  That brings me to my second argument in support of the Bill and why I believe that it is a disservice to the consumer to continue the present artificial pricing of gas under the State monopoly. Underpricing of fuel or any other commodity in a free market discourages the efficient use of it.
  Like most hon. Members, I have two homes. One is in my constituency and is heated by gas. The other is nearer London and is heated by solid fuel. I have spent much money in insulating the home heated by solid fuel, because the fuel bills are twice those for heating the home with natural gas. I have worked out that it has not yet paid me to insulate the latter home. That may be all right for me, but if that experience is multiplied millions of times, one sees the disincentive that there has been for investment in energy conservation.
  What applies to the domestic consumer applies more to industry. In the past year or so relatively cheap gas has not been made available to industry, which has subsidised the domestic consumer. Nevertheless, in earlier years gas to industry was supplied on relatively low-price contracts. As a result, industry did not have the incentive to invest in more energy-efficient processes.
  The energy-intensive industries are suffering because of the increased cost of fuel, but many of those problems could have been avoided. If we had phased the price to world levels earlier, industry would have been provided with that incentive for investment in more efficient fuel consumption. Not only would that have reduced the fuel bills for industry, which is struggling to survive, but it would have increased productivity. As a result, we might have had less unemployment because more of our industry would have been able to remain competitive. We have
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  paid a high price for policies of holding down energy prices. It has been a short-term delusion for the consumer and a mortgage on the future. That is a further example of the fact that it is not in the consumer's best interests to hold down the price of energy, but that it is very much in the consumer's and the nation's interest to price it at a realistic market level.
  A more courageous, even-handed taxation system between gas and oil, if applied a few years earlier, would have allowed the North Sea gas-gathering pipeline to have been built long ago. The question was raised as to why we had not built that pipeline. The associated gas is being flared in vast quantities because it has not paid before to build the pipeline. The price that British Gas has been prepared to pay as a monopoly buyer has not been high enough to justify the capital investment. If the gas price had risen sooner to a European market level the gas pipeline would have been built and we would now be enjoying the benefit of that associated gas. Industry would be benefiting from it. The petrochemical industry would be more flourishing and more competitive. The consumer would have that extra supply of gas.
  That has not happened because politicians have meddled in order to create the monopoly that has held down the price. I therefore argue that more competition might have made more gas available. Although the price would have risen earlier, it would not necessarily be higher today than it will be in any case—on the contrary. As the right hon. Member for Down, South (Mr. Powell) said, with more competition, more gas would have been marketed and therefore the price in earlier years would have been higher and might not be rising so fast as it will during the next two or three years. Our associated gas and new gas fields would have been developed because that would have been cost effective, instead of the development being held back by the reluctance of British Gas to pay a market price for our gas, while it was eager to pay a higher price for the gas from Norway.
  I therefore maintain that the evidence supports the case that the more well-meaning but misguided Governments have intervened in energy pricing by creating monopolies that have held down the price, competition and the development of gas resources, the more we have taxed oil, the worse the consumer has been hit, and the worse the nation has suffered, with its wealth-creating processes held in check. Such policies have undermined the economic viability of alternative and more cost-effective fuel saving schemes such as combined heat and power and district heating. Such policies have distorted the energy market and hit the coal industry. The demand for coal has slackened because industry switched to gas at a time when it was half the price of coal.
  Such policies have failed to provide incentives for investment in conservation. They have deprived the economy of desperately needed revenue and have wasted valuable resources of energy and public expenditure. Therefore they have hit not just the consumer but the economic progress of the nation as a whole.
  Unpopular decisions are hard to take, but often it is more beneficial to take them than to duck them. I congratulate the Government on being prepared to take the unpopular decisions instead of ducking them. It is only this course that will see us on to a more realistic energy policy.
  8.36 pm
  Mr. Robert C. Brown: I declare a dual interest. First, I am a Member sponsored by the General and Municipal Workers Union, which represents 50,000 employees of the British Gas Corporation. Secondly, and more personally, I spent the first 30 years of my working life in the gas industry before being elected to Parliament. Some may say that I am still in the gas industry.
  The gas industry commands great loyalty from its staff, and that has. enabled it to become one of the most efficent in the country. It was largely through the efforts of the staff that the industry organised a fourfold expansion on time. In addition, 14 million consumers were converted to natural gas on time in the biggest conversion operation in the world. The gas transmission system was modernised, again on time. All that was largely achieved by the efficiency of the workers utilising worthwhile public investment.
  Those people, with whom I worked for so many years, are disgusted that their efficiency and loyalty are being rewarded with the penalties being imposed on their industry by the Bill. It is those workers who bear the brunt of consumers' disgust about the even higher prices which seem only to generate massive paper profits. The members of my union are at the sharp end, as I was for 30 years, on the consumer service side, and they get the complaints when prices go up to a level which bears no relation to the value of the end product.
  A leading article in the News of the World yesterday was headed "The State dead-beats". I wonder which dead-beat wrote it. It stated:
  "Two gas price rises this year, bigger bills ahead for electricity and telephones are only part of the dismal fare to be offered us by public services.
  These undertakings, which face no competition, have raised their prices by an average of 27 per cent. over 12 months. Clearly they are playing no part in the efforts to bring down living costs.
  Hard-pressed families and firms striving desperately to survive should not be dragged down by protected dead-beats."
  I do not know who the editor of that rag is, but I imagine that he saw the Prime Minister's broadcast on the Brian Walden show a fortnight ago making the quite unworthy statement that the nationalised industries cannot be allowed to push up prices in the way that they have in the past. It was palpably dishonest of the Prime Minister to make that statement on television. Either the editor of the News of the World is valiantly seeking a knighthood, like the editor of the sister paper, or he is a prejudiced idiot.
  Mr. Merlyn Rees: He could be both.
  Mr. Brown: As my right hon. Friend says, he could be both.
  There is no doubt that that type of leading article conveys less than the truth. It creates a great deal of "aggro" on the doorstep among colleagues of mine with whom I used to work. It is they who are blamed while, on the Government's own admission—that is, the more honest members of the Government—price rises would have been significantly less if the British Gas corporation had had a free hand in fixing domestic tariffs.
  The members of my union deeply resent their role as tax collectors. That is what they have become, particularly at a time when pressure on domestic budgets is increasing from other directions. The levy is seen by them as a direct tax on their efficiency. Resentment aside, the levy will be
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  extremely damaging to the industry—an effect which is of extreme concern to all employees. Unlike the Secretary of State, I have not noticed great joy among employees of the British Gas Corporation, including the chairman.
  The gas industry has an enviable record of investment. Investment is necessary if the industry is to maintain its record of success. By creaming off the top of the industry's profits the levy will reduce the amount of money left for investment. It is estimated that the corporation will make a pre-tax profit of £ 1,500 million in 1983. From that about £800 million will be paid in corporation tax. Under the Bill, a further £750 million will be taken off by direct taxation, turning a profitable industry into a loss maker. There will be no money left for this major energy industry to invest in the future. That is a direct contradiction of any sensible plan for energy supply.
  In addition, there will be little left for major mains renewal programmes which, apart from the public safety aspects, will have appalling implications for jobs not only in the gas industry but in those industries which supply the corporation.
  Is it really the Minister's intention to force a profitable nationalised industry to declare a loss after tax? How does that square with the Minister's statement to the House on Second Reading that the levy will not affect the pricing policy of the British Gas Corporation? Of course it will.
  The proposed gas levy will affect different income groups disproportionately. By levying a flat rate for each therm, the lower income groups, who already spend a higher proportion of their incomes on fuel, will suffer most. Those at the top end of the scale will hardly notice the extra tax, but for the low-paid households with children, pensioners, those on supplementary benefit and one-parent families in the first year alone, the tax will increase their expenditure on fuel by 5 per cent. By 1983, the poorest households will be spending nearly 15 per cent. of their disposable income on fuel compared with only 6 per cent. for those earning £250 a week or more.
  The levy is yet another aspect of the Government's excuse for a conservation policy ensuring that those who need fuel the most do the most conserving for the rest of the community. This is simply an extension of the Government's policy of penalising those who cannot avoid using more energy because of their domestic circumstances. Pricing will be geared to consumption rather than to any sensible use of the appropriate fuel. This rationing by price or, more aptly, by the purse. When a person does not have a very full purse, the choice is stark indeed—"Do I eat, or do I freeze?" I am afraid that with the onset of winter we shall have many more old people and the very young dying from hypothermia.
  Another aspect of the levy which must be touched upon is the effect on industry. What is the use of setting up NEDO task forces to examine the cost of energy to industry in one month when in the very next month the Government impose on the industry a direct tax which is bound to increase the price of gas to the industries which are already crying out for tax relief?
  The right hon. Member for Stafford and Stone (Sir H. Fraser) spoke about Cornings and its problems. I have much sympathy with him. Leamington glassworks is situated in my constituency. The work force of more than 1,000 has been decimated to about 200, with the latest redundancies only last week.
  In the interests of conservation, we ought to be thinking of using the right fuels for the right jobs. In my opinion,

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  gas should be used for small-scale central heating and small-scale industry. It certainly should not be used for large-scale industry. That is the job for coal.
  The Secretary of State said that the levy would be a form of windfall profits tax. That makes it appear that British Gas is responsible for its excess profits. But it has already been admitted that the Government forced the corporation to make such profits so that afterwards they could take their slice.
  The Prime Minister prides herself on being consistent—sticking dogmatically and rigidly to her policies. Where is the consistency here? If the Government are interested in hiving off the windfall profits of British Gas, why not the clearing banks as well? I understand that last year the four clearing banks made profits of £1·5 billion. But we do not hear anything from the Government about hiving off those profits.
  It is interesting to note that in the third year of the levy the tax on gas will be 15 per cent.—equivalent to value added tax, which successive Governments have said will not be put on energy. Will the Government's next step be to put VAT on food—another item about which promises have been made?
  In 1983 the levy will raise £750 million direct for the Exchequer. What will it be used for? Will it enable the Government, in a bonanza pre-election year Budget, to cut l·5p off the standard rate of income tax, forgetting to mention, of course, that they have clawed this out of people's fuel bills already? Forgive me, Mr. Deputy Speaker, for having a suspicious mind, but I suspect that this is the type of thing for which the Government will use the money.
  8.49 pm
  Mr. T. H. H. Skeet: The hon. Member for Newcastle upon Tyne, West (Mr. Brown) was in the gas industry for many years. He will remember the co-partnership schemes which unfortunately were demolished when the industry was nationalised. Of course, time has passed.
  The hon. Gentleman referred to domestic tariffs being unreasonably high. The United Kingdom has the cheapest domestic gas in Western Europe, and this is likely to continue even after the increases come through.
  The levy will not add to price. The hon. Gentleman should bear in mind that value added tax on gas in Belgium is more than 20 per cent.; in Denmark it is 17·6 per cent.; and in France it is 13 per cent., whereas in the United Kingdom it is zero rated. Therefore, we have certain advantages.
  In his speech, my right hon. Friend referred to profits being made of £425 million which are likely to approach £1,000 million over the course of years. Then he talked about a new tax regime. That sounds to me like a tax. Whatever verbiage Ministers use, it is a tax in substance and we have to recognise it as such.
  I fail to understand why the Bill has not been merged in the Finance Bill which will be forthcoming on 10 March. It could form five or six clauses in that Bill. We could have dealt with the matter in the Budget debate and got the whole thing out of the way without a separate Second Reading, Committee stage and Third Reading.
  I was surprised that my right hon. Friend the Minister took 11 days to answer a parliamentary question that I
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  tabled on those very lines. That would have been a much more convenient way of dealing with the subject. After all, clause 3(1) provides that payments are to be made to the Secretary of State and, ultimately, in clause 6(1), paid into the Consolidated Fund. So why not pay it directly to the Treasury and be done with it?
  I have tried to discover when we had a similar levy. The only one that I found was the once-and-for-all levy laid down by Sir Stafford Cripps on 6 April 1948. It was not a specific measure. It was contained in part V of the Finance (No. 2) Act 1948.
  I wonder whether it has been done in this way because the Government are foreshadowing a tax on banks in the Budget? This may be an initial shot across their bows. I hope that I am wrong. Had the matter been deferred until the Budget it would have been a clear indication that there was to be tax on the banks, and we should have had only one measure to deal with.
  In the 1978 Green Paper, paragraph 8.16, page 43, there was a levy which enabled the Government of the day to reduce the public sector borrowing requirement, and a 10 per cent. contribution was made in that instance by the gas industry. On 16 January 1980, my right hon. Friend indicated that domestic prices would have to go up by an average of 10 per cent. over three years, over and above inflation, in order to bring the pricing more in line.
  That is all very well, but now we are faced with a separate Bill. It starts off with three years. It will probably go on for many subsequent years at a rate that we do not know. Moreover, there is no upward terminal to which it may be limited. That is something that should be written in the Bill.
  Let me give one or two reasons for the levy. The British Gas Corporation has made windfall profits through paying the oil companies, the suppliers of natural gas, too little and much below the market rates on contracts made prior to July 1975, pursuant to section 9 of the Continental Shelf Act 1964 and section 8 of the Energy Act 1976. If the input or supply of gas was at 8p per therm, and the gas is sold at between 20p and 30p per therm, only a fool could not make a profit. In the circumstances, the Government are quite right to take this measure. If they were paying realistic prices to the suppliers, the companies operating in the North Sea, this would never have happened. The companies would have got the money and in due course they would have paid taxes. Thus, the money would have gone back to the Treasury.
  Let us examine how the matter developed. Payments were made initially on the United Kingdom side of the United Kingdom median line at 1.87 old pence per therm, and the initial contracts carried escalation clauses to bring it up to, in my judgment, between 6p and 7p per therm.
  Mr. Eggar: It is much lower than that.
  Mr. Skeet: I am trying to be fair. For Frigg the prices were roughly between 12p and 15p per therm. For Statfjord gas the offer was not enough. I understand that the British Gas Corporation made a payment of over 18p a therm.
  On one side of the median line the prices were kept as low as possible. But what are the Norwegians paid, on the other side of the median line? They are offered over 20p a therm—and more. When the British Gas Corporation recently had negotiations with Sonatrach of Algeria, it offered that company $4.60 per million BTU for LNG,

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  which is about 26p a therm. The price continues to rise, but more money is coming in due to the very low input price from the southern North Sea.
  Mr. Rost: A monopoly buyer.
  Mr. Skeet: Of course it is a monopoly situation, which is governed by two Acts of Parliament—the Continental Shelf Act 1964 and the Energy Act 1976. Of course the British Gas Corporation could afford to pay a higher price.
  I now refer to the report to the Select Committee on the European Communties "Harmonisation of energy prices and taxes." Some of the evidence which was given by Mr. C. W. Brierley and others was this:
  "do the best we can to get gas for Britain at a good price for Britain. I do not think that that policy is actually leading people to take a different attitude about exploration."
  On an earlier page, I found something very interesting:
  "It is very important in this situation to remember that there is—this may be a slightly dramatic way of expressing it—only one organisation here which is looking for gas and that is British Gas. Everbody else is looking for oil."
  Obviously they are looking for oil, because they are not paid a sufficient economic for price to look gas. That is why no more gas was found, and that is why the different fields in the southern part of the North Sea were not fully exploited at the time.
  Mr. Eggar: Does my hon. Friend agree that because of this absurd pricing policy and monopoly position of British Gas there are a number of gas reservoirs in the southern basin of the North Sea which could very easily be developed if British Gas were prepared to pay a reasonable price?
  Mr. Skeet: I fully agree with that. My hon. Friend sums it up rather neatly. But in the old days the cost of gas purchased from the suppliers was on a cost-plus basis. So it is cost-plus purchase for the gas, but when one is pricing gas to industry and customers generally it is not on a cost-plus basis; first, it is related to the competing oil product, and, secondly, it is partly determined by the external financing limits and, of course, a return on the net assets, which has now been reduced to 3 ½ per cent. We find that Governments of the day since 1964 are entirely responsible for the accumulation, which would never have occurred if an economic price had been paid for supplies.
  I support the Government on imposing this tax. It became inevitable. It is after the event. The horse has bolted from the stable, but we shall be able to pick him up on the course and see that some of the moneys are drafted over to the public purse. I am very concerned about the use of moneys. I agree with the right hon. Member for Leeds, South (Mr. Rees), who indicated that a separate fund should be established. I know that the right hon. Member for Down, South (Mr. Powell) indicated that he would not accept a concept which has been thrown around for many years, and he had in mind the road fund. However, if one has a specific fund allocated, when one is taking moneys out of it one can see that the funds are properly used for selected purposes. These moneys should not simply go into the Consolidated Fund to be spent on the payment of salaries, however good that purpose. They should be spent on research and development, for the development of alternative energy strategies and to reduce the burden on energy intensive industries. I have mentioned previously those which I consider should be selected, such as iron and steel, where fuel costs amount to at least I8½ per cent. of total costs, and bricks, pottery,
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  glass and cement where fuel costs amount to 18 per cent. of total costs. I should also mention the chemical industry. Enormous costs are involved.
  I would not be opposed to money being utilised for specific advanced projects, through the British Gas Corporation or the energy field generally, for example, on secondary and tertiary recovery from oilfields. I hope that the Under-Secretary will bear in mind that we have embarked on a dangerous course. Sir Stafford Cripps was the last man to introduce a levy, in the true form, in this House. There are difficulties. Where do we draw the line? Is a levy to be imposed on one company simply because it makes a substantial profit? Will such a policy be extended to all commodities in the course of time? Will it be extended from oil to copper and to others? All have reached their own heights on the market. We should draw the line distinctly to avoid a regular recurrence of such taxes.
  I should like to mention clause 2, which is the centre of the Bill. The legislation is unfortunately backdated to 1 April 1980. I should like to see directions relating to how payments are to be made. I dare say that this will be done on a quarterly rather than on an annual basis. I should like information on the cash limits adjustment, not for the first three years, which is already known, but for ensuing years. If the Secretary of State were prepared to advise an annual or periodic revision, that would be an understandable move.
  Clause 2(2) gives power to increase the levy. It is totally open-ended. I would have thought that this power should be debatable by both Houses of Parliament and not simply by the House of Commons. As there is no extended definition of gas in the Gas Act 1972, it should be included in this Bill.
  If there is time tonight, I should like to hear some assumptions on which clause 2 is based. The levy will rise with the steady movement towards economic pricing of domestic gas. I understand that. Therefore, as prices rise, more money will accrue but initial contract prices remain low. There will also be an anticipated increase in oil prices.
  Can the House be given a sample of open government? I should like to be told what the Government consider will be the price of oil by 1985 and 1990. After all, they have worked on certain assumptions. Why cannot the House have them? It might be a good idea if the Under-Secretary scatched his head and gave the information. It has been indicated that the amount of gas to be drawn from the southern fields will drop to about 40 per cent. in the next decade. This is significant.
  The oil and gas industries are making a substantial contribution to the revenue of the State. These revenues will amount to about £4 billion from the North Sea in 1980–81. I work that out at about 35 per cent. of the total public sector borrowing requirement assessed at £11·5 billion. This will be expected to rise later to between 40 and 44 per cent. If one considers all the payments made, including those from gasoline and various taxes on fuel oil, one industry carries a large part of the public sector borrowing requirement. This should not be forgotten. The bigger the imposition, the more difficult it becomes for competition to operate in the United Kingdom.
  We must have the levy on this occasion. The House, however, must understand how it was caused in the first instance. Hon. Members should be guided in the future by learning some of the reasons for it. If we are rapaciously

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  to pursue one industry after another because it makes a substantial profit, we should be pursuing the course of Diocletian. We should be looking for more taxation. We should regrettably become more greedy and rape the economy for the taxes that it will produce.
  9.5 pm
  Mr. Stephen Ross: It was reported in one of the Sunday newspapers that Cabinet colleagues of the Secretary of State did not understand the Government's energy policy. I am not an expert on energy matters. I shall merely refer to one or two issues that concern industry but having listened to the contributions of those whom I know to be knowledgeable on energy—I recognise that the hon. Member for Bedford (Mr. Skeet) specialises in energy—I must confess that I am as confused as I was when I entered the Chamber.
  The right hon. Member for Stafford and Stone (Sir H. Fraser) indicated that Corning Glass was paying more for its gas in the Potteries than it was paying on the Continent. That view was expressed to me a fortnight ago by a trade consul in America, who had encouraged and helped firms to come to Britain to set up a European base. He told me that these firms were reporting back that energy costs in Britain were so high that they were having to think of moving out and transferring their base to the Continent.
  I support the idea of the levy. If a tax is being imposed on the oil companies, it seems only logical that one should be imposed on the British Gas Corporation. However, some Conservative Members are saying that a great deal more research needs to be done and that there are fields that should be exploited. It can therefore be argued that the corporation is not being allowed to retain the money to do it, because it is to be taken by this tax.
  One can understand that British Gas is feeling aggrieved that the levy is being imposed at a time when it should be doing a great deal more research. I know that it is spending vast sums just off my constituency and within it. Only a year ago it was doing some boring in my constituency.
  Mr. Rost: Additional gas has been found in the North Sea, but it has not been developed. It has been found by private enterprise oil companies. The discoveries have not been made by British Gas entirely. These finds have not been developed, because the corporation has not been prepared to pay a realistic price. When it is prepared to do that the development will take place.
  Mr. Ross: The hon. Gentleman has answered my point. We are now talking about taking quite sizeable sums from the corporation. Presumably it will argue that it no longer has the money in the kitty to pay a realistic price to extract gas. The Guardian reported last week:
  "The Corporation does, however, grudgingly accept the Government's view that British Gas will still be able to self-finance its £4 billion investment programme up to 1985."
  The article went on to confirm the argument of the right hon. Member for Leeds, South (Mr. Rees), namely:
  "British Gas participation—of around 30 per cent.—in the proposed North Sea gas-gathering system is outside the programme and will be financed through a subsidiary company to keep the cost outside the public sector borrowing requirement."
  It is logical, to my mind, that gas should face the same tax burden as oil, which is subject to petroleum revenue
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  tax. I wish to question the Government on the way in which the money raised by the levy will be spent. It is on this issue that I think that we shall part company. The hon. Member for Newcastle upon Tyne, West (Mr. Brown) spoke of the effect of increased gas prices on domestic consumers. We know that domestic tariffs will be increased by another 15 per cent. in April. It may be true that we have had gas on the cheap, but I am sure that hon. Members will have had their constituents writing to them about present charges. We have been fortunate this winter, because it has been quite mild, but I am receiving letters from constituents who tell me that they cannot meet their electricity and gas bills, and especially their water bills.
  We must set up a comprehensive heating allowance to enable those who are retired and who are not entitled to supplementary benefit to have something on which they can fall back. I fear that as these charges continue increasing we shall have people dying of hypothermia. I hope that some of the money that is directed to the Consolidated Fund will be used to set up a sensible and fair heating allowance overall.
  I agree entirely with the hon. Member for Bedford that the levy should be dedicated to conservation projects, further research and development in alternative energy sources, and aid to certain industries to enable them to convert to more fuel-efficient plant.
  Large glasshouse growers have operated in my constituency for about 15 years. They are efficient. Expensive houses and modern plant have been built. However, they do not have the advantages of their Continental competitors. The Dutch growers receive gas on the cheap. The Germans receive a £12½ million subsidy and the French and Irish also receive subsidies. The growers in my constituency are closing their plants. One of the biggest companies, A. B. Stevens, has just closed its doors. It spent a great deal of money installing gas. It is a tragedy. The industry should benefit from help, even if it is only temporary.
  Everybody knows that small firms are one of the great hopes for our future and that we must try to encourage them. However, a firm in my constituency is moving from a starter factory to slightly larger premises. It used gas in the original factory and gas is available on the new premises. The quote for being connected to gas was £448.64. That is high enough, but I was shaken when the firm said that it was told that it would be required to pay
  "a security deposit of £352 against the future gas consumption. This deposit will be held by Southern Gas and revised after a period of two years. During retention, interest at a rate of 7 per cent. will be applied at the end of each six month period."
  That company has paid its bills on the dot. How can small firms survive when such impositions are applied and when they are clobbered by high interest rates and an overvalued pound? So many problems face industry that I believe that the money should not go into the Consolidated Fund but to help companies which deserve it most.
  I trust that my words will not fall on deaf ears. I hope that the Secretary of State will stand up and fight in the Cabinet on this issue. If he does not, many modern and efficient firms will go to the wall because they cannot meet their energy costs.
  9.12 pm
  Mr. Tim Eggar: It gives me pleasure to speak after the hon. Member for Isle of Wight (Mr. Ross) who, on this occasion, is the energy spokesman for

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  the Liberal Party. His knowledge of the gas industry is certainly comparable to that of his hon. Friend, who always begins arguments on the nuclear industry on the basis that if it is nuclear he disagrees with it.
  I hope that the oil companies will pick up the advocacy of the right hon. Member for Leeds, South (Mr. Rees) on behalf of the BGC and press him into service when they make representations to the Treasury about the level of PRT and the supplementary petroleum tax. His arguments about the need for sufficient funds for future investment and the need for research and development were wholly admirable. I am sure that they will find sympathy in the oil industry. There could be an interesting alliance between the Opposition Front Bench and the oil majors.
  I welcome the Bill wholeheartedly, not only because it contains one of the 10 recommendations that my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury) and I made in a pamphlet published last year on the future of the BGC, but because we are talking of the most efficient tax, from the point of view of Government income and the cost of collecting it, that this country or any other has known.
  I hope that the Bill marks the first perhaps rather tentative step by the Government towards a far-reaching reform of the British Gas Corporation. The majority of hon. Members on the Conservative Benches hope that the Government will rapidly decide to sell off certain of its peripheral activities, such as the showrooms, which it has been hanging on to over the years. We should like to see the monopoly right of purchase of gas from the United Kingdom domestic continental shelf taken away from the corporation. It has led to the problems that have given rise to the Bill. I go further. I should like to see the corporation's distribution monopoly broken. I trust that before the next election the Conservative Party will make a clear pledge that we are looking to introduce private capital to the corporation. However, that lies in the future.
  The British Gas Corporation deserves at least some support from the House for its success not only in the massive programme of conversion from town to North Sea gas but for being the first corporation world-wide to opt for the development of LNG from Algeria, which was a far-seeing move. It was personally managed and superintended by Sir Denis Rooke, and was a remarkable achievement in 1964.
  However, we may praise the management, but we cannot say that the corporation is effecient. We have no yardstick by which to measure efficiency. We cannot take profits as the only yardstick. Why is the corporation so profitable? It is taking the economic rent from the southern basin North Sea that rightly belongs to the nation. Just as the country has rightly said that we will take away the economic rent that naturally accrues to those who are developing North Sea oil, so should the Government take away the economic rent that accrues from the development of our gas reserves. The corporation's profits are based not on efficiency but on the fact that it has access to the cheapest gas in the Western world. That should be emphasised.
  Why has the feedstock been so cheap? This point was mentioned by my hon. Friends the Members for Bedford (Mr. Skeet) and Derbyshire, South-East (Mr. Rost). When the gas was first discovered, no tax was imposed on the producers by the Government. The abscence of competition to purchase the gas in the southern basin meant that the Government could screw down the oil
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  companies that made the discoveries. The matter went to arbitration. The oil companies stated that they were losing money under the contract that the Government had extracted from them. They could not continue to produce gas from the southern basin at the price that the Government were paying. After a long arbitration, an agreement was apparently reached between the corporation and the oil companies which led to a small increase in world terms in the price paid for southern North Sea gas in return for the companies installing compressor equipment and increasing recoverability.
  Unfortunately, the attitude that has developed at the BGC as a result of its monopoly right of purchase in the United Kingdom has led, or at least has been a major contributory factor in leading, to the Norwegians' decision not to put Statfjord and Heimdal gas through to the United Kingdom. They had had experience of the negotiations for Frigg. They had seen what had happened in the southern North sea. It was so appalling that they decided that if there were any alternative they would not be prepared to put their gas at the mercy of a monopoly nationalised British Gas Corporation.
  Mr. Douglas: That is what Statoil is.
  Mr. Eggar: I recognise the position held by Statoil in Norway, but the problem is the exploitation and, I might say, the lack of foresight of the BGC. I am convinced that if it had got away from its normal attitude it could have teamed up with Ruhrgas and Gaz de France and agreed to purchase gas from the Norwegian sector of the North sea. It could have made an offer to the Norwegians that was competitive with the price that the Germans could make from Emden to bring that gas through the United Kingdom and through cross-Channel pipeline from the southern coast to France. That gas could have been routed through the United Kingdom and would have created jobs and opportunities for United Kingdom industry—things that we could well have done with.
  But I digress. The fact is that the BGC has been making super profits. It has been taking the economic rent from the southern basin of the North sea, and it is right that the Government should take that away from the BGC.
  I go along to a certain extent with the argument of the right hon. Member for Leeds, South and the hon. Member for Isle of Wight, the Liberal spokesman. I hope that in its negotiations with the Treasury, the Department of Energy will point to the considerable revenues both from the levy and the additional tax on the oil companies and say that the presentation of our energy package and policy to the country represents a significant source of income coming in.
  We need additional money as part of that strategy for the purpose of energy conservation, particularly to assist funding to local authorities. There is a strong argument for a specific sum to be put aside for insulation of lofts, and so on, in local authority buildings. I go along a certain way, though not the whole way, with the argument of the hon. Member for Isle of Wight that we should edge towards some form of fuel energy assistance scheme for the elderly and others who need it.
  The Department should therefore use the argument of the vast sums that it is delivering to the Treasury to say that it must have something back to help to market its energy policy. I accept the points that were forcefully put by the

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  right hon. Member for Down, South (Mr. Powell). I agree that one cannot have funds earmarked in or earmarked out. That is not a sensible way to proceed.
  I wish to put a few questions, to which I hope the Minister will be able to address himself. First, can he state what percentage of the BGC's profits will actually be paid over to the Treasury once the monopoly levy is in place? We know that at present the oil companies pay between 80 per cent. and 87 per cent. of their profits to the Treasury. What will be the equivalent figure for the BGC after the levy? Can we now assume that the corporation will actually start paying corporation tax, or are all the projections based upon the assumption that no corporation tax will be payable in the future?
  It is important that the BGC should be allowed some form of forward planning. Will we see a three-year forward rolling programme for the levy? In other words, next year will we have an announcement of what the levy will be in 1983–84 and 1984–85? It is only fair that the BGC should know three yearas in advance what the levy is likely to be. However, I accept that the Secretary of State must have a right to alter the levy if pricing changes on relatively short-term grounds, because nationalised industries should be given the benefit of an ability to plan forward as far as possible.
  I have an additional question. What tax regime will apply to the fields in the southern basin, which are probably marginal gas fields and for which PRT as presently constructed is not suitable? Will we have pre-1975 levy taxes paid under the terms of the Bill—in other words, no tax paid by the producer but a tax paid by the BGC—or will amendments be made to the existing PRT laws? I should like clarification on that point.
  I do not wish to develop my arguments any further, except in respect of pricing. Both sides of the House must accept responsibility for the difficult position in which we find ourselves with regard to gas pricing. The fact is that Governments of both parties have said "We are worried about the RPI impact of an increase in domestic gas prices". Of course the BGC has welcomed that. It has wanted to keep domestic gas prices down, because it has given it some political power as against the Department of Energy.
  It is quite clear that it has suited the BGC and the Department of Energy, under whatever Government, to make their profits from industry. Many of the problems that we now face have arisen from that basic political approach. I wish that the new Opposition spokesmen would seriously consider whether or not it is possible to develop a co-ordinated approach to domestic gas pricing policy, because the BGC must be allowed to make profits.
  The economic rent should rightly accrue to the Government, and we should not go in for subsidised energy policies. It cannot be right for the BGC's profits to come from industry. Cannot we move towards some form of informal agreement on domestic pricing?
  If, as a Government or a country, we get into a position of artificially low energy pricing, we shall be on a slippery slope from which there is no recovery. We are then in an artificial world, which will eventually come to an end, be it in 20 or 30 years' time.
  I listened carefully to my right hon. Friend the Member for Stafford and Stone (Sir H. Fraser) There is strong evidence that our industry is paying more for gas in
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  particular instances than industry in France. I have a case in my own constituency. It relates to a company called E and E Kaye, which is a subsidiary of a French company. It has compared directly similar processes in the plant in Enfield and the plant in France. I am assured and convinced that there is a difference of around 20 per cent. I realise that this is shifting the whole time, but in present economic circumstances we must move towards at least comparable industrial energy pricing, although I do not think that it should be subsidised industrial energy pricing. I am afraid that the profit must come from the domestic gas consumers, with all that that involves. I commend the Bill to the House.
  9.30 pm
  Mr. Dick Douglas: I am a little tempted to follow the hon. Member for Enfield, North (Mr. Eggar) in his argument. One of the strange things about the Tories in relation to public corporations is that they despise them when they are failures, and they hate them when they are successes. There has been no analysis in this debate of why these windfall profits—if we can call them that—have fallen to the Gas Corporation.
  In the whole energy debate, in this House and elsewhere, I resent the underlying supposition that we have to curtail and manage our industry at the behest of a pricing policy that is laid down not by the long-run marginal costs of our indigenous sources but by the pricing policy of OPEC. When we talk about reflecting "world market" prices for energy, we are talking about reflecting the prices that are managed by the OPEC cartel. There may or may not be an argument for doing that, but there is an argument on this side of the House—I hope that we shall carry Conservative Members with us—that we should not decimate our industry by doing so. Of course, if we have an OPEC cartel we have to try to come to terms with it, and we have to shape our policy towards it.
  We are in a favoured position in comparison with other Western industrialised nations. I shall not go into the historic reasons for that, because time is not available. The Japanese will not necessarily tailor their industry to the OPEC structure. They will protect their industry. The Americans will not tailor their industry overnight to reflect world economic pricing. They will resist it and phase in managed prices. Of all nations, we slavishly follow OPEC prices.
  The Bill illustrates clearly the Government's confusion in economic policy. They have managed to screen their activities by adopting a dual image. While the Prime Minister gives the impression that everything is on course, other perhaps more truthful, members of the Administration realise that a rigid monetarist stance has been and is damaging to our industry. They have sought piecemeal to obtain changes, which sometimes have been costly. The Secretary of State for Energy does not know whether he is a hard or soft monetarist. This Bill illustrates that confusion.
  There has been no dispute—except by the hon. Member for Enfield, North—that British Gas is a success story. In an aside, he illustrated the innovative capability of British Gas in experimenting with LNG. If it had not experimented with LNG, it is possible that there would not have been an expansion in the southern sector. In the northern sector British Gas does not have a monopolistic position in regard to gases from the gas gathering system.

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  It has a monopolistic position in relation to methane only. Conservative Members should know that when they make their criticisms.
  Few would deny that British Gas is a success story. It has 20 per cent. of the United Kingdom energy market at present, and, in this case, the public sector has transformed a backward industry into one that leads in technological terms. The oil companies do not like it, not because it has been a failure but because it has been a success.
  Mr. Eggar: Has it been successful in keeping gas in the ground in the southern basin of the North Sea?
  Mr. Douglas: I hope that the hon. Member, in his studies of the question, spent some time reading the report of the Public Accounts Committee that was published in May 1973. If he did, he will know what the oil companies were up to at that time. We are talking in terms of windfall profits. If the regime had continued, the oil companies would not have paid one penny of tax into the United Kingdom. What is happening now arises from a position that was developing in the North Sea. The reason why the oil companies do not like British Gas and have certain reservations—[Interruption.] In terms of the southern gas field, the oil companies had an assured market and were in a bargaining position. What the hon. Member has said is partly true, but we have moved on from that stage.
  I admit that because of the current bargaining position it is possible—indeed, probable—that there is gas in certain areas in the southern sector that is not being exploited. I concede that, and also that one has to have an energy regime that does not leave one drop of oil or gas in one's sector of the North Sea that can be exploited. But that is a managed market; it is not a free market.
  Mr. Skeet: But surely it is a managed price. If, under section 8 of the Energy Act 1976, the British Gas Corporation negotiates with the campanies, it can lay down the price. It is the sole buyer and therefore it dictates it. Is that right and reasonable?
  Mr. Douglas: Whether or not it is right and reasonable, the position is that the people of this country through this House have given the British Gas Corporation these powers. The powers have to be viewed as beneficial or detrimental in the national interest. Looking at the question over the period, I would argue that the powers have been beneficial in the national interest.
  If hon. Members want to jack up the prices of gas and other fuels in order to meet the long-run marginal cost, which is the replacement cost—we are talking about the cost of replacement fuel in X years' time—there is an argument for that, but we have to face the economic implications of doing that. There is no point in hon. Members saying that they are in favour of that policy and at the same time crying wolf about key industries which have been tied to gas, and which have been priced out of the world market for their export products and suffered job losses. The right hon. Member for Stafford and Stone (Sir. H. Fraser) referred to those industries.
  Mr. Skeet Mr. Skeet rose—
  Mr. Douglas: I shall not give way again, because I want to deal with an essential point about the Bill.
  British Gas has been a commercial success, and the Government want to cream back some of the present windfall profits and some of the future windfall profits by
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  means of a levy. Whether or not the Government accept it, that levy will be reflected, albeit indirectly, in the gas industry's pricing policy.
  Let us consider for a moment the nature of the levy. The hon. Member for Enfield, North tried to compare it in some ways with the petroleum revenue tax. One of the reasons why the Government are building in what might be called a new excess profits tax on the oil industry is that the oil industry, rightly or wrongly, is being good and is avoiding PRT. But there is no way in which the gas industry can avoid the levy, because it is a quantity tax. equivalent to a barrelage tax. If hon. Members want to impose a quantity tax on oil, the people in the oil industry will die with their feet up. That is what we recommended in the Public Accounts Committee in 1973, and that tax cannot be avoided and evaded. I am willing to look at that case and argue it. I was very attracted by the idea of a quantity tax—I do not speak for the Labour Party—that could be varied. So the position is not on all fours with that in the gas industry. The levy is a detrimental burden imposed on our gas industry. The NEDC paper states:
  "Industrial gas users on the Continent have a cost advantage over the United Kingdom users of up to 20 per cent. for firm supplies and up to about 10 pet cent. for interruptable supplies."
  That applies to Continental users. No reference is made to users in the United States.
  The slavish pursuit of world market prices for fuel is extremely damaging to industry. When it is related to overvalued sterling and high interest rates, major sectors of our industry are severly penalised. The Government say that they will collect £1·3 billion, from 1980 to 1983, from the implications of the Bill. Whether we like it or not, it is directly related to the public sector borrowing requirement. It will create more unemployment, which will in turn increase the PSBR. That is bad enough.
  As the hon. Member for Stafford and Stone said, we are concerned about the need to stop the flaring of gas in the North Sea. That is why we all welcomed the arguments to promote the gas gathering system, or at least its southern leg. Daily, press reports state that there could be delays in creating that structure, which is an important piece of capital investment in the North Sea. Why? It is because the banks are standing back and viewing it in risk terms. If they are doing so, that is related to the rate at which they will lend capital. If they lend capital to the project at a higher rate than the rate at which the Government and the public sector can borrow it, that is detrimental to the public interest. Perhaps I am wrong, but I believe that any transmission company formed for the gases in the North Sea would have what would be tantamount to a Government guarantee. The cost of borrowing should reflect the Government's own costs.
  The PAC report No. 32, said in paragraph 8:
  "In our view there can be no doubt that the nationalised industries and other statutory public corporations are fully backed by the Exchequer—and if they borrow money in their own name they are effectively doing so on an Exchequer credit, irrespective of their actual or prospective profitability. We, therefore, assume that the rates of interest which they pay for fixed interest money from the private capital market should reflect this credit standing. There would in our view be no justification in principle for paying more."
  That is the utter confusion of Government policy. They are penalising British Gas on the one hand, and putting the money into the Consolidated Fund on the other, to reduce the PSRB, and endangering—I hope that I am wrong—a valuable piece of capital development in the North Sea, because the banks will want the nation to pay more than

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  the public corporation would pay if the Government were the borrower. That is a direct reflection of the Government's doctrinaire approach.
  I should like to raise one or two tangential items. What is the new role of the British Gas Corporation in the gas gathering system when the gas comes ashore? Is it true, as has been reported in the press, that it will be the dispenser of the ethane? That is important to my constituents and other constituents in Kirkcaldy and in Central Fife. It is important in analysing what will happen at Moss Morran and Braefoot Bay.
  I oppose the Bill, not because there is not an argument for creaming off windfall profits but because it is a piecemeal, ill-thought-out development and proposal by the Government.
  9.45 pm
  Mr. Martin Stevens: I am a consultant to the British Gas Corporation, but that does not mean that it has put out a brief on this subject. I certainly have not seen one. It is a bit unfair to talk about windfall profits as even the hon. Member for Dunfermline (Mr. Douglas), who, like me, supports the industry, did. As the Price Commission pointed out barely a year ago, but for the increases last year British Gas would have made a loss on the domestic side of the business. On the industrial side there has been an effort to relate prices to the market, and to some extent that has been achieved. It is misleading to suggest, however, that the British Gas Corporation has been or is enjoying an unearned increment or bonanza.
  The biggest investment in the corporation is in the pipelines, which are its greatest single asset. That investment would be wasted if in years to come it could not use the pipelines that it is developing and expanding for the transmission of gas. In other words, it would be wasteful if, five or 10 years from now, the supply of North Sea gas, the more readily, easily and cheaply obtainable natural gas, were no longer available or were reduced in quantity, and if there were inadequate funds either to develop other forms of gas perhaps through coal, or to import gas.
  The levy is a discriminatory tax on gas customers because no one else pays a levy of this kind. It was the Government, not the corporation, who asked for the gas price to be raised to the inflation level plus 10 per cent. The key anxiety expressed by hon. Members on both sides of the House is this. The corporation will clearly have to invest much more extensively in about five years from now when the present supply of gas from the continental shelf begins to dry up.
  Profits not required for immediate investment go to the Government as loans, and they show up in the public sector borrowing requirement. But it is only right that we should put down markers tonight lest five or six years from now the corporation needs money that it does not then have in order to embark on investment in new ways of producing gas and new forms of gas. People may then know, when that moment comes and the corporation has to ask the Government for financial help, that this is the case not of a nationalised industry with a begging bowl but of an industry which had its loans to the Government converted into a levy, which meant that it was unable,
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  without recourse to the Government, to invest further in order to derive the benefit of the current investment in pipelines
  I do not think that one can oppose what the Government are suggesting but we should pass the Bill with greater regard than has been shown for the problems of the industry and, wht is more important, the likely investment requirements in future years.
  9.50 pm
  Mr. Frank Haynes: I welcome the opportunity to contribute to the debate. In the interests of time, I shall be brief.
  The speeches that we have heard from Conservative Members do not surprise me in the least. All the speeches except one were flashy, and not really to the point. They constituted a cover-up and a smokescreen for what the Government are doing. The public sector borrowing requirement has been mentioned time and again. That is what the debate is all about.
  The Government Front Bench is full of financial wizards, but they get their figures wrong all the time. That means that they have to change policy and switch direction to find the money to cover up the mistakes that they have made. It is an appalling situation when the elderly, the lower-income groups and people with children have to finance the mistakes of the Government. That is a shocking state of affairs. It is high time that it was said in the House. I hope that it will be said in future.
  This is a highwayman's Bill. It is robbing the consumer. I regularly have industrialists at the door of my surgery. When I visit factories I am told about the crippling energy costs that have been imposed by the Government. Such costs will continue to be imposed because of the three-year policy in the Bill. These provisions will continue to cripple industry. The whole essence of the Bill is to try to draw in moneys that the Government have lost. The public sector borrowing requirement is a mire compared with what it was in May 1979.
  The Government are trying to stoke up finance to cover their mistakes. They are making consumers pay. By God, they are making them pay. The Government say that they are concerned about the elderly. In reality they could not care less. We have pressed the Government to do something about heating allowances for the elderly, but that is nowhere near enough. In addition, the children's allowance was cut. That is part of the policy to draw in money that the Government have lost because of their mistakes. The two-week delay in increasing pensions was another way to draw in money to cover up mistakes. It is a pure smokescreen.
  Before I came to the House I used to work in the pits. From time to time there were deaths at the pits. The mining industry is a benevolent society, and a notice would be pinned to the wall. It would tell the men that next Friday, when they drew their pay-packets, there would be a levy to enable some kind of grant to be paid to the widows. When the men came out of the pit on the day on which the notice was posted they would say "God, Levi's here again". We have much the same situation with the Bill.
  It is high time that the Government changed direction. From time to time, particularly in the last few days, we have been told that perhaps a change of direction is coming. By God, we need a change of direction here.

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  One could list a number of things, affecting the ordinary folk, that have been introduced to cover up the Government's mistakes—prescription charges, social security benefits, and child allowances. The Government will not get away with it. People now realise what is going on. The people of this nation will react strongly to the Government because of the wicked policies that they are imposing on the nation.
  9.55 pm
  The Under-Seeretary of State for Energy (Mr. Norman Lainont): The speech of the hon. Member for Ashfield (Mr. Haynes) was not typical of the debate. I make no complaint about his contribution. However, I am glad to say that this has not been a partisan debate, and I welcome the spirit in which the right hon. Member for Leeds, South (Mr. Rees) spoke.
  One of the recurring questions in the debate was: why was the levy not included in the Finance Bill? It is normal for a wholly new income-gathering measure to be introduced in a separate Bill. That is what happened with the Oil Taxation Act 1975 and the levy on the television companies. It is also a convention that receipts and payments are a matter for the Consolidated Fund.
  The hon. Member for Ashfield asked what the money would be used for. I think that he received a good reply from the right hon. Member for Down, South (Mr. Powell), who drew attention to the fact that it is not the habit in the House to hypothecate revenue. I am grateful to the right hon. Gentleman for finding a new word to substitute for hypothecation. "Assignment" is a much less ugly word. But as the right hon. Gentleman pointed out, what is being argued very much leads down the trail of the road tax fund.
  However, I felt that the right hon. Gentleman came near to the hypothecation argument when he talked about £100 million being reserved for a Northern Ireland gas pipeline. That would be an assignment of revenue. As the right hon. Gentleman knows, investments in new gas supply need to be justified by themselves and they have to satisfy a rate of return irrespective of the source of the money or whether the British Gas Corporation is generating sufficient profits to finance such a pipeline.
  The right hon. Gentleman dwelt at some length, as he did in the debate on the Ways and Means resolution, on the question of gas for Northern Ireland. The gas industry in Northern Ireland is a matter for my right hon. Friend the Secretary of State for Northern Ireland, and it would not be right for me to trespass on his territory. However, I am well aware of the arguments for making a supply of natural gas available to the Province. Recently, however, there have been indications that the Government of the Republic of Ireland may be prepared to supply natural gas from their own resources to Northern Ireland. The Northern Ireland Office has asked the Dublin Government to provide detailed information so that a full evaluation of the proposal can take place. It is expected that this will be completed shortly.
  The right hon. Member for Down, South referred to this measure as a diamond of a Bill. I think that his speech was something of a jewel which illuminated certain parts of the Bill. However, on one point—the effect of the Bill on the public sector borrowing requirement—the right hon. Gentleman was not quite correct. The PSBR covers the whole of the public sector, and transactions within the
  106
  public sector have no effect on it. The BGC's surpluses reduce the PSBR whether they are lent to the national loans fund or whether BGC holds on to them.
  My hon. Friend the Member for Enfield, North (Mr. Eggar) supported the Bill and the levy. That is hardly surprising, because only a few months ago he wrote a pamphlet advocating a levy on the British Gas Corporation. So in a way he can claim to be one of the authors and inspirers of this measure.
  My hon. Friend asked a number of questions. First, he asked what would be the percentage of profits comparable to the percentage of profits taken by PRT from the oil companies. I should point out that the levy is not a profits tax. As the hon. Member for Dunfermline (Mr. Douglas) said, it is put on the costs of the corporation. It is a tax on costs. The revenues are set out in the explanatory and financial memorandum. The profits of the BGC that will remain after the levy are approximately £300 million a year.
  My hon. Friend also asked about corporation tax liability. At present, the corporation is incurring liability for corporation tax, though I cannot give an exact figure of what it is likely to pay either this year or next year. It is just beginning to build up.
  My hon. Friend also asked whether we would roll forward the levy. We expect to set the levy and the three-year financial target at the same time. Thus, the BGC will have an opportunity to plan ahead.
  My hon. Friend's last question related to the tax regime on the southern basin. There is no reason why PRT should not apply to new gas in the southern basin. The levy will not apply to gas in such a situation.
  The hon. Member for Dunfermline asked about the position of ethane in the gas-gathering system. That matter does not fall strictly within the Bill, but I can tell him that the BGC has reached agreement with the BNOC about the handling of the ethane. The BGC will handle the ethane and the BNOC will handle the liquids. If I can find any other information to amplify what I have said I shall write to the hon. Gentleman.
  The right hon. Member for Leeds, South and others wondered whether the levy would leave the BGC with enough funds for future investment and whether, at a time when the BGC was to invest some £4,000 million over four years, the levy would cause difficulties. The BGC will have available for investment not just its profits but its depreciation and the money loaned by it to the national loans fund. In 1981–82, we are expecting profits in excess of £300 million, and depreciation in excess of £600 million, and the NLF deposits will be on top of that.
  It is, of course, precisely how much should be left with the corporation for its investment programme that is a matter of judgment. But that is the judgment that the Government have had to make in deciding on the precise level at which the levy should be fixed. It goes without saying that each investment project has to justify itself and has to meet a required rate of return. We do not believe that the levy will so deprive BGC of money that it will be unable to finance its own investment. It is our intention that the corporation should be able to do that.
  Inevitably, much of the debate has been about prices. The right hon. Member for Leeds, South mentioned both domestic and industrial prices. He said that insufficient justificaton had been given for the domestic price increases that had already taken place and those that were in the pipeline. However, my right hon. Friend the Member for

  107
  Stafford and Stone (Sir H. Fraser) gave one of the best justifications, namely, the imbalance between domestic and industrial prices in this country. It is a fact that in this country, in contrast to the situation on the Continent, the domestic consumer pays less than does the average industrial consumer. In this country the British Gas Corporation is barely breaking even on its sales of domestic gas. The price of domestic gas in Britain is only about half of that paid by householders in Germany or France, for the very same gas from the North Sea.
  It is also a fact that the new supplies of gas from the North Sea are costing up to 10 times as much as the original gas from the North Sea. That is why many industrialists are saying, as my right hon. Friend the Member for Stafford and Stone did so forcefully, that there has to be a very considerable rise in domestic prices after a period in which they have been falling sharply in real terms.
  Another part of the speech of my right hon. Friend the Member for Stafford and Stone related to industrial prices. It is not the Government's intention that British industry should be placed at a disadvantage by energy prices. It is our view that our industrial energy prices, while not out of line generally acorss the board, may pose a problem for certain energy-intensive sectors, certain of the larger users. That is precisely the question being looked at by the NEDO task force. My right hon. Friend will also recall that the Secretary of State has asked the British Gas Corporation to look at discounts for bulk users and at a number of different ways of helping the large users of gas.
  My right hon. Friend quoted a number of figures for comparative gas costs. I do not want to go into those in detail, although he will bear in mind that some part of the difference may be explained by the very recent movement in the exchange rate. It is quite difficult to argue that the BGC ought to price its gas in anticipation of movements in the exchange rate.
  Mr. Robert C. Brown: Surely the Minister must take on board the point about energy conservation. Natural gas has a projected life of 20 of 30 years. Coal has one of hundreds of years. It is completely wrong for the Minister to be talking in terms of encouraging industry to use natural gas. Hes should be dicouraging it rather than encouraging it.
  Mr. Lamont: I do not agree with that entirely. There are certain usages in industry for which gas is appropiate. Certainly we ought to have a pricing regime which ensures that gas is used only for premium purposes, for the pruposes for which it is most appropriate.
  A number of hon. Members have questioned the Government's assertion that the levy does not affect prices. But the reason why the levy does not affect prices is that the pricing regime has already been determined. The financial target has already been set on the assumption that the BGC will be charging market rates and the long-run marginal cost for its gas, and the purpose of the levy is to make sure that the proceeds in the BGC are recouped for the benefit of the community as a whole.
  My right hon. Friend the Member for Stafford and Stone said that he was against all windfall profits taxes of any kind. But it seems right that when one is dealing with a natural resource and when the price of that rises and is of benefit to companies, that windfall element should not accrue just to the company but should accure to the Government and the
  108
  community more generally. That is the principle behind the petroleum revenue tax. One of the purposes of the gas levy is to see that there is a tax on those gas fields that were exempt from the petroleum revenue tax because contracts were signed before PRT was introduced.
  That seems to me a right principle. As my hon. Friends the Members for Derbyshire, South-East (Mr. Rost), for Enfield, North and for Bedford (Mr. Skeet), and also the right hon. Member for Down, South, pointed out, that principle seems even more right when one is talking of a monopoly industry with near monopoly rights in the North Sea. In that case, it seems even more right that the profits should accrue not just to the corporation but to the community more generally.
  The right hon. Member for Down, South, in a fascinating part of his speech, speculated on what would be the effect if there were no gas monopoly and if there were competing gas companies and utilities. I do not want to follow him too far down that road. One effect would follow. The prices paid for gas in the North Sea would have been very much higher than in the past.
  I note what some of my hon. Friends, including my hon. Friend the Member for Bedford, said about the regime in the North Sea and the near-monopoly position of the corporation. It was President Carter who said that the energy crisis was the moral equivalent of war. The energy crisis—how we are to use scarce, precious and finite resources—is one of the most important issues that faces this generation and generations to come. The period when oil is running out and gas begins to run out is not far off. There is no way that we in this country can be immune from the pressures that are taking place all over the world where energy prices are rising generally. There is no industrialised country where energy prices are not rising more quickly than prices in general. There is no way that we in this country can be immune from that development.
  The principles behind the Bill were largely supported by the Labour Party when in Government, the Green Paper put forward by the Labour Government advocated market pricing of North Sea oil and added that the nation's participation in the surplus thereby yielded should be secured by taxation and other policies rather than by artificially low prices to the consumer. If that applies to oil, why does it not equally apply to gas? The former right hon. Member for Birkenhead, Mr. Dell, the then Paymaster General, went on to amplify the point when he said:
  "the gas supplied from the North Sea … really should be as liable to PRT as oil".—[Official Report, Standing Committee D, 6 February 1975, c. 703.]
  That was how the Labour Party saw things when in Government.
  Mr. Douglas: Finish the quote.
  Mr. Lamont: Of course, everything seems different in Opposition. Things are better seen in perspective standing on one's head.
  We cannot expect the Labour Party, which is falling apart at the seams, to do anything except grub for votes. We cannot expect it to do other than oppose the Bill. The Government have taken a difficult and courageous decision. They, unlike the Opposition, are prepared to look to the longer term. The Bill seeks to convert the temporary and transient advantages of the North Sea into permanent advantage for this country. I commend it to my right hon. and hon. Friends.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 153, Noes 104.

  Division No. 71]

  [10.14 pm

  AYES

  Aitken, Jonathan

  Lawson, Rt Hon Nigel

  Alexander, Richard

  LeMarchant, Spencer

  Banks, Robert

  Lloyd, Peter (Fareham)

  Beaumont-Dark, Anthony

  Loveridge, John

  Benyon, Thomas(A'don)

  Lyell, Nicholas

  Berry, HonAnthony

  McCrindle, Robert

  Biggs-Davison, John

  Macfarlane, Neil

  Blackburn, John

  MacGregor, John

  Boyson, Dr Rhodes

  McNair-Wilson, M. (N'bury)

  Braine, SirBernard

  Madel, David

  Brinton, Tim

  Major, John

  Brooke, Hon Peter

  Marlow, Tony

  Brotherton, Michael

  MarshallMichael(Arundel)

  Brown,M,(BriggandScun)

  Mawby, Ray

  Bruce-Gardyne, John

  Maxwell-Hyslop, Robin

  Bryan, Sir Paul

  Miller, Hal(B'grove)

  Buchanan-Smith, Hon Alick

  Mills lain(Meriden)

  Buck, Antony

  Mills, Peter (West Devon)

  Budgen, Nick

  Moate, Roger

  Bulmer, Esmond

  Moore, John

  Carlisle, John (Luton West)

  Mudd, David

  Carlisle, Kenneth (Lincoln)

  Murphy, Christopher

  Chalker, Mrs. Lynda

  Needham, Richard

  Chapman, Sydney

  Nelson, Anthony

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

  Neubert, Michael

  Cockeram, Eric

  Newton, Tony

  Colvin, Michael

  Normanton, Tom

  Cope, John

  Page, John (Harrow, West)

  Costain, SirAlbert

  Page, Rt Hon SirG. (Crosby)

  Cranborne, Viscount

  Page, Richard (SW Herts)

  Crouch, David

  Parris, Matthew

  Dean, Paul (North Somerset)

  Pattie, Geoffrey

  Douglas-Hamilton, LordJ.

  Pawsey, James

  Dover, Denshora

  Percival, Sirlan

  Dunn, Robert(Dartford)

  Pink, R. Bonner

  Dykes, Hugh

  Pollock, Alexander

  Eggar, Tim

  Porter, Barry

  Faith, Mrs Sheila

  Proctor, K. Harvey

  Fisher, SirNigel

  Renton, Tim

  Fletcher-Cooke, SirCharles

  RhodesJames, Robert

  Fowler, Rt Hon Norman

  Rhys Williams, Sir Brandon

  Gardiner, George (Reigate)

  Ridley, Hon Nicholas

  Garel-Jones, Tristan

  Roberts, M. (Cardiff NW)

  Glyn, Dr Alan

  Rossi, Hugh

  Goodlad, Alastair

  Rost, Peter

  Gorst, John

  Sainsbury, Hon Timothy

  Gow, Ian

  Shepherd,Colin(Hereford)

  Gray, Hamish

  Sims, Roger

  Greenway, Harry

  Skeet, T. H. H.

  Griffiths, Peter Portsm'thN)

  Speed, Keith

  Grist, Ian

  Spicer, Jim (West Dorset)

  Grylls, Michael

  Spicer, Michael (S Worcs)

  Hamilton, Michael (Salisbury)

  Stainton, Keith

  Hawksley, Warren

  Stanbrook, lvor

  Heddle, John

  Steen, Anthony

  Henderson, Barry

  Stewart, Ian (Hitchin)

  Higgins, Rt Hon Terence L.

  Stradling Thomas, J.

  Hill, James

  Taylor, Teddy (S' end E)

  Hogg, Hon Douglas (Gr'th'm)

  Tebbit, Norman

  Holland, Philip (Carlton)

  Temple-Morris, Peter

  Hooson, Tom

  Thatcher, Rt Hon Mrs M.

  Hordern, Peter

  Thomas, Rt Hon Peter

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

  Thompson, Donald

  Hunt, David (Wirral)

  Townend, John (Bridlington)

  Hunt, John (Ravensbourne)

  Townsend, Cyril D,(B'heath)

  Jessel, Toby

  Trippier, David

  Jopling, RtHonMichael

  van Straubenzee, W. R.

  Joseph, Rt Hon Sir Keith

  Viggers, Peter

  Knight, MrsJill

  Waddington, David

  Knox, David

  Wakeham, John

  Lamont, Norman

  Waller, Gary

  Lang, Ian

  Ward, John

  Langford-Holt, SirJohn

  Warren, Kenneth

  Lawrence, Ivan

  Watson, John

  110

  Wells, John(Maidstone)

  Wells, Bowen

  Tellers for the Ayes:

  Wheeler, John

  Mr. Carol Mather and

  Wickenden, Keith

  Mr. Robert Boscawen.

  Wolfson, Mark

  NOES

  Allaun, Frank

  Lofthouse, Geoffrey

  Alton, David

  Lyon, Alexander(York)

  Atkinson, N.(H'gey,)

  McCartney, Hugh

  Bagier, Gordon A.T.

  McDonald, DrOonagh

  Beith, A. J.

  McGuire, Michael(Ince)

  Booth, Rt Hon Albert

  McKay, Allen(Penistone)

  Bradford, Rev R.

  McKelvey, William

  Bray, Dr Jeremy

  McWilliam, John

  Brown, Hugh D.(Provan)

  Marks, Kenneth

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

  Mason, Rt Hon Roy

  Buchan, Norman

  Maynard, MissJoan

  Callaghan, Jim (Midd't n&P)

  Mitchell,Austin(Grimsby)

  Campbell-Savours, Dale

  Mitchell, R.C.(Sotonltchen)

  Carter-Jones, Lewis

  Molyneaux, James

  Clark, Dr David (S Shields)

  Morris, Rt Hon J. (Aberavon)

  Cocks, Rt Hon M. (B'stolS)

  O'Neill,Martin

  Concannon, Rt Hon J. D.

  Palmer, Arthur

  Conlan, Bernard

  Park, George

  Cowans, Harry

  Parry, Robert

  Cryer, Bob

  Powell, RtHon J.E. (S Down)

  Cunliffe, Lawrence

  Powell, Baymond(Ogmore)

  Cunningham, DrJ.(W'h'n)

  Prescott, John

  Davidson, Arthur

  Rees, Rt Hon M (Leeds S)

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

  Roberts,Albert(Normanton)

  Deakins, Eric

  Roberts, Ernest (Hackney N)

  Dixon, Donald

  Robertson, George

  Dormand, Jack

  Rooker, J. W.

  Douglas, Dick

  Ross, Ernest (Dundee West)

  Dubs, Alfred

  Ross, Stephen (Isle of Wight)

  Dunlop, john

  Ross, Wm.(Londonderry)

  Dunwoody, Hon MrsG.

  Rowlands, Ted

  Eadie, Alex

  Sandelson, Neville

  Eastham, Ken

  Sever, John

  Ellis, Tom (Wrexham)

  Silkin, Rt HonJ. (Deptford)

  Evans, John(Newton)

  Silverman, Julius

  Flannery, Martin

  Skinner, Dennis

  Fletcher, Ted (Darlington)

  Snape, Peter

  Foster, Derek

  Spriggs, Leslie

  Freud, Clement

  Stallard, A. W.

  George, Bruce

  Steel, Rt Hon David

  Gourlay, Harry

  Wainwright, E.(DearneV)

  Hamilton, James(Bothwell)

  Wainwright, R.(ColneV)

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

  Welsh, Michael

  Harrison, Rt Hon Walter

  Whitehead, Phillip

  Haynes, Frank

  Whitlock, William

  Janner, Hon Greville

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

  Johnston, Russell(Inverness)

  Williams, Sir T.(W'ton)

  Kilfedder, James A.

  Wilson, William (C'trySE)

  Lambie, David

  Winnick, David

  Lamborn, Harry

  Woodall, Alec

  Lamond,James

  Leadbitter, Ted

  Tellers for the Noes:

  Leighton, Ronald

  Mr. Joseph Dean and

  Litherland, Robert

  Mr. George Morton.

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Committee of the whole House.— [Mr. Goodlad.]
  Committee tomorrow.

  REDUNDANCY FUND BILL
  Ordered,
  That, in respect of the Redundancy Fund Bill, notices of amendments, new clauses and new schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a Second time.—[Mr. Goodlad]

  HOUSE OF COMMONS MEMBERS' FUND AND PARLIAMENTARY PENSIONS BILL
  Ordered,
  That, in respect of the House of Commons Members' Fund and Parliamentary Pensions Bill, notices of amendments, new clauses and new schedules to be moved in Committee may be accepted by the Clerks at the Table before the Bill has been read a Second time.—[Mr. Goodlad.]

  Fish Imports
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodlad.]
  10.25 pm
  Mr. Austin Mitchell: There could not be a more important debate for the fishing industry at the moment than this brief Adjournment debate on fish imports and their effect on prices. Nor could there be a more graphic demonstration of the level to which the industry has been reduced by the imports and their effect on prices and the importance of the problem than last week's collective refusal by British fishing vessels to put to sea. The refusal is still being maintained in Scotland. It ended in Grimsby only last Friday, with an undertaking that if the Government had taken no action in eight weeks it would be resumed.
  The situation is desperate. The industry is staggering towards bankruptcy. The reason is not that its catches are down in a major way over the past couple of years but that its receipts are down. It is therefore not able to pay the increased costs, particularly for fuel, and interest rates. Every issue of Fishing News reports that receipts are down. In 1980, Peterhead's two top trawlers dropped £100,000 each. The average earnings of the majority of vessels there dropped 20 per cent. in 1980. I have a host of settling sheets for Grimsby vessels that show similar results. Even the receipts for quite good trips are down.
  If the crew share the profit of the catch, they also share the loss, and at the end of the trip they are in debt. The debts range from £10 to £200. The picture is one of accumulating debt in the industry. The debt falls on the skipper who has borrowed to pay for his boat, the crew who are struggling to pay the debts accumulated on various trips, and the agent who carries the debts of the crew. The industry is moving rapidly into debt.
  I am pleased that the fish market is a free market. Sometimes it moves in a mysterious way. At a time of low landings vessels that come in late can get surprisingly good prices for their fish. To some extent, the market is inevitably a lottery. The basic point is simple. A skipper yesterday told me that last year his receipts were up £1 a kit. However, even when receipts are up, they are not sufficiently large to cover increasing costs—and fuel costs rose 20 per cent. last year—and in most cases receipts are substantially down. The fishermen are in serious difficulties.
  I have here receipts for two typical Grimsby vessels for various parts of the season. In December 1978, the "Betty Anne" pair trawler was making, on average, 51p per kilo. By last November that was down to 37p. The "Mary Ronn", a seine netter, in November 1978 was making 58p per kilo. By November last year, that was down to 38p per kilo. Out of that people are expected to pay the steadily increasing charges on the industry, the interest charges and all the other costs which have been rising.
  It is because the fall in prices has been associated with a long-term surge of imports rising steadily each year—even last year, although they did not rise much, they held their own in a depressed market—that the industry blames imports for its present predicament. In particular, it blames the surge of imports occurring in the early part of each year and bringing down prices.
  If the Government are committed, as apparently they are, to work within the EEC, it is essential that the

  113
  Common Market, which has done so well for agriculture and in maintaining the standard of living of agricultural producers, should extend the same service and the same rule to the fish producers and the fishermen, whose standard of living is steadily being squeezed and steadily suffering. If the Common Market is so adept at providing orderly marketing of agricultural products, it should guarantee the standard of living of the fish producers by providing the same kind of orderly marketing for fish products, so that the industry will no longer be in its present situation of going steadily bankrupt because its receipts are down.
  The first requirement is orderly marketing. The Scottish fishermen preferred to go about this by means of a minimum price scheme. But this broke down in Scotland last year, just as it broke down in Grimsby last year.
  Apart from not being in the interests of Grimsby, I believe that such a minimum price scheme has three serious disadvantages. First, it can work only when there are local minimum prices. It does not work very well on a open market such as Grimsby's. Secondly, it is payable to imports as well as to domestic landings, whereas the whole aim of such a procedure should be to help the domestic producer rather than the importer. Thirdly, it tends to lead to fishing for compensation, so that vessels are out catching small fish—what the industry calls "rubbish fish", although it is put more graphically than that—just to get the income from the minimum price scheme.
  It is far better to go for a deficiency payments scheme in which there is a Government guaranteed minimum price which is set on the actual costs of fishing. When the market price falls below that Government guaranteed price, a deficiency payment is made to the producer. The deficiency payment is made only to the local producer, the British fishermen, not to imports, and is differentiated according to size and quality. There is thus no incentive to go on remorselessly catching small fish and dumping them on the market just to get a return.
  The industry's best interests are therefore served by a deficiency payments scheme backed by the Government which brings the guaranteed price into line with the actual cost of fishing, because if the prices obtained by the industry do not reflect costs, in any marketing system in which the minimum prices, whatever they are, do not reflect costs, everything else is purely cosmetic.
  A guaranteed deficiency payments scheme has the advantage of bringing up the price. That is the crucial factor, because it edges up the whole structure of prices. It edges up the guide price. If that is brought into line with the actual cost of catching the fish, we can bring up the reference prices and the withdrawal prices so that all will come into line with the cost of catching the fish.
  The second need, apart from a deficiency payments scheme, is to restrict the flow of imports, particularly frozen imports. The present situation is potentially disastrous, in that those countries which have had the good sense to take 200-mile limits and to build up their stocks with conservation measures behind those limits are likely, within the next few years, to be in a position to swamp our market with their growing export of fish.
  The market must be protected from that threat, which is building up. There is already talk of Canada sending us 30,000 tonnes per year for the next three years. Such an
  114
  influx would be a disaster for the domestic industry. It is vital, therefore, that we have some regulation of imports, if that will not ruin our industry.
  There is no doubt also that, as well as third party imports, a good proportion of the problem is now caused by the EEC itself, specifically Holland and Belgium. Dutch and Belgian fish—fish apparently caught beyond the quotas that those countries are permitted, and not counted towards those quotas—is coming into this country, some of it detoured from the Market, and ruining our prices. It is encouraged by the high pound and it is helping to ruin our industry.
  There is a problem with the pound and with the cheap transport costs, but the basic problem is the flow of cheap imports and the effect on prices. Something is drastically wrong with the fact that fish from the Netherlands can be sold at up to £1 a stone less than the EEC minimum on the Grimsby market.
  We seem to be moving towards a fish merry-go-round, just as we have a merry-go-round with pigs and butter. We have reports of Polish fish caught in the Baltic and going into Denmark and Holland before coming on to the British market in containers from those countries. There are also reports of British fish being sent to Norway and then coming back from Norway. I gather that some of it is due to arrive on the Grimbsby market this week, presumably collecting an import-export subsidy from somewhere, either from Norway or from the Common Market. There must be some incentive to send the fish on its merry-go-round way.
  This kind of Common Market folly, and the over-fishing that it helps to encourage and to maintain, will ruin the industry if it is allowed to carry on. It is no use the Government saying "Give us the examples and we shall follow them up". The industry cannot keep track of all that is going on, and it is vital that the help of Government Departments—particularly the Ministry of Agriculture, Fisheries and Food and the Customs and Excise—should be invoked in producing examples.
  In order to solve problems of this kind it is right for the industry to ask for an emergency levy on all fish imports, from the EEC or anywhere else, to help give us what is so essential in the industry—a managed market, an orderly marketing system, in which the British producer is not forced into bankruptcy by the remorseless flow of imports.
  It is no use simply saying that we have problems with the EEC. Of course we have problems with the EEC. But the EEC has failed to act. It has failed to put up the official withdrawal prices on the Continent to a realistic level. It has failed to enforce proper quotas. It has failed to bring about orderly marketing. Indeed, the EEC has the provision in the basic marketing regulation, 100/76, and in article 22, that if a crisis develops the Commission "shall", at the request of a member, take the necessary measures in 24 hours. Why has not a request gone from our Government for the Commission to take what measures it can to deal with the position?
  Mr. Albert McQuarrie: I am following the hon. Gentleman's case very carefully because, as he rightly says, the position is urgent. He will agree that one of the biggest problems is not only the quantity of fish that is imported from the EEC but that which comes from other countries. From the EEC in 1980 there were 109,486 tonnes, and from countries outside the EEC there were 132,211 tonnes, making a gross total of

  115
  241,687 tonnes, at an approximate value of £18 million. This, as the hon. Gentleman rightly says, is the problem with which the fishermen have been confronted. There has been this mass of imports. I am not saying that there should not be any imports, because obviously the processors must have some, but somebody will have to get to grips with the present position if the fishing industry is to be saved.
  Mr. Mitchell: I am grateful to the hon. Gentleman for those figures, because it is important to have them. The scale of the problem is as he has described it. Although the interests of the processor have to be safeguarded, it is important that we have the market more managed than it now is, because the scale and flow of the imports is proving unpredictable, particularly in the first few months of each year, and because it is unpredictable the effect on the prices is disastrous.
  There is an urgent need for an aid package for the industry. In this mounting crisis of debt, aid is necessary to show that the Government still have confidence in the industry. At present the fishermen are in debt to the agents, the agents are in debt to the banks and the skippers are in debt to the banks. They are all pressed by the mounting burden of interest, and they are all in danger of closure if the situation continues or becomes worse.
  I emphasise that we accept that the Minister has the interests of the industry very much at heart and has worked hard in its interest. I also accept that there is a need for the type of inquiry that the Minister has initiated into the marketing of fish and the advertising and promotion of fish. It is important for the long-term future of the market that we put fish into people's heads as well as into their stomachs in order to regenerate the demand for fish, which has been deficient in the last few years. It is clear that the industry is now facing a serious crisis. It is struggling against bankruptcy because its receipts are down and because the price of fish is depressed by imports as a result of the strong pound and a lack of orderly EEC marketing, which are outside the control of the fishing industry.
  The industry is facing a crisis not only this year. The crisis has prevailed for two years running, so the basic facts about what is happening and why are now well known.
  The industry desperately needs Government action, orderly marketing and management of imports and aid to keep it going and to help it survive through the crisis. If it does not get that aid, the explosion of hostility and anger that took place last week, not only in Scotland but in Grimsby—the bitterness, arrests and desperation—is certain to recur. The Government must take some action to show that they are as concerned about the crisis as is the industry. If the crisis continues, and if there is another explosion of anger, there will be a breakdown in the control that the fishermen's organisations have been able to exercise over their members, and there will be a breakdown of order that will be far worse than anything we have seen up to now. The industry is going bankrupt and the fishermen are coming back from trips in dept. These people have so little to lose, and they are desperate for action from the Government to deal with the problem.
  10.43 pm
  The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): I am
  116
  glad that the hon. Member for Grimsby (Mr. Mitchell) has had the opportunity to raise this important subject. I know how difficult it is, because of competition, to obtain an Adjournment debate, and I congratulate the hon. Gentleman on obtaining one on this topical subject.
  Because of my contacts with the fishing industry I need no persuading about how seriously the industry views the current events. Anyone who has followed the events of recent days—the blockading of ports, and so on—must be conscious of the deep anxieties and concern amongst many sections of the fishing industry.
  Without in any way trying to play down or underestimate the intensity and strength of feeling about the matter, I must say that it was significant that the hon. Gentleman said that this is the second year running in which there has been a crisis. It would be fairer to say that it is one of many years in succession when there has been a problem of imports during the early stages of the calendar year. During the last two years the intensity of the problem, particularly in the face of rising costs in the industry, as in other industries, has become more serious. We must remind ourselves that the phenomenon of increased imports at this time of the year is not unusual. As the hon. Gentleman knows, this is the time of the year when traditionally there is less fish available from our sources of fishing, because of bad weather that affects our grounds more than others.
  There is reaction to that in that this is the month when our processors, for fear of disruption of supplies, tend to look overseas for supplies more than they do at other times of the year. At the same time, countries like the Netherlands, who fish in the southern North Sea, where large quantities of fish are available, take greater quantities than they can absorb. In no sense, therefore, of trying to belittle the problems facing the industry, it is worth reflecting that what we are seeing this year and what we saw last year is an intensification of a trend that has taken place for a number of reasons.
  I appreciate and understand the difficulties, but the hon. Member for Grimsby might do better if he did not try to talk in headlines about some of the problems facing the industry. Comments such as "staggering towards bankruptcy", "drastically wrong" and "merry-go-round for fish" are good for headlines, but in many ways they do not help to resolve the problems facing the industry. Let me pick up the last of those phrases. The hon. Member said hastily, and swiftly moved on, that this is what the industry says, and that it is up to the Government to discover what is happening. The Government do try to find out what is happening. If there are complaints, it helps the Government, in trying to trace whether the complaints are well-founded, if the evidence, gossip or whatever the allegations are based on can be given to me or my officials. I assure the House that we shall follow them up. But many of them are simply rumours, allegations and gossip.
  I remind the hon. Gentleman that Mr. Nigel Atkins, the chief executive of the NFFO, was quoted in The Times of 5 February as saying that in many cases the allegations about fish coming from Holland at below EEC withdrawal prices were "purely anecdotal, nothing else". Mr. Atkins was correct. It does the industry no good if its case is built on allegations or gossip which cannot be substantiated.
  It is significant to note what we have read—I am sure that this goes for my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie), who has shown his interest by attending the debate tonight—of two skippers

  117
  from Peterhead who visited a port in Holland. I have not spoken to the two skippers, and therefore I am careful in what I say, but the report was in Fishing News, which normally reports with considerable accuracy. They said that there was no indication of any fish failing to reach minimum prices. That was the evidence of two Scottish skippers who had taken the trouble, with the support of their fellow skippers, to visit Holland to learn at first hand what is happening there.
  Mr. Austin Mitchell: I accept what the Minister said about the anecdotal nature of the evidence. However, evidence has been put across on television about the Dutch fiddling of the quotas in one specific port, and about the French failure to observe the herring ban. What else can the industry produce but anecdotal evidence? Surely it is the responsibility of officials, particularly in the Customs and Excise department, to keep an organised and controlled watch on this matter—something the industry is incapable of doing. The evidence is bound to be anecdotal. It comes from fishermen, lorry drivers and isolated incidents. The industry just does not have the organisation necessary to maintain the kind of watch that the Government should operate.
  Mr. Buchanan-Smith: I understood that the subject of the debate, and of the hon. Gentleman's allegations, was imports of fish. That is what I was asking for evidence about. Overfishing of quotas or illegal fishing has taken place. We have been given evidence to substantiate allegations and the result has been that prosecutions have taken place in France. Indeed, the Commission has taken action against the French Government in relation to that matter. That bears out what I said. When we are given evidence to substantiate allegations, we have taken action, and we shall do the same with regard to imports.
  I am dealing with imports—the subject of the debate. That is why, if there is evidence of illegal imports, I want to deal with it every bit as much as does the hon. Gentleman. I do not want the industry to suffer problems as a result of illegalities any more than the hon. Gentleman does. The industry has enough problems to contend with which are not based on illegalities, but if there are illegalities let us get to the root of them and deal with them. Therefore, if the hon. Gentleman has evidence and believes that there is any truth in the allegations, I ask him to let me have that evidence. In the same way as we have had evidence of breaches of conservation measures and taken action, so we will take action on illegal imports if there is evidence to support such action.
  The problems on imports are twofold. As my hon. Friend the Member for Aberdeenshire, East pointed out, we have the problem of third country imports. As half our imports come from third countries, obviously we must take very great care. Last year, through the Commission, we succeeded in getting certain tariffs restored to proper levels and we also raised certain reference prices.
  We are still not happy about the way that the Commission has enforced the reference price system. Obviously a great deal can be done if we have a new
  118
  marketing regulation in consequence of a renegotiated common fisheries policy, but I do not believe that the Commission is adequately enforcing the powers that it already has. Our industry has therefore suffered from imports coming in at below the proper reference price.
  We have made a number of specific reports and asked the Commission to take action. In January, we sent 22 reports to the Commission and asked for action to be taken. I have raised this matter in the Council of Ministers in the past week, and the Commissioner has given me a personal undertaking that these cases will be investigated. Our complaints have been based on evidence, not on allegations. I assure the House that I shall continue to take action, where possible, in those areas.
  However, as the hon. Gentleman said, the real problem is not quite so much imports from third countries as imports from Europe. The main problem is the strong pound. I have taken this matter up with the Dutch Minister of Agriculture and Fisheries. The pound has strengthened 27 per cent. in relation to the guilder from a year ago. Therefore, as the evidence of Scottish skippers appeared to show, even adding on transport costs, fish can come into this country at below the level of minimum withdrawal prices here expressed in sterling. That is the basic problem faced not only by the fishing industry but by other industries in this country.
  What should we do? The hon. Gentleman put forward a number of suggestions. There are four areas in which we have taken action. First, as I said, we have taken action in relation to third countries directly with the Commissioner in Brussels. I shall certainly keep the House informed of the outcome in relation to that matter.
  Secondly, we have had discussions with the Dutch Government, and they have undertaken to watch the situation to make sure that there are no marketing illegalities.
  Thirdly, my right hon. Friend has asked two of his marketing advisers to look into the whole question of fish marketing here. That should help to get at the truth of marketing problems.
  Fourthly, as my right hon. Friend announced last week, we have asked the industry to co-operate with us in a specific investigation into what is going on about imports. Tomorrow afternoon my right hon. Friends the Minister and the Secretary of State for Scotland will be meeting representatives of the fishing organisations to discuss precisely how that investigation should be carried out.
  In those four ways we have taken action. The results of these actions are still to be seen, and I understand that. But, on top of that, we have brought forward the review of the financial state of the industry, which again we shall be discussing with members of the fishing organisations tomorrow, because we believe that the state of the industry and the financial problems that it is now facing are such that we must bring forward this review and discuss with the industry what must be done to meet what is admittedly a very serious situation.
  Question put and agreed to.
  Adjourned accordingly at six minutes to 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 Lincoln.

British Airways: Punctuality
The Earl of Kimberley: 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 confirm that punctuality figures for British Airways' operations for 1980 have considerably improved compared with those for previous years.
Lord Lyell: My Lords, I am happy to be able to confirm that British Airways' punctuality figures for 1980 operations were indeed a considerable improvement upon those of previous years. One example which might interest the House is that in the summer of 1979, 55 per cent. of the departures on North Atlantic services left within 15 minutes of schedule but that in the summer of 1980 the figure was up to 74 per cent. The general pattern of improvement was the same for all the airline's route divisions.
The Earl of Kimberley: My Lords, while thanking my noble friend for that very satisfactory Answer, may I ask whether he would not agree that this might be an opportunity to congratulate the management and the entire staff of British Airways for succeeding at last? Can he also say whether the figures for some of the American carriers are below or above those of British Airways?
Lord Lyell: My Lords, I am sure that the management and staff of British Airways will be very grateful for the comments of my noble friend. I shall do my utmost to see that they are passed on to the management and staff, where that is possible. My noble friend has also asked me for statistics and figures relating to American airlines and carriers in order to compare them with British Airways' figures. In a recent survey, in at least two respects British Airways compared very favourably with all the transatlantic carriers, especially in the field of technical developments and safety.
Lord Gisborough: My Lords, while we welcome this improvement, can my noble friend say why the figures are still below those of 1974, despite what must have been a certain amount of modernisation and updating of equipment?
Lord Lyell: My Lords, the answer to my noble friend's question lies in at least four different fields. I wonder whether he will be satisfied if I write to him on the subject.
Lord Wells-Pestell: My Lords, may I ask the noble Lord the Minister whether the House is to understand that the Government will claim this improvement to be a success of their policy?
Lord Lyell: My Lords, I am reminded of the biblical term that one should render unto God what is due to God and unto Caesar what is due to Caesar. We should render tribute to the management of British Airways for such improvements as have been carried out.

Business Advice for Individuals
2.39 p.m.
Lord Gridley: 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 it has done to provide better advice and facilities for individuals who wish to set up their own businesses.
Viscount Long: My Lords, the Department of Industry's Small Firms Service provides information and business advice for individuals wishing to set up their own business in England. The Council for Small Industries in Rural Areas provides such a service in rural areas. Similar facilities are provided in Scotland by the Scottish Development Agency, in Wales by the Welsh Office and Welsh Development Agency, in Northern Ireland by the Northern Ireland Department of Commerce and Local Enterprise Development Unit. In November 1979 a modest increase of resources was authorised to enable the Small Firms Service to handle more inquiries, a considerable number of which come from people wishing to start a business. Valuable work is also done in this field by local authorities, local enterprise units and a number of voluntary organisations.
Lord Gridley: My Lords, while thanking my noble friend Lord Long for the Answer which he has given and warmly supporting the Government in the assistance they are rendering to small businesses, may I ask him whether what they are doing is obtaining the widest publicity and reaching the public generally?
Viscount Long: My Lords, I am grateful to my noble friend. The staff of the Small Firms Service handled over 93,000 inquiries during 1980 for information connected with starting or running a business. Some 8,900 of these inquiries were referred to a Small Firms Service counsellor for in-depth advice. Counsellors are experienced businessmen engaged by the department for this purpose. Over 80 per cent. of the inquiries employ fewer than 25 people—about half of the individuals wishing to start in business. In 1979–80 it cost the Government about £1·8 million. The service employs about 75 civil servants in London and in the regional centres and engages the services of about 130 experienced businessmen as counsellors.
Lord Avebury: My Lords, what advice and facilities are the Government making available to the many thousands of small firms which are going into receivership and liquidation as a result of the policies of Her Majesty's Government?
Viscount Long: My Lords, at this stage I am only interested in the Question, which is to do with helping those people who want to go into business.
The Earl of Lauderdale: My Lords, could my noble friend say whether the advice centres to which he has referred cover the provision of accountancy advice, so that small firms learn to use their balance sheets as an instrument of management and not for tax evasion and that, above all, they are taught to resist the seductive temptation of over-trading?
Viscount Long: My Lords, this question goes into the whole structure of helping small businesses. The advisory service is very conscious of the need to help small firms on the accountancy side.
Lord Gridley: My Lords, is my noble friend aware of the BBC "Money Programme" which goes out weekly and which calls attention to the national unemployment figures and the number of firms going out of operation? In that connection, no mention is ever made of the numbers of unemployed who are setting up businesses on their own and who are also employing people who were hitherto unemployed. Is not that rather an unbalanced programme which does not give credit to the Government for what they are trying to achieve at present, which should receive publicity? May I ask my noble friend whether that is not rather adverse publicity which should be inquired into and corrected?
Viscount Long: My Lords, I am most grateful to my noble friend for bringing that question forward and I shall certainly inform my right honourable friend and my department in order that the necessary steps may be taken.
Lord Leatherland: My Lords, may I suggest to the noble Viscount that that factor is already taken into account with the monthly unemployment figures, where the number of people who have new jobs is subtracted from the large and ever-increasing number of people who have lost their jobs, to give us finally a net figure for lost jobs?
Viscount Long: My Lords, I quite understand the noble Lord, and of course as more and more redundant people become unemployed and receive a "hand-out" in money, so they are coming to the advisory service for help in starting a small business.
Baroness Sharples: My Lords, is my noble friend satisfied with the number of new businesses that are starting up?
Viscount Long: My Lords, there can always be room for improvement.

Immigration Control: EEC Nationals
2.44 p.m.
Lord Bethell: 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 why they have decided to do away with the "EEC Nationals" immigration control points at Heathrow Airport and Dover Docks and whether they will review this decision.
Lord Sandys: My Lords, no such decision has been made. Separate control points for European Community nationals continue to function at Heathrow Airport and at Dover. There is no proposal to abolish them.
Lord Bethell: My Lords, is my noble friend not aware that at certain terminals at Heathrow and at Dover Docks only eight of our fellow Community Members have an entry point assigned to them and that Greeks have to go through the "all other countries" entry point? Is he aware of the furore that has been caused in the Greek press and among Greek public opinion at the idea of their citizens being so obviously separated from others, and does he not appreciate the damage that is being done to the understanding of the European Community in this country by the removal of the "EEC Nationals" designation at various entry points? Can no way out be found of this most unsatisfactory situation?
Lord Sandys: My Lords, I know that my noble friend is fully aware of the background of this situation, which is rather more complicated than may be apparent from the Question on the Order Paper. Under the transitional arrangements for the entry of Greece to the European Community, Greeks will not benefit from the free movement of labour provisions in the Treaty until seven years after the date of their country's accession, which was of course 1st January 1981. Thus the examination of Greek immigration control can be comparatively lengthy. At ports where they arrive in large numbers it would hinder the flow of other European Community passengers if they were examined in the same channel. For this reason it was decided that Greeks should not use the European Community channel at terminals 1 and 2 at Heathrow, to which my noble friend referred, or at Dover West or Dover Hoverport. Sometimes the Greeks have joined the European Community channel at these ports; the result has been congestion and delay which has given rise to the complaint mentioned by my noble friend.
Lord Strabolgi: My Lords, will the Government do something to try to speed up the immigration points and the entry points; and are they aware that it takes much longer to gain entry at Heathrow than, say, at Paris, where one can often go through the immigration point within a few minutes of disembarking, whereas in London it takes anything from half an hour to an hour?
Lord Sandys: Yes, my Lords, but it arises in the difference between our immigration policy in this country and those of our Continental partners. A land frontier occurs in the case of almost all our partners whereas it does not, of course, in this country, and we follow a different policy. So far as improvement is concerned, the British Airports Authority is establishing the closest relationship with the Home Office immigration services.
Lord Strabolgi: Yes, my Lords, but why do holders of British passports have to be subjected to long delay when arriving in their own country?
Lord Sandys: My Lords, this matter is under review. The House will be aware from my previous statement where the difficulties arise.

Vanuatu: Aid From France
2.48 p.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on the situation in the New Hebrides, the former condominium of the United Kingdom and France in the Pacific, particularly on the reported refusal by France to implement the £3·5 million post-independence agreement; and what action the Government have taken in conjunction with Australia to enable education and other public services to he maintained.
The Earl of Avon: The question of French aid is a matter for the Governments of France and Vanuatu. However, despite the fact that the French Ambassador to Vanuatu has been declared persona non grata, I understand that the Franco/Vanuatu aid proposals have neither been withdrawn nor rejected. The question of co-operation with Australia for the purposes mentioned by the noble Lord does not therefore arise at this stage.
Lord Brockway: My Lords, while I thank the Minister for that reply, may I ask him this question: since the New Hebrides were a condominium under British and French control, were we not mutually parties to the agreement which brought it independence? Can he confirm that in Paris last week the French denied signing the agreement, and is it not the case that the loss of £3½ million has disrupted education, closing schools until next week? In view of that situation will the British Government, with Australia, give some aid?
The Earl of Avon: My Lords, this is a delicate matter and I do not particularly wish to be drawn into these issues at the present time. The French officials arrived in Vanuatu only last Saturday, and as I said in my opening reply the question of co-operation at the moment is still on the table.
Lord Goronwy-Roberts: My Lords, while appreciating the particular difficulty which persists in a former condominium dependency like the New Hebrides, and also appreciating that the British Government are proceeding with their own part of the aid programme, will the Minister accept that in all parts of the House there is concern that the new Government of the New Hebrides, which inherits quite exceptional difficulties arising from the circumstances described by my noble friend, should receive every possible help it can get? When he refers to our not being in consultation and co-operation with the Australian Government at this stage—a statement I quite understand—may I take it that he will, however, keep very much in mind that it is essential that the Australian Government be drawn into this matter as soon as ever possible?
The Earl of Avon: My Lords, I am very grateful to the noble Lord for the tenor of his remarks and his wise advice. I think I can say that Her Majesty's Government fully appreciate everything he has said and are on course with what he says.
Lord Brockway: My Lords, because of the delicate situation I will not put the supplementary question I had planned, but may I ask the noble Earl this: Is there anything in the agreement which gives the French the right to revoke it on the ground of the support which has been given to the independence movement in New Caledonia?
The Earl of Avon: My Lords, as I understand the noble Lord's Question, it is about a £3·5 million post-independence agreement. At the moment that agreement has not been signed by either party and still lies on the table. That is why at the moment it is a very delicate situation to comment on from London.

Business
Lord Denham: My Lords, when I announced on Friday last that the Committee stage of the Wildlife and Countryside Bill would be continued on Tuesday of this week, 17th February, I told the House that I would make a further Business Statement today on consequential changes to tomorrow's business.
It has now been agreed that the Motion, standing in the name of my noble friend Lord Cranbrook, on the Report of the European Communities Committee on EEC environment policy should not now be taken tomorrow. I very much regret any inconvenience that has been caused to those intending to participate in this debate. I can give them an assurance that the debate will be taken at the earliest convenient day, and at a more suitable hour than would have been the case had the Motion remained on tomorrow's Order Paper.

East Sussex Bill [H.L.]
Read 3a, and passed, and sent to the Commons.

Judicial Pensions Bill [H.L.]
Read 3a with the amendments.
Schedule 1 [Certain Supreme Court and county court officers, and president of Transport Tribunal]:
The Lord Chancellor (Lord Hailsham of Saint Marylebone)The Lord Chancellor (Lord Hailsham of Saint Marylebone) moved the following amendments:
Page 27, line 2, leave out ("I") and insert ("II")
Page 28, line 17, leave out ("I") and insert ("II").
The noble and learned Lord said: My Lords, your Lordships will see that there are two amendments which, with the permission of the House, I will take together. This refers to a simple error in a complex Bill. By some mistake the Bill contains the phrase "Part I of the Schedule" and it should be "Part II". The error was pointed out, I may say, by a member of the staff of Butterworths. It is a pure error, and I hope the House will forgive those who, through me, are responsible. My Lords, I beg to move that the said amendments be agreed to.
Lord Elwyn-Jones: My Lords, in view of what the noble and learned Lord has said, there does not seem to be a major question of principle arising from these amendments, and we have no objection.
On Question, amendments agreed to.
On Question, Bill passed, and sent to the Commons.

Disused Burial Grounds (Amendment) Bill [H.L.]
2.54 p.m.
The Lord Bishop of London: My Lords, in inviting the House to give a Third Reading to this Bill, I wish to take the opportunity of thanking the House for giving it a fair wind. This Bill is completely uncontroversial and its sole purpose is to extend to other religious communities in this country the powers which are already possessed by the Church of England in dealing with disused churchyards. In the Pastoral Measure the Church of England legislating for itself took powers whereby disused churchyards could be dealt with by Pastoral Measure. We obviously had not the power to legislate for other religious communities, and they still have to labour under the difficulties and disadvantages that if they want to deal with a disused churchyard they have to proceed by way of Private Bill in Parliament. That is a long drawn-out, a complicated and an expensive procedure.
This Bill seeks to extend to other religious communities the same privileges which the Church of England possesses. It will mean that there is much less burden laid upon those other Churches, especially financially, and it means also that we shall be able to deal more effectively and more quickly with places, very often in the middle of cities, which are an eyesore unless they can be properly provided for. That is the purpose of this Bill. I thank this House for the favourable reception it has given to it, and I hope that it will receive an equally favourable reception when it reaches another place. I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—[The Lord Bishop of London.]
Lord Strabolgi: My Lords, I should like from this side of the House to congratulate the right reverend Prelate for bringing this Bill to this stage of the proceedings. As I have said throughout, it is an excellent Bill, and, if I may say so, seems to be a good example of an ecumenical measure. I hope that, after your Lordships have passed it, it will have a speedy passage in another place.
Lord Soper: My Lords, it would be a courtesy and a privilege for a member of one of the other religious bodies to express our sense of gratitude to the Church of England for this Bill. Though we have approximately the same number of people dying regularly as those in the Church of England, we have been incommoded by an inability to bury them properly in consecrated ground, and therefore I think I speak ecumenically for the other non-Anglican communities in saying how much we appreciate the purpose and the significance of this Bill.
The Earl of Avon: My Lords, the Government are sympathetic to this Bill and have adopted a neutral position. The right reverend Prelate the Bishop of London explained to the House at an earlier stage that there are rights of objection and other safeguards in the Bill for the relatives of those buried in the disused burial grounds concerned. The Bill also provides for recording the removal of human remains and memorials, and for the copying of inscriptions. The technical amendments agreed to by your Lordships in Committee now make it quite clear that the duties and obligations in the Bill apply equally to a subsequent owner, if the land is disposed of by a Church before the prescribed procedures are completed.
The Bill is a useful contribution to those areas of burial law which remain in need of modernisation. It would, if enacted, enable the Churches to put such land to uses which they now feel are more appropriate, or to dispose of it in order to realise much-needed finance for their work in other directions. If the House is happy for the Bill to be read a third time, the Government will certainly do nothing to obstruct the passage of the Bill in another place.
Lord Janner: My Lords, may I add one word in respect of those of the Jewish community, to thank the Government and the right reverend Prelate for this step that they have taken?
Lord Greenwood of Rossendale: My Lords, I am a vice-president of the Institute of Burial and Cremation Administration, but I think I should tell your Lordships that I speak in a purely personal capacity today. Nevertheless I have no doubt that the institute itself would share the enthusiasm which I feel for the Bill which the right revered Prelate has introduced. Some years ago when I was still at the Ministry of Housing and Local Government this was a Bill about which many discussions were taking place. It has taken a long time for those discussions to bear fruit, but I am delighted today that the House has with such acclamation received the proposal that this Bill do now pass.

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However, of course my real purpose in rising today is to say how much we have all appreciated the contribution which the right reverend Prelate has made to the discussions in this House during his membership of it, and to say that when he leaves it he will take with him the affection and respect of noble Lords in all parts of the House.
On Question, Bill read 3a, and passed, and sent to the Commons.

Motor Vehicles (Variation of Speed Limits) (No. 2) Regulations 1981
3 p.m.
The Earl of Avon The Earl of Avon rose to move, That the regulations laid before the House on 13th January be approved.
The noble Earl said: My Lords, I welcome this opportunity to explain why we are introducing these regulations. The House may wonder why it is necessary to take the seemingly odd step of reducing the maximum speed limit for vehicles used on factory sites and for road construction purposes to 18 miles per hour. Usually in such cases you would expect to hear arguments about the benefits we expect to road safety; that is why speed limits are usually changed. But in this case the vehicles are hardly used on the roads. The reason, therefore, has nothing to do with road safety. The reason is simply that, without such a speed limit, the vehicles concerned would be subject to the European Community Drivers Hours and Tachograph Regulations, which exempts this type of vehicle only if it has a maximum authorised speed not exceeding 30 kilometres per hour or about 18 miles per hour.
The answer in the longer term must clearly be to sort out the European Community regulations themselves. Certainly, the burdens of compliance with the relevant requirements for vehicles of this kind must outweigh any social and safety benefits derived from them. My right honourable friend the Secretary of State for Transport is urging his colleagues in the Council of Ministers to review the relevant legislation and remove obscurities and inflexibilities of this kind. But as your Lordships know, reviews take time and this country's history of non-compliance with these particular community obligations has left us in a less than ideal position from which to seek changes—at least until we are fully complying. In the short term, therefore, we have chosen a quick and practical approach of reducing the legal speed limits of the vehicles concerned to the level which will bring them into the exempted category.
Your Lordships may possibly think that a reduction in the speed limits for these vehicles may bear a little harshly on those who operate them. But it must be borne in mind that such vehicles would normally be used on roads only when travelling short distances from one site to another. Even if some operators do suffer some inconvenience, it seems a very small price to pay in order to remove the requirement of having to fit a tachograph.
It may also be argued that vehicles which are already exempt from the EC tachograph regulation by virtue of their ownership—for example, fire, police and local
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authority vehicles—will not benefit from the proposal which will merely reduce their speed. This was certainly a point to which we gave very careful consideration before making the regulations. However, I am pleased to say that none of those whom my right honourable friend consulted—and those included manufacturers, local authorities, road construction contractors, the trade unions and the police—put forward any argument that the proposal would cause any real practical hardship.
We have also taken the opportunity—and this is an entirely separate issue from the tachographs point—to include in the regulations a definition of the term "living van". This may look a little curious at first sight. Certainly most of us would say that we know what we mean by "living van" without having to have it defined in regulations. But, in fact, there is at present a rather grey area which this definition will, we hope, remove. This is because there has been a growing practice of using vehicles like old coaches to carry things like cars and horses. If the owners of these coaches also use them to sleep in—they may perhaps put a camp bed in them—are they then goods vehicles or living vans? If they are living vans, they would not, for example, be subject to the goods vehicle plating and testing scheme. We have therefore sought to remove this ambiguity by relating the definition to the primary purpose for which a vehicle is used.
To conclude, my Lords, in view of the unlikelihood of an early amendment to the EC tachograph regulation, we consider that it is right to take the quick practical steps contained in these regulations to achieve what must be a sensible exemption. We shall, of course, continue to make every effort to achieve a long term solution by making the appropriate amendment to the European Community Drivers Hours and Tachograph Regulations.
Against this background, I recommend that the regulations laid are justifiably and sensibly conceived and will eliminate an unnecessary expense on the operators of the vehicles in question. They will also cause very little hardship in other directions. I therefore beg to move that these regulations be now approved.
Moved, That the Motor Vehicles (Variation of Speed Limits) (No. 2) Regulations 1981, laid before the House on 13th January, be approved.—(The Earl of Avon.)
Lord Strabolgi: My Lords, we on this side of the House are grateful to the noble Earl for explaining so clearly the purpose of these regulations. I am sure that the noble Earl is right when he says that, as reviews take time, it is better to press on with these regulations in the meantime. I am glad to hear that the Government have consulted all the trade and other organisations and I understood the noble Earl to say that they all agreed with what was proposed. Certainly, from our side of the House, we support the Government as regards these measures.
On Question, Motion agreed to.

Town and Country Planning (Minerals) Bill [H.L.]
3.6 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Bellwin.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 9 [Orders prohibiting resumption of use and orders relating to suspension of use]:
Lord Mottistone Lord Mottistone moved Amendment No. 103:
Page 9, line 22, leave out ("two") and insert ("five").
The noble Lord said: I beg to move Amendment No. 103 and, in doing so, I should perhaps express my gratitude to those noble Lords who also have amendments down to the Bill, that in the intervening time since the first day of this Committee stage, we do not seem to have added any amendments to the Bill, unlike many other noble Lords taking part in the Committee stages of other Bills!
As regards this amendment, I point out that changes in demand, such as in the present building slump, are a fact of life in the minerals industry. Obtaining minerals planning permissions is difficult, slow and expensive, and operators are understandably reluctant to let one lapse. If the industry is to operate efficiently and economically, operators must be able to draw what material is required from the most suitable sites—that is, suitable both technically and possibly geographically. That may mean leaving others unused for some time.
A two-year limit would force operators to operate every site to a significant extent within the two-year time limit and thus reduce their efficiency. The premature imposition of a prohibition order would involve restoration work which would have to be reversed if a new permission were given at a later date. There would also be an inevitable drop in the value of an operator's assets, and therefore in his ability to raise capital. I suggest that the Committee should think very hard before erecting still more obstacles the main effect of which will be to raise the administrative and operating costs of the industry with the consequence of raising the price of its products—products which I think your Lordships will all agree are essential to the country's economy. A period of five years is much more realistic in ensuring an orderly minerals development. I beg to move.
Baroness Birk: This clause is an extremely important clause in the Bill and one that we on this side of the Committee, and I personally, certainly support and would wish to see strengthened. It is no surprise that the noble Lord, Lord Mottistone, in putting his own and the CBI view wishes to do exactly the opposite. Where working has stopped, local authorities will be able to go in if necessary and—and I emphasise this—subject to the Secretary of State's approval, they will
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be able to say that a site must be restored and that working cannot be resumed.
This power will not be used lightly; but if it is to be effective, local authorities must not have to wait around for five years, as is suggested by the noble Lord, until they can begin the process of getting a confirmed cessation order. The Stevens Committee, which, quite rightly, we have been quoting on all sides of the Committee during the passage of this Bill, recommended that the appropriate period would, in fact, be six months. The Local Government, Planning and Land (No. 1) Bill—which in many ways, fortunately, did not finally see the light of day—said that the period should be 12 months.
The Government have now moved yet again and have put forward the proposal that the period should be two years. I have no doubt that when the Minister replies he will say that further consultations took place and that they wanted to make a happier compromise. But I believe—and I do not speak just for myself and my colleagues—that we would all be in very strong opposition to any increase on two years. We cannot, as seems to be happening as we go through this Bill, contribute to an auction-like atmosphere.
I am concerned about the gradual move from the original recommendation of the Stevens Committee and would certainly wish to see this process of attrition ended and reversed, so that local authorities would have to wait only one year before beginning the cessation procedures. Although I know that the Minister will put forward the answer with his usual charm and sympathy, I very much hope that he will not accept the amendment that has just been moved by the noble Lord, Lord Mottistone.
Lord Bellwin: Once again we are back on this Bill and back to the balancing act that seems to be required as we go along. Of course, as the noble Baroness has just said, there are the points of view of those who would like the period to be less than two years. It is absolutely true that the Government have moved from the Stevens recommended six months to 12 months and then to two years, but this is because we have had consultations. It is an attempt to try to meet the genuine concern which the industry has, which I think is it proper that we should consider, while trying to achieve the environmental and other benefits.
As I say, it is a balancing act. I think that the two-year period is now about right. It should be emphasised that this is an absolute minimum before which a mineral planning authority cannot take action. In practice, I would imagine that it will often be longer and it may, indeed, be five years before something is done. But this refers to a minimum and I think that the two-year period is right. Therefore, if I do not satisfy the noble Baroness—and I certainly do not satisfy my noble friend—at least we have a balance which is not only fair to all but which, in practical terms, is the proper time. That is why I cannot help either my noble friend in accepting the amendment or, indeed, the noble Baroness.
Lord Mottistone: Perhaps I could ask my noble friend the Minister a small question. I am advised that a mineral planning authority wishing to take action sooner than the five-year period, or I suppose

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the two-year period, could do so via a modification or revocation order under the provisions of Section 45 of the earlier Act. The norm could be the five years, for which we plead. So there is a way, as I understand it, if a special situation arises, in which the mineral planning authority could take action in advance of the specified period. I fear that this may be rather a fast ball to bowl at my noble friend and I shall quite understand if he cannot answer it immediately, but if he can that would be very reassuring.
Lord Bellwin: Obviously I would want to look into the point which my noble friend has raised. That I undertake to do. But on the amendment I cannot help him.
Lord Mottistone: With that reassurance, and in the hope that perhaps my noble friend the Minister may be able to find confirmation of my suggestion and therefore later agreement to this, at this stage in the progress of the Bill I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.14 p.m.
Baroness Birk Baroness Birk moved Amendment No. 104:
Page 9, line 22, leave out ("two years") and insert ("one year").
The noble Baroness said: I have really spoken to this amendment when I spoke to Amendment No. 103 in the name of the noble Lord, Lord Mottistone. At this stage I do not think that I want to withdraw it, so I should just like to move it. I shall not push it at the moment, and to save the Minister replying all over again, I shall leave the matter like that, which will give me a chance to think before we reach the Report stage. I beg to move.
On Question, amendment negatived.
Lord Bellwin Lord Bellwin moved Amendment No. 105:
Page 9, line 23, leave out from ("out") to end of line 25 and insert ("to any substantial extent anywhere in, on or under the site of which the land forms part").
The noble Lord said: This amendment seeks to make clear our intention that mineral working must have ceased throughout the whole site for a period of at least two years before a mineral planning authority can make a Section 51A order. This was always our intention and this amendment merely clarifies an ambiguity. I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 106:
Page 9, line 25, at end insert—
("; and
(c) the minerals have been substantially exhausted.").
The noble Lord said: Before mineral operations have begun on a site the deposit will have been assessed, appropriate arrangements made with the owner, and planning conditions established. The planning procedures alone for some projects have taken up to 10 years. Minerals can be worked only where they are found and when they are wanted. It seems senseless to abandon proven deposits before their exploitation is
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effectively complete. Conditions can be renewed if appropriate. I beg to move.
Lord Bellwin: I am afraid that this amendment would destroy much of the purpose of prohibition orders. They are intended to cover precisely those circumstances where an operator has effectively abandoned a working before the reserves are substantially exhausted, and where, for that reason, restoration conditions have not become operative. The problem of the half-worked chalk pits in Thurrock is an example of what I have in mind.
Nor would I accept an argument that compensation ought to be paid for the remaining reserves if the operator has no real intention of reworking them. He has lost nothing if his right to recommence working without a fresh grant of planning permission is taken away. Again, I fear that I cannot help my noble friend with this amendment and I hope that, in the light of what I have said, he will perhaps be willing not to press it.
Baroness Birk: Once again I agree with the Minister on this. In addition to what he has said, I would only add that local authorities have neither the inclination nor the resources to try to secure unreasonable prohibition orders. Again, there is the protection of confirmation by the Secretary of State. Therefore, I hope that the Committee will accept the views expressed by the Minister and supported by this side of the Committee, and reject this amendment.
Lord Mottistone: Although in no way wishing to appear to be influenced by the argument of the noble Baroness, Lady Birk, I shall study with great care what my noble friend the Minister has said, some of which appeared to throw a slightly fresh light on the scene, and make a judgment as to whether to pursue this point at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bellwin Lord Bellwin moved Amendment No. 107:
Page 9, line 29, after ("impose") insert (", in relation to the site,").
The noble Lord said: This amendment seeks to make clear that any of the requirements (set out in Section 51A(2)) which can be imposed on a Section 51A order can relate to the whole site and not just part of the land. The amendment is consequential on the earlier amendments which make clear that mineral working must have ceased throughout the whole site for a period of at least two years before a mineral planning authority can make a Section 51A order prohibiting the resumption of mineral working without a fresh grant of planning permission. I beg to move.
On Question, amendment agreed to.
3.21 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 108:
Page 9, line 33, after ("a") insert ("reasonable").
The noble Lord said: As I said earlier in the Committee stage, there is experience that some planning authorities are reasonable and sensible in the way in which they apply their powers with regard to planning

491
in relation to mineral working, but some are not. Operators are fearful that the new powers that have been given to all planning authorities to require changes without compensation may result in some of them making unreasonable demands. As it stands, the power implied in line 40, which refers to, "any injury and amenity", is extremely wide. Therefore, we seek to strengthen this particular clause by adding the word "reasonable" in the appropriate place. This justification also applies to Amendment No. 110, which I should like to take with this one. I beg to move.
Baroness Birk: This is rather different from the involved discussion we had last time on the difference between "possible", "practicable", and "reasonable". I see what the noble Lord is trying to do. What worries me is that he is creating a weakening instrument and laying the whole thing open to interminable lawyer's arguments. It is going to be difficult to define what is a reasonable requirement. This could go on for ages and ages. It may be that the noble Lord, Lord Mottistone, has that particular cunning point in mind, for which I do not blame him. He is trying his best, so far as I can see, to wreck a great part of this Bill.
I should have thought that this was something that would have received a considerable amount of consideration when this was being drafted, because it is just the sort of point that draftsmen and lawyers love to jump upon. If it is read all together, "a requirement" appears quite sufficient. If it were a completely outrageous requirement then this would be taken up anyhow. I do not like the word "reasonable" inserted where it is not absolutely necessary because of the doubt, the delay and the argument that it provokes. It is for that simple reason alone that I do not think I would be very happy to see it added to the Bill.
Lord Gisborough: May I briefly support this amendment? Planning decisions should be taken for planning reasons, but all who have been in local government know that there are occasions when planning decisions are taken for blatently political reasons. This can happen on either side: I am not blaming one party or the other. It may be that a planning decision has been taken against the other party's wishes, and the other party may wish to close a mine that has been open. Therefore, the addition of the word "reasonable" would give some protection against political planning decisions being taken in the middle of the operation of a mine.
Lord Boyd-Carpenter: May I ask my noble friend one question on this? If the word "reasonable" be not inserted, what, in his view, would be the position were what most people would regard as an unreasonable requirement imposed?
Lord Bellwin: The question that my noble friend Lord Boyd-Carpenter asks is really at the nub of what this amendment and the intention in the Bill are all about. I would submit that the amendment is not necessary to achieve what my noble friend who has
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moved it seeks to do. An order under this section cannot take effect unless it is confirmed by the Secretary of State either with or without modifications. Notice of the moving of the order must be served on the person who last carried out mineral operations, upon the owner and occupier of the land and upon those whom the mineral planning authority consider will be affected by the order. Anyone upon whom notice is served has 28 days within which to request the Secretary of State for an opportunity to be heard, and this must be afforded to the objector.
I suggest that the requirements of the amendment are indeed clearly implied, and for this reason it is not necessary at all that we should put this amendment into the Bill. I hope that that makes the point clear. If we were to become involved in adding the word "reasonable", not only would it be unnecessary, but it could lead to some of the problems of interpretation that the noble Baroness mentioned. I suppose that "unreasonable" could likewise then become a question of debate and argument for the appropriate adjudicating authority at that moment in time to decide. As I have given an assurance that, from the way we understand and interpret the Bill it is not necessary, perhaps my noble friend will not feel any need to take it further.
Lord Hunt: I confess to feeling a little unhappy about the addition suggested by the noble Lord of "reasonable", because it is such an imprecise and an undefined adjective. More importantly, I rise to express surprise at the suggestion by the noble Lord, Lord Gisborough, that in making a requirement a local authority would do so on political grounds. I should have said that the whole purpose and burden of this area of the Bill is that the local authority might well make a requirement, but the requirement would be based on the desirable need to restore the landscape.
Lord Mottistone: With regard to the opening remarks of the noble Lord, Lord Hunt, I should have thought that he would agree that this word "reasonable" occurs frequently in legislation in order to provide just that bit of guidance for people involved in taking action under whatever Act of Parliament is concerned, so that they think twice before they behave unreasonably. This is the sole point of what I originally saw as just a drafting amendment to improve the Bill, rather than a great point of issue which everybody has to join in and talk about. I think it would improve the Bill.
So far as my noble friend the Minister is concerned in his very understandable explanation of the later parts of this clause which give all sorts of powers for the Secretary of State and for people to appeal and that sort of thing, what one wants to try to avoid are all the time-wasting and costs which that sort of thing involves. It is fine to have appeal to the Secretary of State written in, but we all know that that involves a lot of costs to the people who have to do it: costs not only in money but in time, which, in business terms, though perhaps not in administrative terms, are an inefficiency and an added expense.
Looking at it from a businesslike point of view, one wants to avoid that sort of thing. All we are seeking to do is to put in that extra bit of restraint for those who might be unreasonable, so that they think twice and

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make sure that what they are proposing is reasonable. That is all that is there. If that is not good enough for my noble friend it is not a point of desperate importance for all the reasons which have been advanced, but I should have thought that the Bill would be improved with this rather than the other way round.
Baroness Birk: The noble Lord, Lord Mottistone, said people would think first if they thought that what they were doing was unreasonable Can the noble Lord give me an example of anybody who has put forward anything and has then admitted it was unreasonable? The upshot of what he was saying was that, if somebody was going to put forward something that was unreasonable, that person would be likely to say, "It is unreasonable, so I will not put it forward", if the word, "reasonable", was included; but in my view things do not work that way.
Lord Bellwin: It might help if I were to make two observations. First, if the main intention of putting in the word, "reasonable", is to make people pause and think in the way my noble friend suggested, then I submit that the fact of there being an opportunity to take the matter further—in certain circumstances to the Secretary of State—is of itself an equal restraining factor on those who might be inclined to make decisions in an arbitrary way, and one is really as good as the other. Secondly, it might help my noble friend to know that the word "reasonable" does not appear in Section 30 of the Town and Country Planning Act 1971 relating to planning conditions. I accept that my noble friend's intention here is not to do anything sinister but merely to strike a cautionary note to those who are deciding these matters. If that is so, then what we have in the Bill achieves that purpose. I do not think he need have any fears on that score and perhaps he will agree not to press the amendment.
Lord Davies of Leek: It might be interesting in this context to consider the definition of "requirement ". One can acquire, inquire and require but none of them will lead to any action without something imperative behind it. There is nothing imperative about a requirement, is there? I may be wrong. An order may be made asking for everything to be put back in order, but suppose a hole in the ground had been made for, say, the extraction of copper. How strong is a requirement in that context? There have been examples where timber has been replanted and 50 years later kiddies have fallen down a hole that has been left because nobody has looked into the matter afterwards. I do not think the word, "requirement", is strong enough, whatever adjective is put before it. I may be wrong and I make the point just for the record because later on there may be rows about all this.
Lord Bellwin: A requirement, depending on what it is, can be very onerous indeed. It is the nature of the requirement that is the arbitor in deciding how significant it is, but I feel we are getting rather into semantics now. I still think my noble friend's fears are unfounded in that we cover the point which concerns him.
Lord Mottistone: We have spent a great deal of time on this. I would only say in answer to the noble Baroness, Lady Birk, that of course people do not admit to something being unreasonable when they have already taken action. It is what goes on before the stage of taking the action when, while gazing at what is guiding you, to wit the Act, maybe you modify your actions if you feel you will exceed the powers given to you under the Act; and it was along those lines that I made the point to which she took exception. However, having said all that and the subject having been well aired, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.34 p.m.
Lord Bellwin Lord Bellwin moved Amendment No. 109:
Page 9, line 36, leave out ("in, on or under the land").
The noble Lord said: This amendment seeks the deletion of the words "in, on or under the land". These words are considered unnecessary and could lead to confusion. The earlier Government amendment makes clear that working throughout a whole site and not merely on some of the land must have ceased for a period of at least two years before a mineral planning authority can make a Section 51A order. I beg to move.
On Question, amendment agreed to.
[Amendment No. 110 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 111:
Page 9, line 39, leave out ("to remove or alleviate") and insert (", within such period as may be so specified, for the purpose of removing or alleviating").
The noble Lord said: This amendment required a planning authority when imposing a requirement on a Section 51 A order that steps should be taken to remove or alleviate any injury to amenity, also to specify the time period within which such steps should be taken. This was always the intention and the amendment merely makes this explicit.
Baroness Birk: I support the amendment strongly because it represents an improvement, in that it does what is necessary in this part of the Bill by inserting a time limit.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 112:
Page 9, line 42, leave out ("in, on or under the land").
The noble Lord said: This achieves the same purpose as Amendment No. 109. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 113:
Page 10, line 5, leave out ("in relation to the land").
The noble Lord said: The purpose of this amendment is, again, to remove any possibility of confusion. A Section 51A order can be made by a mineral planning authority only when mineral working throughout a whole site has ceased for a period of at least two years.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 114:
Page 10, line 14, leave out ("land") and insert ("site").
The noble Lord said: The reference to a restoration condition previously imposed in relation to the land could be misleading and the amendment brings the wording in line with the rest of the clause. A Section 51A order can be made by a mineral planning authority only when mineral working throughout the whole site has ceased. An after-care condition can therefore be imposed if a restoration condition has been imposed in relation to the whole site.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 115:
Page 10, line 16, leave out subsection (4).
The noble Lord said: This seeks the deletion of subsection (4) of Section 51A. This is consequential on earlier Government amendments which have re-drafted the related provisions in Clause 5.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 116:
Page 10, line 19, leave out ("(3), (4),") and insert ("(2B) to").
The noble Lord said: This is consequential on earlier amendments to subsections (3) and (4) of Section 30A in Clause 5.
On Question, amendment agreed to.
The Chairman of Committees (Lord Aberdare): I have to point out that if Amendment No. 117 is agreed to, I cannot call Amendment No. 118.
Lord Mottistone Lord Mottistone moved Amendment No. 117:
Page 10, leave out lines 30 to 43.
The noble Lord said: This proposes the deletion of subsection (7), which is substantially the same as Clause 5(8). The criticism of them both, which I made earlier, is that they are inoperable because of the uncertainty within them. When I moved Amendment No. 45, which related to the deletion of Clause 5(8), my noble friend Lord Bellwin undertook to study how the drafting of that subsection could be improved. I hope his study will also apply to the redrafting of this subsection and that the improvements will be tabled in good time for us to examine them before Report.
Lord Bellwin: As I said in relation to Amendments Nos. 45 and 94, the Government consider it essential to restore agricultural land once mineral working has ceased. However, I am conscious of the practical difficulties arising from the current drafting and we are studying how this might be improved. I am obliged to my noble friend for bringing this matter forward and I assure him that we are looking carefully at it.
Lord Mottistone: With that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.40 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 118:
Page 10, line 42, leave out ("possible") and insert ("practicable").
The noble Lord said: This amendment is similar to
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an earlier amendment, No. 46, about which we had some discussion. I do not propose to re-enter the discussion, but when responding to Amendment No. 46 my noble friend the Minister undertook to consider the point made, and I hope that that applies equally to this amendment. I beg to move.
Lord Bellwin: As I said in relation to the earlier amendment, I accept the principle behind this amendment, and I gladly confirm that, in consultation with colleagues, we shall consider how best to meet it.
Lord Mottistone: In the light of that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bellwin Lord Bellwin moved Amendment No. 119:
Page 11, line 8, leave out from ("on") to ("person") in line 11 and insert ("any").
The noble Lord said: This amendment seeks to delete the requirement to notify persons who last carried out mineral working on land which is the subject of a Section 51A order when the order is being submitted to the Secretary of State for confirmation. I understand that in certain areas, for example in Cornwall, it may be extremely difficult, or impossible, to ascertain the persons who last carried out mineral working on the land, particularly where the mineral working has ceased for some time. On reflection, I consider that adequate safeguards are already provided by the requirement stated elsewhere in the provision for the mineral planning authority to notify any person who in its opinion will be affected by the order. I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 120:
Page 11, line 22, at end insert—
("(9A) If it appears to the Secretary of State that an order under this section would not be appropriate he may make a suspension order.").
The noble Lord said: This is a probing amendment. We believe it to be important that the Secretary of State should have the power which the amendment seeks to underpin, and I should be interested to hear what my noble friend the Minister has to say about the power. I beg to move.
Lord Bellwin: I have much sympathy with the intention behind the amendment. Unfortunately, however, it seems quite clear that it would not be sensible for the Secretary of State to substitute a suspension order for a prohibition order, as suggested. A prohibition order is intended to deal with permanent closure, and any new conditions imposed are likely to relate to restoration. A suspension order relates to a temporary situation and the conditions required are to ensure the tidying-up of the site.
Because these requirements are quite different, the best course is for the Secretary of State to indicate in suitable cases where he is not confirming a prohibition order, that consideration should be given to the making of a suspension order and leave the mineral planning authority to decide in the first instance what should be the contents of the suspension order. I hope that in

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the light of that clarification my noble friend will feel able to withdraw his amendment.
Baroness Birk: I very much hope that the noble Lord will withdraw the amendment. While I feel that on the face of it this proposal has some merit and would seem to be acceptable, from what the Minister has said—and it is my thinking, too—there are very severe objections. With regard to the two proposals put forward, I should like to emphasise that it could be reasonable to permit a local authority to serve notice of a suspension order at the same time, so that both prohibition and suspension orders could be considered. Alternatively, there would be merit in allowing the Minister to rule that working had ceased within the meaning of the clause, and then ruling subsequently on the specific conditions imposed as a consequence of the suspension order, on the order itself. One of the great advantages of that would be that it would cut out further delay in deciding whether working had ceased. I hope that in view of what the Minister has now said, it will be possible to come back on Report with something along the lines of this compromise proposal.
Lord Mottistone: I should very much like to have time to read what the noble Baroness has said before I make a comment on it. However, I am reassured by what my noble friend the Minister has said, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 121:
Page 11, line 27, at end insert—
("(10A) If the Secretary of State refuses to confirm an order under this section, at least five years shall elapse after the date of such refusal before the minerals planning authority may submit a further application in respect of substantially the same land.").
The noble Lord said: I believe that an operator should not be subject to repeated attempts by a planning authority to remove, in effect, one of the operator's options in arranging his work. The Secretary of State may award costs against an authority making an unreasonable application, but such sanction is unwieldy and does not improve relations between planners and operators. The proposed amendment would avoid unnecessary trouble all round. I beg to move.
Baroness Birk: This amendment contains the same proposal in regard to suspension orders as does Amendment No. 132. Frankly speaking, I consider that these are wrecking amendments which introduce unnecessary and quite unreasonable delay—and I believe that "unreasonable" is the correct word in this context—into the procedures introduced by the Bill. Many things change in five years, in particular in shallow working, and in those rare circumstances where local authorities wish to serve a prohibition order—that is, subject to the safeguard of ministerial approval—they certainly should be enabled to do so. I hope that the Minister will take the same line in this regard.
Lord Bellwin: It really is very difficult for me agreeing
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all the time with the noble Baroness, though I suspect we do not agree for the same reasons. I think it perfectly proper that my noble friend should bring forward this and any other amendments he thinks necessary to try to ensure adequate protection, where it is necessary. However, I do not wish to accept this amendment because circumstances can change at any time, and when they do change the authority should be able to respond if it feels the need to do so. The further order will still require confirmation, and, as my noble friend said, if the authority has acted unreasonably, costs may be awarded against it. I should have thought that that was an adequate protection. It is right that there should be protection, and I feel that that is a good protection. I hope that my noble friend will feel the same about the matter if he considers it a little more carefully.
Lord Mottistone: At first sight the remarks of my noble friend seem to be satisfactory, though I shall reserve the right to examine them with a view possibly to coming back with a proposal at the next stage, In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 122:
Page 11, line 29, after ("any") insert ("existing").
The noble Lord said: This is a probing amendment intended to draw an assurance that a prohibition order does not make it impossible for a mineral planning authority later to give consents for mineral operations at the site concerned. I beg to move.
Lord Bellwin: We propose to deal with this point in a somewhat different way. One of my amendments to Clause 9 is intended to meet the point, and in the circumstances perhaps my noble friend will not wish to press this amendment.
Lord Mottistone: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bellwin Lord Bellwin moved Amendment No. 123:
Page 11, line 30, at end insert ("but without prejudice to the power of the mineral planning authority, on revoking the order to make a further grant of planning permission for development consisting of the winning and working of minerals").
The noble Lord said: This amendment seeks to make clear that although a Section 51A order negates any existing planning permission for mineral working in relation to the site, it does not preclude a mineral planning authority from revoking the order at some future date and granting a new permission for mineral working following the submission of a fresh planning application. I beg to move.
On Question, amendment agreed to.
3.50 p.m.
Baroness Birk Baroness Birk moved Amendment No. 124:
Page 11, line 36, leave out ("twelve") and insert ("six").
The noble Baroness said: This is similar to the amendment I moved earlier, but is for a different purpose. In essence the arguments are the same,

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however, so I shall move it briefly. The previous amendment was to reduce the two-year threshold to one year on cessation orders. Again, I must repeat that both the Stevens Committee and the Local Government, Planning and Land (No. 1) Bill support the idea of a six-month period. It now appears, for no very clear reason, that the Government are going for a 12-month delay; and, again, not being content with one concession, the noble Lord, Lord Mottistone, and the CBI are trying, further, to do something which I can only say will emasculate the provisions of this Bill by moving an amendment to extend the period to two years.
I would point out that the Stevens Committee, when coming to its conclusion, in fact took evidence and consulted not just with industry but with all the environmental interests as well; and I think that every now and then I should say that I am certainly not looking at this Bill in a totally blind way from the environmental point of view, but am very conscious of the need to get the right balance between industry and the environment. I think the balance that was reached by both the Stevens Committee and also the No. 1 Bill is a better focal point of balance than what is now in the Bill, and I beg to move.
Lord Bellwin: This is really going over the same points as I made before. It is a question of striking a balance between two opposing points of view and yet getting that which is right in any case. We think that what we have in the Bill now is right, and therefore I cannot accept this amendment.
Lord Beaumont of Whitley: We would agree with the Minister on this. I think these two amendments—the one at present being considered and the next one to be moved by the noble Lord, Lord Mottistone—are an extremely good example of the contrary influences on this Bill. A very great deal of work and negotiation of one kind or another has gone into the drafting of the Bill, not just in Government offices but in the whole consideration of the matter over the last few years. On the whole, an extremely sensible result has been arrived at, and I am sure the Government are right to resist the amendments on both sides.
Lord Mottistone: It might be to the convenience of the Committee if I speak to my amendment, No. 125, because it is so wrapped up with this one, at the same time. As already explained in moving Amendment No. 103, the vagaries of demand and of the quality of deposits being worked may result in an operator suspending work on a particular deposit for considerable periods. He cannot predict when the relevant demand may resume, and should not be put prematurely to the expense of taking additional steps to protect the environment. The existing planning condition should be adequate.
I noted the point that the noble Baroness made, and it is a matter of balance. What concerns me in a lot of the arguments, and indeed in some of the points that are put forward by my noble friend the Minister in seeking to reach this balance, is that there is also the problem of the efficient and businesslike conduct of its affairs by a company that is subject to the ordinary
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market conditions in which it has to operate. It is really the underlying theme behind all my amendments that the balance needs to take that into account to a greater extent than, as a whole, the Bill does at the moment. It does not need to do it as strongly as might have been the case if, over many years, the Government had not sought to strike the balance and discuss at great length with all parties involved, and had not come up with what one might call a 90 per cent. right Bill.
So we are arguing only about the 10 per cent.; but it is terribly important to realise that in this mineral world, with very long lead times for the exploitation of the material, they must have some of the weight in the balance given to them for difficulties which are not understood at all by those who are interested in the environment. This is the problem. On the one side, mineral operators, the members of the companies that exploit the minerals, are people who themselves are humans. They have their houses, their wives and their families, just like everybody else, and they like beautiful scenery and want beautiful scenery whenever they can have it; and so they understand the problems of people who are trying to promote a greater care of the environment. That is why the industry is supporting this Bill, and why it supported the Stevens Report.
But the other side—that is, in particular, the people who are dedicated environmentalists, and to a certain extent officials both in local government and in central Government, who are not accustomed to having to make their judgments in response to what the market forces force upon them—are people who perhaps do not understand fully the arguments which are being put by the industry. That is not only why there are put forward these amendments, but why I am seeking to press the Government to give that extra bit of thought to making allowances for the sort of things which affect the industry and which other people do not understand.
I have endeavoured to say this in my replies, and I am taking the opportunity at this stage to press it upon the Government that when they come to read what has been said in this debate they should look very carefully, in some of these key amendments—and this is one of them—at precisely what is being advanced and think, "Now, those people are not fools; they are advancing something for a good purpose. Why are they advancing it?" The fact that two years could make quite a difference over one year, or five years could make quite a difference over two years, must not be too readily brushed aside. The arguments are all there if you look for them; and I trust that my noble friend the Minister, when he comes to look at these amendments, will give due regard to them and in that way will be more ready to accept amendments, perhaps of a similar sort, which may be advanced at the Report stage of the Bill.
Lord Boyd-Carpenter: Perhaps I should declare an interest, as chairman of a company that conducts extractive processes to obtain its raw materials; but having done so I should like to put this point to my noble friend. Where one is concerned with the length of period when work must have ceased for one of these orders to be made, it is surely reasonable to

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take into account the possibility of temporary adverse economic conditions being the cause of that suspension of activity. It is impossible at the present moment, when one looks at the number of industries in this country, not to have in mind that there come periods, hopefully short, in which it makes sense to suspend your operations; in which simply the piling up of stocks, given also the high interest rates, is economically unsound and the sensible thing is therefore to halt your operations.
It is a matter very much, as my noble friend Lord Mottistone said, of judgment: what is the right period that you should select, with due deference to the environmental interests that take the other view. But I am bound to say, looking at the economic history of this country over the last 30 years, that it looks as if a period of a year for such a suspension might be on the narrow side, and that real harm might be done by having so short a limit. I do not know what my noble friend will do at this stage, but as a member of a Government which must be desperately concerned with the well being of British industry at this moment I hope that he and his colleagues will reflect just a little as to whether they may not inadvertently do harm by insisting on what looks like a nice tidy figure halfway between the noble Baroness and my noble friend, and whether, if they do so insist, they are not going to risk doing some damage to industry. If ever there were a time in this country's history in which the Government of the day should give concern to the needs of industry, it is surely today.
4 p.m.
Baroness Birk: I was not going to come in again on this, but I cannot let go by what the noble Lord, Lord Mottistone said. One would think from what he said that the only people with a concern for the environment is the CBI. Perhaps they should change their name from CBI to environmentalists. I am sorry to say this, but it is absolute nonsense. As the Minister has said more than once, as we all know, consultations have taken place—industry has had its say and environment has had its say—to get the balance right. I think that it is grossly unfair and quite untrue to give the impression that the whole balance has gone over to the side of the environmentalists. When anything has been put which is rather more on the environmental side, it has always been brought back to try to get the balance.
I understand and appreciate the point of the noble Lord, Lord Boyd-Carpenter, very well. In fact, if you read the Bill it says:
"Where it appears to the mineral planning authority … that for a period of 12 months no such development has been carried out …"—
In my reading that does not leave a completely rigid mandatory duty on the mineral authority. In the case cited by the noble Lord, Lord Boyd-Carpenter, if, because of a recession, because of a difficult time, they have to stop for a few months and say, "We will be able to start this very soon ", it seems to me that the mineral authority would certainly go along with them. Any area is desperate to get employment in the area, to get more money coming into the area, so that the area itself can do more for the community living there. I am afraid that I object strongly to this idea that only
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the CBI understand the right balance between the environment and industry, and that the rest of us are not looking at it at all. Every thinking person in this country today is well aware of the position we are in. Many of us feel that it is largely the fault of the present Government, but I will not go into this at this moment. Nevertheless, we are very conscious of this and do not want to do anything to wreck that.
Lord Boardman: May I also declare an interest and, based on the experience of that interest, voice my support for my noble friend Lord Mottistone? My reasons are similar to those of my noble friend Lord Boyd-Carpenter. It is very often necessary in times of recession to decide upon concentrating one's production on certain quarries or plants or minerals. Indeed, 12 months' suspension of one in order to concentrate on others to get a more economic operation is a comparatively short period. In response to the noble Baroness, Lady Birk, I would say that, when she referred to a mineral planning authority taking note of these facts, the operations may be in a number of different areas under a number of different planning authorities, and it would not be one that may have an omnibus view over all the factors. I support my noble friend Lord Mottistone in this.
Lord Bellwin: When listening to my noble friend Lord Mottistone I did not think that he was implying that which was ascribed to him by the noble Baroness; that he was saying that the CBI was right on all these matters and that the environmentalists were wrong. I did not interpret what he said in that way. I thought the points made by my noble friend Lord Boyd-Carpenter were very powerful points, indeed, It would be a very odd Government who were not concerned at any time—most of all at this time—as to anything that might have an adverse effect upon industry or any section of it. I am anxious about this amendment and about all the others of a like nature referring to the time that must be given to industry. In fact, during the negotiations, my information is that the CBI thought that 12 months was a reasonable period.
There is always the other point that I would have said, and now stress, that it must be remembered that orders will not automatically be made at the end of this period. I do not want to accept this amendment now, but I will undertake to think carefully and discuss again with my colleagues what has been said so that we can be sure that the time in the Bill now is the right one. But we will not be dogmatic about it. I cannot accept the amendment; I am sure that my noble friend, in these circumstances, will be glad to withdraw it. I do not promise that we will come back next time with something else; but we will talk and think about it, and see whether we ought to go with it.
Lord Mottistone: We are on amendment No. 124?
The Chairman of Committees: We are on Amendment No. 124.
Lord Mottistone: I brought in my Amendment No. 125 before we had finished with No. 124 in order to help things along.
Baroness Birk: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 125 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 126:
Page 11, leave out lines 38 and 39 and insert ("to any substantial extent anywhere in, on or under the site of which the land forms part").
The noble Lord said: As with Section 51A orders, our intention that mineral workings throughout a whole site must have stopped for a period of at least 12 months before a mineral planning authority can make a suspension order is that which this amendment seeks to make clear. It is feared that the present drafting of the clause may lead to mineral planning authorities making a suspension order where working had stopped at one part of the site but was continuing elsewhere. I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 127:
Page 12, line 8, at end insert ("or").
The noble Lord said: I should like to take Amendments Nos. 128 and 129 with this one. Amendments Nos. 127 and 128 are paving amendments to Amendment 129. This seeks to leave out subsection (c). I think that subsection (c) adds nothing to subsections (a) and (b). It would appear to relate to land as yet unbroken for mineral operations, and, as referred to in earlier amendments, to import control of agriculture. We suggest that as it adds nothing, it should be deleted. Perhaps, in giving his reply, my noble friend could give examples of steps that might be required. I beg to move.
Lord Bellwin: It seems to me that the point being made, that subsection (c) either adds nothing to what is covered by subsections (a) and (b) or that, if it does, such requirements are unreasonable, is not a point of view with which I could concur. The important point is that subsection (c) refers to the land while the preceding subsections both refer to the area in which the land is situated. Thus, for example, subsection (c) will permit a suspension order to impose a condition requiring the land to be kept drained during the period of suspension so that the soil quality is not irretrievably damaged. And again it will allow a condition requiring land which has yet to be worked to be kept free of weeds so that the soil's goodness is not lost and so that neighbouring farmers do not suffer undue nuisance. I hope that, on careful consideration of this aspect of it, my noble friend will agree that there is a real need for this provision and will not press his amendment.
Lord Mottistone: I will examine carefully what my noble friend has said. At first hearing, it sounds very reasonable, but I reserve the right to come back at a later stage. Meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 128 and 129 not moved.]
Lord Mottistone Lord Mottistone moved Amendment No. 130:
Page 12, line 31, leave out ("subsection (2)") and insert ("subsections (1A) and (2)").
The noble Lord said: This amendment I ask your Lordships to take with Amendment No. 131. Amendment No. 130 is a paving amendment to it. Subsection (9) of the new Section 51A of the Town and Country Planning Act will require an authority to give notice to interested parties of their proposals to submit a proposed order to the Secretary of State. If all have confirmed in writing that they have no objection to the proposed order, there seems little point in involving the Secretary of State and delaying the order until he has approved it. The amendment seeks that end. I beg to move.
Baroness Birk: On this occasion I should very much like to support the noble Lord. This amendment is not only possible; it is practicable and reasonable. It seems totally unnecessary for the Secretary of State to be involved when there is no opposition to a suspension order. If this amendment achieves its end—I cannot comment on its drafting—I shall certainly support it. I shall be very interested to hear what the Minister says on it.
Lord Bellwin: Such a streamlined procedure, in cases where there is agreement, appears to have merit. I shall gladly undertake to look into the implications to make sure that there are no other problems. I undertake to consider this amendment.
Lord Mottistone: With that splendid assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 131 not moved.]
4.11 p.m.
Lord Mottistone Lord Mottistone: moved Amendment No. 132:
Page 12, line 36, at end insert—
("(1B) The Secretary of State shall not confirm an order or supplementary order under this section within two years from the date of the last such order in respect of substantially the same land.").
The noble Lord said: This amendment seeks to add another subsection to this clause. An operator should not be subject to repeated attempts by a planning authority to impose steps for the protection of the environment which the Secretary of State has recently refused. I beg to move.
Lord Bellwin: Suspension orders are intended as a temporary measure only to protect the environment while mineral working is suspended. There may well be occasions on which it would be sensible to up-date or remove some requirements in less than two years and I cannot therefore accept this amendment. If a suspension order or supplementary suspension order is not confirmed, for example, because of a procedural flaw, it would be wrong not to have the opportunity of making a new order for another two years. And even where an order has been confirmed, circumstances can change in less than two years which could necessitate amending the requirements of the suspension order. I hope that when my noble friend has considered

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this reply carefully he will agree with me. Perhaps he will withdraw the amendment.
Lord Mottistone: It is not a sufficient point about which to make a great issue, but this time I do not agree with my noble friend the Minister. I shall almost certainly return on this point later. At this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Bellwin Lord Bellwin moved Amendment No. 133:
Page 12, line 39, after ("order") insert ("and not requiring that any fresh step shall be taken for the protection of the environment").
The noble Lord said: This amendment seeks to make clear that, although suspension orders will normally require to be confirmed by the Secretary of State, a supplementary suspension order which does no more than revoke a suspension order or previous supplementary suspension order—because, for example, working has recommenced—will not require confirmation. However, any supplementary suspension order which, in addition to revoking a previous order, also imposes additional steps which must be taken to protect the environment while working has temporarily stopped will still require confirmation. I think the amendment clarifies the position and I beg to move.
Lord Mottistone: I very much welcome this amendment and thank my noble friend the Minister for it.
On Question, amendment agreed to.
[Amendment No. 134 not moved.]
Lord Gisborough Lord Gisborough moved Amendment No. 135:
Page 13, line 10, at end insert ("within the meaning of section 1 of the Local Land Charges Act 1975").
The noble Lord said: The words "local land charge" are not defined in this Bill. They may be known to practising conveyancers but they should be defined by reference to the section of the Act which now governs the local land charges. The 1975 Act materially altered the law that formerly was set out in the Land Charges Acts 1975 and 1972. The term "local land charges" is not an adequate expression. I move this Amendment to improve the drafting. I beg to move.
Lord Mottistone: I should like to support my noble friend Lord Gisborough. His amendment is excellent and replaces the one that I did not move—No. 134—which is in default as compared with his.
Lord Bellwin: I am advised that this amendment moved by my noble friend is unnecessary. Section 1 of the Local Land Charges Act 1975 provides that where under other Acts orders are made local land charges the provisions of the 1975 Act shall apply. A local land charge is automatically a charge for the purposes of the Land Charges Act 1975. That is the position as I am clearly advised. If it should be that my noble friend can bring forth some evidence or reference that would seem to indicate to the contrary, I should be glad to look at it. However, I am told that the amendment is not necessary.
Lord Gisborough: I am grateful to the Minister for that answer, which I am afraid is a little beyond me because I am not a lawyer. I should like to take the answer back and have it studied. On that understanding, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 136 not moved.]
The Chairman of Committees: If Amendment No. 137 is agreed to, I cannot call Amendment No. 138.
Lord Bellwin Lord Bellwin moved Amendment No. 137:
Page 14, line 15, leave out from ("giving") to end of line 16 and insert ("the mineral planning authority notice of his intention to do so.
(1A) A notice under subsection (1) of this section shall specify the date on which the person giving the notice intends to recommence development consisting of the winning and working of minerals.").
The noble Lord said: The purpose of this amendment, and several subsequent ones, is to provide a simpler procedure for the revocation of suspension orders than the Bill, as drafted, provides. It is now considered that the 28 days' notice required in the present drafting of Clause 9 is unnecessary and that it will be sufficient for an operator merely to let the authority know on what day he intends to recommence working. A suspension order does not negate an operator's planning permission to win and work minerals, but the authority needs to know that an operator is recommencing working and not failing to comply with the terms of a suspension order. The authority will also need to make arrangements to revoke the order and amend the entry in the land charges register. I hope the Committee agrees that this makes the procedure simpler. I beg to move.
Lord Mottistone: I should very much like to support this amendment by my noble friend. It takes the place of my Amendments Nos. 138 and 140. We are grateful to him for it.
On Question, Amendment agreed to.
[Amendment No. 138 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 139:
Page 14, line 17, leave out subsection (2) and insert—
("(2) The mineral planning authority shall revoke the order if development consisting of the winning and working of minerals has re-commenced to a substantial extent in, on or under the land in relation to which the order is in effect.").
The noble Lord said: This amendment is consequential on the earlier amendment, No. 137, to delete the necessity for 28 days' notice to a mineral planning authority of an operator's intention to recommence working. The present reference to a mineral planning authority being satisfied that working did not commence before the end of the 28 days' notice period is no longer considered to be necessary. The amendment provides that if a mineral planning authority are satisfied that mineral working has recommenced to a substantial extent, then they shall be required to evoke the order. I beg to move.
The Chairman of Committees: I have to point out that if this amendment is agreed I cannot call Amendment No. 140.
On Question, amendment agreed to.
[Amendment No. 140 not moved.]
The Chairman of Committees: If Amendment No. 141 is agreed to, I cannot call Amendments Nos. 142, 143, 144 and 145.
Lord Mottistone Lord Mottistone moved Amendment No. 141:
Page 14, leave out from beginning of line 29 to end of line 11 on page 15.
The noble Lord said: This amendment seeks to leave out new subsections (3) to (7). The need for the elaborate procedure which is spelt out in these subsections is not apparent. It is not clear, for example, what evil it is designed to prevent. The industry would have a remedy in the courts if a planning authority did not comply with the Act. Furthermore, we consider this to be a hypothetical case and I would suggest that this kind of provision is best not incorporated in the Bill at this stage, but the matter can be kept under review so that it can be produced at a later date when experience of the working of the Bill has been obtained. I beg to move.
Baroness Birk: I hope that this amendment will not be accepted. The local authority associations have come out very strongly in support of an appeals mechanism if local authorities refuse to revoke a suspension order. I believe that an appeals procedure is necessary because local authorities must have the power to refuse to revoke a suspension order on the grounds that substantial work has not recommenced. Clearly there could be circumstances where operators will, once the Secretary of State has confirmed a suspension order, merely notify the local authority that they intend to start work in order to avoid the cost of tidying up the site, as specified in the suspension order. This may not apply to many cases, but in a statute one has to look at every side of the problem. If in reality they may not be doing any substantial work, a local authority must have the right to monitor this and to refuse to revoke the order.
I would have thought this was something that the Government would accept, but if the noble Lord's amendment is passed there would be the rather extraordinary position in which some work might legally have begun again on the site while the local authority might have legally refused to revoke the suspension order, and it would really be the most colossal legislative and legal muddle. I do not think it could possibly work and I await with interest to hear what the noble Lord the Minister has to say.
Lord Bellwin: There is not a great deal to say on this. We are not clear in fact why the industry are opposed to these provisions, which we would have thought were very much in their interests. These subsections are designed to cover the circumstances where an operator claims to have restarted work but the mineral planning authority does not accept that work has genuinely restarted. I would have thought that an appeal to the Secretary of State seems a sensible way to resolve such a dispute, should it arise. I say again that I would have thought it would have been in the industry's interests to have it. All I can say is that if my noble friend
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would perhaps reconsider his amendment very carefully, and if he would like to talk to us as to why it is thought that is not the case, we should always be glad to listen to what he has to say. But at the moment we could not accept the amendment.
Lord Mottistone: Having listened with care to what the noble Baroness, Lady Birk, has said, and also to the remarks of my noble friend the Minister, I consider there is quite a lot to be said for their respective arguments. At this stage, therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.22 p.m.
Baroness Birk Baroness Birk moved Amendment No. 142:
Page 14, line 29, leave out (" fail to ") and insert ("do not").
The noble Baroness said: This amendment is not quite as semantic as perhaps it looks. As currently drafted, the Bill appears to suggest that local authorities may not or will not revoke an order because of some administrative failing. That is expressed, probably inadvertently, through the words "fail to". I suppose there may be occasional administrative mistakes which could result in an order not being revoked, and clearly procedures have to be such as would deal with this; but in the vast majority of cases orders which are not revoked will be so treated because local authorities feel that work has not begun again on the site. Therefore I think it would be far better to insert the words "do not" and take out the words "fail to". That seems more precise and more in keeping with what the Bill is saying, as I understand it. I beg to move.
Lord Bellwin: I entirely accept that this is an improvement in the drafting and I have no hesitation in accepting it.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 143:
Page 14, line 31, leave out first (" of ") and insert ("specified in").
The noble Lord said: This amendment is consequential upon the Government's Amendment No. 137. The requirement for an operator to notify a mineral planning authority 28 days in advance of his intention to recommence mineral working is now considered unnecessary. This amendment, therefore, alters the period after which an operator may apply to the Secretary of State for the revocation of a suspension order, once mineral working has recommenced and the mineral planning authority does not revoke the order. It is intended that the period should run from the date which is specified in the notice to the mineral planning authority as being the day on which mineral working is to be recommenced. I beg to move.
On Question, amendment agreed to.
The Chairman of Committees: I have to inform your Lordships that if Amendment No. 144 is agreed to I cannot call Amendment No. 145.
Lord Bellwin Lord Bellwin moved Amendment No. 144:
Page 15, line 6, leave out ("he may") and insert ("to a substantial extent he shall").
The noble Lord said: This amendment seeks to make clear that the Secretary of State will revoke a suspension order if the mineral planning authority does not do so, provided he is satisfied that mineral working has recommenced and it is not the case of an operator trying to avoid compliance with the terms of a suspension order by, for example, moving a few shovelfuls of material. I beg to move.
Lord Mottistone: I should like briefly to welcome this amendment on the part of my noble friend, which encompasses that which I would have moved in Amendment No. 145. I thank him very much.
On Question, amendment agreed to.
[Amendment No. 145 not moved.]
The Chairman of Committees: I have to inform the Committee that Amendment No. 146 has been wrongly marshalled and should appear as Amendment No. 187A.
Clause 9, as amended, agreed to.
Lord Sandford Lord Sandford moved Amendment No. 147:
After Clause 9, insert the following new clause:
("Enforcement and stop notices
. The following words shall be added at the end of sections 87 (enforcement notices) and 90 (Stop notices) of that Act—
"References to the local planning authority in this section are to be construed in relation to development consisting of the winning and working of minerals as references to the mineral planning authority.".").
The noble Lord said: My noble friend Lord Ridley is not here and has not provided me with a brief on this subject, but it is clear from the amendment that he is concerned to make it plain that the "local planning authority" in this particular case is a reference to the county council, the mineral planning authority, and not the district council. I, for one, would welcome that clarification, if my noble friend does not think it is already clear from the text. I beg to move.
Lord Mottistone: If I may intervene at this point, I should like to talk to Amendment No. 236, which contains another way of saying the same thing. Perhaps I could explain in rather greater detail than my noble friend Lord Sandford what we see as being the reasoning behind both amendments. I am open to accept either amendment, depending on which the Government might prefer. As I see it, the basic reasons are that the division of planning responsibilities between the county and district councils was, as the Government claim, clarified in the Local Government, Planning and Land Act 1980. Clause 2 of this Bill expressly defines "mineral planning authority" as the county authority. Thus counties are solely and clearly responsible for mineral planning and it follows that they should also be solely and clearly responsible for any consequential enforcement action. That is the intention behind my Amendment No. 236. Without this change, districts would in effect be entitled to undermine the county's authority and would engender uncertainty in the minerals industry.
Lord Bellwin: I am grateful to both my noble friends for what they have said on these amendments. I
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recognise the strong arguments which have been put forward by the ACC, the CBI and others that enforcement action should be limited to county councils in England and Wales. I have asked my officials to discuss this with the ADC, and if agreement can be reached I shall be happy to put down an appropriate amendment on Report stage.
Lord Mottistone: When we come to my amendment I shall not be moving it, being satisfied with the assurances given by my noble friend the Minister.
Lord Sandford: I am most grateful to my noble friend. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 25 [Orders prohibiting resumption of use and orders relating to suspension of use]:
[Amendments Nos. 148 and 149 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 150:
Page 29, line 3, leave out from ("out") to end of line 4 and insert ("to any substantial extent anywhere in, on or under the site of which the land forms part").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 105. I beg to move.
On Question, amendment agreed to.
[Amendment No. 151 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 152:
Page 29, line 8, after ("impose") insert (", in relation to the site,").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 107. I beg to move.
On Question, amendment agreed to.
[Amendment No. 153 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 154:
Page 29, line 15, leave out ("in, on or under the land").
The noble Lord said: This amendment, and Amendment No. 157, are the Scottish equivalents of Government Amendments Nos. 109 and 112. I beg to move.
On Question, amendment agreed to.
[Amendment No. 155 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 156:
Page 29, line 18, leave out ("to remove or alleviate") and insert (", within such time as may be so specified, for the purpose of removing or alleviating").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 111. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 157:
Page 29, line 20, leave out ("in, on or under the land").
The noble Lord said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
The Deputy Chairman of Committees (Lord Drumalbyn): It might be convenient if I put Amendments Nos. 158, 159, 159A and 159B together, if that is agreeable.
Lord Bellwin Lord Bellwin moved Amendments Nos. 158 to 159B en bloc:
Page 29, line 25, leave out ("in relation to the land")
Page 29, line 35, leave out ("land") and insert ("site")
Page 29, line 37, leave out subsection (4).
Page 29, line 40, leave out ("(3), (4),") and insert ("(2B) to").
The noble Lord said: These are Scottish equivalents of Government amendments which have already been moved. I beg to move.
On Question, amendments agreed to.
[Amendments Nos. 160 and 161 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 162:
Page 30, line 28, leave out from (" on ") to (" person ") in line 31 and insert ("any").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 119. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 163 to 165 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 166:
Page 31, line 3, at end insert ("but without prejudice to the power of the planning authority, on revoking the order, to make a further grant of planning permission for development consisting of the winning and working of minerals").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 123. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 167 and 168 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 169:
Page 31, leave out lines 11 and 12 and insert ("to any substantial extent anywhere in, on or under the site of which the land forms part").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 126. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 170 to 172 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 173:
Page 32, line 8, after ("order") insert ("and not requiring that any fresh step shall be taken for the protection of the environment").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 133. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 174 and 175 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 176:
Page 33, line 37, leave out from (" giving ") to end of line 38 and insert ("the planning authority notice of his intention to do so.
(1A) A notice under subsection (1) of this section shall specify the date on which the person giving the notice intends to recommence development consisting of the winning and working of minerals.").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 137. I beg to move.
On Question, amendment agreed to.
[Amendment No. 177 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 178:
Page 33, line 39, leave out subsection (2) and insert—
("(2) The planning authority shall revoke the order if
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development consisting of the winning and working of minerals has re-commenced to a substantial extent in, on or under the land in relation to which the order is in effect.").
The noble Lord said: This is the Scottish equivalent. of Government Amendment No. 139. I beg to move
On Question, amendment agreed to.
[Amendments Nos. 179 and 180 not moved.]
Baroness Birk Baroness Birk moved Amendment No. 181:
Page 34, line 7, leave out ("fail to") and insert ("do not").
The noble Baroness said: This is the same as the English amendment earlier, which was accepted by the Government. I beg to move.
Lord Bellwin: This is the Scottish equivalent of Amendment No. 142, which was tabled by the noble Baroness and the noble Lord, Lord Ponsonby. I am happy to accept this amendment.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 182:
Page 34, line 9, leave out ("of the notice") and insert ("specified in the notice").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 143. I beg to move.
On Question, amendment agreed to.
Lord Bellwin Lord Bellwin moved Amendment No. 183:
Page 34, line 25, leave out ("he may") and insert ("to a substantial extent he shall").
The noble Lord said: This is the Scottish equivalent of Government Amendment No. 144. I beg to move.
On Question, amendment agreed to.
[Amendment No. 184 not moved.]
Clause 25, as amended, agreed to.
Clause 10 [Enforcement of orders]:
4.39 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 185:
Page 15, line 16, leave out ("uses") and insert ("develops").
The noble Lord said: For the convenience of the Committee, I suggest that we might take Nos. 186 and 187 with this amendment. These are all drafting amendments to improve the wording of the Bill, because mineral operators develop land rather than use it. I beg to move.
Lord Bellwin: Clause 8 of the Bill provides that mineral working shall be a use of land for the purposes of Section 51 of the Town and Country Planning Act 1971. That section enables a local planning authority to require the discontinuance of a use of land and to impose conditions on the continuance of a use. Section 108, which is, among other things, concerned with the enforcement of orders made under Section 51, must be related to the use of land and not its development. With that clarification of what seems to have been not too clear, perhaps my noble friend will feel able to withdraw this amendment.
Lord Mottistone: I shall have pleasure in reading carefully my noble friend's remarks and will consider

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whether to take the matter further at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 186 and 187 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 187A:
Page 15, line 31, after (" 51A(2) ") insert ("or (3)").
The noble Lord said: I beg to move this amendment which seeks to make it an offence to fail to comply with an after-care condition order, a Section 51A order, as is already the case in respect of other Section 51A order requirements. The amendment merely rectifies an accidental omission in the original drafting of the Bill. I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 188:
Page 16, line 22 at end insert ("save that where the surplus material includes any material other than material from any building structure plant or machinery the local authority shall give at least twenty-eight days notice of their intention to remove and sell that material to any person who they believe may have an interest in the land or minerals concerned.").
The noble Lord said: The Bill has used the procedure set out in the Public Health Act 1936 which is designed to deal with certain material where an authority demolish or alter an existing building. The procedure requires them to remove the material from the site and then give the owner three days within which to claim that material and remove it. Clearly, for building materials such a procedure could work quite effectively and has been in operation for many years. However, it is quite likely under these provisions that the material which would be surplus would be substantial quantities of minerals.
Clearly the procedure is unworkable because, first, it would be inappropriate to require a planning authority to remove the material from the site before they sell it. Secondly, it is certainly not always possible for the owner of the minerals, who may be separate from the occupier of the surface, to claim ownership. Indeed, he may well not know that any work is being carried out on the site. This amendment therefore is intended to provide a different procedure for non-building material which would not require the authority to have to remove the material from the site first but which does give adequate time for the owner of the minerals to indicate that he has an interest in them and to take appropriate steps. I beg to move.
Lord Bellwin: With the leave of the Committee, I will speak to this amendment and its Scottish equivalent, Amendment No. 195. I must confess that until I heard my noble friend moving the amendment, I did not fully understand its purpose. Under the existing Town and Country Planning legislation, if steps required by a Section 51 order, requiring the removal or alteration of buildings, works, plant or machinery, are not taken, the authority in default may take the necessary action and to defray their expenses they are entitled to sell material they have taken within three days of its removal. Having deducted the cost of removal and sale, the balance must be paid to the owner of the material.
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The Bill simply seeks to include within the existing power the new form of order under Sections 51A and B. In view of this explanation, I hope my noble friend will feel that his amendment is not necessary and that he will agree to withdraw it.
Lord Mottistone: In view of the fact that my noble friend the Minister was not clear as to the purpose of the amendment, perhaps he too will find when he reads my explanation that he has a slightly different view as to its desirability. Perhaps we could talk about the matter between this stage and the next to find out whether either of us would care to come forward with this amendment or something else in its place. Would my noble friend agree to that course of action?
Lord Bellwin: My noble friend knows that I am always happy to agree to look at anything which seems to be reasonable and which may require further clarification. Yes, of course; I shall be glad to do that.
Lord Mottistone: With that happy assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
4.46 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 189:
After Clause 10, insert the following new clause:
("Extension of ancillary rights to include certain pipes
. For the purposes of the Mines (Working Facilities and Support) Act 1966 "ancillary rights" shall include a pipe for the conveyance of minerals provided the pipe was the subject of an easement which was in being at 1st August 1962; and in respect of such pipes the words "otherwise than by means of pipe" in paragraph (b) subsection (1) of section 2 of the Act shall cease to apply.").
The noble Lord said: This is a specialist amendment which perhaps I could explain at reasonable length to your Lordships in order to make it clear. The Mines (Working Facilities and Support) Act 1923 provided that where any facility, right or privilege was required in order that minerals might be properly and conveniently worked and the person entitled to work the minerals was unduly hampered in obtaining such ancillary right, that person could apply to the then Board of Trade for the grant of the right. The Act covered renewals as well as original easements. The Pipelines Act 1962 repealed that provision in the 1923 Act and substituted a general power for obtaining from the Minister compulsory rights in respect of pipelines. It did not cater for renewals, arguably an oversight at that time. Any easements granted without a renewal provision are thus at risk, on renewal, to the attitudes of landowners and others with an interest in the land. Accordingly, a landholder can demand an extortionate sum for the renewal of easements because a procedure to obtain ancillary rights other than by agreement with him is lacking. The Mines (Working Facilities and Support) Act 1966 re-enacts the ancillary rights procedure of the 1923 Act but excludes pipeline conveyance of minerals, which is covered by the 1962 Act.
By removing the exclusion under the 1966 Act, the new clause is intended to reintroduce the power for a person involved in mineral operations to obtain an

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ancillary right for the renewal of easements, provided the easement existed when the 1962 Act received Royal Assent. Before that date, the mineral operator could not be expected to make provision for the renewal of easements, since he then had available a procedure under the 1923 Act for obtaining ancillary rights if agreement with the landholder could not be reached. It is believed that this amendment can suitably, and with order, be made to the Bill. I hope my noble friend will see that it is a reasonable point and that he will be disposed to accept the amendment. I beg to move.
Lord Bellwin: I am happy to tell my noble friend that the Government accept the principle behind the amendment and recognise that it seeks to remedy one unintended consequence of earlier legislation. The lawyers are looking closely at how best this can be done. If my noble friend will agree to withdraw his amendment, I shall table a Government amendment before Report.
Lord Lloyd of Kilgerran: I hesitate to intervene, but on this one point relating to pipeline easements may I thank the noble Lord very much.
Lord Mottistone: I thank my noble friend for his reply and have pleasure in withdrawing the amendment.
Amendment, by leave, withdrawn.
Lord Nugent of Guildford Lord Nugent of Guildford moved Amendment No. 190:
After Clause 10, insert the following new clause:
("Assessment and reinstatement of former mineral workings
.—(1) The Secretary of State shall undertake a survey of all known former mineral workings to identify land so altered that it requires remedial action to improve its appearance or to bring it into an acceptable condition for use.
(2) The necessary remedial treatment of all sites identified under subsection (1) as needing remedial action shall be initiated by the Secretary of State within ten years of the date of Royal Assent of this Act.").
The noble Lord said: I beg to move the new clause standing in my name on the Marshalled List. This new clause is designed to initiate a programme of reclamation of past dereliction. I am speaking of sand and gravel areas with which I am particularly familiar. As have already said on other occasions, this Bill is admirable, in its motives and indeed in its content, for dealing with new mineral working and ensuring, so far as is humanly possible, complete and perfect restoration in the future. But although it makes provision to catch up with existing working, and ensures that that will be adequately restored, it makes no provision for past dereliction. The areas of past dereliction are serious. In the South-East region alone (with which I am familiar) there are some 26 square miles of past dereliction. Over the country as a whole there must be several times that figure.
These sites include areas which have not been restored at all. They include areas where the old rotting machinery is still standing; there are huge pits in the ground, most of them full of water, looking very sad. On some sites partial restoration has been done and there is just a piece of totally infertile land which
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does not drain, and it is usually covered in water. These sites are useless and they really look like a battlefield. In Surrey, Essex, Buckinghamshire, Berkshire and Kent they really are awful. Of course, the operating companies have disappeared years ago, so one can attack nobody about them. There they stand, as monuments to our neglect to repair the countryside of this country.
Clearly the local authorities cannot be expected to shoulder the burden of the cost of restoration of these areas. It is bad enough for the local people to have to live with them, and, if anything, they should be entitled to a rebate on their rates instead of having to pay an addition on the rates for restoring these sites. It is perfectly obvious that when restoration is to be done the Government will have to pick up the tab. I am certainly not advocating that that should be done at this time of acute financial stringency—that would not be reasonable—but what I am asking for in this amendment is that the Government should initiate a survey throughout the country so that a register can be compiled of all such derelict areas, with a record of what restoration will be needed and to what future purpose the land may be put, and the complex problems of future ownership of many fragmented pieces—whether they can be joined up to make farms or for recreation, and so on. The survey would have to be tripartite, involving the Government, local authorities and industry, and it would take some time to do. The restoration problem would follow when the survey had been completed. I should think that would take a good 10 years to do—longer with the after-care period.
It is not so unreasonable to ask that this should be done, because in the assisted areas of the country there are 100 per cent. grants for restoring derelict areas, such as pitheads and so on, but of course in areas like the South-East no such grant is made and therefore there is no provision at present. But the fact is that some day this problem must be tackled. The Government have much to their credit, such as the fact that they have brought in this excellent Bill, and they really should take the opportunity to put into the Bill their intention of carrying out such a survey in preparation for some time in the future when Government funds can be available to set in operation a programme of this kind.
This restoration is not required just for amenity reasons, although, heaven knows!, they are strong enough. One of the major problems for local authorities in giving consent for opening up fresh sand and gravel workings is the growing and intensely hostile opposition of local feeling, much of it being conditioned by having to live with these appalling derelict areas. When we tell the local people that restoration today is different, that it is really well done, that the industry are doing a good job—and indeed they now are—the local people say, "That may be, but look at this!" The fact is that until we can show that a start is going to be made on this appalling heritage from the past, we shall not be able to convince local opinion that we really mean it and that restoration is really going to be first class. So quite a strong practical theme runs through this amendment as well, and I hope that my noble friend will be able to give me a sympathetic answer. I beg to move.
4.56 p.m.
Baroness Birk: I should like to support the noble Lord, Lord Nugent of Guildford, in the amendment that he has moved; but I think there are two different points involved, one in the first part of the amendment, in subsection (1) of the new clause and one in subsection (2). On the question of the review, I think it is absolutely essential that something of this sort should be written into the Bill. I know that there was a Government survey of 1974 but that was not done with this necessarily in mind. I think that today, as the noble Lord, Lord Nugent, has so well put it, people are having to live with this historical dereliction, and that is something which, in 1981, we are far more conscious of, whether it is urban conservation, country conservation or environmental damage which has been caused in the line of industrial development.
On Second Reading I pointed out that one of the problems is that many of the operations were started before the 1947 planning Act and therefore no planning permission at all was needed for them at that time and there they still remain. It is absolutely essential to get the information. I agree with the noble Lord, and I have said so many times during the passage of the Bill, that this is an extremely enlightened, forward-looking Bill. We have not had anything on these lines so far as minerals are concerned for decades, and I do not think we can put anything off on the basis that it will take place in the near future, because we know that it will not. There is not time, and also it is not right to have separate pieces of legislation on the same subject. I think that the Bill must show some vision and looking-forward, even if everything cannot be done immediately. This is so also because we are all aware of the economic recession that we are in at the moment.
So the first thing to ask the Government to do is to accept the need for a survey and really pin it down to historical dereliction so that people know what it is about.
On subsection (2) of the noble Lord's amendment, while my sympathy is very much with him, I fear that to be quite realistic it will be difficult to get any Government to accept those terms—to put a time factor to within 10 years. I should like, in fact, to see this action taken even sooner than that. Remedial action should be initiated, but I am wondering whether one could be even more precise. Under the local government Act, I think for the first time the amount that was to be allowed to be spent on derelict land was going to be taken from capital expenditure, and if those controls could be removed so far as derelict land is concerned I think that would act as a great initiative for local authorities. There is a great danger there will be very little derelict land restoration if it has to compete for spending rights with other programmes which are of crucial human importance. If this could be done, it really is a very small drop in the ocean of public expenditure, and it is public expenditure which results in important capital assets. Not only is it something which is of visual importance—the noble Lord, Lord Mottistone, referred to this when he was talking about the wives and children and families of the operators who also want to live in pleasant places—but these sites are also often found in holiday areas, in areas where there is a great deal of tourism. So we as a country have an
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economic interest, as well as a visual and environmental interest, in seeing that these areas are cleared up.
Then I think the Government should also give very serious consideration to the extension of the provision of 100 per cent. derelict land grants. Again, this is not going to amount to an enormous sum, but it will bring such an enormous improvement to the areas that it will more than pay for itself. It is like everything else; the longer these things are left, the more derelict, the more desperate and the more ugly they get, and the less people want to live and work around them. It seems to me that in this Bill we have nearly got there in so many areas, and to put this in would seem to me to give just that extra impetus that is needed and show the willingness of the Government, which I am certain is there, to look forward. After all, the Control of Pollution Act has a great many provisions which are being brought in at different times. We should all like to see many of the provisions come in more quickly, naturally; that is always the position. I think the ground should be set and there should be something quite specific put in this Bill. I shall be very interested to hear what the Minister has to say in answer to this amendment.
Lord Beaumont of Whitley: We on these Benches would also very much like to support this amendment. I do not think there is any need to add to what the noble Lord, Lord Nugent, has said so ably. The first subsection will not cost much money and should be embarked on at once. With regard to the second subsection, I think the time-scale given—that the work should be initiated within 10 years—is absolutely right. It gets away from the point about spending money now, in the depression. I may point out that if the Government turn this down, for a period of up to 10 years, because of expense, it will be a vote of no confidence in their own plans for our economic recovery. I am sure they would not want to do that, and so I am sure they will accept this amendment.
Lord Hunt: I rise very briefly, and I thank the Minister for being patient while I add one more voice to the support given to the amendment. I have only just looked at it, but, at first flush and having listened to him and the other speakers, I would like to record my support. I think its inclusion in the Bill would fill an important gap that is there at present in this otherwise excellent Bill, in making provision for the making good of the sins of omission in the past. I think the value of the first part of this amendment can be that carrying out such a survey and having on record the things that need to be done, despite the economic difficulties in the immediate future, that record will provide a useful marker, a useful point of reference for members of the public who are affected by these various derelictions to take up with Parliament the need to make them good, as and when it is politically possible. I would like to give the amendment my support.
5.5 p.m.
Lord Bellwin: My noble friend Lord Nugent has been good enough, at Second Reading and subsequently, to give a full exposition as to why he feels that the course of action set out in this amendment is necessary. I

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would like to repay the courtesy by giving a fairly full reply. The first part of the amendment places a statutory duty on the Secretary of State to undertake a survey of all known former mineral workings. I must confess to being somewhat concerned at the full implications of this. I wonder if indeed my noble friend wishes it to apply to all known former mineral workings. I wonder about the large areas of Cornwall in which tin mining took place, or fluorspar and lead in Derbyshire, or peat in East Anglia. Would this mean a full survey of the Norfolk Broads, which are known to be formed from old peat workings? I also note that it is central Government which is required to undertake the survey and carry out action after it, rather than the local authorities, which tends to go somewhat against what the Government have been trying since 1979 to achieve in this relationship.
To what extent is such a survey necessary? Since a full survey of derelict and despoiled land was carried out in 1974, which identified land affected by mineral workings, a number of local authorities and other organisations have carried out further survey work. I should like to pay tribute in particular to the work undertaken by the Standing Conference on London and South-East Regional Planning, of which my noble friend has been such a distinguished chairman. I understand that in 1976 the conference carried out its own survey of the extent of the restoration problem and that some further monitoring is carried out annually, at least so far as current workings are concerned, so that newly formed dereliction is at least known about in the South-East. Indeed, my noble friend did say in his opening remarks that it was the old dereliction that was really troubling him so much.
I do not want to give the impression, and indeed I am most anxious not to, that the Government are complacent. I want to say right now to my noble friend, and indeed to those who have supported him, that Ministers will shortly be giving very careful consideration both to the need for a new derelict land survey and also for survey work more directly connected with mineral workings and the provisions of this Bill. I would further want to say that what has been said today about this will have a bearing on these matters, and I do assure my noble friend that these views and comments, his in particular, will receive the most thorough and careful consideration. This is something which we take seriously, and I am hopeful that we can get certain moves in this direction. I cannot commit the Government today, but there is no doubt at all that the Government is very sympathetic to this.
Before I leave the question of surveys, I should like to add one thing: sometimes surveys get in the way of action, as I am sure my noble friend would agree. There are many cases where the extent of past dereliction is known and where what is now needed is site-by-site examination of how restoration might be tackled, involving both the planning authority and the operator. If this approach throws up more general problems, such as how to deal with sites where the operator is no longer in business, officials in my department will be ready to take part in discussions about how these might best be resolved. I think this aspect of doing something, as well as carrying out surveys, should appeal to my noble friend as a positive step.
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The second part of the amendment relates to the results of the proposed survey and the action to be taken, upon it. Here the implications are worrying. Are we so certain, despite what the noble Lord, Lord Beaumont, said, about the availability of resources in the next few years that we can commit ourselves now to starting work on every site within that period? Somehow I do not think that is my noble friend's intention. I shall gladly listen to what he has to say on that. I suspect that it is not his intention and I would be grateful if he would clarify it.
One could talk at great length about this matter. The noble Baroness, Lady Birk, raised the question of derelict land grants. She knows that the Government have been very willing to give derelict land grants. Her concern is as to what will happen to local authorities who may receive capital allocations, which means that they will have to decide whether this is their priority in the context of the total amount of money which may have been made available to them. I know from my own work in this field that that is so and that it is a matter of some concern for such authorities. I would only say that, as with all the capital allocations, there is within them a great deal of scope for flexibility, not least from one authority to another. In many ways we went over this matter when we discussed the Local Government, Planning and Land Bill, so we need not do it again. Nevertheless, I think that the point which the noble Baroness has made is a fair one and I know that it is one that concerns some people. All that I would say to her about it today is that I hope, from what I have just said, that she recognises that I am aware of it as a matter of some concern.
I hope that I have said enough at least to explain why I am unable to accept today both parts of my noble friend's amendment. I hope that in particular the Committee will feel that at present, on reflection, the financial burden on industry and the taxpayers of this country is something that we should not take on as a commitment. Of course, we always hope that we shall be able to do more. The intentions are there because there is no quarrel at all as to the need which my noble friend has raised. I am entirely seized of that without any doubt at all.
I hope that, with the assurances I am able to give—that most careful consideration will be given to this new survey work, and that officials in my department are ready right now to be involved in discussions which seek to resolve such problems as may exist—my noble friend will feel able to withdraw his amendment. It is one which has attracted a great deal of sympathy not only on other sides of the Committee, but on the part of the Government. I am grateful to him for bringing it forward in the way in which he has done.
Lord Nugent of Guildford: It would be ungracious of me not to thank my noble friend for his charming answer, but he will, of course, admit that there was not much substance in it. I am bound to say that it does not console me very much to know that Ministers are going to give further consideration to this point when there is no commitment of any kind that they will say anything or do anything in the future. I of course accept that this is not the time to make big new financial commitments, and that was why I put

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in a figure of 10 years, which seemed far enough off for it to be contemplated. But I personally would be prepared to settle for the first part of my new clause without the second—that is to say, that the Government should initiate the survey. I said in my speech that the kind of survey that I want is not just to record the areas of dereliction, but to record what treatment would be required site by site in order to restore the land and so be able to compute what would be the cost and how the land could be used afterwards. All that needs to be carefully thought out. I should have thought that my noble friend might have committed himself to that.
I know that the expert professionalism to make these surveys is scarce both in the Department of the Environment and indeed in the local authorities. However, if the Government undertook to make such a survey over the next few years it would not be done in a flash but it would be put on record that here was a national problem with which we must deal. It really is appalling. I would like to take my noble friend out one day, even in my own county of Surrey, and show him some of the devastated areas there. They really are dreadful. It is time that we made at least the beginnings of a plan to deal with the situation. That would mean that some day some Government would say, "Well, things are getting a bit easier now and we shall start a programme over the next 10 years to tackle this ". After all, what are we talking about? —perhaps a programme of £10 million or £20 million a year for 10 years or something of that order, which I should have thought would not have broken our backs although, of course, we cannot contemplate it at present.
So I would ask my noble friend to take this matter back again and talk with his right honourable friends in the Department of the Environment, in order that perhaps, on Report, if I put this amendment down again, he could give us something a little firmer than he has given today. As he knows, we all thank him for an excellent Bill. It is a very valuable measure, but with it we really want to see at least a preparation towards a recovery from the dereliction of the past. There is powerful support from the noble Baroness, Lady Birk, and powerful support from the noble Lord, Lord Beaumont of Whitley, and indeed from all round the Committee, asking that we should at least take the first trembling step in order to deal with the problem. I beg leave to withdraw the amendment, but in view of that support I ask my noble friend to see whether he could say something a little more forthcoming at the Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 [Enforcement of orders]:
[Amendments Nos. 191 to 193 not moved.]
Lord Bellwin Lord Bellwin moved Amendment No. 194:
Page 35, line 12, after ("49A(2)") insert ("or (3)").
The noble Lord said: I beg to move Amendment No. 194. This is the Scottish equivalent of Government Amendment No. 146.
On Question, amendment agreed to.
[Amendment No. 195 not moved.]
Clause 26, as amended, agreed to.
[Amendment No. 196 not moved.]
Clause 11 [Extension of right to compensation where planning permission revoked or modified]:
5.18 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 197:
Page 17, line 11, leave out from (" but ") to end of line and insert (" is being disturbed in his enjoyment of the land or of minerals in, on or under it.").
The noble Lord said: I beg to move Amendment No. 197. This amendment is somewhat unique in that it has no Scottish equivalent. The purpose of the amendment is to echo the phrasing of Clause 13, page 18, lines 14 and 15 and, in fact, it will bring Section 164 of the previous Act into line with Section 170 in the phrasing of the Bill as it now stands. This will ensure that all the various types of interest that can exist in mineral workings have an opportunity of being compensated. I beg to move.
The Minister of State, Scottish Office (The Earl of Mansfield): My noble friend's amendment would extend the people to whom compensation is payable under Section 164 to include anyone who is disturbed in his enjoyment of the land or of the minerals in, on or under it. Section 164 provides compensation for the revocation or modification of planning permissions for all kinds of development and not just mineral working. So this amendment seeks to extend the right to claim compensation from those with an interest in land to include anyone who is disturbed in his enjoyment of such land. This goes far beyond anything to do with mineral working, and I hope that my noble friend will see that, as such, it is not acceptable in the context of a minerals Bill; certainly not without consultation with other interested parties, for instance, house builders and the providers of other forms of development.
Therefore, if this amendment were to be accepted, I believe that such people as traders operating in the neighbourhood of an area where a planning permission for development is revoked or modified, would be able to claim the compensation and, as such, would not be justified. In those circumstances, I hope that my noble friend will see fit to withdraw his amendment.
Lord Mottistone: With that very clear explanation from my noble friend the Minister, I am predisposed to accept it but I shall take care to examine it carefully and possibly come back to it at the next stage of the Bill. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 11 agreed to.
Clause 12 [Special compensation in respect of orders under s. 45 relating to mineral working]:
The Deputy Chairman of Committees: We now come to Amendment No. 198. If this amendment is agreed to, I cannot call Amendment No. 199.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 198:
Page 17, line 25, leave out paragraph (b).
The noble Earl said: Amendment No. 198 is a paving amendment to Amendment No. 200, which provides a revised wording, and Amendments Nos. 203 and 205 are the equivalent Scottish provision. It may be for the convenience of the Committee if I deal with all the four amendments together. The amendments provide for modified compensation to be payable in respect of a modification order where certain requirements are satisfied. The requirements which Amendments Nos. 200 and 205 specify as being necessary are, first, that the order must have been made not less than five years after the date of the planning permission it modifies (this is the requirement which Amendments Nos. 198 and 200 delete so that it can be incorporated in the revised wording); or, alternatively, that an order modifies a planning permission granted before the commencement of Section 30A (which gives mineral planning authorities the power to impose an after-care condition) and the order imposes an aftercare condition and no other requirement.
In the case of recent minerals permissions, operators have often reached a voluntary agreement with the local planning authority and accepted responsibility for a period of after-care. It is desirable for there to be a power for such after-care conditions to be imposed on minerals planning permissions with the benefit of the modified compensation scheme once the power is available through this Bill, and without waiting for five years to elapse. Operators will be protected from a mineral planning authority's unreasonable use of this power because all orders will require to be confirmed by the Secretary of State. I beg to move.
Lord Mottistone: As I understand it—and I think that my noble friend explained this—these amendments will enable a planning authority to impose an aftercare condition on any permission granted before the commencement of Clause 12, without having to pay full compensation. At first sight this may seem a reasonable transitional provision designed to avoid the authority having to wait five years before imposing after-care conditions, such as the industry would accept, as part of a properly balanced Stevens-style package.
It seems to me that the Bill as a whole—and we spoke about this earlier, so I shall not repeat it—does not constitute such a package. It does not quite have the proper balance, for which we had hoped. That means that industry is correspondingly suspicious of this amendment. Can my noble friend the Minister give an assurance that after-care conditions imposed following this amendment and its implementation will be reasonably compatible with restoration conditions which will already have been accepted?
Lord Boardman: My point on this amendment is rather different from that of my noble friend because it relates to the five-year period, which indeed will not be debated under my noble friend's amendment if this amendment is agreed to. As I understand it, this amendment will mean that the review resulting in a lower rate of compensation can be carried out in every period of five years. I believe that that is far too frequent. It can mean that the reduced rate of compensation which will become payable will result in
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a loss to the operator carrying a heavy burden every five years. Although we do not yet know—indeed, it is not relevant to this amendment—on what basis that will be, I believe that my noble friend is already aware of the industry's concern that constant five-yearly reviews at a reduced rate of compensation can be a penalty which the industry will find very difficult to accept.
Lord Nugent of Guildford: This is a clause in which the local authorities are very interested as well as the industry. Of course I understand the point made by my noble friends; the industry is apprehensive as to how much this may cost it. It would seem to me that, once the first reviews have been made, this new liability, as it were, will not be a recurring one because, of course, new consents today will carry the necessary conditions with regard to restoration and after-care. So it will be rather once-and-for-all. Perhaps my noble friend will confirm that point.
I should also like my noble friend to make clear whether his amendment means that local planning authorities will be allowed to make a review, starting immediately, of existing consents so that they can begin without delay to introduce the new, stricter conditions that are needed in order that satisfactory restoration can be made, because I am sure that is desirable. As I understand it, that is one of the main purposes of the Bill. So perhaps my noble friend will deal with those two points when he answers my noble friends sitting behind him.
The Earl of Mansfield: I can confirm to my noble friend Lord Mottistone that the after-care condition must relate to a restriction condition already on the permission. I should like to raise a couple of matters because we are now getting to the more financial parts of the Bill. The purpose of these amendments is to delete the current reference to mineral compensation requirements being satisfied in relation to a Section 45 order where the planning permission which is being modified by the order was granted not less than five years before the date of the order, and to incorporate the requirement in a revised wording which also provides for modified compensation to be payable when a Section 45 order modifies a planning permission granted before the commencement of Section 30A (being added by Clause 5) but only imposes an aftercare condition. This matter of compensation is indeed complex. Although further details were given in the consultation paper, perhaps I could say this as we are entering this part of the Bill. We start from the basic premise proposed by the Stevens Committee that where the conditions on a minerals planning permission are modified as a result of a review, the operator should bear a reasonable amount of any loss or damage incurred by him.
Rather than allowing what is reasonable in each case to be the subject of argument which might eventually involve the Secretary of State, the Lands Tribunal or the courts, we are endeavouring to produce formulae which will set out what is reasonable. In other words, compensation thresholds will be set for each mine or quarry. For active quarries, we are proposing that the threshold should be a variable percentage of the calculated mineral asset value within maximum or

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minimum limits, the variation in the percentage being dependent upon the asset value. The asset value will be calculated from the valuation in the rating list and a factor based on the expected future life of the mine or quarry. We propose to adopt a similar procedure for underground mining. Where working has ceased, it is not possible to use these formulae, and, unless anyone comes up with a better suggestion, we are proposing a fixed absolute compensation threshold for use when prohibition and suspension orders are made.
So the essence of the compensation clauses in the Bill is to provide a framework for setting monetary thresholds for each mine or quarry which, if the loss or damage incurred by the operator is less than this sum, no compensation will be payable by the mineral planning authority. Not all of that information is totally applicable to these four amendments but it may well help the deliberations of the Committee for me to give it now.
Baroness Birk: Since the Minister has embarked on the general principle of compensation I would say a word on that. I appreciate the problem that it is difficult to distinguish between the different amendments because they all link together. I welcome the principle that there should be regular reviews of mineral permissions and that operators should bear part of the costs of improving conditions. The problem is that most of the meat in this issue is going to appear in regulations which we have not seen. We are rather talking around the subject without getting to the financial heart of it. Even when they are tabled they are subject to Affirmative Resolutions in both Houses, and they therefore cannot be subject to any change and have to be accepted or rejected.
I cannot believe that I am alone in this Committee in thinking it essential that this House must be able to debate the regulations during the progress of this Bill, so that the basic proposals themselves are debated and not just the general principles. As I have said on many occasions, we have too much government by regulation, and it is on the increase. It is essential that we know the basic proposals which the Government intend to introduce in regulations. The proposals contained in last year's consultation paper, to which the noble Earl referred, are broadly acceptable, but behind them there lie two assumptions which need closer scrutiny, and he has referred to them in a fairly general and oblique way.
First, the contribution from the mineral operators will, it is suggested in the consultation paper although the noble Earl did not himself put a figure to it, be subject to a ceiling of £100,000. No doubt this will be index-linked. This will benefit the large operators but it may be of great difficulty to the smaller operators. Secondly, the compenation formula proposed for cessation or prohibition orders involves a maximum contribution of £5,000 from the operator no matter what the size of the working, nor how limited the original conditions for restoration which are to be activated. It would seem that such a proposal might mean that local authorities will not use the powers available to them because of the compensation implications.
I appreciate again that this is another problem of balance, to which we have all referred throughout this
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Bill. But this makes it even more essential—and having listened to what was said before the noble Earl himself enlarged it into this rather general thesis on compensation, which is important—for us to know in far greater detail what is proposed and to be able to debate this, otherwise nobody is going to be satisfied. The operators are not going to be satisfied, and the mineral authorities are not going to be satisfied. I should like at least to have an undertaking from the Government that by Report stage we shall be able to debate what is going to be in these regulations. This is essential.
The Earl of Mansfield: May I just intervene? My noble friend Lord Mottistone has an amendment to leave out Clause 12, which would be perhaps the place to debate these matters. I am beginning to regret that I tried to set the scene on an otherwise perfectly inoffensive amendment. Perhaps it would be more logical if matters such as the regulations were debated at the end of the clause.
On Question, amendment agreed to.
[Amendment No. 199 not moved.]
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 200:
Page 17, line 35, at end insert (" and
(e) either—

(i) the permission was granted not less than five years before the date of the order or

(ii) the conditions specified in subsection (2A) of this section arc satisfied.

(2A) The conditions mentioned in subsection (2)(e)(ii) of this section are—

(a) that the planning permission which the order modifies was granted before the commencement of section 30A of this Act; and

(b) that the order—

(i) imposes an aftercare condition; and

(ii) does not impose any other condition.").

On Question, amendment agreed to.
5.36 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 201:
Page 18, line 4, leave out (" five ") and insert ("ten").
The noble Lord said: I should like to take with this, Amendments Nos. 207 and 208, and the Scottish equivalents of all three. These amendments are concerned with the frequency—my noble friend Lord Bordman has already contributed to this but I thought that I would wait until we dealt with this amendment to do so—with which an operator may be exposed to changes of planning conditions with nil or reduced compensation. Industry contends that bearing in mind the serious financial implications—I cannot stress that too highly—the interval should be at least 10 years. It is questioned whether the planning conditions imposed today, for example, are sufficiently different from those imposed in 1976. In many respects 1976 seems to me like yesterday, and that is a five year interval. It seems such a short time.
Because permissions can be reviewed periodically to ensure that an operator does not lose too much value, there are two alternatives. First is to allow the threshold to be counted against the total loss on the various occasions; that is, for the compensation to be totted up against the threshold. Secondly, to ensure that the reviews are not too frequent. We shall come to the threshold business later on. These amendments

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are intended to make sure that the reviews are not too frequent, and indeed that they are not more than 10 years apart. It is suggested that that would be in line with the general long-term nature of planning. With that introduction, I beg to move.
Lord Nugent of Guildford: May I briefly interject a technical comment on my noble friend's speech, with which I sympathise in principle. The fact is that a great deal of technical progress has been made in the last 10 years, and from that point of view it really would not be appropriate to imagine that consents made 10 years ago with regard to restoration were adequate. They just were not. None of them of course included such conditions as after-care, which is absolutely essential in order to get adequate restoration. While this whole subject of compensation is fraught with problems, over which I have some sympathy with the industry, I would hope my noble friend would bear in mind that the shortening of the period in terms of the technical progress in this particular field would not really be justified.
Baroness Birk: May I support the noble Lord, Lord Nugent, in this. He is absolutely right over the technical changes. What we are talking about is a five-year minimum, so I hope that the Government will stick to that, as it is in the Bill.
The Earl of Mansfield: It is a question of balance. As happens frequently with the measure, one has to recognise the need to protect the industry from too onerous a burden. At the same time, circumstances may change and it is important in the interests of the environment that sites are kept under review and if necessary the conditions under which mineral working is proceeding or restoration and after-care taking place should be amended. The industry has the safeguard that all opposed orders have to be confirmed by the Secretary of State and, in the circumstances, I should have thought that five years was a reasonable interval. I think an extension to 10 years would be strongly opposed by local authority interests. I hope on reflection that my noble friend will agree that the balance is about right.
Lord Mottistone: Bluntly, my answer is: No, I do not. I am not sure whether the Committee as a whole sees it my way and in any case it is part of a package, and I feel that the time to discuss the inter-relationship of the compensation and length of time involved in this and other amendments is better dealt with when we come to the clause stand part. So at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.42 p.m.
Lord Nugent of Guildford Lord Nugent of Guildford moved Amendment No. 202:
Page 18, line 5, at end insert—
("(4) The Secretary of State shall pay to the mineral planning authority a sum equal to the amount of compensation payable by the mineral planning authority when:

(a) the mineral planning authority has made an order under section 45 of this Act modifying planning permission for
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development consisting of the winning and working of minerals; and

(b) mineral compensation requirements are satisfied in relation to such an order; and

(c) compensation is payable by the mineral planning authority.").

The noble Lord said: This is aimed at relieving local authorities of the cost of their part of the compensation which will have to be paid following the reviews. The review process, as we have all said in various ways, is very valuable in that it will enable local planning authorities to pick up existing workings where conditions are not adequate. In other words, it will ensure that the method of working now—and I am speaking particularly of sand and gravel workings—will be such as to protect local amenities as far as it is humanly possible to do so.
First, as regards the actual working of the site, in the past it has often happened that sites have been open to an unnecessary extent to an unnecessarily large area being worked at the time, whereas the most modern practice by the most efficient operators is to open sites in strips and start the restoration process as soon as the mineral is worked out and as later strips are being opened and worked. That is all greatly to the advantage of local people and amenities. Secondly, most important of all is the condition which can now be attached of the five-year after-care period which is essential to get the land back to agricultural condition or into good condition for any other purpose, recreation or anything else. This is, therefore, all very much in the public interest.
As the Bill stands, the industry has agreed in principle to pay a certain amount towards the cost of the extra conditions being put on it. That will be quite difficult to work out, but the formula, based on the Stevens Report, we shall see in due course. The balance, as the Bill is drafted, will be paid by local authorities and I am doubtful—I believe I heard the noble Baroness, Lady Birk, say she too was doubtful—whether local authorities will carry out the reviews, certainly as fast as we should like to see them do so, because of their apprehension about the extra costs that will fall on them. It is common knowledge that every local authority is short of cash now and finds it difficult to meet its existing commitments. I believe local authorities will be most reluctant to involve themselves in extra commitments of this kind which will then fall on the local ratepayer.
Let us also bear in mind when considering this point that many of the consents that will be reviewed were consents given by the Secretary of State on appeal, so they were his conditions that were faulty. I do not want to make too much of that. The real point is that everybody has learnt in the last 10 or 20 years something about how pits should best be worked and how restoration should best be carried out to get full and perfect restoration. It is in the light of that that the review clause is put down, so that the very large area which is now being worked and opened should be well restored when the working is finished.
The area involved in the South-Eastern region alone now is over 10 square miles, so taken over the country as a whole it is a very big area. At stake here is the restoration of very large areas of existing workings so that when they are worked out, the restoration will be really good and we shall not have a further addition

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to the awful dereliction of the past. It is an important practical point therefore to get this right. If the balance of the cost of compensation is to fall on local authorities, there will be a serious inhibition about them undertaking something we are very anxious they should do.
I do not claim any virtue for the drafting of the amendment—I have not covered the Scottish position—but leaving aside the technicalities, its effect would be that the Government would make a grant to local authorities to cover the cost of the compensation involved in these matters.
Lord Bellwin: With the leave of the Committee, I will reply at the same time both to this amendment and to No. 209 which is also in the name of my noble friend. Taken together, they would have the effect of providing that where compensation became payable as a result of the making of one of the four orders provided in this Bill, the mineral planning authority paying the compensation would be able to obtain complete reimbursement from the Government. As I said earlier, I have a great deal of sympathy with the view that more should be done to restore sites where mineral working has been completed. Indeed, that is why this Bill is being introduced in the first place. And it has generally been recognised that the first part of the cost of any such restoration should be borne by the mining and quarrying industry.
These amendments deal with who should pay for the remainder, and if they were accepted, a mineral planning authority would be able to impose the most excessive requirements and suffer no financial consequences. Suppose that with a large hard-rock quarry, the mineral planning authority wishes to see no cliff faces left behind but requires graded slopes of say, 45 degrees, something which might cost a couple of million pounds to do. A Section 51A order is made by the authority and the operator claims compensation. If the suggestion in the consultation paper is adopted in the regulations, the operator will have to pay the first £5,000 and can then claim the remaining £2 million or so from the authority, who in turn will be reimbursed by central Government. The taxpayer would have another £2 million to find, and multiplied across the whole country the results could be startling to say the least.
I am sure my noble friend on reflection will agree that that cannot be right, and I am sure that is not what he intends; it is of course far too open-ended. Action and financial responsibility must go together, so that when making an order the authority is fully aware of the effect on its finances of imposing excessive requirements. Once again a balance must be struck; what requirements are laid down must depend, to some extent at least, on what can be afforded.
There is also another reason why I am in difficulty regarding the amendments. Many of the conditions which will be imposed by the new orders can be imposed now. Parliament has never yet seen fit to require that where planning permissions are modified by a local planning authority, central Government should pick up the tab. In our view, it would be anomalous to make special arrangements to fund compensation in minerals cases.
So my advice to the Committee is this. Let us see how we get on with the Bill as drafted and with the
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proposed compensation regulations. After all, as my noble friend has said, a big step is already being made, in that for the first time mineral planning authorities will not have to pay full compensation for any loss or damage arising out of a modification or discontinuance order. If we take the case of a sand or gravel working in the South-East of England, and the only new requirement the mineral planning authority wish to impose is an after-care condition, then I would expect that the largest part of the cost would fall on the operator. Indeed, I suspect that in many cases the entire cost will fall beneath the threshold. Having said that, I should like to give my noble friend the assurance that once all the provisions of the Bill and the compensation regulations are brought into force, the Government will look carefully at how well they are working. If problems are seen to be arising, if the burden on local authorities proves to be too big, a new or amended system of grants is one possibility which may need to be considered.
From what I have said, I hope that my noble friend will recognise that we are going all the way that he would like, and that many of us would like, if it comes to that. However, we are trying to be pragmatic while at the same time making real progress in this field. I hope that with those assurances my noble friend will feel able to withdraw the amendment.
5.53 p.m.
Baroness Birk: Before the noble Lord does whatever he intends to do with his amendment I must once more press the Government a little further. I can see that central Government will not accept a blank cheque. But we are in a real dilemma—the noble Lord, Lord Nugent of Guildford, is absolutely right—in that local authorities just do not have the necessary resources. It is no good just paying lip service to the idea. The Minister has spoken very sympathetically, as he did on a previous amendment. He said that he understood how we all felt and that he would look at this and that. But the noble Lord, Lord Nugent, was quite right; I do not think that any of us can feel that we have achieved anything of real substance, anything which would be realistic and practical in the Bill, and which would help tackle this very difficult problem.
We must start from the point of view that local authorities' resources are squeezed so hard that what we are asking for today and what we are trying to achieve in the Bill will probably come very low in their order of priorities unless they get some help. I would again press the Government over the question of controls on capital expenditure, as well as on the point about grants for derelict land and trying to find a practical way to tackle the problem. A balance is needed here—and not just a balance between industry and environment. There must be a financial balance, so that the mineral planning authorities can find the money for compensation without completely denuding themselves of finances needed to meet other equally important demands.
This is a terrible dilemma and, in putting forward a Bill of this kind, the Government must face up to it in a more practical way than that which we have heard about this afternoon. I do not expect the Minister to give practical answers off the top of his head today,

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but I hope that we shall get something more at Report stage. The amendments moved by the noble Lord, Lord Nugent, are supported by many of us, all over the Chamber. We feel very strongly about the matter, we expressed our views on Second Reading and unless something is done, the Bill will be a very slim shadow of what it ought to be.
Lord Nugent of Guildford: I must thank the noble Baroness for her lusty support, and I feel that it ought to have shaken my noble friend into conceding something, though at the moment it does not look very much like it. I thought that my noble friend made rather a bad point about the fictitious rock face which was to be chamfered to a 45 degree slope at a cost of £2 million, because the fact is that all the orders have to be confirmed by the Secretary of State, and presumably he would not confirm such an order. My noble friend will have to think again before he comes forward with another set of arguments.
The practical position is that no one now has funds to do the job that we all want them to do. I think that perhaps we ought to see what the regulations say. I hope that my noble friend will be able to tell us that before Report stage we can see a draft, or some other document, which will indicate how much industry is going to pay, so that we can get some idea as to what share will fall on the local authorities. That would certainly be a help, at least to me, towards seeing what would fall on local authorities which are concerned with sand and gravel workings in the South-East. I have a rough idea as to what might be the cost of improved conditions regarding restoration and after-care. If my noble friend can let us have such an indication, we might get a rather clearer picture of what expense might fall on local authorities as well as some idea of whether they would be able to bear it.
I must say to my noble friend that it is not very reassuring merely to let this go, to hope that local authorities will get on with the job, carry out the surveys and bring up-to-date the conditions, as we wish—bearing in mind the kind of liabilities that may be involved—and then for Ministers in the future to see how they get on. That really could frustrate my noble friend's splendid intention, which is contained in the Bill, of having the existing workings managed in a way which will ensure that afterwards the land is properly restored. So there is at stake something quite important, and I hope that my noble friend will be able to help us, at least to that extent.
Lord Bellwin: Before my noble friend decides how to deal with his amendment, I should like to make one or two very brief comments. First, in case any Members of your Lordships' Committee are not aware of the situation, it should be made quite clear that the Government give 100 per cent. derelict land grant to local authorities which decide on that priority and wish to carry out the work. That applies in all the assisted areas, and it is for the local authorities to decide whether such work is to have priority. The noble Baroness was touching on something else which I mentioned when we discussed the previous amendment of my noble friend Lord Nugent. But I think that the point I now mention ought to be made
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clear. In these amendments we are being called upon to—
Baroness Birk: The Minister is not saying, is he, that every local authority which asks for 100 per cent. derelict land grant gets it?
Lord Beliwin: No, of course I am not. I am saying that it applies in the assisted areas, which are the areas with most of the land dereliction. Recently I have received representations from areas which have considerable land dereliction, and we have been willing to look very sympathetically at designating them, because that is where this kind of money should go. In fact, the Government have increased the amount of money available for this purpose, and I hope that that indicates the importance that we attach to this kind of work at a time when we have to be very careful about watching all the pennies.
On the other point that my noble friend makes, the fear we have is the open-endedness of the matter. That is the major concern. However, what I will gladly undertake to do is to study very carefully what he has said today and to discuss it again with colleagues. I clearly cannot go any further than that, and I am sure he does not expect me to do so today. But I recognise the strength of concern that there is on the point, and we will have a look at it, but beyond that, of course, I cannot go now.
Lord Nugent of Guildford: I thank my noble friend for having another go, and, of course, I give him credit for continuing to make grants of 100 per cent. for reclamation of dereliction in the assisted areas. But that is no compensation to the other areas of the country, including the South-Eastern region, with which I am particularly concerned, which are not assisted and which therefore do not get grants of that size. However, that is a point by the way. Perhaps we could have a further discussion between now and Report stage, and particularly with regard to what is to be the scheme placing part of the burden on industry, so that we can get some assessment of what the balance is that will fall on local authorities and can make an objective assessment of the prospect of the local authorities picking up the tab and doing it, which is what we really want them to do. Then, perhaps, we can see whether we should accept that or whether we ought to try again on Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.2 p.m.
On Question, Whether Clause 12, as amended, shall stand part of the Bill?
Lord Mottistone: This clause is a lead-in to other clauses relating to compensation, in particular Clause 15. As Members of the Committee know very well, after thorough consideration the Stevens Committee recommended a package of two interrelated components—long-term security of planning permissions for the minerals industry in exchange for a reasonable contribution by the industry to the costs, direct or indirect, of meeting revised conditions. That is the nub of the argument.

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The Government saw fit not to extend the long-term security of the planning permissions in answer to various amendments where we sought that extension, and I think it is reasonable to say that the industry therefore feels somewhat let down in that the Bill as it stands seems to have picked out from Stevens the burdens for industry and ignored or distorted the counter-balances. What we are saying, therefore, is that the failure of the Government to legislate for both sides of the Stevens coin has resulted in not sufficient attention being given to the need for long-term planning on the part of the minerals industry—and this is a point of which I made some issue in my Second Reading speech, and I will not burden your Lordships with it again. The failure to do that means that the industry is reluctant to accept, as the other side of the coin, diminished compensation, and I hope that the Government will give serious attention to this.
We shall come to the details of the compensation, and the points that have been made already by noble Lords about the inadequacy of the Bill as it stands in that respect, at a later stage. But I am not seeking to convey to the Government the impression that if they stay where they are on how they define the periods of long-term planning, industry would accept that provided it has jolly good compensation. That is not the point at issue. The amount of understanding of the Stevens recommendations for long-term security for planning is not enough in itself, and I would hope that against the whole pattern of the amendments which relate to time intervals the Government might feel that they can take yet another look to see whether they cannot accept the real problems of the industry, particularly in that respect. As to the compensation, that is not looking particularly good, but I shall refer to that in greater detail when I come to a later amendment in connection with Clause 15.
Baroness Birk: Before the noble Earl replies, I do not want again to go over what I said earlier because, as he himself said, he has widened the whole thing; otherwise, I would have waited until the noble Lord, Lord Mottistone, raised it here. But I should like to feel that he will give an answer on the points I raised, either in reply to this or on Clause 15; in particular, on the questions to do with thresholds and the whole question of your Lordships' House debating the regulations and what is going to be in them. But I do not want to repeat my whole speech again.
The Earl of Mansfield: It seems to me that there are two real complaints which have been voiced about the compensation elements of the Bill and, as my noble friend has said, this is really the lead-in to those. In effect, my noble friend Lord Mottistone says that Stevens is not really being put into effect. I think he is arguing that industry's acceptance is based on the whole of the recommendations of the committee being implemented as a package, and in particular that the needs of the industry for long-term planning should be recognised. My noble friend Lord Bellwin said on Second Reading, and I think also on the first Committee day, that in the view of the Government these needs are being recognised. Local planning authorities are including within their development plans strong policies which will mean the grant of the permissions required to meet this country's needs for minerals in
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an environmentally acceptable manner and the prevention of the sterilisation of minerals by other forms of development.
This is being backed up by good co-operation between local authorities, the industry and central Government in determining, for example, regional and national needs for aggregates and how these can best be met through inter-regional movements. Officials both in my department and in that of my noble friend Lord Bellwin are very ready to assist in overcoming any problems which may arise and in trying to ensure that the best possible advice is disseminated to interested parties through, for example, publication of a revised edition of the green book on the control of mineral working. This advice will include an exhortation to local authorities not always to put a five-year limit on the time within which working under a new permission must start, but to consider carefully the particular needs of the mineral operator making the application. That, I think, refutes (although I appreciate that it will not satisfy my noble friends) that part of the argument which says, in effect, that one part of the package is being foisted on the industry without their needs in relation to the second being properly looked at or, indeed, looked at at all.
One cannot, I think, implement the whole of the Stevens package at the same time. It is quite impossible to have the Bill, mining regulations, amendments to the general development order and publication of the green book simultaneously. But I would hope that, if everything goes well, all of these would be done by the middle of next year. I hope, therefore, that my noble friend and other noble Lords will, on reflection, agree that we are keeping to our side of the bargain and are producing a package that will have benefits for the industry as well as for local authorities and environmentalists.
I have been pressed by the noble Baroness as to the regulations, both as to their content, so that if possible they can be debated in your Lordships' House, and, arising from that, the timing. It is our intention that the regulations should, first, make clear just what the basis of compensation is for each type of order; secondly, to set out how the compensation thresholds are to be calculated for each mine or quarry—and they may be different for each type of order; and the method of calculation will differ between underground and surface workings; thirdly, to set maximum and minimum thresholds; fourthly, to provide a capitalisation scale in relation to the expected lives of workings; and, fifthly, to set out how index linking of monetary amounts in the regulations is to be achieved. All these matters were discussed at some detail in the consultation paper issued last autumn, so that I do not think the form of the regulations will come as any surprise.
If I may conclude as to the timing, I promised, in effect—certainly, I undertook when winding up the Second Reading debate—to give an indication of our thinking before Third Reading in your Lordships' House. Consideration of the reactions to the consultation paper is still continuing. I understand that officials in the department of my noble friend Lord Bellwin have only just received the response of the CBI to this paper and that they are meeting representatives of the CBI very soon, next week, I think, to discuss compensation; so that there is really no question of

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producing regulations just that quickly. But I hope very much that it will be possible either for my noble friend or I to make a statement during the Report stage of the Bill.
The regulations themselves cannot be laid before this House until the Bill receives the Royal Assent. That is obvious. So, assuming that it gets Third Reading in this House, it has to go to the other place; and that may be some months off. But I think I can say that it is our intention that when we are firm on what we think should go into the regulations, interested parties will be made aware of it. In any event, as the regulations are going to be subject to the Affirmative Resolution procedure, they will have to be debated in this House and I hope, therefore, from what I have been able to say, that noble Lords will, on reflection, agree that there will be ample opportunity to make known their views as to the regulations.
Baroness Birk: Before the noble Earl leaves that, may I thank him for that very full statement. But I am still not quite clear or happy about it. When he says that a statement will be made at Report stage, does he mean a statement of roughly what will be in the regulations or a rehash of the consultation paper; or what, in fact, has now come out from the CBI? I thought that they had spent day and night for ages discussing this, and I am surprised they are still going on in this way. I am still not convinced from what he has said that there is going to be an opportunity to debate the regulations in this House before they are laid before us in due course of time.
The noble Earl knows as well as I do that when they are laid before the House and debated, we either accept them as a whole or we do not accept them. It is not like discussing a clause of the Bill as we are now discussing it. This is what I and other noble Lords are concerned about. Despite his fluent words and the courteous way he replied, I do not feel that he has answered the question in a way about which I can feel happy. I do not get the feeling that we are going to debate the regulations. We will have a statement and then will have an affirmative order laid; and that will be it. It will be the same procedure. What we are asking * What we are asking is that the regulations themselves should be debated during the process of the primary legislation. Will the noble Earl let me know whether I am right?
The Earl of Mansfield: The noble Baroness is forcing me to be less polite. What I did was to set out the five main heads which the regulations will include. That is really as far as I can go. I also said that we intend to make a detailed of our current intentions on Report. I told the noble Baroness why it cannot be done now—because the CBI have reacted but have not yet met officials.
The actual regulations cannot be laid before the Bill received Royal Assent. Therefore, since it will have long gone, will have passed away, from this House, unless there are amendments in another place to be considered, there is no question of going through this rather like a Bill and discussing and amending these regulations. Our system does not provide for it. The only way in which that could be done is if the regulations were written into the Bill. They then could be
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considered in Committee or Report in the normal way. That is what it comes to. I have done what I hope is as much as I or any Minister can do, which is to give a clear indication of our intentions. That, I think, will give the noble Baroness and any other noble Lord a very reasonable opportunity to consider our intentions—which will be in much greater detail than they can be at present—and to make such criticisms (which one hopes will be constructive) as they see fit.
Clause 12, as amended, agreed to.
Clause 27 [Special compensation in respect of orders under S. 42 relating to mineral working]:
The Deputy Chairman of Committees: I have to point out that if Amendment No. 203 is agreed to, I cannot call Amendment No. 204.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 203:
Page 36, line 40, leave out paragraph (b).
The noble Earl said The noble Earl said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 204 not moved.]
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 204A:
Page 37, line 2, leave out (" previous ").
The noble Earl said: This is a small tidying-up amendment. It is a technical amendment to remove an unnecessary word from the listing of mineral compensation requirements in new Section 153A(2)(c). The amendment brings the wording into line with the equivalent English provisions. I beg to move.
On Question, amendment agreed to.
6.20 p.m.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 205:
Page 37, line 5, at end insert (" and
(e) either—

(i) the permission was granted not less than five years before the date of the order; or

(ii) the conditions specified in subsection (2A) of this section are satisfied.

(2A) The conditions mentioned in subsection (2)(e)(ii) of this section are—

(a) that the planning permission which the order modifies was granted before the commencement of section 27A of this Act; and

(b>) that the order—

(i)imposes an aftercare condition; and

(ii)does not impose any other condition.").

The noble Earl said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendment No. 206 not moved.]
Clause 27, as amended, agreed to.
Clause 13 agreed to.
[Amendments No. 207, 208 and 209 not moved.]
Clause 14 agreed to.
[Amendments Nos. 210 and 211 not moved.]
Clause 28 agreed to.
Clause 15 [Mineral compensation modifications]:
Baroness Birk Baroness Birk moved Amendment No. 212:
Page 20, line 3, leave out ("may") and insert ("shall").
The noble Baroness said: In speaking to this amendment, I should also like to speak to Amendment No. 216 which is the parallel amendment. This clause is absolutely crucial to the Bill. Without it the Bill is of very much less consequence. Therefore it is rather strange that it should say that the Secretary of State may make regulations because this weakens the clause enormously. Surely, in the context of the Bill the Secretary of State shall make regulations, the only question being their form and and content. Likewise subsection (2) in the clause is essential to the provisions of this Bill, and again to suggest that in any way such matters may be optional is, I submit, to introduce unnecessary uncertainty. I feel quite sure that the Government did not intend this and that they are following what is probably often a normal drafting practice; but I do not think that this explanation itself is sufficient. I hope that the Government will accept these amendments. I beg to move.
The Earl of Mansfield: This amendment applies also to Amendments Nos. 223 and 227, those are the Scottish equivalents. Regulations will need to be made by the Secretaries of State and these regulations should cover both the basis for compensation and a threshold below which no compensation is payable. The regulations require the approval of each House of Parliament by means of Affirmative Resolution and, in the circumstances, it would not seem necessary to depart from the usual procedure and impose an absolute obligation upon the Secretary of State. My remarks apply to the other amendment. The contents of the regulations will come before this House, and I cannot think it is likely that any government would want to make regulations which did not cover either the basis or the threshold. However, we should also need to ensure that the second "shall" will not be interpreted as "shall only" as there may be other things which we should need to include in regulations. I accept the concern of the noble Baroness. I do not think that it is altogether well founded in this case—I hope I am not being offensive—and I hope that she may feel able to withdraw the amendment.
Baroness Birk: In the circumstances, and for the time being, I shall withdraw the amendment. I should like to look at it again and look at what the noble Earl has said. If I still feel the same way, I shall come back at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistone Lord Mottistone moved Amendment No. 213:
Page 20, line 4, after ("Treasury") insert (" and after consultation with interested parties ").
The noble Lord said: Regulations made at any time under this clause will need to be, first, predictable in operation and certain in effect; secondly, enforceable and practical; and, thirdly, clearly understood by all affected parties. To achieve this it seems to me that it is vital that all interests are consulted when the regulations on compensation are being formulated. This is the object of this amendment. I beg to move.
The Earl of Mansfield: I have already twice now—on Second Reading and this evening—given an
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indication of the Governments thinking on the content of the regulations, and this will happen. There has been considerable consultation on this and I cannot agree that it is necessary to make it a statutory duty for the Secretary of State to consult interested parties before making regulations. I am sure that any Secretary of State would do likewise in the future.
If my noble friend is trying to impart certainty into the Bill, I have to say that this amendment is not the way to go about it if only because there is no definition of what an interested party is. It is certainly not clear who would be covered by the term. So for that reason, as well as the other, I hope that he will not press this amendment.
Baroness Birk: I have some sympathy with the noble Lord, Lord Mottistone, in this matter. The noble Earl practically put me off the point until he said that he was quite sure that any Secretary of State would do so in the future. That seems to me to be a commitment that the Secretary of State would in fact consult. If the problem is: Who would he consult?— and it sounds rather rude to say "Perhaps he will go away and think about it "—then there does not seem to be any reason why that should not go in. As he accepts that consultation should be part of it, and since we have this worry about regulations—and I think that we shall continue to have it—I would not be unhappy to see this amendment in the Bill if it is possible to do so without spreading the issue too widely. I know what the noble Earl means, but he did say that the Secretary of State would consult.
The Earl of Mansfield: Secretaries of State, in my brief experience, do spend their time consulting before they do anything. Nevertheless, I shall ponder the matter. If the definition can be tightened up, and it really is a good idea, then we shall come back to the matter on Report.
Lord Mottistone: That is a very pleasant reassurance to have from my noble friend the Minister. It is all very well to say that Secretaries of State are always consulting. Of course they are. But there is so much time spent consulting on those factors which are written into Bills where it says that they will do so, such as I am seeking to put into this Bill, that maybe they do not have time to consult on things where it does not say that in the Bill. The point of it is that, if it was never in a Bill and it was one of the accepted things in the country that Secretaries of State always consulted with interested parties, that would be something else. But if that were so, it would not be necessary to say that they must consult when it appears in other Bills. If in thinking about this—and I am delighted that my noble friend has said that he will do this—he also reflects on what I have said, I should be delighted at this stage to withdraw the amendment and perhaps put something else down at a later stage.
Amendment, by leave, withdrawn.
6.30 p.m.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 214:
Page 20, line 7, leave out from (" subject ") to end of line 8 and insert (", in such cases as may be specified in the regulations, to such modifications as may be so specified").
The noble Earl said: I beg to move this amendment and speak to Amendment No. 225, which refers to the equivalent Scottish provisions. The amendments are drafting ones which make it clear our intention that the mineral compensation regulations will not only specify how the existing compensation provisions in Sections 184, 170, 178 of the Town and Country Planning Act 1971, and Sections 153, 159 and 167 of the Town and Country Planning (Scotland) Act 1972 are to be modified, but also in which cases the modified compensation will apply. I beg to move.
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 215:
Page 20, leave out lines 9 to 14 and insert—
("(2) The regulations may—

(a) make provision as to the circumstances in which the total amount of compensation which would otherwise be payable shall be reduced by a threshold equal to 10 per cent. of the capital value of the land; and

(b) specify the method by which the capital value is to be calculated and the minimum and maximum values for the threshold.").

The noble Lord said: We now come to the details of the regulations, and before starting to explain this particular amendment, I must say that I am very much in agreement with the noble Baroness, Lady Birk, when she talks about the fact that we are not given enough detail of regulations in Acts of Parliament, and in this one in particular; and we then have to rely on regulations which, in the nature of things, are really almost unstoppable except in extreme cases. I certainly believe it is important to have a bit of detail in the relevant Act of Parliament, so as to give guidance on which the regulations can then be made.
This seems to me to be only reasonable because although my noble friend has said that he is going to have discussions with the CBI, and that he is giving the guidelines of the regulations, and all these things—and I welcome that and I thank him for saying what he has said—in the longer run it is surely important to have the guideline sufficiently tight within the regulations. So this amendment seeks to introduce into principal legislation the important parameters upon which the new compensation code should be based. The existing clause gives no clue to the Government's intentions in respect of compensation, and if such basic parameters are left to subordinate legislation they may well be afforded secondary importance both now and in the future. And it is the future which matters, because this Government may be one, as I feel, that one could rely upon to the do the best they possibly could, but one cannot always be sure that one has a Government in which to be so confident.
The importance of adequate compensation procedures cannot be over-stressed, even if in practice they should not be invoked very often. They provide industry with the security of at least some recompense for significant losses suffered and they curb over-zealous and unnecessary activities of planning authorities. The principles on which the procedures will be based should provide the minimum content of Clause 15.
Another factor which is important here is that this part of the package, this detail in the regulations, that my amendment seeks to add to the outline already in
540
the Bill, was meant to be part of a package that included 10 years between reviews. The Government have effectively said "No" to 10 years between reviews, and so half of what we believe to be an acceptable package has already been rejected. With that in mind, I would not say that this particular amendment is one we would necessarily feel was strong enough or fair enough to industry, and we may have to progress further with it as the Bill goes through its various stages here. I beg to move.
The Deputy Chairman of Committees: I have to inform your Lordships that if this amendment is agreed, I cannot call Amendment No. 216.
The Earl of Mansfield: What this amendment does, first, is to delete the provisions in the Bill which permit an amendment of the basis on which compensation is to be assessed—something which has been included to reconcile the existing provisions of Sections 164 and 170 of the Town and Country Planning Act 1971 in respect of mineral working. Secondly, it appears to limit the setting of the threshold rather more than we think desirable. The consultation paper issued by the department suggested a figure of 20 per cent. rather than 10 per cent. in a particular range of quarries. We are already aware that different provisions will be necessary for underground and surface workings and for the different types of order to which modified compensation will apply.
I am sure my noble friend will confirm, as indeed he said, that this amendment is motivated because he, the CBI and others are unhappy that the compensation arrangements are to be set out in the regulations rather than in the Bill itself, although I am sure they understand all the arguments about complexity and updating which at different moments my noble friend and I have put forward as justification. I can only repeat my invitation to my noble friend to wait and see what is said by my noble friend Lord Bellwin or I on Report. Perhaps in the circumstances he will feel himself able at this moment to withdraw his amendment.
Lord Mottistone: From that rather guarded undertaking on the part of my noble friend the Minister, I derive some satisfaction, and at this stage I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 216 not moved.]
6.38 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 217:
Page 20, line 24, at end insert ("; and
(c) shall provide that in respect of land which has already been subject of an order made under sections 45, 51, 51A or 51B of that Act, any modifications specified shall relate to the total compensation payable in respect of those orders.").
The noble Lord said: Under the Government's proposals, planning authorities will be able to impose upon review new conditions or to modify existing ones, without becoming liable to pay compensation, unless the cost to be incurred by industry exceeds a certain threshold. By requiring expenditure up to the threshold at successive reviews, an authority can avoid payment of compensation while placing a

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substantial financial burden on the industry concerned.
Present Government proposals set the threshold at 20 per cent. of the calculated mineral asset value (as indeed my noble friend remarked in his answer to the last amendment) for smaller developments, and 10 per cent. for larger concerns. These are the amounts at risk at each review. The Stevens Committee made it clear that it would be unjust for industry to bear the cumulative effect of such burdens and recommended that account should be taken of costs imposed arising from reviews within the preceding 30 years. The same principle applies irrespective of the actual burden imposed by the planning authority, whether by orders under Sections 45, 51, 51A or 51B of the 1971 Act, and is enshrined in the amendment which is proposed. I beg to move.
Baroness Birk: I hope that the Government do not accept this amendment. It is somewhat similar to Amendment No. 215, on which the noble Lord, Lord Mottistone, felt he had been given some joy by the noble Earl. I hope it does not turn out that way, because both amendments are intended to restrict compensation by more than the consultation paper indicates. This undermines the effectiveness of the Bill, by restricting the amount which an operator will have to pay on a site that is subject to a number of reviews and orders. Yet, surely, this would occur only in the case of poor and ineffective operators, where local authorities have to go back periodically to try to ensure that operations are carried out without detriment to the locality and then restored effectively. Good operators will have nothing to fear from this Bill and they do not need this kind of amendment. I am surprised that the CBI should be concerned to protect inefficient operators and those who lack concern for the environment.
The AMA which, under the Bill, will be one of the mineral planning authorities, feel that this could mean that the total amount payable by an operator will be set at the date of the first order or review, and that any balance in the contribution for which the operator is liable will not be index-linked as the compensation scales will be. Secondly, the total sum for which the operator is liable will be the maximum set by the first order to which he is subject, which might, for example, be £5,000 in the case of a suspension order, and even if conditions are subsequently reviewed, the ceiling on the operator's contribution will be any balance left over from his earlier contribution under the suspension order. This amendment is dangerous. The implications are quite unclear in their detailed operation and I strongly oppose it. I know that, unfortunately we shall not be getting any tea, but I hope that the noble Earl will not show any sympathy towards it.
The Earl of Mansfield: I accept that it would be wrong for mineral planning authorities to make new orders each year and never have to pay compensation. That is why we have included a provision that orders must be spaced by at least five years, and there is the additional safeguard that all orders must be confirmed by the Secretary of State. This amendment would mean that when a mineral planning authority had "used up" its compensation threshold for that particular quarry, it would always have to pay full com-
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pensation in the future, regardless of any desirable changes due to different environmental weightings.
I am sure that, on reflection, my noble friend will agree that this is not acceptable, as one of the main principles of the Bill is to permit the regular review of the conditions under which quarries operate and are restored. It is for those reasons that I cannot commend this amendment to the Committee.
Lord Mottistone: I shall have a good look at what my noble friend has said, and, indeed, at what the noble Baroness has said, with regard to this amendment. I must confess that I am disappointed. I rather thought that my noble friend might be more enthusiastic than he has turned out to be about this amendment. I shall have to take it away and have a good look at it, and maybe come back later. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 218:
Page 20, line 33, after ("(a)") insert ("subject to subsection (1A) of this section,").
The noble Earl said: It may be convenient for the Committee if I deal with Amendments Nos. 218 and 219 together, along with their Scottish equivalents, Nos. 229 and 230. The amendments make allowance for the fact that when carrying out special consultations in connection with the making and terms of an order, a mineral planning authority might not always be able to trace all the persons with an interest in the land and the minerals. This could be particularly difficult where the mineral rights are severed from the ownership of the land and there are a number of people with an interest in the minerals. In such circumstances, we consider that it would be unfair if a mineral planning authority was required to pay full compensation because it failed to trace somebody with an interest provided that it took all reasonable steps open to it to do so. I beg to move.
On Question, amendment agreed to.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 219:
Page 20, line 38, at end insert—
("(1A) The duty to consult imposed by subsection (1)(a) of this section is only a duty to consult persons whom the mineral planning authority are able to trace by taking reasonable steps to do so.").
On Question, amendment agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 220:
Page 21, line 30, leave out ("and") and insert ("; or
(vi) for the height or the area of any tip associated with the winning and working of minerals.").
The noble Lord said: The Stevens Committee listed in paragraph 8.6 of its report the matters on which changes should not be allowed on a review of conditions. It said that if it was desired to make a reduction in the basic parameters, existing powers and liability to compensation should be involved. The matters included the size of the permitted area for extraction or for waste disposal, and others mentioned in the proposed Section 178C. The amendment seeks to rectify the lack of reference to waste disposal in that section, by adding not only the area of tip, as Stevens proposed, but also, because of the obvious

543
interdependence, its height. The formation of tips is such an integral part of minerals production that it cannot properly be divorced from, and warrants the same attention as, the other basic matters listed. I beg to move.
Baroness Birk: I very much hope that the Government will not accept these two amendments. As it is drafted, the Bill requires local authorities to pay full compensation if they seek to vary conditions that are fundamental to the working of a site. What this amendment seeks to do is to add to the list something which is not fundamental. One can go on and on just adding things, and it should not be in the primary legislation. Local authorities should be able to vary conditions on the height or area of a tip, and they should come within the compensation provisions. But they certainly should not be spelled out in the Bill in this way; while Amendment No. 221 is a kind of catch-all amendment. It would be quite wrong to have this in the statute, much as I like to have things spelled out in statutes.
The Earl of Mansfield: This is another amendment which, in effect, seeks to move the Government from their point of balance between the views of industry and local authorities. My noble friend's amendment seeks to extend those matters which attract full compensation to include the areas of tips and their heights. It is noteworthy that the Stevens Committee recommended that the area of the tip should be one of these fundamental conditions, but not its height. So far as fundamental conditions are concerned, the Government have taken the view that full compensation should cover those things any of which would fundamentally alter the nature of the planning permission.
We do not believe that either the area of a tip or its height are of this nature. For example, if, because of new development or other environmental pressures, it becomes desirable to move a waste deposit area from one side of a site to another, we believe that the mineral planning authority should have the power to achieve this and to attract modified compensation on it. So that this is another instance where, I am afraid, I do not have unbounded sympathy for my noble friend's amendment.
Lord Mottistone: I am sorry to hear that, but I shall read with great interest the report of what my noble friend has said. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.50 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 221:
Page 21, line 30, at end insert—
("(vii) for restrictions similar in effect to any of the provisions in subsection (1)(a)(i) to (vi) above.").
The noble Lord said: This amendment would include with the basic parameters listed in the proposed Section 178C any others which have like effect and which should attract full compensation, if modified under existing procedures. For example, under certain circumstances noise or dust requirements imposed by the planning authority after a review of planning conditions under the Bill could determine the period
544
during which the winning and working of minerals was to continue—for example, not at night. Thus, the authority could achieve changes to the listed matters and hence reduce its liability for paying compensation in an indirect way. The amendment proposed would prevent such clever distortions of the system. I beg to move.
The Earl of Mansfield: I was not sure of the purpose of my noble friend's amendment until he rose to his feet. Section 178C sets out clearly just what matters the modification of which will attract full compensation. What my noble friend's amendment seems to do is to extend the list of matters to include such matters as modification of hours. That must be resisted. It is likely that in some circumstances a mineral planning authority would very reasonably wish to amend the hours of working of a particular quarry. In those circumstances, I think it is right that modified compensation should be attracted.
Lord Mottistone: Again I will study what has been said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15, as amended, agreed to.
Lord Mottistone Lord Mottistone moved Amendment No. 222:
After Clause 15, insert the following new clause:
("Compensation for sterilisation of mineral resources
. For section 146 of the Town and Country Planning Act 1971 shall be substituted the following—
". Subject to the provisions of this Part of this Act, a person shall be entitled to compensation under this Part of this Act in respect of a planning decision whereby planning permission for the carrying out of a new development of land is refused, or is granted subject to conditions, if either—

(a)(i) at the time of the decision he is entitled to an interest in any land to which the decision relates which has an unexpected balance of established development value; and

(ii) the value of that interest, or, in the case of an interest extending to other land, the value of that interest in so far as it subsists in such land as is depreciated by the decision; or

(b)(i) he is entitled to an interest in any land to which the decision relates; and

(ii) the decision is in respect of development comprising the winning and working of minerals; and

(iii) but for the decision he would be entitled to compensation by virtue of the provisions of sections 7 and 8 of the Mines (Working Facilities and Support) Act 1966.".").

The noble Lord said: The first part of this proposed amendment is a restatement of Section 146 of the 1971 Act giving a general entitlement to compensation when a new development reduces the value of land. The second part is designed to implement the Stevens Committee recommendation:
"That the law should be amended to provide that any condition attached to a mineral permission which has the effect of sterilising some part of the mineral deposits shall not operate to remove any right of compensation which the mineral operator may have under other legislation for part or all of the mineral sterilised by condition".
The quotation is from paragraph 7.33 of the Stevens Report.
I understand that the Government recognise that occasionally it may be necessary to use planning powers to restrict or prevent mineral development taking place—for example, to support railway lines—

545
just as, conversely, it is sometimes right to avoid sterilising valuable mineral deposits by surface developments, especially when the development conflicts with the provisions of structure or local plans. It is fair that under such circumstances proper rights to compensation are preserved and this is the intention of the proposed new clause. I appreciate that its wording may not be 100 per cent. correct but I hope that at this stage the Government will at least accept it in principle, if not its details. I beg to move.
The Earl of Mansfield: I hope my noble friend will not think me offensive if I confirm that his drafting is a little less than 100 per cent.—indeed, so much less that I did not fully understand what he was driving at until he rose to his feet.
Section 146 of the 1971 Act is limited by virtue of Section 152 to the value of the unexpended balance of established development value, so no compensation is payable on land which has no unexpended balance. Where there is a relevant unexpended balance, compensation can already be claimed if the refusal of planning permission for mineral working reduces the value of an interest in the land.
If the amendment is designed to deal with a situation where sterilisation of mineral deposits occurs to provide support to adjoining land—my noble friend gave the example of railway lines—I am not convinced at the moment that it would be right to provide compensation in cases where an essential right of support is required. May I therefore suggest to my noble friend that he should withdraw his amendment now and that each of us should study the Official Report to see what has been said. However, I fear that I cannot give any particular undertaking.
Lord Mottistone: That is more encouraging than a few of the answers which I have received. With that modified assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 29 [Mineral compensation modifications]:
[Amendments Nos. 223 and 224 not moved.]
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 225:
Page 39, line 12, leave out from ("subject") to end of line 13 and insert (", in such cases as may be specified in the regulations, to such modifications as may be so specified").
The noble Earl said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
[Amendments Nos. 226, 227 and 228 not moved.]
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 229:
Page 39, line 37, after ("(a)") insert ("subject to subsection (1A) of this section,").
On Question, amendment agreed to.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 230:
Page 40, line 3, at end insert—
("(1A) The duty to consult imposed by subsection (1)(a) of this section is only a duty to consult persons whom the planning authority are able to trace by taking reasonable steps to do so.").
On Question, amendment agreed to.
[Amendments Nos. 231 and 232 not moved.]
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 232A:
Page 42, line 3, leave out ("relating to that land").
The noble Earl said: This is a technical amendment. I beg to move.
On Question, amendment agreed to.
Clause 29, as amended, agreed to.
[Amendment No. 233 not moved.]
Clauses 16, 30, 17 and 31 agreed to.
Schedule 1 [Consequential amendments—England and Wales]:
Lord Gisborough Lord Gisborough moved Amendment No. 234:
Page 43, line 4, leave out (" timber ") and insert (" woodland produce ").
The noble Lord said: This minerals planning Bill, strangely, presents the first occasion upon which the word "forestry" has been defined. It is not defined in the Forestry Acts of 1919 and 1967. The definition given is adequate for the purposes of commercial forestry where silvicultural practices are carried out with the aim of producing timber for pulp, building, pit props and so on.
Timber at law means mainly oak, ash, elm and beech, according to the part of the country, and 20 years old at that. Only in 1967 was the term "timber" extended to include softwood and all forest products to empower the Forestry Commission to plant conifer, hazel, chestnut and coppice. The amendment attempts to achieve for private woodland the ability to plant shelter belts and the like after mining operations rather than necessarily pure commercial forestry. I beg to move.
The Earl of Mansfield: The definition of forestry at the top of page 43 of the Bill, in Schedule 1, and moreover the Scottish equivalent on page 45, was in effect provided by the Forestry Commission; and since it is they who have to be consulted on the terms of after-care conditions and on compliance with them, I think it is right that they should provide the definition.
So far as my noble friend's amendment is concerned, I am advised that it goes rather wide and would in fact embrace, for instance, the growing of mushrooms—or indeed any other produce—between trees, and for that the Commission may or may not have the most appropriate professional expertise. So to that extent I am not happy to accept my noble friend's amendment. Nevertheless, so far as after-care provisions are concerned, relating to amenity planting (which is really rather a different matter), I will draw the points my noble friend has made to the attention of my noble friend Lord Bellwin to see whether something comes of it at a later stage of the Bill.
Baroness Birk: I should very much like to support the intention behind this amendment moved by the noble Lord, Lord Gisborough, but I hope that it will be unnecessary because I hope the Government will

547
come back at the next stage with an interpretation of "amenity" for the Bill which will perhaps cover the point that is being made.
Lord Gisborough: I thank the noble Earl, and on that understanding I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.2 p.m.
Lord Mottistone Lord Mottistone moved Amendment No. 235:
Page 43, line 17, at end insert—
("(dd) The following shall be inserted into the definition of "minerals "after the word "working"
"and a mineral working deposit".").
The noble Lord said: With the permission of the Committee, I should like to speak also to Amendment No. 238, that being the Scottish version of this amendment. The Act introduces for the first time the fact that a movement of a chattel can require planning consent. However, the chattel referred to in the Act as "a mineral-working deposit" is probably in many cases not included in the definition of an interest in land or definition of a mineral. These amendments are intended to put that right. I beg to move.
The Earl of Mansfield: I do not believe that either this amendment or its Scottish equivalent is necessary or indeed desirable. Although we are bringing the removal of material from mineral working deposits under planning control, this does not in itself alter the nature of minerals. They still include all minerals and substances in or under land of a kind ordinarily worked for removal by underground or surface working and we would not expect different substances to be in a mineral-working deposit as defined in Clauses 1 and 18. For those reasons I hope my noble friend will feel able to withdraw the amendment.
Lord Mottistone: I will certainly read my noble friend's remarks with great interest, and at this stage beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Mottistonehad given notice of his intention to move Amendment No. 236:
Page 44, line 1, at end insert—
("(8A) In paragraph 24(2) of Schedule 16 (definition of "County matter") leave out sub-paragraphs (2) and (3) and insert:—
"(2) In a case where the functions mentioned in sub-paragraph (1) above relate to County matters those functions shall be exercisable only by a County Planning Authority.".").
The noble Lord said: I spoke to this amendment with Amendment No. 147, and I am interested in what the Government will say about this.
Baroness Birk: When this matter was raised before in connection with an earlier amendment, I think I am right in saying that the noble Lord, Lord Bellwin, said that he would consult with the ADC and the ACC. I hope the noble Earl will ask him also to consult with the AMA, which is a county planning authority, in relation to certain areas and in some respects will be a mineral planning authority.
The Earl of Mansfield: I am sure my noble friend will take heed of the request of the noble Baroness.
[Amendment No. 236 not moved.]
Schedule I agreed to.
[Amendments Nos. 237 and 238 not moved.]
Schedule 2 agreed to.
Clauses 32 and 33 agreed to.
House resumed: Bill reported with the amendments.

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