Sitting of 4 March 1981

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

    Home Ownership Schemes
    Mr. Blackburnasked the Secretary of State for the Environment how many local authorities are now operating low-cost home ownership schemes.
    The Minister for Housing and Construction (Mr. John Stanley): Inquiries indicate that some 165 local authorities currently have low-cost home ownership schemes.
    Mr. Blackburn: I am obliged to my hon. Friend for that answer. However, will he give wide publicity to the schemes, particularly in view of reports in the press about Lambeth council and the fact that there are 2,000 applications in Wolverhampton council that have not yet received attention from that authority?
    Mr. Stanley: I assure my hon. Friend that we are giving extensive publicity to low-cost homeownership opportunities. We are making arrangements to publish written infomation about it and we are also making a film about the low-cost opportunities available to all local authorities.
    I read with great concern reports in the press today about industrial action to impound right-to-buy claim forms, alleged to have been carried out by NALGO officials in Lambeth. It has not been possible this morning to establish the precise facts with the council, but if the reports are correct that action would represent a most serious abuse. The Government expect Lambeth council to take the necessary steps to recover possession of the right-to-buy documents concerned and to fulfil its obligations to process without delay the right-to-buy applications that it has received.
    Mr. Alton: Is the Minister not ashamed of the fact that in a written reply two days ago he had to admit that in his constituency and in that represented by his right hon. Friend the Secretary of State not one house had been sold by the end of December under the new right-to-buy proposals?
    Mr. Stanley: The hon. Member will be aware that the right-to-buy took effect only on 3 October. I assure him that the record of district councils such as South Oxfordshire and Tonbridge and Mailing in giving council tenants the right to buy is better than that of most Labour, and some Liberal, authorities.
    Mr. William Shelton: Is my hon. Friend aware that many people in Lambeth wish to buy their council homes and that 300 to 400 letters are being held up? Does he agree that that is scandalous, and that something must be done as soon as possible?
    Mr. Stanley: I agree with my hon. Friend. As he will be aware, there are later questions on the Order Paper about the implementation of the right to buy. I shall come to those questions and refer to Lambeth again shortly.

    Sunday Football
    Mr. John Carlisleasked the Secretary of State for the Environment what his policy towards the Football League proposal to stage matches on a Sunday.
    The Under-Secretary of State for the Environment (Mr. Hector Monro): The decision taken by the Football League is not one in which I have any standing. The question of policy concerning sporting events on a Sunday is a matter for my right hon. Friend the Secretary of State for the Home Department.
    Mr. Carlisle: Does my hon. Friend agree that the staging of matches on Sunday will bring extra revenue to the football clubs and will be of benefit to the players? Does he agree also that it will result in a certain amount of nuisance for the residents around the grounds and extra work for the police? Will he make representations to the Football League and suggest that these games should be the exception rather than the rule, so that we do not see a wholesale switching of games from Saturday to Sunday?
    Mr. Monro: I note what my hon. Friend says. The games are relatively few at the moment. They are confined to a maximum of 6. those that have taken place in Divisions III and IV have been reasonably successful. I agree with my hon. Friend that the Football League should consider carefully the effect on the local environment and on the work load of the police, and the problem of public transport. However, those difficulties can be resolved.
    Mr. Marks: This is not just a matter for the Football Association and the Football League. There is here a social problem. Does the Minister agree that it is not just a question of Division IV teams increasing their gates from 1,500 to 5,000? In some of the big cities, where the gates are 40,000 and 50,000, the grounds such as Maine Road in Manchester, are in the midst of hundreds of terraced houses, so that there are serious problems on the days on which the matches are played. Will the Minister urge the FA and the Football League to have discussions with local representatives and the people who live near the grounds before action is taken to play games on Sundays in those areas?
    Mr. Monro: I accept what the hon. Member has said. He knows that so far there have been only Division III and IV matches. If there were Division I or II matches, and major games, there would be complications. I shall draw the attention of the Football Association and the Football League to the exchanges that have taken place in the House this afternoon.
    Mr. Stokes: Does my hon. Friend agree that the best thing that people can do on Sunday is to go to church, and after they have done that they can engage in any lawful activity?
    Mr. Monro: I support my hon. Friend's view. Of course, the wish of many people is to go to church and perhaps later go to a football match, but it is a new idea in this country to have these football matches on Sundays, and I think that we shall have to see how it settles down.
    Mr. Denis Howell: Does the Minister agree that the law on Sunday entertainment is totally unfair as between one leisure activity and another? For example, music and the theatre are lawful, cricket, athletics, golf and Rugby League matches are tolerated, Association Football is experimenting, and racing wishes to come under starter's orders. In these circumstances, will the Minister take action to clear up the confusion and also to do what I believe most hon. Members wish to do, namely, relate the social implications to the sporting considerations, which also are involved?
    Mr. Monro: As the right hon. Gentleman knows, the interpretation of the Act is for the courts. It has always been considered in the House that a change in the law is a matter for Private Members' legislation, and on the last occasion when such a Bill came before the House in 1974 it did not get a Second Reading.

    Vacant and Under-used Land
    Mr. Iain Millsasked the Secretary of State for the Environment whether he will take steps to ensure that all local authorities supplying information on the value of land held for publication in the register of vacant and under-used land do so on a comparable basis.
    Mr. Bob Dunnasked the Secretary of State for the Environment if he will seek powers to compel local authorities to dispose of vacant and under-used land.
    Mr. Bevanasked the Secretary of State for the Environment what progress has been made in the setting up of registers of vacant and derelict land; and what steps he plans when the registers are complete.
    The Secretary of State for the Environment (Mr. Michael Heseltine): The compilation of registers for 33 districts and London boroughs is under way, with the aim of publication in April. Public bodies are providing information according to standard criteria, under guidance from my Department. This does not include information on land values. I already have power to direct the disposal of land entered on a register, but I am hoping that the publication of site details, coupled with supporting work by the local authorities and business communities, will in most cases be enough to activate disposals.
    Mr. Mills: I thank my right hon. Friend for his answer, but will he try to ensure that no delay arises from either bureaucratic or cost reasons due to the overvaluing of land in public hands?
    Mr. Heseltine: I am grateful to my hon. Friend for what he says, since I think that overvaluation can be a major stumbling block to the release of land. I shall certainly want to look at that, although it will be a matter in which the district valuer will have a crucial part to play.
    Mr. Dunn: How much time will my right hon. Friend give to local authorities to make an effective start on the disposal of vacant land before he takes action?
    Mr. Heseltine: My hon. Friend will understand that it is not just a question of the local authorities. It is all
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    publicly owned land. I intend that the review of the registers should begin as soon as practicable, under the leadership of my Department, after the establishment of the registers in April.
    Mr. Bevan: What further steps will my right hon. Friend take to ensure that the land referred to in his original reply is released for sale or is utilised as quickly as possible, without regard to historic or book values, so that high valuation prices do not inhibit its being dealt with?
    Mr. Heseltine: My hon. Friend will understand that, in the end, value is the figure which a particular piece of land can realise on the open market, and I shall have to bear that in mind. However, I assure him and the House that no time will be lost in scrutinising the lists of sites that appear on the registers. I have already begun the process of setting up a tripartite team in each area, consisting of a representative of the local authority, of my Department and of the private sector, to go through every site on those registers, and I shall want to be satisfied before I agree that such sites should remain in the public sector.
    Mr. Spearing: In view of what the Secretary of State has said, will he confirm that the real purpose of these registers is to force local authorities to sell public land, whatever the future value of that land to the public might be? Why is he putting on statutory or semi-statutory tribunals representatives of private landed interests?
    Mr. Heseltine: I think that in his quest to find some sinister motive the hon. Gentleman has grossly misrepresented the situation. The power to direct disposal lies in my hands, subject to the House, but I am entitled to look for advice on the widest possible basis, especially in these matters, if I may say so, following the precedent established by the Labour Secretary of State when he put forward the proposals for the urban programmes in the first place. I assure the hon. Gentleman that there are no sinister motives. I am just trying to get land released so that jobs and wealth can be created, which I should have thought was an objective that he would support.
    Mr. Heddle: Since land is our most valuable natural resource, is it not criminal that local authorities, statutory undertakers and public corporations are sitting on land, and will my right hon. Friend therefore consider extending this register beyond the 33 local authorities to the country as a whole?
    Mr. Heseltine: As this was a new method of achieving the disposal of land, I felt that it was right to proceed at a reasonable pace in the first instance and to take 33 registers as a means of finding out how the process worked. I am now considering requiring local government as a whole to declare its holdings of land in general. This would mean that there would be availability of knowledge, but that would not be the same as establishing a register in the first instance. The establishment of a register carries with it the power of compulsory disposal, and that would be the second step if I felt that the revelations coming from disclosure of land in the hands of local government justified such a register.
    Mr. Graham: As the Secretary of State has taken power to order land on the register to be disposed of to private interests, will he now put his belief in competition to the test by instituting a register of privately owned land and then taking power to order that to be sold to public undertakings?
    Mr. Heseltine: What the hon. Gentleman fails to understand is that the private sector cannot afford to hold land. There are already all the disciplines of the market place. If it was so apparent that devices of that sort were necessary, why did the Labour Party not introduce them?

    Ordnance Survey
    Mr. Freudasked the Secretary of State for the Environment whether he has plans for the privatisation of the Ordnance Survey; and if he will make a statement.
    Mr. Andrew F. Bennettasked the Secretary of State for the Environment if he is now in a position to make a statement about the future of the Ordnance Survey.
    The Minister for Local Government and Environmental Services (Mr. Tom King): I hope in the next few weeks to be able to make a statement on the recommendations of the Ordnance Survey review committee and on an immediate operating remit for the Ordnance Survey. I also have in hand an examination of the possibilities for giving the Ordnance Survey a more independent status. This last study will take rather longer to complete.
    Mr. Freud: May we have an assurance that the Minister will not jettison 200 years of expertise for the sake of party political dogma, without a full debate in the House? Secondly, will he accept that the pressures on private businesses are too great for them to ensure the excellence of cartography maintained by the Ordnance Survey, an excellence that private business cannot emulate?
    Mr. King: I have the highest respect for the quality of the work of the Ordnance Survey, and I believe that that respect is widely shared throughout the House. Nevertheless, I wonder whether hon. Members are aware that the Ordnance Survey will this year make a deficit of about £21 million. This is an expensive facility, and it would be irresponsible for any Government not to see how that facility, which the whole House prizes, might be organised in such a way that the call on the public Exchequer might be modified.
    Mr. Bennett: In view of the considerable interest in Ordnance Survey matters in the House, will the Minister give a guarantee that he will make an oral statement about his proposals? Secondly, will he bear particularly in mind the recommendation of the Serpell committee that there should be major investment in the Ordnance Survey to ensure that its mapping techniques could be brought up to date, with particular regard to microprocessors and the like?
    Mr. King: The first matter is not one for me, but for my right hon. Friend the Leader of the House. Clearly, however, we shall wish to keep the House well informed on our proposals. As I have said, we hope shortly to make a statement to the House, in whatever form is thought approporiate, about the review, and later to make a statement about a possible alternative status.
    I take the hon. Gentleman's point about the development of technology. The work in digital mapping referred to in the Serpell report which the hon. Gentleman has probably studied, as I have, could be an important development which I hope it will be possible to encourage and develop. There is also the possibility of expanding British technology overseas.
    Mr. Biggs-Davison: Is the deficit to which my right hon. Friend referred carried on the Defence Vote, or on the Vote of his Department?
    Mr. King: I believe that it is carried on the Department, but I think that it comes under the Treasury as well.
    Mr. R. C. Mitchell: Will the right hon. Gentleman give an undertaking that before reaching a final decision he will have the fullest possible consultation with all the trade unions and staff representatives at the Ordnance Survey, and also with representatives of organisations which use Ordnance Survey maps extensively?
    Mr. King: We have already informed the unions, whose concern about the matter we understand, that we are considering these matters. At an appropriate stage there will, of course, be further discussions with them. We shall certainly be consulting more widely, and also with the private sector, which is obviously concerned. As many hon. Members know, there is concern in the private sector about what, in certain aspects of the more popular maps, it feels is subsidised competition with which it has to compete.
    Mr. Hill: My right hon. Friend will know that the whole of the Ordnance Survey is based in my constituency and that I have already presented a petition of about 2,000 signatures to his right hon. Friend—for whose acknowledgment I am grateful. Is it possible for the Member of Parliament most concerned in this problem also to be consulted? If this undertaking is to be privatised in any way, does my hon. Friend agree that full consultation should take place not only with the unions, but with the Member of Parliament, on the welfare of constituents who rely on pay packets from the Ordnance Survey? Is he aware that those people are very cooperative, but that, nevertheless, indecision breeds fear?
    Mr. King: I assure my hon. Friend that we shall be very willing and anxious to hear any representations that he wishes to make on this matter.
    Mr. Kaufman: Is the right hon. Gentleman aware that the Ordnance Survey is regarded throughout the world as a prize national asset of this country and that if he and his right hon. Friend tamper with that national asset for reasons of party dogmatism they will be committing an act of vandalism that will not easily be forgivable.
    Mr. King: The right hon. Gentleman refers to this as though he were talking about some aspect of the national heritage—[HON. MEMBERS:"It is."]—as though it were in some sense like the Crown jewels or some inanimate object. This is a dynamic and important facility. It is involved in high technology in the development of new production processes for maps. It is not one that can be fossilised, put on the shelf and admired from a distance. It is one that must be properly organised. It is also an expensive facility. We recognise our responsibilities in this matter. We recognise the quality of the performance of the Ordnance Survey. We also recognise the importance of ensuring that that quality is achieved at a cost that the nation can afford.

    Merseyside
    Mr. Steenasked the Secretary of State for the Environment how much money has been earmarked for the

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    Liverpool urban development corporation and the partnership committee, the general development area and the traditional urban aid programmes on Merseyside; and what percentage of the total will come from central Government.
    Mr. Heseltine: At outturn prices, the proposed UDC's initial allocation in 1981–82 will be £17 million. Further sums may be allocated in respect of certain land acquisitions. The Liverpool partnership will get £17·6 million, and Wirral—Merseyside's only programme authority—about £2¾ million, depending on the quality of its programme. The other Merseyside districts designated under the Inner Urban Areas Act—Sefton and St. Helens—will receive some resources for industrial and commercial projects—how much depends on demand and availability of resources. We hope to announce decisions on traditional urban programme circular 21 in April.
    The UDC will be financed at a 100 per cent. rate. The central Government contribution to urban programme projects is normally 75 per cent.
    Mr. Steen: Will my right hon. Friend recognise that the principal reason why private investment and private industry have been driven out of the centre of Liverpool and other large cities is the increasing level of Government intervention? If he believes in joint enterprise between the Government and the private sector, and in real partnership, what is he doing to see that that takes place?
    Mr. Heseltine: I have made it clear that in future the expenditure programmes under the urban programme will be authorised by me only if there has been full consultation with the private sector—for example with the chamber of commerce in Liverpool. I have also introduced—and we hope shortly to see established—an urban development corporation to reclaim the most difficult areas in Liverpool. That has substantial representation from the private sector, including, of course, the chairman.

    Homelessness
    Mr. Soleyasked the Secretary of State for the Environment, of the total of national homelessness, what percentage there is in Greater London.
    The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): From the latest statistics supplied by local authorities in England, we estimate that in the first half of 1980 local authorities accepted responsibility for securing accommodation for about 29,000 households. Of these, some 29 per cent. were initially accepted by London boroughs.
    Mr. Soley: Is the Minister aware that in the calendar year 1980 there were only 4,100 local authority lets in the Greater London area, compared with 24,000 in 1977? Does he agree that this not only deprives the homeless and those on the waiting list of any real hope, but is a damning indictment of the Government's housing policy and that of Conservative local authorities?
    Mr. Finsberg: An even more damning indictment is the deliberate attempt by the Labour Party to sabotage shorthold and the inefficiency of the majority of London Labour boroughs in keeping houses empty because of party dogma.
    Mr. Squire: Does my hon. Friend accept that while the well-documented aberrations of the Opposition, some of
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    which he has just given us, are well-known and accepted on this side of the House—indeed, they ignore the national surplus in housing—there is a particular problem in London, which I earnestly commend to him and ask whether he recognises that the market alone is probably unable to cope with it.
    Mr. Finsberg: I think that my hon. Friend is right to draw attention to the particular problems of London, but it is right to point out, for example, that London's HIP allocation is about £548 million, which represents £200 for every household, compared with £85 per household in the rest of the country? London has not done all that badly. It must also be remembered that if Labour boroughs started selling their properties to the tenants they could augment their HIP allocations.
    Mr. Alton: I congratulate the Government on at least providing £12 million this year for the renewal of many of the hostels for the homeless that are run by the Salvation Army and the Church Army, but is the Minister aware of the press conference held last week by the Archbishop of Canterbury and those two organisations? Is he aware of the great anxiety felt by those organisations, which deal with homeless people? Is he prepared to meet them to discuss the major crisis that they are experiencing, in view of the fact that they say that £12 million will not be enough to cope with the growing problem of homelessness that they are trying to tackle?
    Mr. Finsberg: I am sure that my right hon. Friend and I are always delighted to meet anyone who has a view to put. It is perhaps a trifle unfortunate that the hon. Gentleman omitted to mention, first, that this is the first time that any Government have done this sort of thing, and secondly, that the Archbishop congratulated my right hon. Friend on this initiative?
    Mr. Lawrence: Does my hon. Friend agree that the last Adminstration's destruction of the private rented sector did more than anything else to precipitate homelessness? Will he try a little harder to reverse those policies?
    Mr. Finsberg: We hope very much that the provisions of the Housing Act 1980—apart from shorthold—to encourage the private rented sector will indicate to people that this is a very important sector. The most helpful development in the provision of additional housing would be for the Labour Party to live in the 1980s, and not in the 1930s.
    Mrs. Ann Taylor: When the Minister quotes the HIP allocation for Greater London this year, does he acknowledge that that HIP allocation is less than 50 per cent. of what was requested? Will he also acknowledge that the London Boroughs Association, which is Tory controlled, now says that 75 per cent. of all the boroughs' lets in 1982 will be taken by homeless families, and that the real problem is that they do not have the money to make any housing starts over the next few years?
    Mr. Finsberg: I hope that the hon. Lady realises that it would be unrealistic to allocate the limited housing capital available on the basis of bids. The greediest would make the biggest bids. We have tried to relate housing to need. That is what is required.

    Partnership Committees
    Mr. Greenwayasked the Secretary of State for the Environment if he will abolish the Lambeth and Hackney, Islington partnership committees.
    Mr. Heseltine: No, Sir. I have already announced that after a review of inner city policy I do not intend to change the present status of partnership authorities. However, as I indicated in my statement of 18 September last year, I have refused to authorise expenditure on new statutory schemes by Lambeth and Hackney London boroughs, which are not only high overspenders but have acted contrary to the spirit of partnership in ignoring the Government's calls for current expenditure reductions in 1980–81.
    Mr. Greenway: As it is clear that my right hon. Friend is dissatisfied with the working of the partnership agreements, will he abolish them?
    Mr. Heseltine: In the majority of authorities, partnerships contribute towards solving the problems of inner urban areas. That is why I decided to continue with them. Unfortunately, there are a small number of authorities that seem determined to do the maximum amount of damage possible to their areas by high overspending. I am not prepared to add to the burden that has already been placed on ratepayers, by continuing with the projects of those specific authorities.
    Mr. Clinton Davis: Is the Secretary of State aware of his hon. Friend's impudence in raising matters that affect constituencies other than his own, which is exceeded only by his invincible ignorance about those areas? Does the right hon. Gentleman not realise that an area such as Hackney faces enormous problems of deprivation, which he has simply failed to recognise? Does the right hon. Gentleman accept that the uncertainties that he has created for that local authority and for industries operating in that area are mutilating the authority's prospects? The right hon. Gentleman has the sole responsibility for that.
    Mr. Heseltine: The Labour Party has put forward an interesting new doctrine, to the effect that hon. Members should not raise matters that affect the constituencies of others. I look forward to that admirable suggestion being taken up by his right hon. and hon. Friends. I care very much about the employment prospects in those boroughs where partnership arrangements exist. It is because I am appalled by the high level of rate increases—which the Labour Party has encouraged—and by the job-destroying effect that that has on those areas that I have taken such steps.

    Land Development
    Mr. Chapmanasked the Secretary of State for the Environment if he is satisfied with the way that local planning authorities are operating section 52 of the Town and Country Planning Act 1971 agreements relating to regulating the development of land.
    Mr. King: I have already asked the Property Advisory Group to examine this question. I expect it to report by the middle of the year and I shall then consider whether any action is needed.
    Mr. Chapman: As my right hon. Friend's Property Advisor}' Group identified this problem and brought it to
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    his attention in a report as long ago as February 1980, will he deplore the increasing tendency of many local authorities to insist that a potential developer should provide council facilities and, in one case, a substantial amount of money, precedent to the granting of planning permission? Will my right hon. Friend reiterate that planning determinations should be based on planning considerations only and not on the size of an applicant's pocket?
    Mr. King: I can understand my hon Friend's concern about this matter. It raises issues that are of great concern to the House, including whether this is a proper use of planning power. The report, which I expect in June, will be very helpful on this matter, which—as my hon. Friend knows as well as anyone else—is complicated. I would rather not comment further at this stage.
    Mr. Lennox-Boyd: When my right hon. Friend considers the subject will he bear in mind the fact that there is considerable disquiet in parts of the Lake District, where the planning authority is the Lake District special planning board? That board uses section 52 to grant planning permission on condition that the dwelling in question is inhabited by someone who is employed locally."Employed locally" has been defined on some occasions as meaning within the parish. Does my right hon. Friend agree that such conditions may not be legally enforceable? Will he further agree that they are, in any event, wholly unreasonable?
    Mr. King: I should like to consider the points that my hon. Friend has raised. I was not aware that the provision was being used in such a restrictive way. Its use does not seem to be in line with the original intentions of section 52. If my hon. Friend writes to me, I shall have the matter considered.
    Mr. Cant: Does the right hon. Gentleman agree that some developments involve local authorities in massive costs in terms of infrastructure and that there is bound to be considerable hard bargaining between developers and local authorities, particularly where highway development is concerned? Does he agree that his new capital expenditure control system, which severely limits capital expenditure even further, makes the possibility of reaching section 52 agreements even more difficult?
    Mr. King: The hon. Gentleman's question merely underlines the wisdom of my reply to my hon. Friend the Member for Chipping Barnet (Mr. Chapman).

    House Building (Planning Contravention)
    Mr. Farrasked the Secretary of State for the Environment if it is his policy that where a house is built in a position which does not comply with planning consent it should be removed.
    The Under-Secretary of State for the Environment (Mr. Giles Shaw): Not necessarily.
    Mr. Farr: I thank my hon. Friend for that brief reply, but is he aware that by the ingenious use of the appeal machinery it is possible to delay almost indefinitely the demolition of a house that has been improperly built? Does my hon. Friend think that that is right? Will he consider a way of speeding up the machinery, so that if it is admitted that a house has been built in an improper position it can be demolished without delay?
    Mr. Shaw: My hon. Friend will be aware that there are many cases in which buildings can be ameliorated. Therefore, those buildings would not require demolition. We must ensure that we strike a fair balance, and that is why there is an appeal system.
    Mr. Douglas-Mann: Will the Minister accept that there is scope for great abuse in a system that makes it possible for someone who has applied for planning consent and had that consent refused and his appeal rejected to hold up the enforcement procedure while a fresh application is made? Does my hon. Friend agree that the procedure can go on almost indefinitely, and that legislative action may be needed to prevent that?
    Mr. Shaw: I appreciate that there should, and could, be ways of speeding up the appeals procedure so that such matters can be dealt with more quickly. My right hon. Friend and I are looking at the matter.

    Palace of Westminster
    Mr. Greville Jannerasked the Secretary of State for the Environment what works or repairs are currently being carried out on the Palace of Westminster; at whose recommendation; and at what cost.
    Mr. Geoffrey Finsberg: I have authorised essential structural repairs to and repainting of the roof of Victoria Tower at a cost of £80,000 after receiving professional advice from the Property Services Agency. A further £ 11,000 is likely to be spent in the current year as part of a continuous programme of replacement of the weathered statues around the colonnade.
    Mr. Janner: Do the Minister's plans include the repair of the masonry around the Members' entrance, part of which collapsed this week? If not, will the hon. Gentleman be less selective in the dangers that he perpetuates and arrange for some of the masonry to fall outside the public entrance as well? Is the hon. Gentleman waiting for a by-election, the recess, or the death of all qualified stonemasons before the Palace is put into proper order?
    Mr. Finsberg: I am sure that the hon. and learned Gentleman does not wish to exaggerate. We have already removed the potentially dangerous coping stones and string courses. We have brushed off all the spalling stone surfaces. We have spent over £105,000 on making sound the stonework above doorways. At some time during the Summer Recess we propose to start the replacement of the stone copings. As I have had to indicate to the House before, there is a major problem. With the best will in the world, we cannot, in a limited time, repair the weather ravages of a century or more.
    Mr. Stokes: When will work start on cleaning the whole of the outside of the Palace of Westminster? Does my hon. Friend agree that it badly needs doing? Would it not be far cheaper than giving aid to the nationalised industries?
    Mr. Finsberg: I shall not allow myself to be drawn into the subject of aid to the nationalised industries. We are still trying to decide how best to allocate the limited funds available, bearing in mind that, as hon. Members will have seen in the Select Committee's report, the total cost is about £5 million.
    Mr. Jay: Will the Minister give an assurance that the Government have no plans to privatise the Palace of Westminster?
    Mr. Finsberg: This side of the Chamber has no such plans.

    Council House Sales
    Mr. Durantasked the Secretary of State for the Environment how many letters his Department has received from council tenants complaining that their local authorities are hindering their right to buy.
    Mr. Lawrenceasked the Secretary of State for the Environment if he is now satisfied that tenants of all councils are exercising their right to buy effectively and without hindrance from their local authorities.
    Mr. Alexanderasked the Secretary of State for the Environment what steps he is taking in connection with those local authorities who delay in processing the sale of council houses to their tenants who wish to buy.
    Mr. Stanley: The Department has received approximately 2,000 letters from tenants complaining about delay in a small minority of local authorities. Each of these individual complaints is being pursued by the Department with the authority concerned. In addition, the Department has now taken up formally with the following 16 authorities their rate of progress in implementing the right to buy. The authorities are Bolsover, Bristol, Doncaster, Great Yarmouth, Hull, Leeds, Manchester, Sheffield, Stoke-on-Trent, Sunderland, Wolverhampton and the London boroughs of Barking and Dagenham, Camden Greenwich, Lambeth and Newham.
    Mr. Durant: May I thank my hon. Friend for that depressing reply, bearing in mind that this is the law of the land? Will he examine the situation in which some local authorities are not passing documents to the valuation departments to enable the purchasing process to be continued? Following the exchanges on Lambeth, will he come to the House when he has investigated the matter and make a statement about the scandal that is mentioned in the newspapers today? Will he even consider putting in commissioners, bearing in mind that this is the law of he land and that we are here to defend the rights of the citizens?
    Mr. Stanley: On the general point that my hon. Friend rightly makes, I can assure him that the Government are concerned to see that all local authority, new town and housing association tenants with the right to buy are able to exercise that right. The Government will ensure that they are not denied that right through delays or administrative inaction by Labour-controlled local authorities.
    In regard to my hon. Friend's points about valuation, I agree that there are signs of a bottleneck in some authorities in processing valuations. It is incumbent on all local authorities to make instructions available quickly to district valuers or other valuation services that they use to get the valuations carried out. We wish to continue our inquiries with Lambeth council. The Government will be glad to inform my hon. Friend and the House what the position is there.
    Mr. Lawrence: What advice does my hon. Friend give to the many thousands of tenants of Labour-controlled

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    authorities that are dragging their feet, and have not yet contacted his Department about what they can do about this matter? What positive assurance does he give that the Government will take action to oblige those recalcitrant councils to perform their rights and duties?
    Mr. Stanley: It is open to any tenant who has submitted a right-to-buy application form and who has not received a response notice to it within the statutory period, to tell the local authority and also to tell the Department. We have made that clear in the right-to-buy application form. Any tenant can make direct contact with the Department of the Environment and give the Department information about the application.
    So far as intervention is concerned, my hon. Friend will be aware that under section 23 of the Housing Act it is open to my right hon. Friend to intervene where it appears to him that tenants have, or may have, difficulty in exercising the right to buy effectively and expeditiously. I assure him that my right hon. Friend is assessing progress in each and every authority againt that yardstick.
    Mr. Alexander: Will my hon. Friend consider adding to the list the district council of Gateshead where, it is understood, threats are being made to potential purchasers regarding the type of neighbours that they may receive if they proceed with a purchase? Is not this a subtle threat to a would-be purchaser and an infringement of the rights that exist under the Act? If my hon. Friend considers it as such, will he. in this type of case, exercise his powers under section 23 and intervene with the local authority concerned?
    Mr. Stanley: I shall be glad to consider any information that my hon. Friend cares to send me about the rate of progress in that authority. I assure him that I deplore absolutely any steps taken by elected councillors to try to intimidate or prevent people exercising their rights under the law.
    Mr. Stoddart: Will the hon. Gentleman confirm that he has also received correspondence from people who are against the sale of council houses? Will he confirm that he has received from me a petition from the Townswomen's Guild and many other people, including the whole council in Swindon, against the proposed sale of the Railway Village, a listed building, erected in 1840, which proposal has aroused fears that our heritage will be destroyed?
    Mr. Stanley: As the hon. Gentleman knows, the electorate as a whole had a chance to express a view in this matter in May 1979 and decided to give council tenants the statutory right to buy their homes.
    Mr. Garel-Jones: Is my hon. Friend aware that nearly 1,000 of my constituents in Watford have applied for the right to buy from the local authority but have now received a letter from the local authority informing them that no repairs will be undertaken in their homes? Since the local authority, they believe, is dragging its feet, they find themselves in a position where no repairs can be made to their houses while no offers for them to buy have been made to them? What does my hon. Friend say about that situation?
    Mr. Stanley: I can assure my hon. Friend that the statutory responsibility of a local authority in respect of repairs to a given council house continues for such time as that council house remains in its ownership.
    Mr. Eastham: The hon. Gentleman persists in attacking Labour local authorities over the sale of council houses. Will he admit that his Department and its civil servants are responsible for compiling the statutory forms which have resulted in such confusion in Manchester that 29 per cent. of the 4,000 applications have had to be returned? This is a direct result of the guidance given by the Department of !he Environment. Is he aware that at the same time, in Manchester, the housing aid department has seen a doubling in the number of applications for a house in which to live?
    Mr. Stanley: I can inform the hon. Gentleman that I had the pleasure last Friday of meeting representatives of the Manchester Tenants Housebuyers Association. The entire burden of their remarks was that many thousands of applications for the right to buy have been submitted to Manchester council and many hundreds of applications—which I hope will soon become some thousands—have been acknowledged. The difficulty tenants experience is getting an adequate rate of progress from Manchester council.

    Industrial Cities (Rejuvenation)
    Sir William Elliottasked the Secretary of State for the Environment how much money has been earmarked for the two urban development corporations, the six partnership committees, the 15 programme authorities, the assisted areas and the traditional urban aid programmes to rejuvenate the larger industrial cities; and what percentage of this comes from central Government funds.
    Mr. Stevensasked the Secretary of State for the Environment how much money has been earmarked for the two urban development corporations, the six partnership committees, the 15 programme authorities, the assisted areas and the traditional urban aid programmes to revitalize the towns and cities; and what percentage of this comes from central Government funds.
    Mr. King: The proposed allocations for 1981–82 at outturn prices are £82 million for UDCs, £113 million for partnerships, £49 million for programme authorities, £5 million for other designated districts and £44 million for the traditional urban programme. Urban programme grant is normally 75 per cent. UDCs will be 100 per cent.
    Sir William Elliott: Will my right hon. Friend accept that it is recognised in such old cities as Newcastle upon Tyne that Government assistance with rejuvenation is considerable? Will he also accept that revitalisation depends very much on private investment which can get our cities going? Will he encourage private investment to the maximum of his influence?
    Mr. King: We are most anxious to do that. However much public money is available—it is obviously limited at present—we shall not get the improvements that are needed without the maximum contribution, to be used as pump-priming, from the private sector. I share my hon. Friend's desire in that respect.
    Mr. William Shelton: Will my right hon. Friend accept that the loss of rate support grant in London which may amount to £200 million could seriously hinder the rejuvenation of our capital city? Should there not be some tighter safety net to limit any furher loss?
    Mr. King: I would not like to comment on the figures used by my hon. Friend. This matter will depend on the

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    rating and spending decisions of individual authorities. This is a difficult problem. As my hon. Friend knows as well as anyone in the House, expenditure decisions by certain authorities can do more damage to the sort of objective we all share for urban programme or partnership objectives, which it is then impossible for public money to repair. We are most anxious to strike a proper balance in these matters.
    Mr. Dixon: Will the Minister accept that urban problems are not solely confined to industrial cities? South Tyneside faces as many problems as some industrial cities. Will he also accept that when the partnership and urban programme schemes were introduced it was stated that they would be reassessed, from time to time, with a view to grading them? In view of the high level of unemployment in South Tyneside, primarily due to the Government's policies, the cutback in local expenditure because of the redistribution of the rate support grant and the fact that the housing investment programme allocation means that virtually no new houses will be built and that many construction workers will be thrown on the dole, will the Minister now accept that South Tyneside should be reassessed as a partnership scheme instead of a programme scheme?
    Mr. King: The hon. Gentleman will be aware that we reviewed the urban programme and the issue of partnership and programme authorities. We decided to make no change. South Tyneside is a programme authority and receives significant help in that respect.

    Home Ownership Schemes
    Mr. Brintonasked the Secretary of State for the Environment how many local authorities have shown interest in the new film on low-cost home ownership made by his Department.
    Mr. Stanley: The Department's film on low-cost home ownership is attracting widespread interest, not only from local authorities, but from new towns, housing associations, private housebuilders, professional bodies and lending institutions. Arrangements are being made to show it to all housing authorities in England, approximately two-thirds of which have already arranged to see it.
    Mr. Brinton: I thank my hon. Friend for that answer. Is he aware that the Opposition were so keen on the prospect of low-cost house buildings that they refused to allow the inclusion of a date for a showing of the film in The Whip? Will my hon. Friend encourage the remaining one-third of local authorities to make use of the film and thus stretch slender resources further under this admirable plan?
    Mr. Stanley: I assure my hon. Friend that outside the House there is some interest among Labour Party supporters in seeing the low-cost home ownership film. I am ready to acknowledge that a number of Labour-controlled authorities are engaging in homesteading, shared ownership and improvement for sale projects. I hope that we can reach a measure of agreement across the Floor of the House on the desirability of using this means of extending home ownership.
    Mr. Alton: Does the Minister accept that instead of merely producing a film on low-cost home ownership it
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    would be better, and much more in the interests of those buying their own homes, if he were to bring down the mortgage rate to the level that obtained when he became responsible for housing matters?
    Mr. Stanley: I am glad to be able to tell the hon. Gentleman that despite the level of the mortgage rate we have had a significant extension of home ownership during the lifetime of the Government. We have on the statute book the most far-reaching means of extending home ownership that there has ever been.

    Housing Act
    Dr. Mawhinneyasked the Secretary of State for the Environment if he is satisfied with the level of interest shown in the shorthold provision of the Housing Act.
    Mr. Heseltine: It is still too early to assess the impact of shorthold in terms of lettings.
    Mr. Mawhinney: I thank my right hon. Friend for that answer. Will he estimate how many people are living in bad housing conditions because of the Labour Party's vindictive prejudice against the shorthold provisions and the private rented sector?
    Mr. Heseltine: It would be difficult to give a precise figure. There is a significant number in the position that my hon. Friend has described. On the other hand, it is not as large as the number who are living in inadequate accommodation as a result of the Labour Government doing nothing to deal with the private rented sector, in which so many could otherwise have been housed.
    Mr. Douglas-Mann: Does the right hon. Gentleman accept that most of the decline in the private rented sector stems from the fact that the majority of those who have been unable to escape from that sector have incomes that are inadequate to enable them to pay rents that will give a return to landlords to allow them to compete with the subsidised return of a house purchaser. Does he accept that the fact that a house purchaser is subsidised and a private rented tenant is not lies at the root of the sector's decline?
    Mr. Heseltine: No. As the hon. Gentleman knows, there are rent allowances to protect those on low incomes in the private rented sector. The root cause of the decline is inflation, which has placed capital values way above the income returns from controlled rents. We have tried to introduce a more flexible system to combat, in part at least, the trend that I have described, and that is why the shorthold experiment should be welcomed, as opposed to being deliberately sabotaged by the Labour Party.
    Mr. Grieve: I congratulate my right hon. Friend on introducing the shorthold provisions, which, if properly respected, should go a long way to deal with the shortage of private rented accommodation. However, does he accept that two factors militate against the release of the large quantity of vacant space in private houses? The first factor is the difficulty of obtaining repossession once a tenancy has been granted. The second factor is the weight of the Rent Acts. Will he give further consideration to amending the law in both respects?
    Mr. Heseltine: I am most grateful to my hon. and learned Friend. I think that he will find that the recent Housing Act has gone some way towards easing the situation and redressing the balance. The most dramatic

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    advance that we introduced was, conspicuously, the shorthold concept. Nothing indicates more clearly the difficulty of trying to get genuine provision of more housing in the private rented sector than the deliberate sabotage on the part of the Labour Party. That indicates that it is far more interested in party dogma than in housing conditions.

    New Towns
    Mr. Robert Atkinsasked the Secretary of State for the Environment what steps he is taking to continue rehabilitation and redevelopment assistance to those local authorities where new town corporations are to be wound up.
    Mr. Geoffrey Finsberg: I shall be consulting the local authorities concerned about the implications for them of the target dates for winding up the relevant development corporations. I shall, of course, consider any points they raise about future assistance for urban renewal.
    Mr. Atkins: Is my hon. Friend aware that the Central Lancashire new town has received no official notification of the winding up of the corporation and that no consultation has been carried out with either the Central Lancashire development corporation or the local authorities concerned? Bearing in mind that the leader of Lancashire county council, together with an all-party delegation of boroughs affected by the winding up, is coming to Parliament this afternoon to discuss with Lancashire Members what should happen, has he any message that I can give them?
    Mr. Finsberg: I am perturbed to hear what my hon. Friend says. A letter was sent to the chairman of the development corporation, as is normal and customary. I cannot be responsible for non-delivery, but I can firmly assure the House that the normal courtesies were rightly observed.
    Mr. Newens: Is the Minister aware that many residents of new towns are now becoming convinced that the Government are prepared to discriminate against them? If there is to be any rehabilitation, or if further funds are to become available, what hope is there that the Government will behave any better than they did in the shameful matter of the settlement of the section 10 claims?
    Mr. Finsberg: I have a feeling that the hon. Gentleman's supplementary question was designed to follow question 18.
    Mr. Newens: No, it was not.
    Mr. Finsberg: However, I am glad to answer it. I believe that the Government are doing all that they can to assist, within the resources available.

    New Towns
    Mr. Newensasked the Secretary of State for the Environment if he has yet reached agreement with those local authorities to which new town houses have been transferred on the settlement of claims under section 10 of the New Towns (Amendment) Act 1976.
    Mr. Geoffrey Finsberg: No, Sir.
    Mr. Newens: How does the Minister justify the disgraceful procrastination that has taken place on the
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    settlement of the section 10 claims, which is preventing local authorities from carrying out essential works such as those required to be done in my constituency on a defective district heating scheme at Brocklesmead? Does the hon. Gentleman realise that unless some early action is taken he should not have the effrontery to criticise other authorities that keep houses empty? Does he understand that he is making it difficult for good authorities with good records—such as that enjoyed by the authority in my constituency—to keep their houses in a state in which they can be occupied?
    Mr. Finsberg: I am sure that the hon. Gentleman is aware that negotiations on the defects began when the Labour Government were in office.
    Mr. Newens: They are still going on.
    Mr. Finsberg: It is a difficult problem. I have made it clear time and again—the local authorities know this, even if they have not told the hon. Gentleman—that the settlement of the claim need not prejudice their starting on urgent repairs.

    House Building
    Mr. Hardyasked the Secretary of State for the Environment if he is satisfied with the present levels of house building, housing improvements and the level of rents in both the public and private sectors.
    Mr. Stanley: I am satisfied that local authorities now have the necessary powers and discretion to obtain the optimum housing value for the available public expenditure, and that in the private sector the building industry will respond very positively to the Government's low-cost home-ownership programme.
    Mr. Hardy: Does that mean that the Government are satisfied with the growing needs of those affected by the moratorium, by the inflationary increases in rents and the cost of rent rebates and rent allowances, which involves an enormous transfer of resources? Does it mean that the Government are satisfied with the high level of unemployment in the building trades, while the condition of the nation's housing stock deteriorates? Should not the Government be profoundly dissatisfied with their record over the past two years?
    Mr. Stanley: The hon. Member will be aware that as from 1 April it will be open to local authorities to increase the HIP allocations by the use of capital receipts. My latest information is that nearly 4,000 right-to-buy applications have been received by Rotherham district council, which suggests that the hon. Gentleman should be giving full support to a rapid processing of those applications, in order to increase the availability of housing capital expenditure in his constituency.
    Mr. Hill: Is my hon. Friend aware of the anomaly building up in the public and private rented sectors, in that private rents are now far below the public rents that are paid through councils? Rent officers in the districts, certainly in Southampton, have had no indication from the Department of Environment—or any other indication—and they are still assessing rents on the basis of a formula that has not changed for the past five years.
    Mr. Stanley: As my hon. Friend will be aware, the fixing of rents in the private sector is done on a statutory

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    basis and it is not open to Ministers to intervene in the way in which the rent officer service carries its statutory responsibility. In the Housing Act 1980 we reduced the period between fair rent reviews from three years to two years to ensure that a fair rent maintained its value in the light of the current rate of inflation.
    Mr. Kaufman: Can the Minister say whether council housing starts will reach 20,000 this year?
    Mr. Stanley: That will depend upon the decisions that the individual authorities take between improving their existing stock and starting new building.

    BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 20 MARCH
    Members successful in the ballot were:

    Mr. Clive Soley.

    Mr. John Bruce-Gardyne

    Mr. Peter Hordern

Consumer Credit Act 1974 (Amendment)
3.33 pm
Mr. Ken Weetch: I beg to move,
That leave be given to bring in a Bill to amend sections 52 and 53 of the Consumer Credit Act 1974 in order to require building societies to follow 'truth in lending' policies when providing to prospective borrowers information about the financial terms on which mortgages are offered and when displaying such information.
The proposed Bill is concerned with truth in lending. For that purpose I seek to amend the Consumer Credit Act 1974, which established in legislation the principle of truth in lending. The Act was a considerable step forward because, in simple terms, it obliged those who lent money and advertised credit to quote accurate and true rates of interest.
The Act stated that borrowers had to be told the truth about the rate of interest that they were being charged. It established a standard formula for quoting interest rates when they were advertised publicly. That is the APR, or the annual percentage rate of interest. The APR. or the true rate of interest, is the rate of interest, broadly speaking, that takes into consideration the value of the repayments made on the loan received. That is a simple working definition.
The 1974 Act arose as a result of the Crowther report on consumer credit. The aim of the Act was to compel providers of credit to quote rates of interest in a standard way so that the consumer could make a comparison of one interest rate with another. In practice, the Act was an aid to more effective credit competition. However, it is astonishing that the largest lenders, the building societies, were exempted from its provisions. The biggest purveyors of credit were allowed to escape scot-free from its obligations. If someone borrows money to buy a bicycle or a hi-fi system, the person lending the money has to quote the true interest rate. However, if a person borrows money for a house—the most important purchase of his life—there is no obligation on the building society to give the true interest cost of the loan.
If on an ordinary repayment mortgage—the sort that most people have—a person thinks that he is borrowing at 15 per cent., that is not the truth, because the true rate of interest is higher. That is because the building society charges 15 per cent. interest on the whole amount of the loan outstanding at the beginning of the year. In reality, however, one pays monthly, and each monthly payment includes a repayment of part of the principal as well as the interest on the loan.
Because that is not allowed for in the calculations, the true rate of interest is higher that that quoted by the building society. A person may think that he is borrowing at 15 per cent., but over 15 years the true rate of interest is 16·6 per cent. Over 20 years the true rate of interest is 16·4 per cent. and over 25 years the true rate is 16-2 per cent. At best, that is misleading and, at worst, deception.
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There is no good reason to exclude building societies from the obligations that most other lenders have to fulfil. The position is confused in mortgage lending because, although building societies are excluded from those obligations, other organisations, such as the banks and the trustee savings banks, are included.
Sir William Clark: So are local authorities.
Mr. Weetch: I accept that local authorities are included.
The major disadvantage for the house purchaser is that he is hindered from comparing one rate of interest with another. There have been times when many could have obtained better financial terms from the banks. But the banks were placed at a disadvantage in advertising because they were obliged to quote true rates while the building societies were not. There is no justification for that. The administrative problems involved in quoting the APR are not so formidable that they justify concealing the truth.
The Bill is based on two principles. The first is that millions of home buyers throughout the country are worth protecting and it is worth revealing to them the true cost of the credit that they pay. The second is that in rates of interest and credit, as in anything else, the truth is the truth.
Question put and agreed to.
Bill ordered to be brought in by Mr. Ken Weetch, Mr. Jim Craigen, Mr. Peter Fry, Mr. Leslie Spriggs, Mr. K. J. Woolmer and, Mr. Peter Hardy.
CONSUMER CREDIT ACT 1974 (AMENDMENT)
Mr. Ken Weetch accordingly presented a Bill to amend sections 52 and 53 of the Consumer Credit Act 1974 in order to require building societies to follow 'truth in lending' policies when providing to prospective borrowers information about the financial terms on which mortgages are offered and when displaying such information: And the same was read the First time; and ordered to be read a Second time upon Friday 19 June and to be printed [Bill 85].

FISHERIES [MONEY] (No. 2)
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to establish a Sea Fish Industry Authority with the duty of promoting the efficiency of the sea fish industry in the United Kingdom, it is expedient to authorise the payment out of money provided by Parliament of any sums required by Ministers—

(a)to fulfil guarantees given by them in connection with borrowing by the Authority;

or

(b)to make grants to the Authority in respect of—

(i) expenses incurred by the Authority in fulfilling guarantees given to assist co-operatives; or

(ii) losses incurred by the Authority where the Authority have borrowed money in one currency and lent it in another.— [Mr. Buchanan-Smith.]

Orders of the Day
  Fisheries Bill
  As amended (in the Standing Committee), considered.
  Fisheries Bill

    New Clause 1
    GOVERNMENT GUARANTEES
    '(1) The Ministers may guarantee, in such manner and on such conditions as they think fit, the repayment of the principal of and the payment of interest on any sums which the Authority borrows otherwise than from Ministers.
    (2) Immediately after giving any such guarantee the Minister shall lay before each House of Parliament a statement showing the extent and character of the guarantee and the circumstances in which it came to be given.
    (3) If any sum is paid by the Ministers in fulfilment of a guarantee under this section, the Authority shall as from the date of the payment be indebted to the Ministers in the amount of payment and the Ministers shall lay before each House of Parliament as soon as practicable after the end of the financial year in which the payment is made a statement showing the amount and the circumstances in which it was made.
    (4) Where any sum is so paid, the Authority shall make to the Ministers, at such time and in such manner as the Ministers from time to time direct—

    (a)payments of such amount as the Ministers so direct in or towards repayment of that sum; and

    (b)payments if interest at such rate as the Ministers so direct on what is outstanding for the time being in respect of that sum;

    and so long as that sum has not been repaid in full, together with any interest payable, the Ministers shall, from time to time as the Treasury may request and in any case not less often than once in each financial year, lay before each House of Parliament a statement showing how much of that sum remains to be repaid by the Authority, the proposed programme for future repayments, and what directions are currently in force or are proposed to be given with respect to the payment of interest.

    (5) The consent of the Treasury is required for any guarantee given by the Ministers under this section and for any direction given by them under subsection (4) above.'.—[Mr. Buchanan- Smith.]
    Brought up, and read the First time.
    3.38 pm
    The Minister of State, Ministry of Agriculture, Fisheries and Food (Mr. Alick Buchanan-Smith): I beg to move that the clause be read a Second time.
    The new clause provides an enabling power the purpose of which would be to assist the Sea Fish Industry Authority to borrow funds for the exercise of its powers. Certain lending institutions, such as the European Investment Bank, will lend funds only if they obtain a Government guarantee of repayment of the loan principal and interest payments. The Government consider that it would be helpful to the new authority to enable it to borrow from such sources and we therefore propose to take the powers in the clause to provide such guarantees.
    The clause provides for guarantees to be given in respect of principal and interest. There are provisions to ensure that Parliament is kept informed of the use to which the powers are put and to provide for a situation in which the Government make payments to the authority in fulfilment of the guarantee. Similar powers already exist in respect of other bodies and the provisions that I am introducing follow closely the existing precedents.
    It is difficult to judge at present how such powers may be used, but I hope that the House will agree that it is
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    prudent to take them, since they could give the authority additional scope in funding its activities. I think that I interpret correctly the wishes of the House and of the Standing Committee on the Bill when I say that we want to give the new authority as flexible a framework as possible in which to operate.
    Mr. Gavin Strang: The Opposition are happy to support the new clause. It gives additional financial flexibility to the new authority. It is an important point of principle, in the sense that the authority will be free to borrow from the private sector and the Government will guarantee its borrowings. That is in line with the Government's thinking on at least one nationalised industry, and we are happy that the new clause should be added to the Bill.
    Mr. Arthur Lewis: What is the view of the Social Democratic Alliance on the new clause? I was hoping to hear an SDA Member giving his views. None of them is here. Apparently the SDA is the coming Government, I should like to know the views of its Members.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    New Clause 2
    GOVERNMENT GRANTS
    The Ministers may, with the consent of the Treasury make grants to the Authority, on such conditions as they think fit, in respect of—

    (a)any expenses incurred by the Authority in fulfilling a guarantee given under section 3(1)(f) above;

    (b) any loss incurred by the Authority by reason of foreign exchange fluctuations where the Authority has borrowed money in one currency and lent it in another'— [Mr. Buchanan-Smith.]

    Brought up, and read the First Time.
    Mr. Buchanan-Smith: I beg to move, That the clause be read a Second time.
    Mr. Speaker: With this we may take Government amendments Nos. 5, 6, 11, 12, 33, and 34.
    Mr. Buchanan-Smith: The new clause is in two parts and I shall deal with them separately. The first part and most of the amendments relate to loans to fishery cooperatives. In the amendments the Government are providing powers for additional financial help to fishery co-operatives. In doing so, we recognise the position of co-operatives and, in particular, the role that they can play in improving the marketing of fish.
    By their nature, co-operatives can face special problems in obtaining loan finance, and the powers could be of value to them. That problem has been drawn to our attention by fishery co-operatives since the publication of the Bill, and in introducing the new clause I am responding directly to those reasonable representations.
    Amendments Nos. 5 and 6 provide powers for the Sea Fish Industry Authority to act as guarantor in respect of loans to co-operatives. Such a power is currently available to the White Fish Authority, and we consider that it should also be available to the new authority. Any sums for which the new authority stands guarantor are potential commitments, analogous to its own borrowings, and amendments Nos. 11 and 12 therefore provide that the sums guaranteed by the authority shall count towards its borrowing limits as set out in clause 6.

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    The power to guarantee loans has not been exercised by the WFA, because of the potential costs to the authority of fulfilling a guarantee if it became necessary. We have carefully considered the problem, particularly in the light of representations made to us, and we have decided to seek powers in the first part of the new clause to enable a Government grant to be made to the SFIA if, in using the guarantee powers, it incurs expenditure. That should be welcome to the co-operative movement. It is available to agricultural co-operatives and we hope to extend a similar facility to fishery co-operatives.
    3.45 pm
    The second half of the new clause is related to the powers of the authority to borrow finance. If it borrowed from overseas it would presumably be borrowing in foreign currency, but it would obviously be lending to the fishing industry in sterling. If exchange rates fluctuated, the authority could be involved in financial loss. The power in the second part of the new clause will allow the Government to give a guarantee to the authority in respect of such losses. It would be a further power to assist the authority in obtaining loan finance from whatever might be the most suitable source at any time. Amendments Nos. 33 and 34 make consequential provisions.
    It is not possible at this stage to judge precisely how the powers will be exercised. However, it is clearly advantageous to insert them into the Bill so that they will be available to the authority if appropriate circumstances arise. The new clause is introduced in the same spirit as was the previous new clause. It will enable the authority to operate in a flexible way, in the best interests of the fishing industry, and to carry out its functions effectively.
    Mr. Strang: The Opposition are happy to approve the new clause and amendments. As the Minister of State explained, they give greater financial flexibility to the authority and we support their inclusion in the Bill.
    Mr. J. Grimond: I also welcome the new clause, but I wonder whether the Minister of State could help us to be clear about the drafting. The new clause refers to clause 3( 1)(f). Although the new clause relates only to co-operatives—as I understand—it appears from the drafting of the Bill that the authority might be empowered to make loans or grants
    "for the purchase of fishing gear, fuel, stores or other materials requisite for the sea fish industry".
    whether through a co-operative or not. Am I correct in understanding that the new clause applies only to co-operatives?
    Mr. J. Enoch Powell: Will the Minister kindly say something further about the second element of the new clause? The power of the authority to borrow overseas does not appear to be in any way connected with the nature of the authority or its functions; it appears simply to be an extension of the borrowing opportunities of a public authority—much as local authorities and nationalised industries have borrowed abroad in recent years.
    What ground is there for giving to the authority, any more than to any of those other bodies, including the Government, in other forms, and indemnity against bad speculation in borrowing in foreign currencies?
    Mr Buchanan-Smith: The right hon. Member for Orkney and Shetland (Mr. Grimond) is correct. The new
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    clause applies solely to co-operatives. In reply to the right hon. Member for Down, South (Mr. Powell), all that we are seeking to do is to give the authority the opportunity to borrow funds from whatever may be the most suitable source. I might add that the power is already available to the White Fish Authority. We are not introducing a new precedent in connection with the public authority that has responsibility for the sea fish industry.
    The right hon. Gentleman fairly asks"Why should the Government carry the can if the authority seeks to speculate in foreign currencies?" I hope that the authority will not speculate in that way. It will borrow only where it is appropriate, and in the best interests of the functions that it performs, and it will do so prudently. I believe that it will benefit the industry that the authority serves.
    Mr. Powell: Perhaps I was injudicious in using the word"speculation". In any case, it is an ambiguous term. Any borrowing in foreign currency of necessity involves the implication of future fluctuation of the exchange rates. Will the Minister say, first, whether the existing borrowing powers have been subject to a similar indemnity and, secondly, whether he knows of any parallel for other semi-public bodies which are authorised by statute to borrow being indemnified in a comparable way?
    Mr. Buchanan-Smith: There are precedents for these powers. I shall be happy to give the right hon. Gentleman details of them. We are not seeking to do anything new in this regard. We simply wish to help.
    Will the right hon. Gentleman remind me of the second question that he asked me?
    Mr. Powell: If we have to indemnify authorities for losses incurred as a result of borrowing overseas, and if a Government have to stand over those borrowings in this way, we had better limit the borrowing powers of those authorities to the national loans fund. After all, they seem to have it both ways; they are able to borrow outside the national loans fund and have the security that borrowing from the fund gives, and at the same time the public will indemnify them against the consequences of such borrowing. It is part of the Government's policy, and a part with which I agree, to borrow from the general public, if possible, but if at the same time we indemnify those who borrow from the general public we are trying to have our cake and eat it.
    Mr. Buchanan-Smith: I shall look into that matter, but I do not accept the fears that the right hon. Gentleman expresses.
    As a result of the strange way in which the House works, I now have the information about the other question that the right hon. Gentleman asked. British Nuclear fuels, for example, has powers in this connection. However, I shall look into the matter further, and if I obtain any fresh information about the way in which these powers are used by other bodies, I shall be very happy to let the right hon. Gentleman know.
    I assure the right hon. Gentleman that all that we are seeking is to give the authority the opportunity to borrow from the most favourable sources. We believe that one such source could be a foreign source. Clearly, we expect the authority to act prudently, but without this guarantee we believe that it would be less prepared to borrow in that way. We think that the provision helps the authority, and the industry that the authority serves, by enabling it to go to the best sources for finance.
    Sir Albert Costain: Before the Minister leaves that matter, will he say what will happen to the profits that are made on the exchange movement? Will the authority pocket the profits, while someone else has to pay for its losses?
    Mr. Buchanan-Smith: I shall look into that matter. If the body is successful in its exchange transactions I am sure that it will be to the benefit of the sea fish industry. I shall consider the matter in relation to the guarantee and let my hon. Friend know.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    New Clause 3
    LICENSING OF VESSELS RECEIVING TRANS-SHIPPED FISH
    '(1) After section 4 of the Sea Fish (Conservation) Act 1967 (licensing of fishing boats) there shall be inserted the following section:—
    "4A.—(1) The Ministers may by order provide that within British fishery limits or in any specified area within those limits the receiving by any vessel (whether British or foreign) of fish trans-shipped from any other vessel is prohibited unless authorised by a licence granted by one of the Ministers.
    (2)Such an order may apply to the receiving of fish generally or to the receiving of—

    (a)a specified description of fish; or

    (b)fish caught by a specified method; or

    (c)fish caught in a specified area; or

    (d)fish caught or trans-shipped during a specified season of the year or other period; or

    (e)fish caught or received by vessels of a specified description, including vessels registered in a specified country;
    and may provide for exceptions from the prohibitions contained in it.

    (3) Where any vessel is used in contravention of a prohibition imposed by an order under this section, the master, the owner and the charterer (if any) are each guilty of an offence under this subsection.
    (4) An order under this section, if made with the consent of the Treasury given for the purposes of this subsection, may authorise the making of a charge for a licence under this section, and if it does so it shall specify a maximum charge and may specify different maxima in relation to different classes of licence.
    (5) A licence under this section shall be granted to the owner or charterer in respect of a named vessel and may authorise the receiving of fish generally or may confer limited authority by reference to, in particular,—

    (a)the area within which the fish was caught or is transshipped; or

    (b)the periods, times or particular voyages during which the fish was caught or is trans-shipped; or

    (c)the descriptions and quantities of fish that may be received; or

    (d)the description of vessel or method by which the transshipped fish was caught.

    (6) A licence under this section may authorise the receiving of fish either unconditionally or subject to such conditions as appear to the Minister granting the licence to be necessary or expedient for the regulation of trans-shipment, including conditions as to the treatment on board the vessel of the fish received by it; and different conditions may be so imposed with respect to different vessels or vessels of different descriptions.
    If such a condition is broken the master, the owner and the charterer (if any) are each guilty of an offence under this subsection.
    (7) The Minister granting a licence under this section may require the master, the owner and the charterer (if any) of the vessel named in the licence and any agent named in the licence to provide him with such statistical information as he may direct, and a person who fails without reasonable excuse to comply with such a requirement is guilty of an offence under this subsection.
    (8) Any person who—

    (a) for the purpose of obtaining a licence under this section;
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    or

    (b) in purported compliance with subsection (7) above, furnishes information which he knows to be false in a material particular or recklessly furnishes information which is false in a material particular is guilty of an offence under this subsection.

    (9) The licensing power conferred by this section may be exercised so as to limit the number of vessels, or of any description of vessel (including vessels or any description of vessel registered in a specified country) engaged in receiving fish to such an extent as appears to the Ministers necessary or expedient for the regulation of trans-shipment.
    (10) A licence under this section—

    (a)may be varied from time to time; and

    (b)may be revoked or suspended, if it appears to the Minister who granted it to be necessary or expedient for the regulation of trans-shipment.

    (11) If a licence is varied, revoked or suspended, the Minister who granted it may, if he considers it appropriate in all the circumstances of the case, refund the whole or part of any charge made for the licence.
    (12) The Ministers may make arrangements for any of their licensing powers under this section (but not the power to make orders under subsection (1)) to be exercised by other persons on their behalf."
    (2) In the following provisions of the said Act of 1967, after"4," there shall be inserted"4A."—

    (a)in section 9(5) (exceptions for scientific investigations, etc,);

    (b)in section 20(2) and (5) (orders to be made by statutory instrument and subject to negative resolution); and

    (c)in the words in parenthesis in the definition of"sea fish" in section 22(1) (which relate to the inclusion of salmon and migratory trout).'.—[Mr. Buchanan-Smith.]

    Brought up, and read the First time.
    Mr. Buchanan-Smith: I beg to move, That the clause be read a Second time.
    Mr. Speaker: With this we may take the following new clauses:
    No. 4—Enforcement of provisions as to transshipment; No. 5—Offences committed by bodies corporate; and the following amendments:
    No. 13, in line 19, at beginning insert—
    '(1A) Ministers shall take powers to regulate the numbers of off-shore processing vessels in British fishery waters and their operations in such a manner as to ensure that:

    (a)stock conservation and quota control is assisted,

    (b)the environment is protected, and

    (c)regard is paid to the current capacity of on-shore processing."

    No. 14, in line 19, at beginning insert—
    '(IB) Ministers shall be required to implement subsection (1 A) above if the authority advises that it is necessary to protect the catching and/or on-shore processing sectors of the industry.'.
    Government amendments Nos 15 to 23 and 26 to 29.
    Mr Buchanan-Smith: I welcome the other amendments that are being taken with the new clause, because they cover the same general points.
    This is the first of the substantial new clauses that we are moving at this Report stage. It stems directly from the useful and constructive discussions that we had in Committee. As those right hon. and hon. Members who were members of the Committee will know, at that stage several amendments were tabled which sought to introduce further controls over the activities of receiving vessels in connection with the transhipment of fish. By transhipment of fish, we mean the practice whereby our own catching vessels catch the fish and transfer it to another vessel—frequently a foreign vessel, which is moored in United Kingdom waters—and that vessel carries out the further processing of the fish and subsequent export abroad.

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    The practice has increased in recent years in our waters off the West of Scotland and the south and South-West of England. It has gained increasing attention in recent years and has caused increasing concern to the fishing industry and to the public in general. In Committee I gave an undertaking to consider the matter further. In particular, I said that I should consider whether we should bring forward some form of licensing control for the receiving vessels and also whether receiving vessels should be guilty of an offence if a transhipment took place in contravention of an order prohibiting such transhipments.
    I have given the matter careful consideration. Although we recognise that some further controls over transhipment are necessary—the Bill already contains provisions of a purely controlling nature—I am satisfied that the power to acquire receiving vessels to be licensed could be a useful additional measure of control over transhipments. I am also satisfied that it is only fair and reasonable that receiving vessels, as well as fishing vessels, should be guilty of an offence if illegal transhipments take place. It is for that reason that we tabled new clause 3, which gives Ministers the power, by order, to prohibit the receiving of fish by way of transhipment, except under the authority of a licence granted by one of the Ministers. We also tabled amendment No. 15, which makes it an offence to receive fish by transhipment in contravention of an order prohibiting such transhipment.
    We have drawn this enabling power as widely as possible to permit Ministers to react to the needs of any particular circumstance. Those right hon. and hon. Members who have direct experience of transhipment will understand that circumstances do change and have changed over the years. We cannot take legislative powers every year for new circumstances. It is for that reason, and also to deal with the present situation and to anticipate future developments, that we have drawn the powers relatively widely.
    Unfortunately, the result is that the new clause is somewhat long and complex. Having introduced this enabling power and the amendment related to illegal transhipments, there are many consequential amendments that need to be made to other parts of the Bill and to existing fisheries legislation to introduce appropriate offences and penalties and to give British sea fisheries officers the same enforcement powers as they have in relation to other controls. At the same time we have taken the opportunity in new clause 5 to correct an anomaly in the treatment of corporate bodies under the 1967 Act.
    4 pm
    New clause 5 not only applies to the powers that we are introducing in new clause 3; it goes more widely in respect of penalities generally. The clause makes it possible for the officers of a body corporate to be prosecuted for offences in relation to transhipments made by those bodies. However, it goes wider, in that it extends to offences committed in relation to licensing and prohibition orders generally. It is therefore a clause that we would have introduced regardless of the transhipments issue.
    I am pleased to be able to put the new clause before the House because since I have been responsible for fisheries matters I have been conscious that this issue has given wide cause for concern. Although I am reasonably satisfied that the controls in the Bill will help us more effectively to police transhipments, particularly on
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    receiving vessels, we are aware that the position we are dealing with is not static. It has changed dramatically in recent years and it could change in the future.
    Since we do not have the opportunity to introduce fisheries legislation every year, the pressure put on me from both sides of the Committee was only to be expected, and I am happy to respond to it. I apologise for the complexity of the clause. It relates however, to a complex matter. Bearing in mind the support the idea received in Committee, I hope that the House will accept the clause.
    Mr. Strang: We regard the clause and the Minister's statement this afternoon as representing a great Labour victory for the fishing industry. When we embarked on these proceedings in Committee we had no doubt that our most important achievement for the industry would be to persuade the Government to license these vessels. The Government had received representations from many quarters before they drafted the original Bill but they steadfastly refused to incorporate these important new elements in it.
    The licensing of these transhipment factory vessels—"Klondikers", as they are colloquially known in the industry—is an immense advance for that industry. It is not simply a question of achievement by Labour Members. We are grateful for the support that we received in Committee from the right hon. Member for Orkney and Shetland (Mr. Grimond) and the hon. Members for Aberdeen, South (Mr. Sproat) and Aberdeenshire, East (Mr. McQuarrie). Other members of the Committee may also have been persuaded by the arguments that we advanced of the need for the change.
    There is no doubt that the operation of these"Klondikers" has been something of a national scandal. I refer particularly to the mackerel fishery. The 1979 figures showed that two-thirds of all the mackerel caught in United Kingdom waters were sold directly to these factory ships, and therefore were not landed in British ports.
    I should explain why it is so important to control and restrict—some might want to go as far as virtually to eliminate—the operation of these vessels. First, the transhipment operation, particularly involving mackerel in recent years, has involved substantial abuse of conservation measures. There is no question but that the landing of mackerel on these factory ships involved a flouting of quotas and of conservation measures. There is no doubt also that the unrestricted fishing of mackerel would have led to the decimation of these stocks in the same way as the herring stocks were allowed to be fished out. It is crucial that we protect them.
    We welcome the Minister's announcement that fishing vessels over 40 ft long will have stopped mackerel fishing off the Cornish coast on 1 March. I know that the freezer trawlers will still operate in the area, but surely that provides all the more reason for having the type of licensing proposed in the clause.
    The black economy has been manifesting itself in the sale of fish by our fishermen to these factory ships, which come predominantly from Eastern Europe. A somewhat remarkable report has been produced by the Institute for Fiscal Studies arguing that the black economy can be beneficial in some circumstances. I do not think that anyone is suggesting that the black economy—or what I might term"black" fish—has been good for the fishing industry.

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    The second reason why it is tremendously important to license the Klondikers is the enormous loss of employment and production as a direct consequence of tonnes of fish being sold directly to the factory ships and not being landed in British ports. There is an enormous wealth creation process between the stages at which fish is landed and when it is marketed. The process covers the fish market, the transporting of fish from the market to the freezer depots, the work at the freezer depots-one small such depot in my constituency has been paying off workers recently—and the transport of fish from the depots to the processing factories. There is also work in the factories and in subsequent transportation and marketing.
    Therefore, the fish processing industry has been taking an enormous hammering in the past couple of years, partly as a direct consequence of the Government's monetarist policies—involving high interest rates and an overvalued pound—but partly because United Kingdom fish has not been landed in British ports or processed in British factories.
    The case for licensing the Klondikers is overwhelming. There is no reference in the new clauses to balancing the amount of transhipment against our processing capacity. That approach is pursued, for example, in Canada. I hope that the Minister will say that the allocation of the licences and the extent to which he will allow transhipment to take place will be influenced by the degree of under-utilisation of our fish processing facilities.
    My hon. Friend the Member for Bothwell (Mr. Hamilton) raised that issue with me. A firm in his constituency—Frigoscandia—carried out a survey in 1979 and 1980 which indicated that fish processing plants in Scotland were operating at less than 20 per cent. utilisation, and that many were in danger of permanent closure. We have seen the results in Associated Fisheries. We have seen the significant decline in the British processing industry.
    Another reason why the clause is a victory for the industry relates to the catchers themselves. In the short term some fishermen may feel that their opportunity to sell fish directly to factory vessels will restrict their market and will have an adverse effect on their prices, but in the long term it would be very much against their interests if our processing industry continued along the road of almost terminal decline. We need such an industry and such a market in Britain. I hope that in future we shall need that market more and more. If we begin to catch herring once again in large quantities, and a market in herring develops, I hope that the work that once existed in Scotland in the herring industry will return.
    When the Minister replies, will he say something about the withdrawal of licences? The Government, if they mean business, must be prepared to withdraw licences from Klondikers that contravene British regulations. Will the Minister elaborate on the offences and penalties that will be imposed and tell us how he can make them effective against the large East German and Russian vessels and, indeed, vessels from all over the world? May we have an assurance from the Government that the licensing scheme will be established quickly? It will require an order. I trust that its drafting is now in hand. Will the Minister give undertakings about the speedy and effective implementation of the new scheme for licensing the Klondikers? It is
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    important to the whole industry. We welcome the Government's change of position. The whole House wants to see the matter advanced as quickly as possible.
    Mr. Patrick Wall: If there is any great victory on this series of amendments, anyone who reads the report of the Second Reading debate will see that it is shared impartially by both sides of the House. I am wholly in favour of the new clauses. I want to ask the Minister one or two questions about administration. How will the clauses be administered when they become law?
    The Minister knows that the distant water fleet is in a bad condition. It has been saved during the past two years only by mackerel fishing off the Cornish coast. However, we are thinking more of foreigners when discussing these clauses. British industry does not obtain much profit by selling to Eastern bloc Klondikers. My figures show that they pay about £50 a tonne for mackerel, while the fishmeal price is about £45 a tonne. Frozen mackerel sells at between £180 and £190 a tonne. Clearly we should be aiming at that. Therefore, it is a good suggestion to introduce licensing. How does the Minister intend to administer the scheme for British vessels?
    4.15 pm
    I wish to quote one sentence from a letter that I received from a major firm in Hull. It states:
    "A positive Government policy would have enabled the United Kingdom vessels to have their freezing capacity increased allowing them to spend part of the year fishing and part klondiking. Such production would, obviously, have increased the period of time during which UK mackerel would be available to supply world demand."
    Transhipment is important for the distant water vessels. How does the Minister intend to help them through his legislation? Does he agree that if we had better processing and freezing facilities in Britain more mackrel could be landed and it would not need to be sold to foreigners?
    Mr. Grimond: When the Minister drafts the orders, will he watch two points? First, the new clause as drafted is complicated and lengthy. It also goes very wide, as the Minister admitted. Will he take care that it does not catch ordinary fish carriers trading between the Islands and other ports? It is not necessary to license them, but the clause would give him the power to do so. Although licensing may be necessary, administration expenses should be kept to the minimum.
    If the order is introduced, is the Minister confident that he will have the means to enforce it? The order could refer to fish caught by a specified method. There is already anxiety in the industry about the enforcement of limits. It is doubtful whether there are enough fishery cruisers and other methods of enforcement. Is the Minister satisfied that there will be the means to enforce the orders if they are passed?
    Mr. Iain Sproat: I want to say two things to my hon. Friend the Minister. First, I very much welcome the proposals that he has brought forward this afternoon. He was reacting directly to the wishes of the Committee. I congratulate him on the speed with which he did so. Secondly, I was astonished that the hon. Member for Edinburgh, East (Mr. Strang), who is usually so moderate and generous in these matters should talk about the new clauses as a Labour victory. I tabled an amendment, as did my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie). We both spoke to the amendments.

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    I was under the impression that both sides of the Committee had pointed out how, first, conservation had been damaged; secondly, how the British processing industry had been damaged; and, thirdly, how essential it was to license the Klondikers. When my hon. Friend the Minister replied in Committee I received the impression that he took the argument as an all-Committee point and that he would bring forward a new clause at the appropriate time. He has done so. It is what we on the Conservative side pressed for. To talk about it as a Labour victory is not only ridiculous; it is demeaning to the industry. We have all worked together on this issue. We have all been successful. The industry has benefited. We should take party politics out of the matter.
    Mr. James Johnson: As I sit on the Opposition Benches these days I am happy to welcome any Labour victories. Let us be sensible and say that it is a victory for common sense on both sides of the Committee."Klondiking" is a somewhat poetic and romantic word, but in the past few months it has acquired almost an evil connotation.
    I speak as a Hull MP. We in Hull have had some stick over this, not merely from fishermen off the South-West peninsula but from ill-informed people all over the country who seem to think that Klondiking consists of Communist vessels coming into the English Channel, mooring 12-15 miles, or sometimes 6 miles, off the coast and then getting stuck in to fish for mackerel. I make it clear that whatever was done in the past was done legally. It has been legitimate for the vessels, whether from Hull, Fleetwood or anywhere else, to anchor off these shores, catch the fish and then tranship their catch on the water to, say, a Polish vessel or any other vessel, even an Egyptian vessel, which was willing to pay in the market for the fish.
    A term was used a few minutes ago which to me is almost insidious. There was a reference to the black market. There is no black market in open exchanges on the water. I should like to see all the fish caught by our vessels landed at our ports, on our quaysides, thus giving employment to workers on shore. What has been happening has been legitimate, and"Klondiking" is a poetic word that can be forgotten.
    When the Minister replies to the debate, will he make quite clear what he means by licensing? I am sure that he knows as well as I do that this has caused a lot of perturbation to Hull fishing owners, skippers and deck hands because they did not know how long they were staying to fish. Let us be explicit, so that when men leave the Humber, or anywhere else, they know that they are going to fish for a month, or more or less, and can get down to the job of catching the fish. When I hear words like"black market","black economy","scandal" and so forth, I do not think that it is good enough. Our people have to catch the fish. They have been doing that and selling it in public.
    Mr. Strang: I was not meaning to slight the constituents of my hon. Friend, but I think that he will recognise that substantial amounts of fish have been sold direct to foreign vessels. It is widely believed that cash payments have been made to these fishermen. Indeed, there has been some suggestion that all of that cash may not have been declared. Furthermore, the Minister himself in opening the debate on the Second Reading of the Bill used the word"abuse" in relation to transhipment.
    Mr. Johnson: This all sounds to me like buying Argentinian footballers and putting them in the Second Division with Hull City. I hope, all that apart, that the Minister will make clear what he means by licensing.
    Last season about 300,000 tonnes of mackerel were caught off the South-West peninsula. Can the Minister specify what amounts he deems sensible and wise for conservation purposes? Will he then tell us which sections of the fleet will be getting these licences and for what length of time? In view of the past confusion and feeling of unfairness amongst owners in Hull about this, it is important that he makes it explicit and puts it on the line.
    Mr. Albert McQuarrie: I welcome the clause which arose, among other proposals put down by the Opposition, from an amendment put down by my hon. Friend the Member for Aberdeen, South (Mr. Sproat) and myself. I was sorry that the hon. Member for Edinburgh, East (Mr. Strang) was endeavouring to take the total credit for this. I have always looked at fishing as a bipartisan subject. I agree that the hon. Member supported it, but in his earlier remarks he appeared to indicate that this was a Labour proposal and that it was they who had managed to get the Minister to change this. However, I do not wish to be partisan. I am sure that the hon. Member for Kingston upon Hull, West (Mr. Johnson) would be one of the first Members to welcome the view that fishing should be a bipartisan subject.
    Mr. Kevin McNamara: Bipartisan?
    Mr. McQuarrie: I am not partisan. I take the point that the hon. Member for Kingston upon Hull, Central (Mr. McNamara) endeavours to make from a sitting position.
    Mr. McNamara: I am sorry if I offended the hon. Gentleman. All I am saying is that bipartisan policies in this House have always meant that we have had to agree with the Tory Party, on the Common Market or anything else.
    Mr. McQuarrie: That might not be bad policy.
    I support the speech of the hon. Member for Edinburgh, East in respect of the processing industry. If we are to control the Klondikers or those vessels that process fish offshore, it is absolutely vital that sufficient resources should be landed for our processing factories. One of the problems that is being created at the quayside is the low price of fish. As the hon. Member for Edinburgh, East rightly said, that is where the black economy starts.
    Despite the honesty that no doubt exists in most parts of the fishing industry, in whatever sphere we think of in the world there are always people who are prepared to take a little extra on the side if they can get it. The fishing industry is no different, although, as I say, those involved in it are traditionally honest. There are always a few"black" people around who are prepared to take"black" money, as there are in any industry. It is only fair to say that the fishing industry would admit that. The industry is as anxious as we are to ensure that licensing of this nature takes place.
    The Minister's decision to table the new clauses will be welcomed not only by those of us who served on the Committee and who endeavoured to get him to come to the view that he has now reached in bringing forward these proposals, but by the fishing and processing industries. I trust that the House generally will support this proposal as

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    those of us on the Government Benches who have spoken and the hon. Member for Edinburgh, East who spoke on behalf of the Opposition have done.
    Mr. Donald Stewart: I, too, welcome the tabling of the new clause. I was surprised that originally nothing was done about this subject in the Bill, since the matter had become a great bone of contention. There was a lot of anger and resentment at the way in which the system was being abused. I agree entirely with the hon. Member for Kingston upon Hull, West (Mr. Johnson) that Klondiking of itself has a respectable pedigree. When I was a boy, the fishermen welcomed the arrival of Klondikers. It was an excellent market and they were delighted to see them. So the system in itself is not inherently evil and there is nothing wrong with it as such.
    Undoubtedly there have been breaches. For the protection of the mackerel stocks and of the processors on land it was obvious that something had to be done about it. Since I was not represented on the Committee I am unable to claim that this was a victory for my party. I am content to follow the example of the non-partisan Members who have already spoken and welcome it on behalf of the fishing industry.
    Mr. Buchanan-Smith: I was rather surprised at the opening remarks of the hon. Member for Edinburgh, East (Mr. Strang) in claiming this as a Labour victory. I have taken the opportunity while sitting on the Government Front Bench to remind myself of what was said in the debate in Committee. It is rather interesting that, out of four Members who spoke in Committee, apart from myself there were two Members from the Conservative Benches, and the hon. Member for Edinburgh, East was the only Member from the Labour Benches who spoke on this. Therefore, the number of Labour abstentions was very large.
    Mr. McNamara Mr. McNamara rose—
    Mr. Buchanan-Smith: I shall give way in a moment. I am always happy to give way, particularly to the hon. Gentleman.
    I prefer to adopt the approach of the hon. Member for Kingston upon Hull, West (Mr. Johnson) and the right hon. Member for the Western Isles (Mr. Stewart). I simply put this forward as a sensible measure which had the support of the Committee and has the support of the House. It is in that spirit that I have proposed it.
    4.30 pm
    Mr. McNamara: Surely the hon. Gentleman is not relying on the number of hon. Members who speak on every clause as a degree of support or otherwise, is he? If so, he will not get to his bed tonight.
    Mr. Buchanan-Smith: I thought that I should put the record straight.
    I endorse what was said by the hon. Member for Kingston upon Hull, West and the right hon. Member for the Western Isles about there being nothing wrong with transhipment. There is nothing evil about it.
    I wholly agree with the hon. Member for Edinburgh, East about more British companies' shore-based facilities taking advantage of the processing opportunities offered by mackerel and herring fishing. Let us be under no illusions. No matter how pelagic fishing is
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    organised—whether for herring, sprats or mackerel—I do not see how we could have sufficient shore-based processing facilities to service a seasonal fishery without processing capacity being under-utilised for large periods of the year. Even if the Government put in massive funds, we could not get a proper return on the investment because of the physical nature of the way that this fishery is undertaken.
    That is why over the years this tradition of Klondiking and transhipment has built up. It is a good thing. Without it we would not be able to cope with the harvest that the sea offers of these pelagic species. If we did not have these factory vessels to process the fish at the appropriate time, our fishermen would not get a proper return for their fish and our processing factories would not have any advantage. We must get this matter in perspective. That is why I endorse strongly what has been said about it.
    Our domestic market, given its size, is unable to cope with what is produced out of this fishery during the short time that it takes place. Much of it has to go for export, which is an opportunity made available by some of these factory vessels and transhipment. Therefore, there is nothing basically or fundamentally wrong with Klondiking or transhipment as it takes place now and as it has taken place in the past.
    We took the powers in the Bill initially in order to control better the way in which the transhipment takes place. The Government did not ignore this matter. I think that the right hon. Member for the Western Isles would agree that this is a question not of licensing or not licensing, but of control. If there have been abuses—I believe that there have been abuses, and some of the problems have been in the identification of those abuses—we need additional control. That is why originally we took the power to control. We brought in more powers to inspect—to go aboard vessels to find out what is going on. That will be more effective than licensing to ensure that abuses do not take place.
    We have now, so to speak, approached the matter by two stages. The first stage was in the Bill as originally published, and I think that is the most important part of it. The control measures are more important than anything else, and we included those in the Bill originally.
    As a result of pressure in Committee, we have now taken further powers which will enable us to license and to take the opportunity referred to by the hon. Member for Edinburgh, East of being able to go much wider. In future we may be able to take a broader view of balancing shore-based facilities for processing against the facilities of vessels which receive. I do not want to deceive the House in any way. The control measures, if we are to have proper conservation, are more important than any measures that we may take on licensing.
    I was asked specific questions on the new clause and I shall now seek to answer them. The hon. Member for Edinburgh, East asked whether licences could be withdrawn. Of course they can be withdrawn. The Minister has taken the power to issue licences, and he also has the power to withdraw them. That power will also exist for the courts. If a licence is contravened, the court will have power to remove the licence.
    The hon. Gentleman asked about penalties. We have followed the precedents on illegal fishing. Receiving fish without a licence or in contravention of a prohibition on

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    transhipping would be subject to a maximum fine of £50,000 on summary conviction. I emphasise that this is no light matter. It is backed up by proper penalties.
    The right hon. Member for Orkney and Shetland (Mr. Grimond) asked how, if we introduced licensing, we would ensure that we did not inadvertently cover areas that we did not intend to cover. We have the power to make the order subject to exemptions. I assure him that we would be sensitive to the point that he made if we considered introducing a licensing scheme.
    I turn now to the more general points. The hon. Member for Edinburgh, East asked when and how we would introduce these powers and my hon. Friend the Member for Haltemprice (Mr. Wall) asked how we would administer them. These points were implicit in many of the speeches to which I listened. I emphasise that in the new clause we are taking enabling powers. Therefore, we would have to introduce the licensing scheme by order. I have no immediate plans to introduce a licensing scheme as such. First, only a short time has elapsed since we decided to introduce this enabling power. Therefore, I should like to give it a great deal more thought.
    Secondly, we have already introduced powers of control. Therefore, in terms of trying to stop abuses and to ensure that transhipment takes place responsibly and properly, particularly in the light of our conservation measures, we should first see how those control measures work. It is silly to take powers in response to popular feeling or even where there is a genuine need when we have power:; available in the Bill as drafted to deal with the main abuses. Therefore, I should make it clear that I have no immediate intention of introducing a licensing scheme as such. But these enabling powers will enable us to assess the position. In the light of our experience of how the control measures work or in furtherance of any new conservation measures, we could then introduce a licensing scheme.
    Mr, Wall Mr, Wall rose—
    Mr. Buchanan-Smith: I now come specifically to the point on which I anticipate my hon. Friend the Member for Haltemprice is seeking to intervene. I give him and the right hon. Member for Orkney and Shetland an undertaking that, before introducing any scheme, we shall consult all those with interests in it. The hon. Member for Kingston upon Hull, West also referred to this matter. We shall consult those companies with interests which have vessels capable of receiving transhipped fish. We shall also consult those with processing interests. My hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) speaks very strongly for those interests in the House. Obviously, we would also consult the catching side of the industry, because it has a tremendous financial interest in what happens to transhipment. We shall also have to take account of overseas interests.
    I cannot respond directly to the hon. Member for Edinburgh, East by saying what kind of scheme we would introduce or when we would introduce such a scheme. We have taken the enabling power so that at the appropriate time, after we have seen how our control measures work, and even then only after consulting all the interests involved, we may bring forward a licensing scheme.
    I hope that I have not only helped to clarify the points raised in this debate, but made clear the circumstancs in which a licensing scheme might be introduced in
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    furtherance of the enabling powers which we have taken before us. I thank the House for the welcome which it has given to the new clause. We are right to take those powers, but we should not forget the service which the Klondiking and transhipment of fish provides to the British fishing industry.
    Mr. McNamara: I am grateful for being allowed to take up some of the time of the House. I can restore the balance of speakers on the clause; because it would be unfortunate if it were to go through with the feeling that there is not the support for the measure for which the Minister is rightly looking. In fact, the Labour Party strongly supports the new proposal.
    The public and the consumer have been aware of one matter relative to Klondiking. In the past, scenes have been portrayed of fish being caught and transhipped, often outside our territorial waters and often to foreign vessels, of species that are on sale by British fishmongers at an enormous price. We have been told that that has taken place because of the better price that the fishermen have been able to obtain for selling in bulk to foreign vessels—mainly Eastern European vessels. If the system of control of licences is likely to produce—as I hope it will—a system whereby the British consumer and housewife have a better price for fish at the fishmongers, and if some of the recent exorbitant prices come down as a result of proper licensing and controls, these measures will be welcome.
    Question put and agreed to.
    Clause read a Second time, and added to the Bill.

    New Clause 4
    ENFORCEMENT OF PROVISIONS AS TO TRANS-SHIPMENT
    "(1) For the purpose of enforcing the provisions of an order under section 4A or 6(1A) of the Sea Fish (Conservation) Act 1967 or the condition of any licence granted under section 4A of that Act, a British sea-fishery officer may exercise in relation to any vessel (whether British or foreign) within British fishery limits the powers conferred by the following provisions of this section.
    (2) He may go on board the vessel, with or without persons assigned to assist him in his duties, and for that purpose may require the vessel to stop and do anything else which will facilitate the boarding of the vessel.
    (3) He may require the attendance of the master and other persons on board the vessel and may make any examination and inquiry which appears to him to be necessary for the purpose mentioned in subsection (1) above.
    (4) Where it appears to him that a contravention of the order or a breach of a condition of the licence has at any time taken place he may—

    (a)require the master of the vessel in relation to which the contravention took place to take, or may himself take, the vessel and its crew to the port which appears to him to be the nearest convenient port, and

    (b)detain or require the master to detain the vessel in the port; and if he detains or requires the detention of the vessel he will serve on the master a notice in writing stating that the vessel will be or is required to be detained until the notice is withdrawn by the service on the master of a further notice in writing signed by a British sea-fishery officer.'— [Mr. Buchanan-Smith]

    Brought up, read the First and Second time, and added to the Bill.

    New Clause 5
    OFFENCES COMMITTED BY BODIES CORPORATE
    'In section 12 of the Sea Fish (Conservation) Act 1967 (offences committed by bodies corporate) after"sections 3", there shall be inserted"4, 4A, 5".'.—[Mr. Buchanan-Smith.]
    Brought up, read the First and Second time, and added to the Bill.

    New Clause 6
    CONSULTATIVE COMMITTEE
    '(1) For the purpose of giving advice to the Authority about the exercise and performance of their functions generally, there shall be a sea fish industry authority consultative committee, which shall number at least 15 and not exceed 20 people.
    (2) The consultative committee shall consist of a chairman who shall be such member of the Authority as may from time to time be appointed by the Authority, and of such other members as may be appointed by Ministers to represent the interests of the different sections of the fish industry and any other such interests (including those of persons employed in the industry) as Ministers may consider to be affected.
    (3) Before appointing to the consultative committee a member to represent any such interests as aforesaid, Ministers shall consult such bodies, if any, as appear to them to be representative of the interests concerned.
    (4) Ministers should endeavour to ensure that a substantial number of the members are drawn from the representative organisations of the industry.
    (5) Ministers should endeavour to ensure a fair geographical representation which reflects the diverse nature of the fishing industry.
    (6) The Authority shall appoint a person employed by them to act as secretary to the consultative committee.'.—[Mr. Strang.]
    Brought up, and read the First time.
    Mr. Strang: I beg to move, That the clause be read a Second time.
    Mr. Deputy Speaker (Mr. Bernard Weatherill): I suggest that we consider at the same time Government amendment No. 1.
    Mr. Strang: In Committee we decided that the structure of the proposed authority was unsatisfactory. We made an important change, which we believed would enable the authority to operate more effectively. I hesitate to describe that Government defeat as an Opposition victory. I do not want to offend the sensibilities of the hon. Members for Aberdeen, South (Mr. Sproat) and Aberdeenshire, East (Mr. McQuarrie), who abstained in the Division and enabled us to carry that important change.
    The Government have had time to think about that important aspect of the Bill, as have their Back Benchers. I expect that there have been some comings and goings between hon. Members and Ministers. I am sure that there have been discussions between the Government and representatives of the industry. I should like to think that as a result of that defeat in Committee the Government took the issue sufficiently seriously to reappraise the situation and reconsider whether the structure that they had proposed was right. They have now decided to attempt to reverse the change that was made in Committee. We regret that decision.
    4.45 pm
    I shall briefly reconsider the establishment of the Sea Fish Industry Authority. At the outset the Government had to decide whether to amalgamate the Herring Industry Board and the White Fish Authority to create a new authority, or to take those functions back into Government and charge the Ministry of Agriculture, Fisheries and Food with the responsibility of carrying out all the functions that the Bill will give to the Sea Fish Industry Authority. I believe that there was a case—it was not one which, on balance, the Opposition pursued—for doing so.
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    There was a case for not establishing a major quango. The Government's determination to reverse the changes made in Committee makes it a bigger quango than it would otherwise have been. I do not wish to make too much of that point. I do not wish to embarrass the Minister, but that option was open to the Government. It was supported by some sections of the industry and by at least one major fishermen's organisation.
    The Opposition accept that the Government were right to opt for a Sea Fish Industry Authority. We argued successfully in Committee that we wanted an authority with a tighter, more committed membership. We wanted an independent authority, not one where sectional interests were directly represented, but one of six members, which we believed would have been cohesive. They could have been chosen by the Government. They could have been a more effective executive for this organisation than the larger authority that was proposed by the Government in the initial Bill.
    The Government have decided to go back to the proposed 12-member authority, eight of whom will be representatives of the industry. I do not believe that the Minister will satisfy the industry as a whole with eight members. At Heathrow airport this week I bumped into a few representatives of the fishing industry. It was obvious that at least one of those distinguished representatives felt that he had a good chance of serving on the authority. I believe that he should be a member of the authority if the Government are successful in reversing the decision taken in Committee.
    There may have been a failure by the Government to reappraise the issue sufficiently and to say to the industry that they know that a number of its representatives had it in mind to serve on the authority and that many of the organisations said that they would like to be directly represented on the authority, but in the light of the vote in Committee and of the arguments raised by hon. Members there the Government believe that a smaller, more independent authority will be more effective.
    I cannot see how the different sections of the industry can be properly represented under the scheme that the Government propose. Clearly, the trade unions must be represented on the authority. The processing sector, which is enormously important, must be represented. The fishermen's organisations, the catchers' organisation, must have representation on the authority. Which fishermen's organisations will be represented? The deep-sea fishermen and the inshore fishermen surely will, but what about geographical representation? In Committee we took the view that not only should the different sections of industry be represented, but that there should be a genuine geographical representation on the authority.
    It is still our view that the Government will fail to achieve the desired objective on the basis of eight members out of the 12 on the authority. That is why, in addition to the important change in the composition of the authority, the Opposition advocated in Committee—and advocate again now in new clause 6—the establishment of a consultative committee. The consultative committee would consist of 15 to 20 members—in my view, probably nearer 20 than 15—as representatives of the industry.
    Mr. Wall: I am following the hon. Gentleman's argument closely, but I cannot see how, with a membership of 20, he will bring in all those in the industry

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    whom he wants to be represented. If he has geographical representation, the total is more likely to be 70 than 20. Will he explain his figure of 20?
    Mr. Strang: The hon. Gentleman would have a point only in the sense that there would be a problem if one were trying to represent every individual section. I do not regard that as practical. Indeed, I should be against a very large assembly almost as it was in the case of the White Fish Authority, which really had no clout. One has to strike a balance or draw a line. I think that eight is not practical. Incidentally, I think it wrong also that there should be those with direct vested interests on the authority, but, leaving that aside, I argue that we shall be more likely to secure fairer representation, a representation more acceptable to the industry, on the basis of 15 to 20 members than on a basis of eight.
    We believe that the consultative committee will have real status in the industry. With 15 to 20 members, we are not talking about a large amorphous body. It will be a committee on which the organisations will be represented. The authority will be dependent on the advice of that committee, and it will speak for the industry.
    We attach great importance to the organisations themselves, and the establishment of a consultative committee would in no way pre-empt a direct dialogue in some instances between the different organisations in the industry and the authority. Certainly there would be no question of the consultative committee's usurping or replacing the dialogue between the industry and the Ministry of Agriculture, Fisheries and Food. It is to the Government's credit that they have carried on the continuing and genuine dialogue between the fishing organisations and Ministers in relation to the development of the industry and, in particular, the negotiations in Brussels.
    My right hon. Friend the Member for Deptford (Mr. Silkin) initiated that relationship with the industry, and the present Minister has continued it. We believe that the Government are right to work closely with the industry in Brussels in the important negotiations on the common fisheries policy. It would be out of order now to discuss the common fisheries policy, and I merely make that point in the present context.
    It seems to us that the Government have shown a lack of courage here, and we shall be interested to hear the views of their Back Benchers. I am not sure whether they have succeeded in persuading those who were members of the Committee on this issue. I regret that they intend to use their majority, or attempt to use it, in this Chamber to reverse a change which was made by the Standing Committee and which, in our view, would have given the authority a much better start than will the method proposed by the Government.
    Mr. Buchanan-Smith: Although I recognise that this is a matter of broad interest throughout the House, I think that it may be of assistance if I intervene now, especially since we are considering Government amendment No. 1 with the new clause.
    I repeat at the outset—I said it in Committee and, I think, on Second Reading—that I do not believe that there is any clear-cut view as to which form of authority would be best. There are arguments on both sides. Should we have an authority, as we have at present in the White Fish Authority and the Herring Industry Board, which is small
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    in membership and comprising only independent members, or should we, as the Government proposed in the Bill as originally drafted—and as we propose in our amendment No. 1—have a somewhat larger authority which, in addition to the independent members, will comprise a number of representatives of the industry? It is a matter of judgment. I put it no higher than that. I do not claim that either our solution or the one which the Opposition advocate is necessarily or obviously the right one.
    The hon. Member for Edinburgh, East (Mr. Strang) said that our approach to the matter was to produce an even bigger quango. That is not true. The principal feature of a quango is that there are upon it individuals who are completely independent of the task which they seek to perform. If anything, what we propose is less of a quango in the generally accepted sense in that it will have upon it representatives of the industry which the authority will seek to serve.
    Second, the hon. Gentleman said that we had failed to reappraise the situation since our proceedings in Committee. I assure him that there has been no such failure. Not only since the Committee proceedings but over the many weeks since we first dealt with the matter in Committee, I have taken trouble to consult the main interests involved. I can advise the hon. Gentleman and the House that the broad view of the industry and of the main organisations has remained in support of the view which the Government presented in the Bill as originally drafted and as now proposed in our amendment No. 1—in other words, that we should have this rather larger authority within which there would be representatives of the industry.
    Mr. J. Enoch Powell: The Minister of Agriculture, Fisheries and Food has more than once given a very firm and gratifying undertaking that the authority as proposed to be constituted will comprise at least one Ulsterman representing that section of the fishing industry. Will it be easier or more difficult for the Minister to discharge that undertaking with an authority of six members or of 12?
    Mr. Buchanan-Smith: I assure the right hon. Gentleman categorically that it is easier with a body of 12 than it would be with one of six. Moreover, one can be certain that in the discharge of the undertaking to which he referred one will more likely be able to get someone who is representative of the fishing industry in Northern Ireland. I am grateful to the right hon. Gentleman for his support in that respect.
    Third, the hon. Member for Edinburgh, East accused Ministers and the Government of a lack of courage in simply bringing back the Bill as it was. I assert the precise opposite. It is the hon. Gentleman who is lacking in courage. He is the one remaining with the status quo of an independent body as we have had with the authorities serving the fishing industry up to now. What the Government propose—and we emphasise this in amendment No. 1—breaks new ground by bringing into this body representatives of the fishing industry who are not represented on existing bodies.
    5 pm
    I shall not repeat all of the arguments adduced on Second Reading and in Committee. All that we are doing is bringing this body into line, for example, with similar bodies in agriculture where representatives of the industry

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    are included. Therefore, if there is any question of courage, I believe that it requires more courage to break new ground. As I said at earlier stages, I think that there is a great deal behind the hon. Gentleman's argument. In an industry of wide geographical differences, as well as differences in terms of deep-sea and inshore fishing, catchers and processors, merchants and retailers, I accept that one takes a certain risk in setting up an organisation on which so many bodies will seek representation.
    Clearly, as the hon. Gentleman quite fairly said, it will be impossible for everyone in the industry to be represented on the authority. Nevertheless, this has been achieved and has worked in agriculture, where there are similar bodies on which not everybody is represented. I believe that that industry is mature enough and sufficiently well organised to accept the challenge and responsibility of providing members from the industry to serve on the authority. If a particular organisation or corner of the industry is not represented on the authority, they would still rather have some representatives from the industry included because this gives the industry rather more say in what happens.
    I therefore believe that rather more courage is required to go in that direction than to rely upon the status quo.
    Mr. Roy Mason: If, as we believe, the Minister intends to force this through the House, to reverse the decision taken in Committee and to revert to what was originally introduced in the Bill and in his Second Reading speech, namely, that there shall be 12 members—we do not know whether they will all be full-time—including four independent members and eight representatives of the fishing industry, may I take it from what he has said that he is now committed to putting one person from the Northern Ireland fishing industry on the authority?
    Mr. Buchanan-Smith: I am saying that there will certainly be one person from Northern Ireland on the authority. In what part of the authority that person would be, I do not know. But it is inconceivable that there should not be a member from Northern Ireland on the authority. I respond directly and with pleasure. One might consider an independent member from Northern Ireland. I said that on the authority there would certainly be one person from Northern Ireland.
    As I have said, I do not wish to delay the House. We have had some very full debates on this subject. Certainly those who served on the Committee or who have read the report of its debates will realise my views on it. I return to the point that I made a moment ago. Since the Committtee stage, I have taken the opportunity to discuss this very fully with those concerned. I have not, of course, been able to conduct all the discussions personally, but I have had consultations carried out in the industry. There is certainly no real change of view among the main organisations in the industry from that which was expressed to us when the original proposals of the Bill were discussed more widely during the past year. I have to report to the House that the result of these consultations is that all the major organisations which were originally in favour of the form of authority that we originally proposed remain in favour of that form of authority. I understand that they have indeed written to Members in support of their views.
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    I summarise briefly, under four main heads, the reasons why we originally introduced the idea of an authority that is partly independent and partly representative of the industry, and why we wish to maintain that position.
    First, we must ensure that the authority commands the confidence and respect of the industry. I believe that we are more likely to do that if representatives of the industry serve on the authority. I refer the House to the debates just over a year ago on raising the levy of the White Fish Authority. I believe that there was a certain gap of confidence at that time. Certainly a number of individuals put it to me at that time that an authority which included representatives of the industry would be more likely to have the respect and confidence of the industry. That type of situation, I fear, will occur again in the future. It happens whenever a levy has to be raised, because nobody likes to pay levies. There is therefore a strain on relations at the time. I believe that it is helpful to the industry if, when such decisions are taken, some of the industry's own representatives are party to the decision. People in the industry then know that their views have been taken into account in any proposal that is put forward.
    Secondly—and this follows on from my first reason—I believe that those who have to pay a levy should also have some say in how that levy is spent. I believe that that is a simple matter of principle rather than simply a matter of confidence and respect.
    Thirdly, the authority has an important task to carry out. It has to bring together an industry comprising many different elements. I believe that bringing representatives of the industry together as part of the decision-making process—I emphasise that it is the decision-making process, not the consultative process—will enable the authority to carry out its task very much more effectively.
    Fourthly, no matter how great or how good some of the independent members appointed to the authority may be, the authority has to work in a particular area where it is helpful to have technical knowledge and expertise. It is sometimes difficult to find people who are independent but who can also bring to the work of an authority such as this a certain knowledge and expertise in technical matters. The tasks of the authority are complex and difficult, and they are specific to one industry—the fishing industry. I therefore believe that it is helpful to have on the authority representatives who have practical experience and knowledge of that industry.
    For all those reasons, therefore, I believe that what we propose in amendment No. 1 is an improvement on the amendment which was adopted in Committee and which is carried further by the new clause.
    The hon. Gentleman quite fairly argued that for the kind of authority that he wished to see there should be a consultative committee. I make two points in relation to that. First, in a consultative committee of the kind suggested—I know that this is true of the existing consultative committees of the White Fish Authority—a fairly large number of people are brought together somewhat infrequently. I know that many people do not feel a sense of involvement simply because their function is purely consultative. I therefore do not believe that the kind of consultative committee suggested in the hon. Gentleman's new clause would in any sense answer the needs that the industry feels and which I outlined a moment ago.
    Secondly, if the new authority wanted consultative committees—and I would hope that they would be small

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    in terms of numbers—in relation to particular problems or sections of the industry, the Bill contains powers for the authority to set up such consultative committees in its own way.
    Therefore, while I appreciate that the Opposition's new clause is put forward in a constructive sense, I must advise the House not to support it. On reflection, as well as on the evidence of the further consultation that I have had carried out. and, perhaps most of all, simply on the strength of the arguments that I put forward at earlier stages and which I have sought to summarise today, I believe that we should do better to restore the authority to the position in which it was when the Bill was introduced, namely, that of an authority made up partly of independent members and partly of representatives of the industry.
    I therefore ask the House to reject the Opposition's new clause and to agree to amendment No. 1.
    Mr. Grimond: I am glad that the Minister responded to the suggestion made in Committee by that shrewd man the hon. Member for Kingston upon Hull, West (Mr. Johnson) that the Minister should occasionally speak earlier in debates and explain the Government's attitude to new clauses and amendments. That he has kindly done. I do not dissent from his view that the arguments are nicely balanced. However, I have come down rather more in favour of the views of the hon. Member for Edinburgh, East (Mr. Strang) than I did even in Committee.
    I believe that the views of the industry are difficult to obtain. I accept that the Minister has probably received support from major bodies in the industry for his own suggestion. I must put on record the fact that I have received support from other bodies in the industry for the contrary suggestion. I do not know which view is the more valid.
    The crux of the matter is that we must choose between an authority of 12, which will contain representatives of those engaged in the industry, and a smaller authority with a large consultative committee. I do not deny that there is a strong case for including people engaged in the industry. However, I do deny that because people are not engaged in the industry they are ignorant about fishing. I am sure that we could find independent members who would be well versed in the ways of the industry. The nub of the debate is that people on many parts of the coast, including the coast in my constituency, feel that with an authority of 12 they will not be represented.
    It was interesting that the Minister came clean, but only in an interjection, by saying that he has already promised one place to Northern Ireland. I tried to persuade the Committee that the House of Commons should have more say about, and more knowledge of, who will be appointed to these quangos and how. I hope that the Minister will now tell us whether he is committed to appointing people from other areas. Important as Northern Ireland is relative to the population, fishing is far more important to Shetland—it is absolutely vital to certain islands—than it is to the economy of Northern Ireland. How many more authority places will be given away before the Bill even reaches the statute book?
    I am not wholly addicted to the idea of consultative committees, nor am I addicted to the setting up of quangos or authorities which, whether they are bigger or smaller, will be more expensive than the two quangos which they will replace. I feel that the original proposals of the hon. Member for Edinburgh, East would allow for a smaller and
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    more economical authority and a consultative committee which would meet some of the feelings of the different sections of the industry which fear that their views will not be properly represented when the authority takes decisions.
    The Minister on several occasions quoted the agriculture industry as an example. I maintain that the agriculture industry is quite different. In Committee the Minister made an eloquent speech about the dangers and possibilities of licensing. He properly warned us that the licensing proposed under fishing legislation is a general licence to remove a man's livelihood. As he said in Committee, it is one thing to say"You may not fish for mackerel", but it is quite another thing to say"You will not get a licence to fish at all".
    We are proposing to set up an authority which, although it may not do the actual licensing, could well administer it and could well have a powerful say in the licensing scheme that is introduced. That does not happen in agriculture. In addition, agriculture does not have communities with no hinterland which are wholly dependent on fishing. Therefore, I do not accept the Minister's analogy with the agriculture industry.
    Frankly, the decision is a narrow one. Whether or not we have a consultative committee—I appreciate that there are objections to that, one of which I raised, which is that it may preclude the authority from taking advice on specialised matters from throughout the industry—nevertheless, a smaller independent authority with a wider area of consultation would on balance best suit the fishing communities in my constituency.
    If we accept the Minister's proposal, there must be a clear understanding that the new authority will continue the practice of the present authority and go outside official channels and consult widely throughout the industry. Like no doubt other hon. Members, I have received a letter from the chairman of the White Fish Authority on certain points in the Bill. I very much welcome that and I pay tribute to his close attention to all the views of the industry. However, I do not believe that all sections or areas engaged in fishing will be entirely happy if they are not represented on the authority unless they can have a greater assurance that consultation will be extremely wide and frequent on matters that are absolutely vital to the livelihood of individuals and to the survival of certain communities.
    5.15 pm
    Mr. McQuarrie: I intervene briefly to deal with clause 1 specifically. In Committee I opposed the Government's recommendations relating to that clause. I did so, not because I objected to the number of members, which I accepted should be 12, but because I was concerned about the factors set out in clause 2 relating to the functions of the authority. I was concerned that the four independent members would have total control of the financial provisions, to the exclusion of the other eight members.
    I am sorry that the Minister has not seen fit to take cognisance of that factor. I am still extremely concerned that the eight members who will be appointed from within the fishing industry will have no say in the financial provisions that will be apportioned by the new authority. I hope that the Minister will at least consider this matter again, because it is important.
    As I said, I accepted the suggestion of an authority of 12 and did not accept the suggestion that the numbers

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    should be reduced to six. That view is recorded in the report of the Committee proceedings. I said categorically that I could not support the clause at that stage because of the restriction that was being placed on the eight fishing industry members of the authority. I hope that on reflection the Minister will take that point on board. I hope that he will bear in mind the points that I made in Committee. Perhaps he will indicate whether there will be some discussion between the fishing industry members and the four independent members before there is any question of finality with regard to the financial provisions.
    Mr. Austin Mitchell: I support new clause 6 and oppose amendment No. 1. I found heartrending the picture painted by the Minister of the blood, sweat, toil and tears involved in returning to what he thought of in the first place before the consultations began. After our decision in Committee to reverse his proposal, it seems that the mountains have since laboured and have produced not a mouse but a pilchard. In effect, the Minister has come forward with the proposal that we started out with and which we rejected.
    I have certainly received no mail in support of the Government's proposal. In his consultations about the composition of the authority, I wonder whether the Minister got the same reaction which some Labour Members received, which was strongly critical of the whole Bill. The Scarborough and Bridlington Fish Producers' Organisation states:
    "we no way share the euphoria of many MPs which was evident in the debate on 12 January 1981, that this Bill is an enormous step forward".
    The Grimsby Fishing Vessel Owners' Association said:
    "much of the industry has not been exactly enchanted with the White Fish Authority".
    It spread some of that disenchantment onto the new authority.
    The Cornish Fish Producers Organisation Ltd. said:
    "Having seen Hansard … the CFPO is very worried to read how complacment nearly all those contributing to the debate were … The non-catching part of the industry hardly seems to have expressed an opinion either way".
    Therefore, it is unreasonable to say that the industry is strongly in favour of reversing the decision that we took in Committee. It has real doubts about the relevance of an authority with such wide powers and with such increased stature. In some sections of the industry there is a strong preference for a direct relationship with the Ministry rather than with this new authority. The numbers on the authority are not adequate, and will not allow the authority to win the industry's confidence. On the contrary, the authority might be able to divide and rule within the industry. Indeed, the Government pioneered that tactic in their relationship with the industry over the Common Market.
    I emphasise that three fundamental problems are involved in the authority's composition which have not been solved by the Minister's proposals. The first problem is the most basic: who is to be included in the representation? There are to be eight representatives from a very diverse industry. The industry is fragmented not only into skills, but also into roles. For example, the catching, merchanting, distribution and fish processing sides are all involved. The industry is also divided between the unions and the owners.
    Indeed, it is fragmented even more into geographical areas. The problem cannot be solved by providing eight
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    representatives. Indeed, it would be as difficult to solve one problem in that way as it would be to solve the dilemma of angels dancing on the point of a pin. Any attempt to fit such a diverse industry into the straitjacket of eight representatives will prove to be forlorn.
    Growing unity has been shown in the industry as a result of its determination to check the Government's headlong rush into sacrificing its best interests to the Common Market. The industry has come together more in its attempts to impose some restraint on the Government's propensity to give away so much of the industry's future to the Common Market. However, the Common Market negotiotions have reached a stage at which that precarious unity is beginning to fall apart. The industry faces the dilemma of French vessels—as well as Belgian vessels and others—being admitted within our 12-mile limit. That brings to the fore the geographical differences within the industry. It also highlights the differences between the inshore and the deep water sections of the industry. Until now those differences have been latent.
    It is proposed that there should be a box round the Islands, with reserved fishing for local fishermen. That proposal has given rise to a deep gulf between Scottish and English fishermen. If there were to be such a box, and if foreign vessels were also to be excluded from the 12-mile zone around Scotland, the burden of fishing effort would fall disproportionately on those waters that have been traditionally fished not only by the fishermen of Grimsby but by those of England as a whole. As a result, the industry would fragment once again on geographical lines, despite the precarious unity that had built up as a result of the Common Market negotiations.
    It is unrealistic to imagine that the industry is sufficiently united to be satisfied with eight representatives. It would be dissatisfied even if we were to ignore the other problems. The Minister has still not committed himself on the question of how many representatives will come from the catching side of the industry, which is the most important side. Again, that side of the industry is itself divided. What provision will there be for representation from the Transport and General Workers Union? The union has a specific role. It has strong and responsible views on safety, and decasualisation, arid on the role of fishermen.
    The Minister gave a commitment that the authority would include a representative from Northern Ireland. What other specific commitments have been made to the industry? What hopes have been held out to it, to the effect that certain sections will be represented on the new authority? At present, bait is being dangled in a most undesirable way.
    I am not satisfied that eight will prove adequately representative of the industry, or that the divergent elements in the industry can be brought together on such a basis. If that is to be the authority's constitution, the eight representatives will be brought straight into the political arena. The authority will be involved in decisions about licensing. Geographical arguments and arguments between the different sections of the industry will have to be fought out in the authority. As a result, a divisive situation will arise.
    It is important to note that the legislation proposes that the eight representatives should be excluded from certain financial functions. On what basis do the Government draw a distinction between those functions, and, for example, licensing functions? Those functions are just as

    305
    difficult and divisive. The sections can disagree in exactly the same way. There is a danger that political and geographical divisions will be created between the eight representatives.
    If the Government are to hand over to an independent authority functions that they should fulfil themselves they should hand them to a dynamic and effective authority. The best way to ensure that it is dynamic and effective is to create a smaller authority, which has a larger consultative body. The industry could then be brought together and could adopt the attitudes and express the aspirations of a united industry. Such representation would be better than the rather half-hearted attempt presented by the Bill.
    I accept the Minister's argument that there is a fine balance between the choices, but we feel that he has adopted his position because the Conservative Party is prejudiced against quangos. The Minister's definition of a quango was, under the circumstances, tautological. The fact that the body is representative does not make it any the less a quango. The slogan should be"a quango is a quango is a quango." Some had hoped that the White Fish Authority would be the last quango in Edinburgh, but that is not the case. If we are to have a quango there should be effective representation. Therefore, it should be larger, as that is the only way in which the industry can be brought together.
    I am disappointed that some of the questions that we put to the Minister in Committee concerning the reasons for the choice of eight representatives remain unanswered. When asked about consultation with the industry he said that the industry was in favour of his structure rather than the one for which the Committee voted. Judging from the correspondence that I have received from the industry, that is questionable. What is wrong with the framework of the White Fish Authority that the hon. Gentleman is rejecting? How will the eight representatives be selected? Which sections of the industry will be represented?
    I appreciate that the Minister is in difficulty if he lets the cat out of the bag. If he tells us, he might alienate those sections of the industry that are not chosen. Nevertheless, if he wants the House to endorse the structure, it is incumbent upon him to indicate who will be the representatives. In particular, we wish to know what representation will be given to the catching side of the industry. That is the prime question that that side of the industry is asking.
    Organisations such as the NFFO are asking what representation will go to the catching side and, specifically, to the English catching side as distinct from the Scottish catching side. How will these people be selected? What advisory machinery will the Minister possess if his option of eight representatives is carried? The Minister has stated that under the legislation it is possible to have an advisory body, but the House would like to hear what is his preference. Does he want to see such an advisory body? If so, he may be voting with us in the Lobby.
    It is difficult to decide between the two proposed frameworks. The Committee decided in favour of a smaller authority advised by a wider consultative body. That gives better representation to the industry. Even if it is a bigger quango, which costs the Government more money, I believe that the House should reaffirm the decision taken by the Committee.
    5.30 pm
    Mr. Sproat: When the hon. Member for Edinburgh, East (Mr. Strang) moved his new clause he reminded the House that during the Committee stage my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) and I had abstained on particular amendments and that the effect of our abstention had been that the size of the new authority was reduced from 12 to six. That is true. I would, however, advise the hon. Gentleman that he must draw a distinction between an abstention in order that a matter may come before the House again—which was my stated objective—and a rejection of the whole idea of a committee of 12, composed of eight from the industry and four from outside the industry.
    I make that point not so much because the hon. Member for Edinburgh, East put a false construction on it as because the hon. Member for Grimsby (Mr. Mitchell) said, in effect, that my hon. Friend and I had rejected the Government's original proposals. This was not the case. Our aim was to achieve a finely balanced judgment between a committee that would have, as its prime commodity, objectivity—because its members were not financially interested in the industry—and a committee where experience was regarded as a more important commodity, drawing on the fact that the industry was willing to have eight or more members on the new authority. My hon. Friend the Minister had to decide between objectivity and experience, and he came down on the side of putting into the new authority more experience from the industry.
    My hon. Friend the Member for Aberdeenshire, East and I wanted to find out what those parts of the fishing industry that we represent felt about the matter. Although hon. Members assume that everyone has thought about a Bill before it goes to Committee, the fishing industry, as is probably the case in all industries, does not operate in that manner. I often receive letters proposing possible amendments in Committee long after the Committee stage: is finished. The timetable that exists in the House is not always appreciated. That is not a criticism. It is a fact of life. That was one of the reasons why my hon. Friend and I decided not to vote. It would enable us to look at the matter again.
    I have spoken widely with members of the fishing industry. I do not necessarily maintain that only those in the fishing industry should be consulted. The consumer and the taxpayers also have to be considered. It is, nevertheless, true that the fishing industry in my constituency felt that the Government's idea of an authority of 12, divided into eight and four, was worth trying.
    I should like to underline the point made by my hon. Friend the Minister of State about the evidence taken by the Select Committee. It was surprising to some to note the venom with which the White Fish Authority was described by certain members of the fishing industry when we met in Aberdeen. Under the goading of an increase in the levy, a gap of confidence—the phrase used by my hon. Friend—between the industry and the White Fish Authority, however unjustified and however temporary, existed I believe that that gap of confidence will to some extent be diminished by the fact that eight experienced members of the industry will be serving on the new authority. They will be able to put strongly the feelings of the industry. Even if on financial matters the remaining

    307
    four do not accept those views, no one can accuse the new authority of being out of touch with the true feelings of the industry.
    I have shown that I disagree with the right hon. Member for Orkney and Shetland (Mr. Grimond). I am always sad when that happens. The more often he passes through Aberdeen the wiser he seems to become—more liberal than the whole of the rest of his party put together on this subject.
    Mr. Grimond: The emphasis is on"through".
    Mr. Sproat: Wisdom can be sprayed on quickly. Looking at the matter again, I feel that it is worth trying my hon. Friend's proposal. I may have the agreement of the right hon. Member for Orkney and Shetland when I say that I distrust this increasing obeisance to vested interests. It is the curse of American politics that vested interests are consulted so strongly and have so much power. I hope that this practice will not creep into our deliberations in the House. To put eight members of the fishing industry on the board increases, in a sense, the balance of vested interests in the judgments that we make.
    I wish to deal with the point about a divided industry—the fact that it is divided between catchers, merchants and processors and is divided geographically. In Committee the right hon. Member for Orkney and Shetland made the astounding statement that hon. Members from the Highlands knew what hon. Members in Aberdeen and Aberdeenshire were thinking. My hon. Friend the Member for Aberdeenshire, East and I quickly rejected that. I dare say that the hon. Member for Western Isles (Mr. Stewart) would say that nobody from England could ever represent what anyone in Scotland thinks. However, having managed to overcome this feeling of prejudice that a person not wholly engaged in one section could represent the views of that section, it was with some surprise that I heard the right hon. Member for Down, South (Mr. Powell) say that a place on this authority had been guaranteed to someone from Ulster. I took it that an essential virtue of the new body was that members of the fishing industry would be representing the industry as a whole, and that although in private or commercial life someone might be a director of the British Fishing Federation, when he took his place on the new Sea Fish Industry Authority, he would be representing the best interests of the industry as a whole.
    That principle demonstrated how it was possible, within the small compass of eight people, to represent the whole industry. If my hon. Friend is saying that the new authority is not to represent the industry as a whole and that certain representatives will represent certain sectional interests, whether commercial or geographical, I believe that he is undermining the important principle on which he originally constructed the new authority. I shall be sorry if we are told that Ulster is now definitely to have a representative. Does that go for Scotland? Does it go for the catching side? Does it go for the South-West of England, and so on?
    We must make up our minds whether we accept the principle that everybody in this authority will be objective or whether we accept the principle that each individual will represent a different section of the industry. I do not think that we can marry the two together. If we have somebody specifically representing the interests of Ulster, it will be
    308
    very difficult to persuade people in Aberdeen that although there is nobody from Aberdeen on the new authority, Aberdeen will be properly represented. I hope that my hon. Friend the Minister of State will clarify this point about sectional interests.
    I am prepared to support my hon. Friend and see whether this new form of authority works. I very much hope that it does. However, I cannot leave this debate, possibly the most important that we shall have on Report, without expressing my distaste and my pain that we are setting up a new quango. The Government came to power pledged to do two things in this matter—first, to cut the number of members of quangos and, secondly, to cut the cost of quangos.
    The good news about the Bill is that we are abolishing two quangos. The bad news about the Bill is that we are setting up one new quango in its place—a quango that will have more members than the two old quangos combined and may cost more in remuneration and allowances than the two old quangos put together.
    That is bad enough, but in Committee the Minister of State said that he could not even put a cash limit on this quango. If we can put cash limits on the Ministry of Defence, on the Manpower Services Commission and on the other important quangos we certainly should be able to put a cash limit on this.
    I had hoped that my hon. Friend would say"Well, I have thought about this matter again. While I believe that the structure and principle of the new authority is correct"—that is to say, that we shall have a predominance of members representing the fishing industry as a whole, a balanced and smaller part of members who do not represent the fishing industry as a whole—"I will cut the numbers not from eight to four but perhaps from six to three. In that way we will at least have fulfilled our pledge and given an indication to people that we are determined to cut the number of quango members."
    I hoped that my hon. Friend would put a cash limit on this new quango that would be lower than the spending limit—index-linked, of course—on the old one. I am sorry that my hon. Friend has not done this. I think that that is an error. I think that he has missed a chance to take a lead in something that is very important, namely, cutting public expenditure and cutting quango members. However, on the greater issue of the new form of the authority, having deliberated since Committee I am prepared to support him now.
    5.45 pm
    Mr. James Johnson: I do not desire to detain the House for long before it votes on this issue. However, the Minister of State let slip the fact that one place on the board of the authority will be saved for Ulster. That prompts me to make a few comments about the geographical nature of the industry and to implore him to accept what has been said by my right hon. and hon. Friends. I foresee the new board playing a vital part in the battles that lie ahead for the fishing industry. We shall have one board instead of the two old authorities, and we must get the best people on it.
    Fishing is unique in its geographical disposition. The isolated pockets of fishing communities need to be united in the battle for survival that lies ahead of them. That unity will not be achieved by a small board. We are more likely to achieve it if we have a larger board, which includes

    309
    those who are working and speaking for the various areas concerned. That is typified by the inclusion of a representative from Ulster.
    There is a need for unity. There is a need to have representatives from Scotland, England—including Cornwall—and Ulster. There is a need for these isolated communities to get together on a national united federal basis and to fight their battles together, as one. That applies to the inshore and deep-sea fleets. We have heard about the clash between the Klondikers from Hull and the inshore fishermen of Cornwall and Devon. The industry is crying out for a sense of unity, a sense of understanding and, above all, a feeling that not only the nation and the Government are behind it but that it is solid in its battle against the EEC or any other opponent.
    We need more places on the board to cater for the different and divisive sections of the industry. I appeal to the Minister on that score and on that score alone.
    Mr. Donald Stewart: I said on Second Reading that some regard should be given to the representation of the West of Scotland when appointments to the authority were made. I mentioned the West of Scotland because of its share of the industry. However, I acknowledged that areas such as Aberdeen, Hull and Fleetwood would be able to make a case for their areas. There are certain areas—for example, the Shetlands and my own—in which fishing is extremely important.
    I had assumed that there was general agreement that the authority would be set up on the lines indicated by the hon. Member for Aberdeen, South (Mr. Sproat), namely, a general committee, drawn in the first place without regard to geographical location. It seems that the assurance that has been given to the right hon. Member for Down, South (Mr. Powell) has breached that agreement to some extent. I have no doubt that great pressure has been put upon the hon. Gentleman to take account of the various fishing locations.
    It seems that some Conservative Members think that the only good quango is a dead quango. It is true that quangos multiply and that most of the attacks on them are fully justified, but we must not get ourselves into such a frame of mind as to feel that we cannot have an advisory or consultative body again through fear of someone shouting"quango", in the hope of killing it stone dead. It is quite a good idea that we should have such a body advising the authority. I ask the Minister not to be put off by propaganda. There are some quangos that should receive the boot, but that is not necessarily true of every quango.
    Mr. McNamara: In Committee I moved an amendment that stated:
    "At least two members of the Authority shall be appointed from persons representing trades unions, at least one of whom shall represent workers employed in the catching of fish and at least one person representing workers employed in the landing, processing and distribution of fish."
    I moved that amendment on the basis of what was to be the membership of the new authority. It has been announced that one member of the authority will definitely come from Ulster. There are far fewer fishermen, far fewer people engaged in the fishing industry generally and far fewer engaged in landing, processing and distribution in the Six Counties of Norhtern Ireland than in England and Scotland. There are far fewer engaged as trades union members within the fishing industry.
    In the past the White Fish Authority has tended to have trade union representation in one form or another. It is
    310
    especially important that trade unions should be represented and that those trade unions, such as my own, the Transport and General Workers' Union, should represent the large majority of those employed in the catching and the processing and distribution sides of the industry. I hope that the Minister will bear that strongly in mind. If he can make concessions to the Six Counties, my union deserves to be represented two, three or four times.
    Mr. Wall: I suggest that the House is making rather heavy weather of the Bill. There has been talk about a united industry. I have known the fishing industry for 26 years and have never known it united, unfortunately. We know that that is the history of the industry. If my hon. Friend accepts the advice that he has been given he will have a quango of at least 70 members. If we are to have representatives from trade unions and the catching, freezing, processing, geographical distribution and other sections, we shall need that size of membership if the authority is to be properly representative. That is the point that I made to the hon. Member for Edinburgh, East (Mr. Strang) when he opened the debate. We are discussing the difference between eight members and 15, although 15 will not be any more truly representative of all sections of the industry than will eight.
    If there is a choice between an executive and an advisory committee I think that most hon. Members would prefer an executive committee. That is what I understand us to have. If the new authority decides that it wants special advice on certain subjects, I understand from what the Minister said that it could set up advisory committees if it wished to do so. That seems to be the most sensible answer.
    Mr. Strang: I shall not detain the House, but shall briefly reply to the debate. The Minister is clearly intent on pressing ahead with his 12-member authority, eight members of which will be representatives from the industry.
    This has been a remarkable debate, in the sense that the Minister has committed himself to having one representative from Northern Ireland on the authority. I note that he was careful not to rule out the possibility that that representative might be one of the independent members. We have no objection to a member from Northern Ireland; on the contrary. There will still be a number of members from Scotland.
    I hope that the Minister will respond to one sectional interest. May we have an assurance that at the minimum there will be one trade union representative? In Committee I argued for two trade union representatives, on the basis that the TUC would be asked to supply two, or perhaps only one, from the Transport and General Workers' Union and one from the Union of Shop, Distributive and Allied Workers.
    I hope that the Minister will reply to my hon. Friend the Member for Grimsby (Mr. Mitchell) at this stage. Having committed the Government to the request of the right hon. Member for Down, South (Mr. Powell) for an Ulsterman, I hope that he will respond to the Opposition and commit himself to at least one trade union representative on the authority.
    Mr. Buchanan-Smith: I am grateful for what has been said in the debate, and I shall deal quickly with one or two of the specific matters raised.

    311
    My hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) raised a specific objection to the clause 14 provision which would disqualify industry representatives from taking part in financial decisions under that clause. I have reflected on that, but I believe that what is proposed in the Bill is correct. I ask my hon. Friend to reflect on the clause because it is about the administration of Government grants, the policy governing which has been laid down by the Government. The background decision in relation to those grants has been taken by the Government. What is involved in the clause is what I would describe as the case work in relation to the adminstration of those grants. It is correct that in that case those members of the industry should not and need not be involved.
    That is but one area of the activities and functions of the authority. It is simply carrying out policy decisions that have been taken by Ministers. The earlier clauses cover the wider powers of the authority. The members who are appointed to the authority from the industry have full powers in formulating the policy of the authority and the important functions that it has to carry out. There is a distinction. I ask my hon. Friend, in his turn, to reflect on what I have said about the powers under those clauses.
    My hon. Friend the Member for Aberdeen, South (Mr. Sproat) said that he was worried about cash. Cash limits will be placed on the Sea Fish Industry Authority, as they are on other bodies, and those figures will be published in the Estimates in due course. There is a cash limit. I hope that my hon. Friend will be reassured about that, despite his natural anxiety about these sorts of bodies generally.
    I turn to the representation and the formation of the body. I am rather surprised that there has been such surprise in the House. I said quite willingly—there was no question of letting it slip—that on such an authority I would expect there to be one member from Northern Ireland. There is a distinction about areas such as that and the sectional interests in different parts of the industry. I give an assurance that we shall consider all aspects and sections of the industry and will consult them in relation to appointments made to the authority.
    A further point about representation was raised, correctly, by my hon. Friend the Member for Aberdeen, South. I hope that he noticed in the reply that I gave to the right hon. Member for Down, South that I was careful in the words I chose. I hope that those who are appointed to the authority from within the industry will be in no sense representatives or delegates from that part of the industry from which they come, although they will bring to the authority the expertise, experience and knowledge that they have gained of their section of the industry. Once those representatives are appointed to the authority they will be working for the good of the industry as a whole. That is the case in other similar bodies on which representatives of industry sit. They serve their industries in an objective sense. That is the sense in which, knowing the responsibility of the different organisations in different parts of the industry, I know that they will serve.
    In conclusion, I ask the House to reject the new clause and to accept amendment No. 1.
    Question put and negatived.
    Amendment proposed: No. 1, in page 2, line 1 leave out 'six' and insert 'twelve'.—[Mr. Buchanan-Smith.]
    Question put, That the amendment be made:—
    The Committee divided: Ayes 183, Noes 139.

    Division No. 92]

    [6.00 pm

    AYES

    Alexander, Richard

    Heath, Rt Hon Edward

    Ancram, Michael

    Heddle, John

    Arnold, Tom

    Hicks, Robert

    Atkins, Robert(PrestonN)

    Higgins, Rt Hon Terence L.

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

    Hogg, Hon Douglas(Gr'th'm)

    Baker, Nicholas (NDorset)

    Holland, Philip(Carlton)

    Banks, Robert

    Hooson, Tom

    Bennett, Sir Frederic (T'bay)

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

    Benyon, Thomas(Adon)

    Howell, Ralph (NNorfolk)

    Berry, Hon Anthony

    Hurd, Hon Douglas

    Best, Keith

    Jopling, Rt Hon Michael

    Bevan, David Gilroy

    Kimball, Marcus

    Biggs-Davison, John

    Kitson, Sir Timothy

    Blackburn, John

    Lamont, Norman

    Bradford, Rev R.

    Lang, Ian

    Braine, Sir Bernard

    Latham, Michael

    Bright, Graham

    Lawrence, Ivan

    Brinton, Tim

    Lawson, Rt Hon Nigel

    Brotherton, Michael

    Lee, John

    Brown, Michael(Brigg&Sc'n)

    LeMarchant, Spencer

    Bruce-Gardyne, John

    Lloyd, Peter (Fareham)

    Bryan, Sir Paul

    Luce, Richard

    Buchanan-Smith, Alick

    Lyell, Nicholas

    Buck, Antony

    Macfarlane, Neil

    Bulmer, Esmond

    MacGregor, John

    Burden, Sir Frederick

    MacKay, John (Argyll)

    Carlisle, John (LutonWest)

    McNair-Wilson, M.(N'bury)

    Carlisle, Kenneth(Lincoln)

    McQuarrie, Albert

    Chapman, Sydney

    Major, John

    Churchill, W.S.

    Mates, Michael

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

    Mather, Carol

    Clark, SirW. (Croydon S)

    Maude, RtHonSir Angus

    Clarke, Kenneth(Rushcliffe)

    Mawby, Ray

    Cockeram, Eric

    Mawhinney, DrBrian

    Colvin, Michael

    Maxwell-Hyslop, Robin

    Cope, John

    Meyer, SirAnthony

    Cormack, Patrick

    Miller, Hal(B'grove)

    Corrie, John

    Mills, lain(Meriden)

    Costain, Sir Albert

    Mills, Peter (West Devon)

    Cranborne, Viscount

    Moate, Roger

    Crouch, David

    Molyneaux, James

    Dean, Paul (NorthSomerset)

    Montgomery, Fergus

    Dorrell, Stephen

    Morgan, Geraint

    Douglas-Hamilton, Lord J.

    Murphy, Christopher

    Dover, Denshore

    Myles, David

    Dunlop, John

    Neale, Gerrard

    Dunn, Robert(Dartford)

    Needham, Richard

    Dykes, Hugh

    Nelson, Anthony

    Elliott, SirWilliam

    Neubert, Michael

    Emery, Peter

    Newton, Tony

    Fairgrieve, Russell

    Onslow, Cranley

    Faith, Mrs Sheila

    Osborn, John

    Fenner, Mrs Peggy

    Page, John (Harrow, West)

    Fisher, Sir Nigel

    Page, Rt Hon Sir G. (Crosby)

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

    Page, Richard (SW Herts)

    Fookes, Miss Janet

    Pawsey, James

    Forman, Nigel

    Peyton, Rt Hon John

    Fowler, Rt Hon Norman

    Pollock, Alexander

    Fraser, Peter (South Angus)

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

    Garel-Jones, Tristan

    Prentice, Rt Hon Reg

    Glyn, Dr Alan

    Price, SirDavid(Eastleigh)

    Gorst, John

    Proctor, K. Harvey

    Gow, Ian

    Rees-Davies, W. R.

    Gower, Sir Raymond

    Renton, Tim

    Grant, Anthony (HarrowC)

    Rhodes James, Robert

    Gray, Hamish

    Ridley, Hon Nicholas

    Greenway, Harry

    Roberts, M. (Cardiff NW)

    Griffiths, Peter Portsm 'thN)

    Rossi, Hugh

    Grist, Ian

    Sainsbury, Hon Timothy

    Grylls, Michael

    Shaw, Giles (Pudsey)

    Gummer, John Selwyn

    Shelton, William(Streatham)

    Hamilton, Hon A.

    Shersby, Michael

    Hamilton, Michael(Salisbury)

    Skeet, T. H. H.

    Haselhurst, Alan

    Speed, Keith

    Havers, Rt Hon Sir Michael

    Speller, Tony

    Hawksley, Warren

    Spence, John

    313

    Spicer, Michael (SWorcs)

    Wakeham, John

    Sproat, lain

    Walker-Smith, Rt Hon Sir D.

    Squire, Robin

    Wall, Patrick

    Stainton, Keith

    Waller, Gary

    Stanbrook, lvor

    Ward, John

    Steen, Anthony

    Warren, Kenneth

    Stevens, Martin

    Watson, John

    Stradling Thomas, J.

    Wells, John(Maidstone)

    Taylor, Robert (Croydon NW)

    Wells, Bowen

    Taylor, Teddy (S'end E)

    Wheeler, John

    Tebbit, Norman

    Wiggin, Jerry

    Temple-Morris, Peter

    Winterton, Nicholas

    Thomas, Rt Hon Peter

    Wolfson, Mark

    Thompson, Donald

    Younger, Rt Hon George

    Thornton, Malcolm

    Trippier, David

    Tellers for the Ayes:

    Viggers, Peter

    Mr. Alastair Goodlad and

    Waddington, David

    Mr. Peter Brooke

    NOES

    Alton, David

    Hooley, Frank

    Archer, Rt Hon Peter

    Howells, Geraint

    Barnett, Guy (Greenwich)

    Hughes, Mark(Durham)

    Beith, A. J.

    Hughes, Robert (AberdeenN)

    Booth, Rt Hon Albert

    Hughes, Roy (Newport)

    Bottomley, RtHonA.('M'b'ro)

    Jay, Rt Hon Douglas

    Bray, Dr Jeremy

    Johnson, James(Hull West)

    Brown, Hugh D. (Provan)

    Jones, Barry (East Flint)

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

    Jones, Dan (Burnley)

    Campbell-Savours, Dale

    Kerr, Russell

    Carter-Jones, Lewis

    Kilfedder, JamesA.

    Clark, Dr David (S Shields)

    Lamborn, Harry

    Cocks, Rt Hon M. (B'stolS)

    Leighton, Ronald

    Concannon, Rt Hon J. D.

    Lestor, Miss Joan

    Cowans, Harry

    Lewis, Arthur (N'ham NW)

    Craigen, J. M.

    Lewis, Ron(Carlisle)

    Crowther, J.S.

    Lyons, Edward (Bradf'dW)

    Cryer, Bob

    Mabon, Rt Hon DrJ. Dickson

    Cunliffe, Lawrence

    McCartney, Hugh

    Dalyell, Tam

    McDonald, DrOonagh

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

    McElhone, Frank

    Deakins, Eric

    McKay, Allen (Penistone)

    Dean, Joseph (Leeds West)

    McKelvey, William

    Dempsey, James

    McNamara, Kevin

    Dewar, Donald

    McWilliam, John

    Dixon, Donald

    Marks, Kenneth

    Dobson, Frank

    Marshall, D(G'gowS'ton)

    Dormand, Jack

    Marshall, DrEdmund(Goole)

    Dubs, Alfred

    Mason, Rt Hon Roy

    Duffy, A. E. P.

    Maxton, John

    Dunwoody, Hon Mrs G.

    Maynard, Miss Joan

    Eadie, Alex

    Millan, Rt Hon Bruce

    Eastham, Ken

    Miller, Dr M. S. (EKilbride)

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

    Mitchell, Austin (Grimsby)

    Eggar, Tim

    Morris, Rt Hon C. (O'shaw)

    Ellis, R. (NEDbysh're)

    Morris, Rt Hon J. (Aberavon)

    Evans, John (Newton)

    Morton, George

    Ewing, Harry

    Newens, Stanley

    Fitch, Alan

    O'Neill, Martin

    Fitt, Gerard

    Palmer, Arthur

    Flannery, Martin

    Park, George

    Fletcher, Ted(Darlington)

    Pendry, Tom

    Foster, Derek

    Penhaligon, David

    Freud, Clement

    Powell, Raymond(Ogmore)

    George, Bruce

    Prescott, John

    Gilbert, Rt Hon Dr John

    Rees, Rt Hon M (Leeds S)

    Ginsburg, David

    Richardson, Jo

    Gourlay, Harry

    Roberts, Albert(Normanton)

    Grant, George(Morpeth)

    Roberts, Ernest (Hackney N)

    Grant, John (Islington C)

    Robertson, George

    Grimond, Rt Hon J.

    Robinson, G. (Coventry NW)

    Hamilton, James(Bothwell)

    Rooker, J. W.

    Hamilton, W. W. (C'tralFife)

    Roper,John

    Hardy, Peter

    Ross, Stephen (Isle of Wight)

    Harrison, Rt Hon Walter

    Sever, John

    Hattersley, Rt Hon Roy

    Sheldon, Rt Hon R.

    Haynes, Frank

    Short, Mrs Renée

    HoggM-(EDunb't'nshire)

    Silkin, Rt Hon J. (Deptford)

    HomeRobertson, John

    Silverman, Julius

    Homewood, William

    Skinner, Dennis

    314

    Spearing, Nigel

    White, Frank R.

    Spriggs, Leslie

    Whitlock, William

    Steel, Rt Hon David

    Wigley, Dafydd

    Stewart, Rt Hon D. (W Isles)

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

    Stoddart, David

    Williams, Sir T.(W'ton)

    Strang, Gavin

    Wilson, William (C'try SE)

    Taylor, Mrs Ann (Bolton W)

    Woolmer, Kenneth

    Thorne, Stan (Preston South)

    Young, David (Bolton E)

    Wainwright, E.(Dearne V)

    Wainwright, R.(ColneV)

    Tellers for the Noes:

    Watkins, David

    Mr. James Tinn and

    Welsh, Michael

    Mr. Donald Coleman.

    Question accordingly agreed to.

    Clause 2

      DUTIES OF THE AUTHORITY
      Mr. Buchanan-Smith: I beg to move amendment No. 2, in page 2, line 30 at end insert—
      '(4) Where the Ministers give a direction under this section, they shall lay before Parliament a statement setting out the direction.'.
      The amendment represents our response to the point that was put to me in Committee by several of my hon. Friends. We do not expect to use the power of direction that we have under the clause other than in exceptional circumstances. Hoewever, if it were used Ministers would wish—as the Committee wished—its terms to be made public. Indeed, one of the justifications for making such a direction is that it should be in"the public interest". I therefore considered that was the point raised in Committee, and the amendment ensures that Ministers will bring any directions to the attention of Parliament, and thereby to the public, by laying before Parliament a statement setting out the direction. I hope that the amendment meets the wishes of the House and of those hon. Members who rightly raised the matter in Committee.
      Mr. Strang: I welcome the amendment. We made it clear in Committee that it was right that the Government should have the power to issue directions to the authority, which would be spending Government money and be responsible for the research and development programme of the industry. The Minister said that the power would be used only in exceptional instances and that he would avoid giving directions to the authority in so far as that was practicable. We agree with that, but we feel that it is important, for the sake of open government, that if the Government give a direction to the authority it should be clear, explicit and widely known throughout the industry. We therefore welcome the amendment.
      Amendment agreed to.
      Mr. Strang: I beg to move amendment No. 3, in page 2, line 33 at end add—
      '(5) It shall be a duty of the Authority to establish and operate a deficiency payments scheme to protect the livelihoods of those involved in the sea fish industry.'.
      The amendment seeks to give the authority the power to introduce a deficiency payments scheme to protect the livelihoods of those involved in the sea fish industry. Our purpose is, first, to argue the case for a deficiency payments scheme. My hon. Friend the Member for Grimsby (Mr. Mitchell) will wish to speak on this matter. Secondly, it would be remiss of the Opposition not to take this opportunity to emphasise the gravity of the financial state of the industry. It is some months now since the Government announced the temporary financial aid

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      scheme. Last August we welcomed that aid, but we made it clear at the time that we viewed it as a temporary measure, and that if there were no improvement in the fortunes of the industry the Government should take further action to help the industry by giving it additional money and/or taking action to control cheap imports.
      The position is now worse than it was last August. There is even greater anxiety about the future of the catching sector. Last August there was the blockade. In recent weeks, fishermen, who are by no means militant by nature, have taken desperate action to focus attention on the plight of the industry. It is vital that the Government act quickly. I know that they are considering the whole question of cheap imports. I think it is accepted on all sides of the House that in some instances these imports are what are described as"black" fish—fish that have been caught illegally in British waters by foreign vessels flouting our conservation measures. The prices that have prevailed of late in our ports have not been adequate to give the industry anything like the return that it needs to pay for its labour, to service its capital or to provide the profit that it needs for future investment.
      6.15 pm
      I repeat that the Government must move quickly. In my view, there is no alternative to a package of financial measures and direct action to control imports. I see no hope of the European Community stepping in in time to save the British industry. It is highly unlikely that there will be any settlement on the common fisheries policy until after the French presidential election.
      We realise that the Government are considering the matter very carefully, and we know that a committee is considering the whole subject of imports, but fishermen cannot wait for long. They are desperate. The whole British fishing industry, including the processing side, is almost in a state of collapse. The Government must therefore take bold interventionist measures to protect an industry that is important in terms of its contribution to our national wealth and in terms of employment, particularly in some areas where a significant element of the local population is totally dependent on the fishing industry. Moreover, the fishing industry is part of our heritage—the heritage of a great seafaring island nation.
      We therefore hope that the authority will have power to intervene in this area. In particular, it should have the power to operate a deficiency payments scheme. The Minister of State is familiar with the operation of deficiency payments schemes. Indeed, many hon. Members on both sides of the House are well aware of the way that these schemes have operated in the past in agriculture. As a result of the renegotiations by the Labour Government and of the present Government's agreement on the fisheries regime, deficiency payments schemes are now operating for beef and sheep, albeit in a limited form.
      This approach, which seeks to give a guaranteed return to the fishing industry for the fish that it catches and lands in Britain, may well be the right way to provide a secure future for the people who work in the industry. The amendment does not spell out all the details. It will not be enough simply to give the authority power to operate a deficiency payments scheme. Other elements will be needed in this method of supporting the industry.
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      The industry's future is vital to this country. A number of hon. Members, including my hon. Friend the Member for Aberdeen, North (Mr. Hughes), who takes a great interest in this issue and is clearly very concerned about the future of the Aberdeen-based industry, wish to support the amendment.
      Mr. Austin Mitchell: The amendment represents an attempt to grapple with the most serious problem now facing the industry, that of marketing, which constitutes a threat to the livelihoods of large sections of the industry, particularly those on the catching side. This serious threat has developed over the past two years and the need for it to be resolved is more desperate than is the need for a settlement in Europe. Unless the industry gets efficiently regulated markets and a proper return on its catches, companies and individuals will once again be brought to the point of bankruptcy, will stop fishing and will lay up their vessels. That will reduce our catch and curtail our ability to catch.
      The proposed deficiency payments scheme is an attempt to grapple with those circumstances. We have chosen the new authority as the most reasonable framework within which to operate such a scheme. The problem of markets is basically the problem of price, which is caused partially by a falling off of demand, but also by the threat of imports, which rose steadily through the late 1970s. They were rising again last year, and according to the latest report of the White Fish Authority research unit, they have risen again substantially in 1981. The effects on the industry have been cataclysmic. The authority's latest report, dated 26 February 1981, emphasises that the prices of imports are below the prices prevailing in January 1980 and in January 1979. Dutch cod entered this country at an average price of £509 a tonne last month, compared with £555 a tonne in January 1979 and £519 a tonne in January last year. Even more astonishing was the decline in the price of fresh or chilled plaice and of cod fillets, imports of which have been a serious threat to the industry.
      That is the basic threat, and we are attempting to surmount it by regulation of the markets. Fish imports are attracted here by our open market, but, more specifically, by the overvaluation of the pound. The slight slide in the value of the pound in the past couple of weeks has done nothing to improve the position, because the overvaluation has developed over four years. It has produced a crisis in fishing because it has meant that fish can be imported more cheaply than our industry can catch it. Fishing, therefore, with a whole range of other industries, is becoming uncompetitive, through no fault of its own. Yet, like those other industries, it has been subjected to the usual sermons from the Government, and particularly from the Prime Minister, about how to make itself competitive when that is impossible because of the over-valuation of sterling.
      The other aspect of the problem is the undoubted over-fishing and cheating on the quotas by our so-called partners in the EEC. They are breaking the gentlemen's agreements on quotas and on the marketing of fish, and are swamping our markets as a result. That poses a threat to the livelihoods of those in our industry, which in turn produces the stoppage that we witnessed in January and which is certain to resume unless something is done to rectify the problem.

      317
      The Grimsby fishermen made it clear that they were giving the Government eight weeks in which to come up with an answer or the stoppage would resume. That threat hangs over us all. The only way to solve this crisis is to manage the markets. The minimum price scheme, as a means of doing that, has broken down in Grimsby and Scotland. It: does not solve the problem, because it simply attracts imports since they, too, can secure the minimum price. Deficiency payments are therefore the only answer.
      Under such a scheme a price would be set to reflect the cost of catching the fish. If the fish does not make that price in the market the fisherman would be paid the deficiency payment as a means of keeping him and the industry going. The price would have to be varied by species, quality and size. It is no use stimulating deliberate over-fishing and encouraging the catching of rubbish fish to be dumped on the market simply to obtain the payment. We do not want to encourage that. There would therefore have to be differentiation by size and quality, but it is possible to devise a scheme that does that while giving a better base level to the whole market, moving prices upwards and keeping the industry going in these difficult times.
      There could be no better way of helping the industry. I said earlier that there are doubts in the industry about the Bill, but there can be no more effective way of making the new authority acceptable to the industry, which is in desperate straits, than by allowing it to operate a deficiency payments scheme of this nature, with the Government providing the necessary finance.
      The authority is the appropriate body to handle the scheme. I therefore hope that the House will accept the amendment and bring much-needed respite to the industry in its difficulties.
      Mr. Robert Hughes: The fishing industry has always been governed by supply and demand. It is probably one of the few parts of our economy that experience the full effect of market forces almost from day to day. The one fact that is agreed upon in the fishing industry is that although there were good times and bad, and although the bad times were sometimes dreadful, over a period the good times outweighed the bad. For a considerable time after 1945 the industry had a secure financial future and there was prosperity in our fishing ports such as they had never seen.
      Everyone in the fishing industry is now agreed, irrespective of the view taken about the EEC or about how the problems may be resolved, that the industry is lurching from crisis to crisis. The length of time between crises gets smaller every time. We have just witnessed a time of militant action by fishermen—not the traditional militant action that we sometimes think of. A myth has grown up that a militant means some son of Left-wing coal miner. The militancy in the fishing industry was shown not by working fishermen, but by the vessel owners. They initiated the action and were strongest in their attempts to force the Government's hand and bring about change.
      We have experienced a time during which fishermen have been concerned about the low level of prices on the quayside. Although they fluctuate from time to time, there is no doubt that quite soon the market will be back in the chaotic conditions of not so long ago. That state of affairs cannot be allowed to persist. Like many hon. Members who have fishing interests in their constituencies, I have had discussions with both sides of the industry. I have
      318
      talked to the Aberdeen Fish Curers and Merchants Association, to the chairman of the fishermen's action committee, to the representatives of the Scottish White Fish Producers Association and with others. They are all of the same view—that the industry must find some system whereby those in it, instead of pulling against each other, work together.
      6.30 pm
      The difficulties facing not only the owners, but everyone working in the industry, are best illustrated by a story that I was told by a skipper in Aberdeen. He operates on a share basis—the men who go to sea receive a share of the value of the catch. He told me that in the week before the stoppage he and his crew were at sea for 95 hours. After he had paid the running costs of the vessel, such as fuel—he did not pay his bill for the lubricating oil—and various other things, all that he was able to make available to the members of his crew was £42 each. That was less than 50p an hour. I should be surprised to learn of any industry in Britain where the pay is less than 50p an hour.
      When we consider the safety aspects of the Bill, I am sure that it will be recognised that going to sea is a dangerous occupation.
      Those 95 hours were spent working in miserable conditions. It is not pleasant going out into the North Sea at this time of year, even on fairly calm days. It is bitterly cold. It is very nasty work. The skipper was apologetic because that was all that he could afford to give his crew. Nobody knows how the crew can afford to live on £42 a week. A scheme must be introduced that guarantees a certain level of return, so that men are properly paid.
      The interests of the owners and the men who go to sea as working fishermen—not only share fishermen—are paramount. Those interests are coming closer together. Everyone believes that we must stop the chaotic conditions from recurring again and again. Whole fleets are being destroyed. In Aberdeen, the lamentably small number of 11 to 13 trawlers now sail from the port. In my young days we could walk across that harbour from vessel to vessel because there were so many of them. The fleet has been more than decimated. It is considerably smaller now than it has ever been.
      In such a situation all sorts of allegations of bad faith are made. The men who go to sea believe that one reason for the low price of fish on the quayside is that the merchants are operating a ring to drive down prices and keep them low in order to maximise profit. That allegation is as old as the industry itself. Fishermen have always felt that, whatever the price of fish—even when it was high—they were not getting enough return because the merchants cobbled together a price that they were willing to pay.
      The merchants argue that they do not operate in that way. I am not saying that they have never operated in that way. I hasten to say that I am not referring to merchants in my constituency. However, I know of merchants in other parts of the country—
      Mr. Buchanan-Smith: Kincardineshire.
      Mr. Hughes: I shall not mention any area. I do not want to start any tribal rivalries. We have enough trouble as it is, especially with Mr. Speaker in the Chair. Merchants have had the means available to operate a ring

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      to hold down prices, but they say that that does not happen. They say that they are as much governed by market forces as is anyone else.
      That leads me to describe how the merchants view the price of imported fish. They argue that the volume of imports does not have such a great effect on the price available at the quayside as does the price at which the imports come in. They phone their customers, mainly in England, in the mornings and offer them cod at, for example, £8 a stone. The customer says that he can get imported cod for £4 a stone. If every merchant tried to buy imported fish at that price he would not get it, because it is not available in sufficient quantities to satisfy the market. If the customer says that he will not pay the price that the merchant asks, the merchant goes to the market and bids as low as possible, because that is the only way to sell the fish. Everybody is in the business to sell fish. There is a real need for a system that will bring order and some certainty into market conditions.
      During the past six or seven years the industry has had close contact and discussions with Ministers, under both the Labour Government and this Government. Ministers are readily accessible to the producers. When they go to Brussels for negotiations, deputations of fishermen also go, and discussions take place. The merchants feel that they are left out. To some extent they are being blamed for the chaos in the industry and for the bad prices, yet they do not have access to Ministers.
      A deputation from merchants' associations has asked to see the Minister. It may also wish to see Lord Mansfield, the Minister of State, Scottish Office. I hope that the hon. Gentleman, as the Minister responsible for fishing, will agree to meet the merchants, so that they can put their point of view. I hope that he will give me an answer to that this evening. They are not asking for handouts. They want fair competition. They believe that the industry can survive, given fair competition. Without it, they believe that it cannot survive, even in the unlikely event of a settlement in the common fisheries negotiations that are due to take place next week.
      I am horrified by the suggestion in some of today's newspapers that the meeting scheduled for next week may not take place. It is being suggested that the meeting will be cancelled because there is no prospect of agreement and that to register failure once again would be worse than continuing the negotiations. I hope that when the Minister replies to the debate he will tell us what is happening on that issue.
      All sorts of factors affect the price of fish. We argued in Committee about how much fish should be landed ungutted—the so-called problem of rounders. Because of the lifting of regulations about the landing of rounders, almost every vessel is now landing them. The merchants say that that has two consequences. First, if the rounders are landed by trawlers there is a serious deterioration in the quality of fish reaching the market. Secondly, when rounders have been landed by inshore fishing vessels an additional cost must be paid by the merchant for cleaning, gutting and filleting the fish before they are sold. The merchants want a temporary ban on the landing of rounders.
      I see that you are looking rather quizzically at your Notice Paper, Mr. Speaker. You may be wondering what this has to do with the deficiency payments scheme. All
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      those conditions affect the price in the market. The price fluctuates from day to day and from catch to catch. No one knows what will happen. Above all else, the industry is desperate for an assurance that it has an existence and that it can pay its way.
      We know the tremendous debt that vessel owners have to pay—especially those who have built vessels in recent times. We know that the cost of servicing the borrowing has risen as has the price of oil. Those factors affect the price that the producers acquire on the market. What the industry needs is stability. In my discussions with the various fishing interests, that is the one thing on which they hold together, but I accept that not everyone is in complete agreement on how we are to get that stability.
      I confess that there is one weakness in the proposed deficiency payments scheme, and that is that it has to be paid for by somebody. That somebody will be the Government and the taxpayer, so the Government may try to resist the amendment on the ground that such a scheme would be enormously expensive. I do not think that that is necessarily so, although if there were a deficiency payments scheme related to a bottom price on the market it is possible that, in the knowledge that the difference between what they bought at and the deficiency price would be made up by the Government, there would be a tendency for merchants to bid even lower, because the difference would not come out of their pockets.
      Having discussed the matter with merchants, I think that they are aware of the difficulties. They say that it is not in their interests to allow the present conditions to continue, nor to have a deficiency payments scheme and then to bust the scheme by not paying enough, and thus landing the Government with an enormous bill. The amendment is a serious attempt to look at all the different conditions that I have described and find a way out of the impasse. This would be a satisfactory scheme. It should be possible for the Government to accept the amendment and at a later stage in another place to put a ceiling on the amount of money that would be made available for the scheme.
      The industry would welcome this scheme. It would give it stability and enable it to plan ahead. It would allow all those in the industry to know where they are going. Above all, although in these debates we tend to concentrate on the technical aspects of how fish are marketed, how the price is arrived at and on the need for proper earnings for people who go to sea, and so on, the one thing that should interest every hon. Member is the importance of fish as a food.
      I am disappointed, as I have said on earlier occasions, that it is always the same people who take part in debates on fishing. Fish is a high protein food which is valuable to the health of the nation. If people ate more fish and less of the so-called convenience foods, which are really rubbish foods, they would be much healthier. Here we are speaking about the health of an industry and also about the health of a nation. For those reasons I commend the amendment to the House and hope that hon. Members will accept it.
      Mr. McNamara: I see that you, Mr. Speaker, are looking quizzically at Members on this side of the House. We seem to be adducing most of the arguments in this debate.
      Mr. McQuarrie: The hon. Gentleman is at it again.
      Mr. McNamara: I am just trying to redress the balance. Earlier the Minister of State said that not all hon. Members supported certain amendments, although we vouchsafed support for them. Therefore, I thought that the best thing I could do would be to speak where and when I thought it appropriate on matters which were of interest to my constituents and which you, Mr. Speaker, decided were in order. I thought I had better get that in quickly.
      If I were to point out a deficiency in this amendment, particularly on the question of applying for a deficiency payments scheme, it would be that we have talked about it without putting it into the context of the general market for fish and the position within these islands on the import of fish. One cannot talk about a deficiency system which would work efficiently and well and which would meet the need so adequately and eloquently put forward by my hon. Friends if one does not control the imports from EEC countries and elsewhere.
      If we are merely to subsidise our own fish, we are leaving ourselves wide open for subsidies from elsewhere disguised in one way or another. Therefore, I add my plea to that of my hon. Friends that in introducing a deficiency payments scheme we must also have a market controlled specifically to import quotas, the price to be charged and the nature of the fish that is landed. Conceivably this might appear to be a rather bureaucratic scheme, although I believe it could be done simply by having proper regulations and certain ports of entry.
      6.45 pm
      It is important that we should have some system of this nature. It is not sufficient to give licences to boats to go to fish perhaps in Norwegian waters, as trawlers have gone from Hull recently not knowing whether, when they return, they will have covered the expenses of their voyage. In some cases, members of my union owed the trawler owners money because the catch had not realised the price that they had hoped it would achieve. Therefore, there is the strongest case for a deficiency payments scheme.
      If we are to protect the industry, we must link the scheme strongly and purposefully with control on imports. That is fundamental when looking at this sort of scheme. We cannot do it in isolation. We can protect the livelihood of people engaged in the sea fishing industry and guarantee for them the degree of security that we would like to see in whatever aspect of the industry, whether in relation to catching, processing or distributing, only if we are able to control the price at which the commodity is sold in the English market. The two—import control, and a deficiency payments system— must go hand in hand. One without the other is useless.
      Mr. Buchanan-Smith: I should like to respond to the debate in two parts—first, in relation to the amendment itself, and, secondly, in relation to what I think lies behind the amendment—the natural concern, which I share, about the marketing of fish.
      On the amendment itself, there are already powers in the Bill for the Government to provide money for any kind of financial scheme for the industry. In clause 13 the Government have powers to give financial aid to the industry, and the range of the powers is fairly wide. Therefore, Government assistance could be available to the industry under the Bill as it stands. Equally, it is within the power of the Government to ask the authority to administer a scheme of financial assistance, or the
      322
      Government themselves can carry out directly a financial scheme. So there is power for financial assistance without need for this amendment. The Sea Fish Industry Authority could be used to administer that power. To that extent, the amendment is not necessary.
      Secondly, this amendment is in one sense rather more specific than what I have indicated in what I said about general powers to make provision for financial assistance for the industry. The amendment specifically relates to aid to the industry by means of a deficiency payments scheme. I waited for most of the speech by the hon. Member for Edinburgh, East (Mr. Strang) to find out what he meant by a deficiency payments scheme. The hon. Member indicated in general terms what he meant by it. but he did not give any details of how such a scheme could work. It was left rather more to his hon. Friends.
      The hon. Member for Aberdeen, North (Mr. Hughes) fairly expressed doubt on how a deficiency payments scheme might work because of problems relating to the way that auctions operate and so on. There is no doubt that, given the nature of the marketing organisation within the industry, more thought would have to be given to how such a scheme could work.
      The hon. Member for Kingston upon Hull, Central (Mr. McNamara) went even further and touched on the heart of the matter. I think that it would be dangerous for the Government to embark upon a scheme of this nature unless at the same time there were certain other controls. It is not a question of being either opposed or committed to intervention in the industry. No Government could enter a scheme of this nature without some knowledge of the financial implications to which they might be committed. That is why the hon. Member for Kingston upon Hull, Central did a service to the House by drawing attention to the fact that to make such a scheme work we would need other financial controls. Otherwise, the scheme could be open-ended. I am grateful to the hon. Members for Aberdeen, North and Kingston upon Hull, Central for highlighting some of the practical problems in a scheme of this nature.
      Mr. Robert Hughes: What I should like to hear from the Minister is not that there is the possibility under clause 13 for aid to be made available to the industry and therefore that the amendment is unnecessary because the Sea Fish Industry Authority could make arrangements under its existing powers, but whether the Government are serious about having discussions with the industry on such a scheme. Knowing the industry as I do, I can say that it has hitherto always resisted this kind of control over its activities. But now, for the first time in all the years that I have know the industry, I believe there is a strong desire within the industry seriously to examine a deficiency payments scheme as a way of resolving its present difficulties.
      Mr. Buchanan-Smith: I am grateful to the hon. Gentleman for that intervention. I was coming to that point. I have made two points so far. First—the hon, Gentleman summarised this point for me—I said that there is no necessity to take power in the way suggested in the amendment to introduce such a scheme, because the power already exists.
      The second point, which I was just finishing when the hon. Gentleman intervened, is that the introduction of a deficiency payments scheme would require a great deal of

      323
      preparation and consideration because of the genuine practical difficulties mentioned by the hon. Gentleman and his hon. Friend the Member for Kingston upon Hull, Central.
      I acknowledge that deficiency payments schemes have worked satisfactorily in the agriculture industry, but that is not totally comparable with the fishing industry. However, such a scheme in this area would raise many complexities. I should not like to give any encouragement either to the House or to the industry for believing that such a scheme could easily be contemplated and introduced.
      That leads me to the second major part of the debate—financial aid generally to the industry. This matter is under consideration and is being discussed between responsible Ministers and representatives of the industry. The Government were already committed to a financial review of the industry at the end of March. Acknowledging the real difficulties being experienced by the industry, we brought the review forward by several weeks. We have already had a meeting with the industry on this matter, and it has put forward a number of suggestions to us.
      One of the suggestions is not precisely a deficiency payments scheme, but what might be called a variation of it regarding market price support measures. One of the Scottish organisations put forward that suggestion. I should add that at the meeting at which that proposal was put forward, not only Ministers but other sections of the industry expressed deep reservations about the effectiveness of such a scheme and about whether public money spent in that way would be a good use of funds to help the industry. I mention that in passing as a matter of fact.
      I assure the House that the scheme that has been suggested by one organisation in the industry will be carefully considered. However, I do not want to mislead the House. I say no more than I have already said to the industry. I see considerable difficulties. I have so far done nothing to encourage the industry to believe that the suggested scheme, or even a variation of it, might be adopted. Not only do we see real difficulties, but we have genuine doubts about whether aid for the industry in that form would stabilise the market or ensure that the finance would be effectively deployed. Despite these misgivings, I assure the House that the proposals put to us will be carefully considered.
      We are still considering the proposal put to us by the industry. We have a number of alternatives to consider apart from whether aid is necessary. We must consider how, if aid is to be given, it should be provided. The means will be considered. However, I do not rate the chances very high, because our assessment does not encourage us to believe that it is a useful or sensible way to proceed.
      I do not think that it is necessary to deal with the technical nature of the amendment. I re-emphasise that I have misgivings about the practicality of the scheme suggested here. The Government, in co-operation with the industry, are considering this matter. We recognise the industry's financial difficulties. I hope shortly to be in a position to respond to the proposal put to us by the industry. I must ask the House not to accept the amendment.
      Question put, That the amendment be made:
      The House divided: Ayes 125, Noes 169.

      Division No. 93]

      [7 pm

      AYES

      Alton, David

      Leighton, Ronald

      Archer, Rt Hon Peter

      Lestor, MissJoan

      Barnett, Guy (Greenwich)

      Lewis, Arthur (N'ham NW)

      Beith, A. J.

      Lewis, Ron (Carlisle)

      Booth, Rt Hon Albert

      Lyons, Edward (Bradf'dW)

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

      Mabon, Rt Hon Dr J. Dickson

      Bray, Dr Jeremy

      McCartney, Hugh

      Brown, Hugh D. (Provan)

      McDonald, Dr Oonagh

      Callaghan, Jim (Midd't'&P)

      McElhone, Frank

      Campbell-Savours, Dale

      McKay, Allen(Penistone)

      Clark, Dr David (S Shields)

      McKelvey, William

      Cocks, Rt Hon M. (B'stolS)

      McNamara, Kevin

      Coleman, Donald

      McWilliam, John

      Concannon, RtHonJ. D.

      Marks, Kenneth

      Cowans, Harry

      Marshall, D(G'gowS'ton)

      Craigen, J. M.

      Marshall, Dr Edmund (Goole)

      Crowther, J.S.

      Mason, Rt Hon Roy

      Cryer, Bob

      Maxton, John

      Cuniiffe, Lawrence

      Maynard, Miss Joan

      Dalyell, Tam

      Millan, Rt Hon Bruce

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

      Miller, Dr M. S. (EKilbride)

      Deakins, Eric

      Morris, Rt Hon C. (O'shaw)

      Dean, Joseph (Leeds West)

      Morris, Rt Hon J. (Aberavon)

      Dempsey, James

      Morton, George

      Dewar, Donald

      Newens, Stanley

      Dixon, Donald

      O'Neill, Martin

      Dobson, Frank

      Palmer, Arthur

      Dormand, Jack

      Park, George

      Dubs,Alfred

      Penhaligon, David

      Duffy, A. E. P.

      Powell, Raymond (Ogmore)

      Dunwoody, Hon Mrs G.

      Prescott, John

      Eadie, Alex

      Rees, Rt Hon M (Leeds S)

      Eastham, Ken

      Richardson, Jo

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

      Roberts, A;bert(Normanton)

      Ellis, R. (NED'bysh're)

      Roberts, Ernest (Hackney N)

      Evans, John (Newton)

      Robertson, George

      Ewing, Harry

      Robinson, G. (Coventry NW)

      Fitch, Alan

      Ross, Stephen (Isle of Wight)

      Fitt, Gerard

      Sever, John

      Flannery, Martin

      Short, Mrs Renée

      Fletcher, Ted(Darlington)

      Silkin, Rt Hon J. (Deptford)

      Freud, Clement

      Silverman, Julius

      George, Bruce

      Skinner, Dennis

      Gilbert, Rt Hon Dr John

      Spearing, Nigel

      Ginsburg, David

      Spriggs, Leslie

      Gourlay, Harry

      Steel, Rt Hon David

      Grant, George (Morpeth)

      Stewart, Rt Hon D. (WIsles)

      Grant, John (IslingtonC)

      Stoddart, David

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

      Strang, Gavin

      Hardy, Peter

      Thorne, Slan (PrestonSouth)

      Harrison, RtHonWalter

      Tinn, James

      Hattersley, RtHon Roy

      Wainwright, E. (DearneV)

      Haynes, Frank

      Wainwright, R. (ColneV)

      Hogg, N.(EDunb't'nshire)

      Welsh, Michael

      Home Roberts'on, John

      White, Frank R.

      Homewood, William

      Whitlock, William

      Hooley, Frank

      Wigley, Dafydd

      Howells, Geraint

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

      Hughes, Mark(Durham)

      Williams, Sir T. (W'ton)

      Hughes, Robert (Aberdeen N)

      Woolmer, Kenneth

      Jay, Rt Hon Douglas

      Jones, Barry (East Flint)

      Tellers for the Ayes:

      Jones, Dan (Burnley)

      Mr. James Hamilton and

      Kilfedder, James A.

      Mr. Austin Mitchell.

      Lamborn, Harry

      NOES

      Alexander, Richard

      Berry, Hon Anthony

      Ancram, Michael

      Best, Keith

      Arnold, Tom

      Bevan, David Gilroy

      Atkins, Robert (PrestonN)

      Biggs-Davison, John

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

      Blackburn, John

      Baker, Nicholas (N Dorset)

      Braine, Sir Bernard

      Banks, Robert

      Bright, Graham

      Bennett, Sir Frederic (T'oay)

      Brinton, Tim

      Benyon, Thomas (A'don)

      Brooke, Hon Peter

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      Brotherton, Michael

      McQuarrie, Albert

      Brown, Michael (Brigg&Sc'n)

      Major, John

      Bruce-Gardyne, John

      Mates, Michael

      Bryan Sir Paul

      Mather, Carol

      Buchanan-Smith, Alick

      Maude, Rt Hon Sir Angus

      Buck, Antony

      Mawby, Ray

      Bulmer, Esmond

      Mawhinney, Dr Brian

      Carlisle, John (Luton West)

      Maxwell-Hyslop, Robin

      Carlisle, Kenneth (Lincoln)

      Meyer, Sir Anthony

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

      Miller, Hal (B'grove)

      Chapman, Sydney

      Mills, lain (Meriden)

      Churchill, W.S.

      Mills, Peter (West Devon)

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

      Moate, Roger

      Clark, SirW. (CroydonS)

      Montgomery, Fergus

      Clarke, Kenneth (Rushcliffe)

      Morgan, Geraint

      Cockeram, Eric

      Murphy, Christopher

      Colvin, Michael

      Myles, David

      Cormack, Patrick

      Neale, Gerrard

      Corrie, John

      Needham, Richard

      Costain, Sir Albert

      Nelson, Anthony

      Crouch, David

      Neubert, Michael

      Dean, Paul (North Somerset)

      Newton, Tony

      Dorreil, Stephen

      Onslow, Cranley

      Douglas-Hamilton, Lord J.

      Osborn, John

      Dover, Denshore

      Page, John (Harrow, West)

      Dunn, Roben (Dartford)

      Page, Rt Hon SirG. (Crosby)

      Dykes, Hugh

      Page, Richard (SW Herts)

      Elliott, Sir Wiiliam

      Pollock, Alexander

      Emery, Peter

      Prentice, Rt Hon Reg

      Fairgrieve, Russell

      Prior, Rt Hon James

      Faith, Mrs Sheila

      Proctor, K. Harvey

      Fenner, Mrs Peggy

      Rees-Davies, W. R.

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

      Renton, Tim

      Fookes, Miss Janet

      Rhodes James, Robert

      Forman, Nigel

      Ridley, Hon Nicholas

      Fowler, Rt Hon Norman

      Roberts, M. (Cardiff NW)

      Fraser, Peter (South Angus)

      Rossi, Hugh

      Garel-Jones, Tristan

      Sainsbury, Hon Timothy

      Goodlad, Alastair

      Shaw, Giles (Pudsey)

      Gorst, John

      Shelton, William (Streatham)

      Gower, Sir Raymond

      Skeet, T. H. H.

      Grant, Anthony (Harrow C)

      Speed, Keith

      Gray, Hamish

      Speller, Tony

      Griffiths, Peter Portsm'th N)

      Spence, John

      Grimond, Rt Hon J.

      Spicer, Michael (S Worcs)

      Grist, Ian

      Sproat, lain

      Grylls, Michael

      Squire, Robin

      Gummer, JohnSelwyn

      Stainton, Keith

      Hamilton, Hon A.

      Stanbrook, lvor

      Haselhurst, Alan

      Stevens, Martin

      Havers, Rt Hon Sir Michael

      Stradling, Thomas,J.

      Hawksley, Warren

      Taylor, Teddy (S'end E)

      Heath, Rt Hon Edward

      Tebbit, Norman

      Heddle, John

      Temple-Morris, Peter

      Higgins, Rt Hon Terence L.

      Thomas, Rt Hon Peter

      Hogg, Hon Douglas (Gr'th'm)

      Thornton, Malcolm

      Holland, Philip (Carlton)

      Townend, John (Bridlington)

      Hooson, Tom

      Trippier, David

      Hordern, Peter

      Viggers, Peter

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

      Waddington, David

      Howell, Ralph (NNorfolk)

      Wakeham, John

      Hurd, Hon Douglas

      Wall, Patrick

      Jopling, Rt Hon Michael

      Waller, Gary

      Kimball, Marcus

      Ward, John

      Kitson, Sir Timothy

      Warren, Kenneth

      Lamont, Norman

      Watson, John

      Lang, Ian

      Wells, John (Maidstone)

      Lawrence, Ivan

      Wells, Bowen

      Lawson, Rt Hon Nigel

      Wheeler, John

      Lee, John

      Wickenden, Keith

      LeMarchant, Spencer

      Winterton, Nicholas

      Lloyd, Peter (Fareham)

      Wolfson, Mark

      Luce, Richard

      Younger, Rt Hon George

      Lyell, Nicholas

      Macfarlane, Neil

      Tellers for the Noes:

      MacGregor, John

      Mr. Donald Thompson and

      MacKay, John (Argyll)

      Mr. John Cope.

      McNair-Wilson, M.(N'bury)

      Question accordingly negatived.
      Mr. McNamara: I beg to move amendment No. 4, in page 2, line 34 at end insert—
      '(5) It shall be the duty of the Authority, if requested by any section of a trade union representing any section of employees in the industry, to publish reports comparing the employment practice in the industry with other industrial workers.'.
      The purpose of the amendment is twofold: first, to draw attention to the situation within the industry, and, secondly, to try to devise methods by which the industry can perhaps be better organised, and certainly more information can be given about the industry. This is a very general industry. At one end there are a number of large multinational companies for which fishing may be a small though important part of their enterprise, and at the other end of the spectrum there is the one-man concern, the fisherman going out in his coble, perhaps with a long-line, seeking to supplement his income by a couple of hours' fishing.
      The fishing industry cannot be compared with, for instance, the motor car industry. If there be an industry with which it can be compared in terms of organisation, perhaps the best example is the building and construction industry. We see the same chaotic state of organisation in the building industry as we see in the fishing industry. At every level, in every type of firm and in each part of the industry, there is the same degree of confusion—in the catching of fish, in processing, in distribution and in retailing.
      Thus, the first major problem confronting anyone seeking to examine the industry is the result of its economic organisation, whatever type of firm or enterprise is involved. This creates all sorts of difficulties. It creates a problem for people seeking to act in a representative capacity, whether in employers' or employees' organisations, or acting as representatives speaking for constituencies as we do in this place. We have already seen among hon. Members the confusion of interests that can arise between different elements within the fleet and different groups among the merchants.
      We know the problems, but I believe that they have a particularly evil effect in relation to various employment practices within the industry. We shall at a later stage consider the specific questions of accidents in the industry and the effect that decasualisation has upon the availability and provision of various social security benefits and employment defences for workers in the industry.
      My concern at this point is to see that a duty is laid upon the authority to oversee what is happening in the industry as a whole. What are the rates of pay? What are the hours of work? How do they compare with what happens in other industries in the United Kingdom with comparable work practices? How do workers in the industry stand in terms of social, fringe and other benefits?
      I am referring here not just to the catching side of the industry, but to the whole gamut, from catching to retailing. How do workers in the fishing industry fare in comparison with workers in other industries in the United Kingdom?
      This matter is of particular importance because of the nature of the industry and the way it works. North of the border and, indeed, in parts of England, many of the firms are in small factories or processing shops, places that lack much organisation—sometimes among employers and

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      sometimes among employees—and which are often isolated, not always knowing what goes on in the rest of the industry and unable to make comparisons.
      In essence, what I seek is a general power. I am concerned that the Government do not know what the practices are, and neither do the various representative organisations in the industry. There is no uniformity of employment or work practices, of wages or of all the other matters that concern us in this place and, I believe, concern people in the industry.
      7.15 pm
      No records exist. There is no examination of the industry in that way, and I believe that the new authority should have such a responsibility laid upon it. That resonsibility can be laid upon it very properly and effectively if, as we propose in the amendment, a section of employees within the industry ask for these various matters to be brought to the attention of the authority and for proper comparisons to be published.
      As I have said, we shall consider later amendments dealing specifically with accidents and with decasualisation, but my present concern is that a general duty should be laid upon the authority. Some of my hon. Friends will, no doubt, if they catch the eye of the Chair, draw attention to certain anomalies that they have found to exist in recent times, quite apart from the old and continuing sores which will be the subject of later amendments.
      Mr. John Home Robertson: I wish to draw attention to an extremely topical employment practice in the fishing industry which, frankly, would not stand up to any comparison with other industries. I refer to the treatment of employees when they have been laid off. I refer not so much to employment practices as to unemployment practices, together with the treatment of fishermen by the Department of Employment. I am sure that it would be useful if the authority were to have power to examine these practices.
      By the very nature of the industry, it stands to reason that fishermen are frequently unable to work, sometimes for quite long periods during the winter, because of bad weather. They have to be laid off by their employers. During my two years as Member of Parliament for Berwick and East Lothian, where there are several small fishing ports, it has been my experience that far too many fishermen have been laid off for one reason or another and have run into difficulties when claiming unemployment benefit.
      It is particularly topical to raise this issue now since a number of fishermen were laid off during the recent dispute when the entire Scottish fishing fleet was tied up for weeks. The crewmen who normally man those vessels were subjected to a number of demoralising experiences during those weeks. For a start, it must have been demoralising for them to pick up their copy of Fishing News of 20 February and read the headline telling them that the Belgians had"hit the herring" and that in only one day 1,900 50-kilo boxes of herring had been landed in Ostend. That must have been especially demoralising for them when they are not allowed to think about herring, never mind catch the wretched things or land them.
      But it was even more demoralising when those fishermen went along to claim their unemployment
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      benefit. Since their skippers had voluntarily tied up their vessels and laid off their employees, these crewemen were unquestionably unemployed, but far too many of them are now, almost a month later, still waiting for the first payment of unemployment benefit in respect of that period.
      I have taken the matter up with the Department of Employment in Edinburgh, and the problem appears to be that fishermen are treated as special cases when they claim unemployment benefit. I understand that what is to happen on this occasion is that the insurance officer will have to give individual examination to a test case in respect of one employee from each and every boat which was involved in the tie-up before the rest of the employees on each vessel will receive their benefit. This could take a long time.
      That is why I welcome the initiative of my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) in bringing forward the amendment. It would be useful for the Sea Fish Industry Authority to have the power to examine employment practices and, indeed, the way in which employees in the fishing industry are treated by the Department of Employment during temporary or protracted spells of unemployment which occur through no fault of the employees concerned.
      Mr. Austin Mitchell: The intention of my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) and myself in putting forward the amendment was to provide more information about the fishing industry. It is our belief that the best ally of the industry, particularly at the present difficult juncture, is information being put out about conditions in the industry, the prices fetched, and the kind of return that skippers and fishermen make on their extremely tough and difficult job. When people are given that information the sympathy of the country goes out to the industry. The best way of improving the position of the industry is to provide information about what is happening to it and the type of conditions in which people are working.
      I am not talking about the romantic"Red Sails in the Sunset" view of fishing; I am talking about the sheer, bloody reality of broken limbs, lost lives, appalling working conditions and the intolerable situations that fishermen face on returning to port. Employment practices in the industry leave a great deal to be desired.
      One of the problems in obtaining information is that there is no clear responsibility for provision of the kind of information upon which a case for improvement can be made. People in the industry therefore have no leverage, no point on which to work, and no source for the kind of information that would improve their position. One has to say that many of the problems would not have occurred if the information had been available and widely known. It is in an attempt to provide that information that the amendment has been put forward.
      I cite briefly four classic examples of situations that would probably not have arisen had there been the continuous invigilation and the constant source of information that the industry so badly needs and that could be provided through the authority.
      The long delay in decasualisation has been an abomination. The arguments have gone on for so long, with so little end result, that an industry in which the unions and the fishermen are crying out for a scheme of employment is still without that scheme after all these

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      years. The accident rate shows that it is by far the most dangerous industry. It is far more dangerous than coal mining. The figures should not merely be collated but should be made known, because that aspect, too, is part of the employment conditions.
      Occasional, intermittent anomalies may have disastrous effects upon people's lives. For instance, a drowning may occur, or a death may occur on a vessel on which insurance has not been paid. There is the type of responsibility that can then arise, and the tragedy for the family of the man who is killed.
      I raised a further case in Committee. I was grateful for the Minister's undertaking that he would look at it. I shall certainly send him the information. I refer to the DTI log book for vessels. In the case of share-fishermen, it does not specify the share of the catch that is payable to them. That has been described by one spokesman for the Grimsby share-fishermen as a licence to steal, because, in effect, shares can be changed at will in the course of a voyage. All those anomalies need to be highlighted. They need the focus, the flow of information, and the leverage that would be provided by the clause.
      The diminishing number of fishermen employed in the industry has been paralleled in inverse ratio, as it were, by increasing anger of the kind that exploded in the January stoppage. It was interesting to note that in Grimsby the skippers decided to go back three days before the men could be persuaded to do so, so strong was the anger about the situation that they and the industry faced and so wide had the gulf become between different sections of the industry.
      What is needed is not the rush of sympathy that comes every time there is a film about fishing, about the conditions in which people work and about the death rate in the industry. What is needed is a body that has specific responsibility for collating and providing that information, a source of leverage for the unions and other sectional groups in the industry to acquire the kind of information that will help them to put forward a case for the improvement that is so vitally needed in the industry today.
      Mr. John Prescott: I wish briefly to put on record my support for the amendment. My hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) has a very long history of fighting for changes for the fishermen and for his own union's interest in these matters. As a seaman back in 1966, I used to go to my hon. Friend to ask him to do the same for seamen as he was doing for fishing. I was glad that I was able to relieve him of some of that burden when I entered Parliament in 1970.
      Mr. McNamara: So was I.
      Mr. Prescott: My hon. Friend, too, was relieved. We have worked together in the interests of fishermen. I therefore wish to put on record my admiration for all that he has done for seamen and, in particular, fishing.
      The amendment reflects matters about which my hon. Friend was campaigning a number of years ago and on which we have considerable agreement, such as the great difficulty in attempting to bring about the normal advances that are given to industrial workers, and in some cases to seamen, but which for some reason are not given to fishermen.
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      When I first came to the port of Hull as a seaman in 1966, I was amazed to see that fishermen still carried their mattresses away to sea. Indeed, I understand that in some cases that still continues today. That is a terrible practice. It is difficult to believe that in this day and age one still has to turn up with one's mattress. The problem has to some extent ceased in the port of Hull, because very few fishing ships are now putting to sea. Nevertheless, it is an indication of how fishermen have lagged behind in conditions which have been given to other maritime workers, particularly seafarers.
      I generally welcome the proposal in the Bill to set up a central authority. Indeed, in a report entitled"Fishing into the Eighties", I and a group of other people advocated a central authority of some form. I therefore welcome this provision in the Bill. I believe that one of its most powerful duties should be that recommended by my hon. Friend in his amendment, namely, the duty and responsibility to examine employment practices in the industry. Those employment practices may reveal not only deficiencies in the way in which benefits are paid to fishermen but also, as my hon. Friend said, in regard to safety benefits and employment practices. A considerable amount needs to be done. Other amendments may provide the opportunity to explain in detail what needs to be done.
      Nevertheless, this amendment places upon the authority the responsibility to compare practices in similar industries. Seafaring is not entirely the same, but it is similar in some of the circumstances and in the environment in which fishermen work. If one compares the safety figures for industries of this kind, fishing, seafaring and diving have an accident and death rate 40, 50, 60 per cent. or more above that in the most dangerous occupation ashore, which is normally considered to be mining.
      We believe that much of that is due to the fact that extra safety precautions have not been introduced in this industry. In the past, the philosophy has always been that greater discipline means greater safety. The irony is that workers in this industry have always laboured under the greatest discipline exercised in any work force and at the same time have had the worst safety record of any work force. That is the central philosophy behind a great deal of the legislation against which we have fought relating to those workers.
      I am glad to say that some changes have taken place as a result of the Merchant Shipping Acts. Nevertheless, there is value in having a central authority, because it would be able to look at the problems constantly complained of by the workers in the industry and produce a useful report covering the peculiarities of the industry.
      7.30 pm
      Mention has already been made of the disadvantages experienced by workers in this area, particularly in relation to benefits. The speeches of other Labour Members reflect the different types of fishing which exist in different ports, be it share fishing, industrial fishing, or a mixture of fishing, which I believe is the position in Grimsby.
      Benefits can vary according to the type of industry. For example, there is the question whether one is considered to share in a catch and, therefore, to be classed as self-employed or whether one is an industrial worker for redundancy purposes but is required to serve two years on the vessel. Of course, the articles in the contract of employment of a seafarer or fisherman cover a period

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      considerably less than two years. In reality, while a man may work in the industry for 20 years, he may not be eligible for redundancy pay if he has moved around from company to company or from ship to ship. Therefore, the authority could consider the problem of what articles seamen or fishermen should sign.
      My own industry was able to get a cumulative consideration under a special redundancy scheme which allowed us to be exempt from the State scheme. That dealt with the peculiarities of shipping. Exactly the same argument applies to fishing, but fishing has never been given that exemption. While on the one hand the industry would argue"Of course our benefits are very good and are the same as what a shore worker gets", the difficulty is that a fisherman is not eligible because he does not meet the two-year requirement because of the nature and circumstances of his employment.
      That is one small example. Hon. Members have mentioned others. We think that it would be useful if a central authority were able to look at the advances given to other workers when this House passes legislation. Instead of saying"It is difficult to apply it to seamen or fishermen", a body which deals with fishing could identify the peculiarities and suggest how those advances could be achieved in the same legislation in order to overcome the difficulties which are normally used as arguments for not granting those advances.
      A classic example is the use of gangways on ships. Because pilots and men who must gain access to a vessel cannot use a gangway at sea, we introduce special legislation to define the gangway and to make it a requirement. When it comes to a docker going on board a ship, there is a requirement for a gangway to be provided as a statutory responsibility. Unfortunately, when it comes to seamen and fishermen who eat, sleep and live on board ship in different parts of the world, we are told that the rise and fall of the water in the docks make it difficult to provide a gangway and that, therefore, there will be an exemption which inevitably means that a gangway is not provided. It is an excuse not to provide it. For too many years, such anomalies have contributed to a deterioration in fishermen's conditions.
      I very much welcome the amendment. It is useful in order to expose the anomalies relating to marine workers, be they divers, fishermen or seafarers. We could even learn something from the Community. Some Community countries are prepared to tie aid to an improvement in workers' conditions. Very little notice has been taken of that in all the money that has come from Government to the industry, particularly in the port of Hull. According to many letters which hon. Members receive, fishermen are aggrieved that, while a lot of money has been given to the industry, they have been denied such things as redundancy and benefits which they feel they have sacrificed as a result of the decline in the industry. Parliament has done nothing. It has simply taken the easy way out. It has allowed these anomalies to continue, which means exemption, as a result of which the fishermen have been denied these benefits.
      The amendment would place a most useful responsibility on the authority. It is one that I would very much welcome.
      Mr. Buchanan-Smith: In considering that amendment, it is important that we look first at the powers of the authority under clause 3. I direct the attention of the House to those powers, particularly those contained in clause 3(1)(a) and (b). As the Bill stands:
      "The Authority shall have the power—

      (a) to carry out research and development with respect to any matters relating to the sea fish industry;

      (b) to give advice on any such matters."

      Therefore, the Bill as drafted gives wide discretionary powers—I acknowledge that they are discretionary—to study matters affecting the industry, through research and development. As a consequence of having carried out that research and development, the authority can then give advice on any of those matters. Therefore, in a wide and comprehensive sense, what the amendment seeks to do is wholly within the powers of the Sea Fish Industry Authority as the Bill is presently drafted. As a result, the powers contained in the amendment are already covered in the Bill.
      The amendment puts on the authority the duty that in relation to important aspects for fishermen, it could be required to carry out certain work and research and to publish reports in relation to employment practices. I should point out that as drafted the amendment states:
      "It shall be the duty of the Authority, if requested by any section of a trade union … to publish reports."
      To that extent it goes further than the discretionary powers, in that the authority would be"required" to do so.
      Although the authority has this wide discretionary power and could cover the matters that the amendment covers, we must also remember that the authority that we are appointing will have a majority of representatives from the industry. As I have said, its duties are framed in general terms in order to permit the maximum scope and to grant it power to establish its own priorities for action, expenditure and so on. My view will probably come as no surprise to the hon. Gentleman, because I resisted similar amendments in Committee. I do not think it appropriate to try to impose narrow responsibilities on the authority. Having established the authority, and given the nature of its composition, the House and Ministers should leave it to work out its own priorities. It must decide what to do in light of representations received, either from outside or from within the authority. That is the appropriate way for the authority properly to carry out its powers.
      The discretionary powers of the authority were drawn up on purpose. That was done consciously, so as to give the authority the discretion to decide its own priorities. Without in any way trying to belittle or minimise the importance of the matters covered by the amendment, I believe that it is better to let the matter rest where it is at present. We should let the authority decide its own priorities, having regard to its own views and the representations that it may receive.
      In saying that I do not belittle the topics covered by the amendment. My answer would be the same with regard to any other topic. This is very much a matter of principle about the way in which we should conduct the affairs of the authority. Therefore, although I understand the feelings that led to the amendment, I must advise the House to reject it.
      Mr. McNamara: I listened to the Minister with a degree of sadness. I understand his attitude and accept that we sought to impose a duty rather than a discretion, as exists under the provisions of clause 3. On more pointed

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      amendments, we shall drive this home to a Division. I am sure that the new authority will read carefully what the Minister has said in this important subject. However, on this occasion, I suggest that we should not divide the House.
      I thank my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) for the kind things that he said about me. However, the House should bear in mind that in recent years several vessels have been lost at sea for reasons that remain unknown. The owners were compensated for their vessels, for what was known to be the catch, and for every material part of the vessels. The dependants of crews received nothing for that loss of life. Nobody could be blamed. I merely ask whether that is a good employment practice. Perhaps the new authority should direct its attention to that and should ensure that those who go down to the sea in ships should know that if they perish their next of kin will be properly compensated.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.

    Clause 3

      POWERS OF THE AUTHORITY
      Amendments made: No. 5, in page 3, line 5 leave out 'make loans or grants' and insert
      'give financial assistance (by way of loan, grant or guarantee)'.
      No. 6, in page 3, line 6 after 'forming', insert 'carrying on'.—[Mr. Buchanan-Smith.]
      Mr. Robert Hughes: I beg to move amendment No. 7, in page 3, line 9 at end insert—
      '(g) to make regulations to ensure operational safety in any matters relating to the fish industry, to appoint inspectors to ensure compliance with such regulations, and to keep records of accidents in this respect.'
      I sometimes think that one can judge the health of an industry by the amount of nostalgia about what the industry might have been like in bygone days. The closer that an industry is to extinction the more nostalgia there is. If we were to discuss the fate of the fishing industry in such terms, and if we were to set aside the statistics, we might well conclude that the increase in folk songs and so on shows that the industry is approaching extinction.
      In many circles a romantic myth seems to be growing up about what life was like at sea in the good old days, and to some extent about what life is like today. I have been connected with the fishing industry for a long time, but thankfully, I have never gone to sea to earn my living. I do not know whether that means that I had better sense. However, I am the first for many generations—on both my paternal and maternal sides—not to have been involved in seafaring of one kind or another. From bitter experience I know—as almost everyone connected with the industry knows—that the sea fishing industry is a hard, cruel and even brutal industry. I say that not just because of the loss of life, or because of accidents at sea, but because many mothers, wives and girlfriends spend sleepless nights during extremely bad weather. They wonder what has happened to their loved ones at sea and whether they will return from the harsh environment from which they seek their living.
      7.45 pm
      I made that point because I wished to show that behind every statistic lay a family that had suffered the grievous
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      loss of a relative. Often the family has also suffered grievous financial loss. The statistics confirm our worst fears about safety in the industry. I shall not go into the figures in the same amount of detail as I did in Committee. However, in the past two decades there have been 647 fatalities in the fishing industry. Over the same period, 453 vessels have been lost at sea. The figure includes vessels that have gone missing without any trace. That is a serious position.
      How can the seriousness of the situation be measured? There is no feeling about statistics. If one simply quotes them one does not convey any measurement. One method of gauging them is to compare the fishing industry with two other industries that are generally regarded as being the most dangerous, namely, the construction and mining industries. I do not for one minute suggest that the tragedies that occcur in the mining or construction industries are tragedies of no account, which can be set aside. I take them very seriously. By quoting the figures, I do not wish to make any unfavourable comment on the two industries. I simply wish to show how the fishing industry stands in comparison with those two industries.
      The best comparison can probably be made by considering the incidence of fatalities per 100,000 at risk. In 1961, the incidence rate in the fishing industry was 114.5 per 100,000 at risk. By 1978 that figure had increased to 247.3. That means that the fatality rate is getting worse. In 1961 the incidence rate in the coal industry was 39.8 per 100,000 at risk. By 1978, that rate had improved to 25.4. In the construction industry the comparable figure for 1961 was 22.1. By 1978, the rate had improved to 12.1 per 100,000 at risk.
      Despite all the difficulties of comparing one industry with another, one aspect remains clear, namely, that the incidence rate for fatalities in the fishing industry is 20 times that in the coal mining industry. It would be something to be seriously worried about if there had been no improvement—if the figures had remained exactly the same as those for 20 years ago. The fact is that those who go down to the sea in ships seem to be going to sea at a time when the industry is becoming more dangerous with the passing of every year.
      There may be a number of reasons for that. It is difficult to say with certainty why so many vessels have been lost and why there are so many fatal accidents. In fishing debates, it is not popular to point out that the commercial pressures on skippers, who face heavy debts and who find it difficult to pay their way from voyage to voyage, may force them to go to sea when they would not otherwise do so. Once at sea, they tend to continue to fish even when the weather forecast predicts deteriorating conditions. They continue to fish because it is commercially necessary that they should fish for as long as possible.
      It is said that these are some of the reasons for such a high number of fatalities and loss of vessels. The fact is that the industry does not seem to take safety as seriously as one might think. It is perhaps the old story of familiarity breeding contempt—that because fishermen go to sea in such dangerous conditions, year in and year out, they believe that accidents will not happen to them and that they will go to sea and come back.
      There is an appallingly low level of training. A document produced by the Transport and General Workers Union called"Fishing—The Way Ahead" quotes statistics from the Sea Fisheries Training Council, indicating that at least half of the existing labour force of the seagoing

      335
      industry has never received training in survival, fire-fighting or first aid. It states that 60 per cent. of existing fishermen began working life without any formal training and that many young people continue to enter the industry in this manner. That state of affairs must not be allowed to continue for one day longer than is necessary.
      A suggestion put by the Transport and General Workers Union, which I believe could be adopted by the new authority if the amendment is accepted, is that in addition to the measures taken in the field of training, certificates of competence for vessels and officers, and terms and conditions of employment where these govern working conditions, serious consideration should be given to the proposal that, with larger crews of nine men or more, there should be a safety representative to represent the crew in drawing up proposals under the skipper's authority that would provide for safer working practices on board the vessels.
      We take the matter of safety seriously, as, I am sure, do the Government. One of the difficulties under which the fishing industry operates is that responsibility for safety at sea rests not with the Ministry of Agriculture, Fisheries and Food but with the Department of Trade. If the issue of safety at sea is to be taken seriously and given the high priority that it deserves, it should be taken much closer to the fishing industry. There is a distinct difference between the safety measures that need to be practised in large, ocean-going ships, large cargo vessels, tankers, and so on, and the smaller vessels that go fishing. They operate in a totally different environment. The industries are totally different.
      It is possibly right that large vessels should remain the responsibility of the Department of Trade. We believe, however, that safety in the fishing industry is of such importance that it should be the responsibility of the new Sea Fish Industry Authority. The authority should have power to make regulations to ensure operational safety. There should also be a power to appoint inspectors to ensure compliance with the regulations and to ensure that a proper record of accidents is kept. Unless we begin to build up a day-to-day knowledge of what happens we cannot make proposals for the future that will ensure that fishing becomes a much safer occupation for those who go to sea and to ensure that the price paid for the fish on the slab is cash and not the blood that fishermen have shed when going to sea in ships.
      Mr. McNamara: My hon. Friend the Member for Aberdeen, North (Mr. Hughes) has eschewed the privilege of going over all the compelling facts and figures that he gave in Committee. In some ways, I regret his decision. It is possible that he would have obtained far more publicity for the dangers and difficulties associated with the accident rates had he given them on the Floor of the House.
      This is one of the more important amendments before the House upon which I hope my right hon. and hon. Friends will join us in the Division Lobby. When the matter was debated in Committee the Minister of State told my hon. Friend the Member for Aberdeen, North that the power to take this action existed under clause 3(1 )(a) and (b) and that the authority, if it so wished, could do something about it. We happen to believe that this is such an important and direct matter that it should not be left in
      336
      any state of uncertainty or subject to that degree of discretion. We believe that the authority should have the power to do what we propose. If it were enumerated as one of its powers, the authority would carry it out.
      The Minister also argued in Committee that the proposal would cut into the powers of the Health and Safety Executive, and that the question of vessels at sea was, in any case, covered by the Department of Trade. The hon. Gentleman cannot put forward that argument in addition to saying that in any event the authority has the power under clause 3( 1 )(a) and (b). He cannot have it both ways. If the power exists in the bill, the Minister cannot say that the proposal cuts into the authority of the Health and Safety Executive. We maintain that these matters of grave concern to the industry should be the responsibility of the authority.
      My mind goes back to Christmas 1965, when there was a fatality at sea. I was a new hon. Member. The fatality occurred before the sad loss of the"Kingston Peridot", the"St. Romanus" and the"Ross Cleveland". The fatality occurred if I recall correctly, on the Newfoundland Banks. The secretary of one of the oldest associations in Hull, referring to accidents at sea, said:
      "Yes, it is true that men are sometimes washed overboard but, then, they are often washed back."
      I asked a question in the House about the number of occasions on which men had been washed overboard, how often had they been washed back, and how often had they landed on their trawler of origin. I am still awaiting an answer. Actually, I was surprised to get the question past the Table Office.
      That was the start of a campaign, in which many hon. Members took part, to try to find out something about the fishing industry. No firm duties and obligations were laid upon vessel owners or skippers to keep precise and exact details of accidents that happened aboard trawlers. Fatalities and perhaps even incidents in which people were washed overboard and washed back were recorded, but a great number of accidents went unrecorded. One of the terrible aspects of the list read out by my hon. Friend the Member for Aberdeen, North, is that it concerned fatalities. There were, however, a large number of people who were seriously injured in accidents on trawlers, the details of which were not recorded.
      8 pm
      In 1968 we lost three trawlers. We had the establishment of the Milner Holland report. One of the strange features is that the number of fatalities at sea has remained almost as high since that time. In 1974 fatalities were almost as high as in 1968, despite the welcome improvements that the Milner Holland recommendations created in the design, safety and capability of fishing vessels, especially those of the deep-water fleet.
      These are serious matters for the House. They happen to occur in remote places. They are remote from the great metropolis and the suburbia of the Midlands. They take place within small communities. As a result, it is almost accepted that such fatalities should be considered as part of a way of life. I do not believe—this applies generally to hon. Members—that fatalities, injuries and accidents in any form of occupation should be accepted as part of a way of life. If an individual is prepared to take such a risk, he should go into the Armed Forces and be properly paid and compensated for the risks that he has chosen to take..
      It was Sir Walter Scott, in"The Antiquary", who wrote:

      337
      "It's no fish ye're buying—it's men's lives."
      That is what we are discussing. That is why we believe that we should press the amendment to a Division. We are concerned with men's lives and men's safety. We are also concerned about the effect that a fatality or serious accident can have upon a fishing family or fishing community. For that reason I trust that my right hon. and hon. Friends will support the amendment in the Lobby.
      Mr. Buchanan-Smith: I make it clear at the beginning of my remarks so that there is no misunderstanding—I felt that there may have been a slight misunderstanding following the speech of the hon. Member for Kingston upon Hull, Central (Mr. McNamara)-that there is no power vested in the authority to carry out a regulatory function in safety matters. I have not checked the record, but I am certain that I never said that the authority had such a function. If I did say it, I did not intend to do so.
      I said in Committee—I repeat my words in the event of the record of the proceedings in Committee being incorrect, or if I used words carelessly in Committee—that the authority has powers to carry out research and development. It can give advice on safety matters. However, it does not rest with the authority to regulate matters of safety under the Bill as drafted. The amendment seeks to give the authority power to make regulations and to provide it with a regulatory power. It seeks to extend the Bill.
      Consequently, I do not reject the amendment on the ground that its contents are covered by the Bill. I merely say that the Bill enables the authority to give advice on safety. The authority could interest itself in such matters if it so wished, but that would fall short of what the amendment seeks.
      Mr. McNamara: If the Minister reads his remarks of 3 February in Committee, he will note that his most recent remarks somewhat soften, if they do not go against, his earlier comments. Of course, it could be a semantic argument. However, I was left with the impression that the Minister could require the authority to act more directly. In Committee he said:
      "In this connection, the powers of the authority can be used in connection with safety matters without amending the Bill. For example, the authority could involve itself in safety research, or in safety training in the way that I have indicated. It also has the power to advise on 'matters relating to the sea fish industry'. This would enable it to pass advice on safety matters to the appropriate bodies within the industry. The Bill also gives Ministers the power to require the Sea Fish Industry Authority to undertake work as their agent. Therefore, if Ministers felt that there was a need for a new initiative in this area, the authority could be required to carry out that work. I shall give one instance of this."—[Official Report, Standing Committee D;3 February 1981, c. 132.]
      Mr. Buchanan-Smith: With respect, the hon. Gentleman is confusing the issue. There is a great difference between what I said in Committee, which is correct and which I stand by—namely, that Ministers can give directions to the authority, and they can do so on safety matters—and the amendment. The amendment seeks to give direct power to the authority, which is totally different. There is nothing contradictory between what I said in Committee and what I am saying now.
      It is not appropriate for the authority to be given regulatory powers to deal with safety matters. We have given to the Health and Safety Executive and the Department of Trade direct responsibility for safety at sea
      338
      and safety in the fishing industry. A Government Department and a Government agency are already charged with the direct responsibility for making the regulations that the hon. Gentleman is seeking to give to the authority. In the executive and the Department we already have the necessary expertise and organisation to implement the regulatory function. I ask the hon. Gentleman to reflect whether we shall gain anything by proliferating activity and responsibility as he proposes.
      The fishing industry is already closely involved with the Department of Trade in efforts to improve safety standards. Surely it is appropriate that that channel should continue to be used. There are many proposals for amendments to the existing arrangements currently under consideration by the Department of Trade and representatives of the industry. The present arrangements are accepted, are understood and are working. That is the view of the industry and the organisations that are involved. If we were to give the authority a new and formal role, we would be likely to hamper the direct and effective links that have been established between the Department of Trade and the industry's organisations. It would not necessarily be in the interests of the industry to add yet another intermediary.
      I ask the House to reject the amendment. I do not suggest that these matters are unimportant. I acknowledge that they are extremely important and I acknowledge the strong feeling of all those who have participated in the debate. I recognise the need for attention to safety matters. That is the view of many in the industry. However, if the amendment were accepted, it would proliferate responsibility and would hinder rather than assist the general cause which we all support, namely, to ensure that we have more effective safety arrangements for those who go to sea.
      Mr. Robert Hughes: I accept that both sides of the House and Government Back Benchers take seriously the subject of safety in the industry. Therefore, I accept what the Minister says. The difference between us is whether the existing system is the best way of ensuring that safety.
      There is an anomaly in the Minister's argument. He mentioned the activities of the Sea Fisheries Training Council, but that body is purely voluntary. I am not saying that it does not do valuable work and I do not wish to cast doubts on the work of the people involved in it. My hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) referred to what the Minister said in Committee. In talking about where the power should lie in relation to safety the Minister said:
      "In this connection, the powers of the authority can be used in connection with safety matters without amending the Bill. For example, the authority could involve itself in safety research, or in safety training in the way that I have indicated. It also has the power to advise on 'matters relating to the sea fish industry'. This would enable it to pass advice on safety matters to the appropriate bodies within the industry."
      Thus, the Minister was accepting that there is a safety role for the new body. Therefore the question arises: to what degree should the new authority be involved in safety matters? That is a matter of degree, but an important degree.
      The Minister advanced an important argument in relation to acceptance of the amendment. He said:
      "The Bill also gives Ministers more power to require the Sea Fish Industry Authority to undertake work as their agent"—
      that is, the Government's agent—

      339
      "Therefore, if Ministers felt that there was a need for a new initiative in this area, the authority could be required to carry out that work. I shall give one instance of this. As members of the Committee know, the White Fish Authority and the Herring Industry Board are currently, on behalf of the Government, undertaking safety checks on vessels."—[Official Report, Standing Committee D, 3 February 1980; c. 132.]
      The Government have conceded that here there is direct intervention by the Minister, using the White Fish Authority and the Herring Industry Board as agents for carrying out safety checks.
      Given the Minister's acceptance of a number of ways in which the new authority can be involved in safety matters, our argument is that it would lead to better safety in the industry and a much more cohesive and concentrated investigation of safety matters if responsibility and authority were given to the new body instead of leaving it as an agent that sometimes gives advice, sometimes does the work and sometimes discusses matters voluntarily within the new Sea Fisheries Training Council.
      I accept the good faith of the Government, and I do not charge them with not taking safety seriously, but it is our contention that the issue is vital because of the fatalities and the many thousands of accidents, some of them very serious, that occur every year. It is serious enough to give the new Sea Fish Industry Authority the power to regulate the industry and to make safety one of its prime matters of paramount importance. I hope that my hon. Friends will join me in the Lobby in pressing the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 93, Noes 142.

      Division No. 94]

      [8.15 pm

      AYES

      Alton, David

      Homewood, William

      Archer, Rt Hon Peter

      Hooley, Frank

      Beith, A. J.

      Howells, Geraint

      Booth, Rt Hon Albert

      Hughes, Mark (Durham,)

      Brown, Hugh D.(Provan)

      Hughes, Robert (Aberdeen N)

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

      Johnson, James (Hull West)

      Campbell-Savours, Dale

      Jones, Barry (East Flint)

      Clark, Dr David (S Shields)

      Jones, Dan (Burnley)

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

      Kilfedder, James A.

      Coleman, Donald

      Lestor, Miss Joan

      Concannon, Rt Hon J.D.

      Lewis, Arthur (N'ham NW)

      Cowans, Harry

      Lewis, Ron (Carlisle)

      Crowther, J.S.

      Lyons, Edward (Bradf'dW)

      Cryer, Bob

      McCartney, Hugh

      Cunliffe, Lawrence

      McElhone, Frank

      Dalyell, Tam

      McKay, Allen (Penistone)

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

      McKelvey, William

      Deakins, Eric

      McNamara, Kevin

      Dean, Joseph (Leeds West)

      McWilliam, John

      Dewar, Donald

      Marks, Kenneth

      Dixon, Donald

      Marshall, D (G'gowS'ton)

      Dobson, Frank

      Marshall, Dr Edmund (Goole)

      Dormand, Jack

      Mason, Rt Hon Roy

      Duffy, A. E. P.

      Maxton, John

      Dunwoody, Hon Mrs G.

      Maynard, Miss Joan

      Eadie, Alex

      Millan, Rt Hon Bruce

      Eastham, Ken

      Miller, Dr M. S. (E Kilbride)

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

      Morris, Rt Hon J. (Aberavon)

      Evans, John (Newton)

      Morton, George

      Ewing, Harry

      O'Neill, Martin

      George, Bruce

      Palmer, Arthur

      Gilbert, Rt Hon Dr John

      Park, George

      Ginsburg, David

      Penhaligon, David

      Grant, George (Morpeth)

      Powell, Raymond (Ogmore)

      Hardy, Peter

      Prescott, John

      Harrison, Rt Hon Walter

      Rees, Rt Hon M (Leeds S)

      Haynes, Frank

      Roberts, Aibert (Normanton)

      Hogg, N. (ED unb't'nshire)

      Ross, Stephen (Isle of Wight)

      Home Robertson, John

      Sever, John

      340

      Silkin, Rt Hon J.(Deptford)

      Welsh, Michael

      Silverman, Julius

      White, Frank R.

      Skinner, Dennis

      Whitlock, William

      Spearing, Nigel

      Wigley, Dafydd

      Spriggs, Leslie

      Woolmer, Kenneth

      Steel, Rt Hon David

      Stewart, Rt Hon D. (W Isles)

      Tellers for the Ayes:

      Strang, Gavin

      Mr. Austin Mitchell and

      Tinn, James

      Mr. James Hamilton.

      Wainwright, E. (Dearne V)

      NOES

      Alexander, Richard

      Kimball, Marcus

      Ancram, Michael

      Lang, Ian

      Arnold, Tom

      Lawrence, Ivan

      Aspinwall, Jack

      Lawson, Rt Hon Nigel

      Atkins, Robert (Preston N)

      LeMarchant, Spencer

      Banks, Robert

      Lloyd, Peter (Fareham)

      Benyon, Thomas (A'don)

      Luce, Richard

      Berry, Hon Anthony

      Lyell, Nicholas

      Bevan, DavidGilroy

      MacGregor, John

      Biggs-Davison, John

      MacKay, John (Argyll)

      Blackburn, John

      McNair-Wilson, M.(/V'bury)

      Braine, Sir Bernard

      McQuarrie, Albert

      Bright, Graham

      Major, John

      Brinton, Tim

      Mates, Michael

      Brooke, Hon Peter

      Maude, Rt Hon Sir Angus

      Brotherton, Michael

      Mawby, Ray

      Brown, Michael (Brigg & Sc'n)

      Mawhinney, Dr Brian

      Bruce-Gardyne, John

      Maxwell-Hyslop, Robin

      Bryan, Sir Paul

      Meyer, Sir Anthony

      Buchanan-Smith, Alick

      Mills, lain (Meriden)

      Buck, Antony

      Mills, Peter (West Devon)

      Bulmer, Esmond

      Moate, Roger

      Carlisle, John (Luton West)

      Morgan, Geraint

      Carlisle, Kenneth (Lincoln)

      Murphy, Christopher

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

      Myles, David

      Chapman, Sydney

      Neale, Gerrard

      Churchill, W.S.

      Needham, Richard

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

      Nelson, Anthony

      Clark, Sir W. (Croydon S)

      Neubert, Michael

      Clarke, Kenneth (Rushcliffe)

      Onslow, Cranley

      Colvin, Michael

      Osborn, John

      Cope, John

      Page, John (Harrow, West)

      Cormack, Patrick

      Page, Rt Hon Sir G. (Crosby)

      Corrie, John

      Page, Richard (SW Herts)

      Dorrell, Stephen

      Pawsey, James

      Douglas-Hamilton, Lord J.

      Pollock, Alexander

      Dover, Denshore

      Prentice, Rt Hon Reg

      Dunn, Robert (Darftord)

      Proctor, K. Harvey

      Dykes, Hugh

      Renton, Tim

      Elliott, Sir William

      Rhodes James, Robert

      Faith, Mrs Sheila

      Roberts, M. (Cardiff NW)

      Fenner, Mrs Peggy

      Rossi, Hugh

      Fletcher, A. (Ed'nb'ghN)

      Sainsbury, Hon Timothy

      Fookes, Miss Janet

      Shaw, Giles (Pudsey)

      Forman, Nigel

      Shepherd, Colin (Hereford)

      Fowler, Rt Hon Norman

      Skeet, T. H. H.

      Fraser, Peter (South Angus)

      Speller, Tony

      Garel-Jones, Tristan

      Spence, John

      Goodlad, Alastair

      Spicer, Michael (S Worcs)

      Gorst, John

      Sproat, lain

      Gow, Ian

      Squire, Robin

      Gower, Sir Raymond

      Stainton, Keith

      Grant, Anthony (Harrow C)

      Stanbrook, lvor

      Gray, Hamish

      Stevens, Martin

      Griffiths, Peter Portsm'th N)

      StradlingThomas, J.

      Grist, Ian

      Taylor, Teddy (S'end E)

      Grylls, Michael

      Tebbit, Norman

      Gummer, John Selwyn

      Temple-Morris, Peter

      Haselhurst, Alan

      Thatcher, Rt Hon Mrs M.

      Havers, Rt Hon Sir Michael

      Thompson, Donald

      Hawksley, Warren

      Thornton, Malcolm

      Heddle, John

      Townend, John (Bridlington)

      Hogg, Hon Douglas (Gr'th'm)

      Wall, Patrick

      Holland, Philip (Carlton)

      Waller, Gary

      Hordern, Peter

      Ward, John

      Howell, Ralph (NN orfolk)

      Warren, Kenneth

      Hurd, Hon Douglas

      Watson, John

      Jopling, Rt Hon Michael

      Wells, John (Maidstone)

      341

      Wells, Bowen

      Younger, Rt Hon George

      Wheeler, John

      Wickenden, Keith

      Tellers for the Noes:

      Winterton, Nicholas

      Mr. Tony Newton, and

      Wolfson, Mark

      Mr Carol Mather.

      Question accordingly negatived.
      Mr. McNamara: I beg to move amendment No. 8, in page 3, line 9, at end insert—
      '(g) to make provision for the decasualisation of full-time employee fishermen not being share fishermen, to ensure that no such full-time fishermen by reason of their employment, shall fail to benefit from social security legislation available to industrial workers not so engaged.'.
      The hon. Member for Aberdeenshire, East (Mr. McQuarrie) will note that the amendment has been drafted to meet the point that he raised in Committee.
      Of all the issues that rankle in what is left of the deep-sea industry' in Hull, the one that rankles most, after many years of campaigning by the union and by my hon. Friends, is that we have failed to achieve a regular system of employment for our fishermen. Indeed, at the time of the Icelandic dispute the union and my hon. Friends were led to believe that one of the benefits to come out of that dispute would be that employment in the fishing industry and the deep-sea industry in the ports of Fleetwood, Grimsby and Hull would be regularised and that, for the first time, there would be a proper system for employment of deep-sea fishermen.
      Why is this matter so important? I shall not weary the House with the long explanation that I gave in Committee. I shall try to paraphrase it. Deep-sea fishermen, while they consider that they are employed by one company, are in fact employed only voyage by voyage for which they sign their articles when they go on board ship. When, after being at sea for a fortnight, or for any period of up to three or four months, they sign off the articles, they sign off the ship and the period of employment comes to an end.
      That means a number of things. First, they do not have a regular pattern of employment for national insurance purposes. Secondly, they do not have long enough—the minimum period is two years, if I remember correctly—to qualify under the redundancy payments Acts. Thirdly, because of the short period of their employment, they frequently cannot benefit from the advantages that are given to working people in the employment protection legislation.
      Said coldly and logically like that, the matter does not excite great concern, but when it is translated to the home or life of the individual fisherman and his family it causes tremendous difficulties. For example, a fisherman rarely obtains unemployment benefit. He frequently has to depend upon supplementary benefit. A fisherman cannot gain wage-related benefits because he has not been employed long enough when he becomes unemployed. There are no severance payment schemes or redundancy payment schemes for him. He finds it difficult, even under some of the old schemes, to qualify for an adequate pension because in many cases his working life ends at 55.
      Thus, because of the casual nature of their employment, such fishermen as are left are at an enormous disadvantage compared with their fellow citizens. They are the heroes, the people about whom songs are written, they are the subject of many toasts and of much admiration for courage and virility. These are easy words, but they
      342
      constitute empty phrases when it comes to what the State is prepared to do to help these men when they go to it in time of need.
      The union has campaigned for a long time. We felt at the time of the second cod war that we had achieved our goal. That was under the Labour Administration, and we regarded ourselves for a variety of reasons as having been badly let down when we failed to secure our aim. Towards the end of the Labour Administration, the employers and the union reached agreement on a scheme to come into operation in the late summer of 1979. All the documents had been agreed and all the papers had been sent to the Ministry for approval. Mr. John Boyd and Mr. David Cairns for the owners and the union respectively both regarded the scheme as being ready for approval. They waited. It was lack of progress that caused us to table our amendment in Committee. We wanted to discover what had happened. We felt that the Government were dragging their feet. They had asked the industry to produce a scheme. It was produced, but now the Government have not implemented it.
      8.30 pm
      When the Minister replied to our debate on the general question of decasualisation, he said that responsibility in the matter was not his. He fairly and properly said that it lay with his colleagues in the Departments of Employment and Health and Social Security. He went on to say that he had brought himself up to date on the matter because he appreciated that it was an issue of concern. But he said that the industry was dragging its feet. That was a serious statement. It led me to inquire further as to the facts. I can assure the Minister that it still is within the Ministry's power to produce an order to introduce the scheme.
      There has been some discussion about the question of redundancy. At the time the scheme was agreed the union and the owners felt, as I believe they still do, that the scheme could go into operation in spite of any arguments about redundancy. The Government do not seem prepared to move further on that matter, and that is causing considerable concern. The longer it goes on the more difficult it will be to identify those people who should be compensated for loss of employment as a result of the cod war, of our having joined the EEC or of the change in fishing patterns.
      Whenever the Minister has spoken at the Dispatch Box on the question of EEC fishing policy and our disagreements with the Community, I have asked him whether, regardless of the discussion about limits, he has obtained anything from the social fund to compensate fishermen in Hull, Grimsby, Fleetwood and Aberdeen for losing their jobs as a result of Community policies. His answer has been"No". I have been chided on occasions for breaching the united approach by the industry on the problems caused by Community policies. I chided the Labour Government about their contrariness over this issue. I shall not spare this Government. The industry and my union regard decasualisation as a matter of fundamental importance because men, out of dignity, are entitled to the same rights as their fellow citizens. If the industry is not capable of achieving that, the Government should do what the Labour Government should have done.
      If we regularise the pattern of fishing, especially in the former deep-sea ports, we must have a system of regular employment for fishermen along the lines of the scheme that I put forward and explained in Committee, namely,

      343
      an amalgam of the Merchant Navy pool scheme and the registered dock labour scheme. The matter is of vital importance to the families in the area. They must know what will happen.
      Every time that the unemployment figures are published in Hull, I have pencilled on the bottom the current number of unemployed fishermen—500, 600 or more. Those men are registered as fishermen, but many will never get another ship. My hon. Friends the Members for Kingston upon Hull, East (Mr. Prescott) and Kingston upon Hull, West (Mr. Johnson) and I see people in our surgeries who ask how they can obtain another job at sea. If they cannot obtain a job at sea, they want to know who will train them and what will be their future opportunities. We have to shrug, express sympathy, and say that we cannot do a great deal for them. But a great deal could be done if the scheme for decasualisation were introduced.
      The amendment meets the point made by the hon. Member for Aberdeenshire, East in Committee. We are seeking to provide that the authority should be responsible for introducing a scheme for decasualisation, which successive Governments have failed to do, and which the industry has not been able to do. We must put the reason for doing so on the statute book, namely, to ensure that the deep-sea fishermen who depend for their livelihoods not only on their share of the catch but upon wages and bonuses should have at least the same rights accruing to them as accrue to their fellow industrial workers.
      There is one final reason why the Government should put such provision on the statute book. The fishing industry is demoralised. That is not wholly the Government's fault. I say that out of charity; it is Lent and I must be charitable, even to Conservatives. The industry is demoralised because of the failure to reach agreement at Brussels. No one knows what will happen to the common fisheries policy, what shape the new industry will take, and what investment will take place. Uncertainty at Brussels and the 200-mile limit have affected many other branches of the industry such as processing, canning and distribution. Grimsby, Hull and Fleetwood have seen the disappearance of many of the large firms that have been associated with the deep-sea industry.
      Decasualisation is owed to the fishermen of Britain. We have a duty to stop the demoralisation. We must show the areas involved that both the Government and the House still think that they are worth something, that they should be given attention, that they should be given an opportunity, and that they should be treated properly. One of the best ways in which that can be done is by first introducing a proper system of decasualisation and then, on the basis of that dealing with the question of redundancy and severance pay which will be needed in this industry when it is restructured.
      Mr. McQuarrie: I listened with considerable interest to the comments of the hon. Member for Kingston upon Hull, Central (Mr. McNamara) on this amendment. As those of us who served on the Committee know, at that stage he put forward a similar amendment very cogently, but without success. I should have been happier in this case if it had not been so divisive as to exclude the share fishermen.
      I am at a loss to understand how the amendment will work. Its purpose is
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      "to make provision for the decasualisation of full-time employee fishermen not being share fishermen, to ensure that no such full-time fishermen by reason of their employment, shall fail to benefit from social security legislation available to industrial workers not so engaged."
      Were these fishermen to be employed full-time they and their employers would pay national insurance contributions and PAYE on engagement, and when they came back from the sea they would be entitled to social security benefits. If that is not the case, I suggest that the amendment should be worded a little differently, to give us a clearer indication of what is behind it.
      To speak for the section to which I referred, those who are not share fishermen, legislation is required to cover the fishing industry as a whole, so that even the share fishermen will be entitled to some form of social security benefit. In my constituency, in the dispute a few weeks ago 700 to 800 share fishermen applied for social security benefits but were unable to get them because there is no legislation covering them. Where there are definite reasons—for example if a vessel is being repaired or if a vessel cannot go to sea—the fishermen may get social security benefits. It is not just a question of going to the social security office and drawing benefits. It is a matter of waiting for the insurance officer, the tribunal and various other factors. In one case that I handled not long ago, it took over two years to get the matter clarified before payment was made.
      I should have been happy if the hon. Member for Kingston upon Hull, Central had made a more general attempt to persuade the Minister to bring in some form of legislation that would cover that sort of thing. If these people are full-time fishermen there is no reason why they should not enjoy the benefits of social security. This is something that should perhaps be covered by the Employment Act, rather than by the new Sea Fish Industry Authority.
      During the third sitting of the Committee, when referring to a document produced by the Transport and General Workers Union, the hon. Member for Kingston upon Hull, Central said:
      "Under the heading: 'Employment of Fishermen and Ancillary Workers in a Changing Industry', it states:
      'The system of casual employment in the sea-going sector of the industry must be eliminated by the enactment of legislation and substituted by a more humane employment scheme for fishermen. This employment scheme must provide the fishermen with all the rights and benefits accorded to workers in shore-based industries such as continuity of employment, a regular minimum income, sickness and injury benefit, a pension and severance payment fund'."—[Official Report, Standing Committee D, 29 January 1981; c. 110.]
      I agree with those sentiments, but I do not consider that we should insert this provision in the Bill and make it the responsibility of the Sea Fish Industry Authority. I suggest that this matter should be dealt with in a general way by the Department of Employment. I sincerely hope that my hon. Friend will indicate that he will pass these comments on to the Department of Employment so that we do not have the problems that have emanated from my constituency and have rightly been referred to by the hon. Member for Kingstom upon Hull, Central.
      8.45 pm
      Mr. Prescott: I fully support the comments made by my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara), particularly about the most contentious issue of decasualised labour. The lack of

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      identity of regular work associated with one employer or industry has been a constant problem for the fisherman in the denial of benefits. While he may be associated with the industry, he has tended to be identified legally in the terms of the contract into which he entered as a fisherman—the articles of voyage of the vessel on which he sails. Employment tends to be identified with the time served on the ship. As there may be a considerable period between one voyage and the next, that can sometimes be identified as paid leave.
      There is some continuity if a man gets a ship right away, but all too often it is not the same ship to which he goes back. That therefore denies him the continuity generally associated with the regularity of employment, which is the important feature in distinguishing the casual nature of the employment.
      It has sometimes been argued that to be regularly employed by one company made a man a company man, and that gave him some regularity of employment. In reality, in law it is usually the articles of voyage with which the fisherman or the seaman is identified. If he has a three-months voyage and three months ashore, the continuity of employment for employment benefit and other purposes of regular employment is associated solely with the three months' sea time. That becomes the active period for the purpose of employment, which determines whether he is entitled to the social benefits about which we are talking.
      As the hon. Member for Aberdeenshire, East (Mr. McQuarrie) said, in the amendment we are concerned with the ending of casualisation and the identity of full-time employee fishermen with social security legislation.
      I understand the fears expressed by my hon. Friend the Member for Kingston upon Hull, Central. Nevertheless, the clause, which deals with the powers of the authority, provides discretionary powers to give advice on such matters and to carry out research. We hope that the discretionary powers will be used in the way that has been indicated, certainly in regard to advice and research.
      The amendment asks for that power to be used for the ending of casualisation in the industry. It is important to recognise that the benefits of regular employment are not confined solely to social security, as I am sure my hon. Friend the Member for Kingston upon Hull, Central would readily agree. My hon. Friend used the powerful example of redundancy and social security benefits. As we made clear earlier, identity of sea service becomes an important factor in determining whether a fisherman is entitled to redundancy pay. Therefore, to be denied these benefits causes considerable concern in Hull, particularly to fishermen who probably have no future prospects of getting back into this industry.
      The features of casualisation are known to anybody in maritime industries. I was a seaman for 10 years. I belong to the National Union of Seamen. We had casual employment. Interestingly enough, since the war it has always been identified with the docks, ships and fishermen. It is also associated with the North Sea oil industry, because similar problems arise concerning divers and so on. Indeed, my union was actively involved. It took a great deal of industrial muscle to end casualisation in the docks industry.
      When this country was at war, it was decided to have regular employment practices and to have seamen regularly available. Therefore, the casual nature of the seafarers' employment was ended. Unfortunately for
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      fishermen, there has not been the same consideration. It is apparently thought that fishermen are a special breed—a gambling breed—they like to share in the profits from the fish which they catch, they are not interested in their conditions of employment as long as they can have a few bob when the ship docks and can go out and have a good time before catching the next tide. That has always been the justification for a number of intolerable and deplorable practices which have continued in this industry, with its casual employment.
      Two aspects of that casual employment have created many penalties for both fishermen and their relatives. I made some remarks about redundancy earlier. When I registered for employment as a seaman I did not register solely with the employer or with a ship. I registered with the central pool. I was a seaman who was identified in the central pool. Whether I sailed with Cunard, P & O, or any other line, I had a record of employment that guaranteed me holiday pay and redundancy pay. If there were more seamen than jobs, a regular redundancy system came into play. A record could be found of my service in the industry. Compensation could be given for the period of service that I had given to the industry.
      The same could be done for fishing. As my hon. Friend the Member for Kingston upon Hull, Central pointed out, the union and other hon. Members from the Hull area have constantly pressed that the suggested scheme should have been accepted by Governments, including the previous Administration. That was probably most relevant during the cod war with Iceland.
      It is well known that I disagree with my colleagues and was inclined to support Iceland's case in the cod war. It was central to the argument that if Britain wanted to adjust to that situation, compensation needed to be made.
      My right hon. Friend the Member for Doncaster (Mr. Walker), who was a Minister in the Department of Employment at that time, managed to obtain a considerable amount of money from the Treasury to be used for redundancy payments. The Member for Grimsby at that time was Mr. Tony Crosland. He promised compensation from a deal arising out of one agreement with Iceland. That money was secured, but unfortunately it was not given to the fishing industry, although the general agreement was that the money could be used for decasualisation.
      The reality was that the money was not given to the fishermen who were made redundant as a result of the Icelandic agreement, nor was it used to set up a decasualisation scheme. The only people who benefited were those in the Treasury, who got the money back. That was unfortunate, because the fishermen did not get anything out of that agreement, although the industry got some money. The industry might not have felt that the amount of money was sufficient. The ships were compensated, but the men were not. That is a deplorable principle for the House to endorse, and it should be changed.
      The Minister is concerned with concluding an agreement with the Community that inevitably will involve a certain amount of compensation. Compensation has already gone from the taxpayer to the British fishing industry. Other hon. Members and I have been pressing for that matter to be dealt with because of the difficulties arising from the delay in arriving at a Community fishing policy.

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      No doubt, the Minister will receive a certain amount of money from the Community for the readjustment of the fishing industry. All too often, such compensation has been associated either with purchasing old trawlers or with compensating trawler owners in one way or another. Very little has been given to fishermen who have been in the front line, in terms of being made redundant. I agree that certain amounts have been given to share fishermen and to the industry, whether to uphold prices or to help in certain financial circumstances, but the thousands of men from the ships who have been thrown on the scrap heap have not been given a penny directly because of the casual nature of the industry.
      If EEC compensation is possible, and if extra money is now to be made available for the industry, we hope that a little humanity will be shown in order to give these fishermen at least some compensation in the same way as compensation is normally given to workers in accordance with their period of service in an industry.
      Over the years my hon. Friends and I have received many letters from people working in the industry who ask why they are not getting compensation when money is poured into the trawler owners' pockets. We cannot give an adequate answer. All that we can say is that we shall keep arguing the case and pressing for justice to be given to fishermen.
      My hon. Friend the Member for Kingston upon Hull, Central referred to the problem of vessels that sink with the loss of the crew. We are concerned also for the relatives who are left. There are various charities that may assist in such circumstances, but I have in mind one case—I think that my hon. Friend had it in mind as well—the loss of the"Gaul", with everyone on board.
      No one knew where the ship went down, and the courts found that negligence could not be shown. Naturally, under its insurance policy the company would receive compensation for the vessel that was lost. It simply had to show the loss. Thus, it was compensated for the loss of the ship itself, for its legal costs, and, I believe, to a certain extent, for loss of the cargo.
      The relatives of the men who were lost with the vessel could not show negligence—I am not for a moment suggesting that there was negligence—so they could not establish a case for further compensation beyond the £1,000 given under the terms of insurance and six months' money. Frankly, that is quite inadequate. This industry should have a proper insurance policy under which, if men are lost—this is the most dangerous occupation of all—there will be money readily available to assist the relatives.
      Perhaps I may add here a reference to the company involved—British United Trawlers. The three Hull Members of Parliament have been discussing the matter for some time. It was clear that the relatives would not be able to get any further money, and we felt that more should be done for them. We feel that special assistance should be given for the dozens of children and widows who are left, and we are grateful that the company continues to discuss with us the possibility of giving at least a little extra help to those who remain—particularly the children and widows—in difficult financial circumstances.
      Those are but two examples of various aspects of the casual nature of employment in this industry. We regard it as deplorable, and since the industry is now undergoing
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      considerable change, with a good deal of money involved, we consider that as a priority there should be decasualisation, with the establishment of the new industry arising out of the new agreements.
      Mr. James Johnson: As the House will have gathered, my two hon. Friends the Members for Kingston upon Hull, Central (Mr. McNamara) and for Kingston upon Hull, East (Mr. Prescott) and I have for some years felt very keenly on the question of decasualisation for the benefit of our constituents who go to sea in ships. It is a long-standing argument, and it is not finished.
      My hon. Friend the Member for Kingston upon Hull, Central was right to remind the House that we nearly got a settlement after the Icelandic cod war. Jack Jones for the T and GWU, my right hon. Friend the Member for Doncaster (Mr. Walker) and Lord Peart, as he now is, sat down and discussed the matter and, as my hon. Friend said, money was put on the table. Unfortunately, it did not end up in payments to fishermen, who—it has been said half a dozen times already in the debate—deserve much better compensation and far better terms of service than they have had hitherto.
      It is well known on the dockside at Hull that the T and GWU desires, and has attempted to achieve for its members, those better terms of service. As the Minister knows, this advance has been opposed in the past by owners and by skippers. It has, indeed, been opposed by some of the men themselves. They have had this, so to speak, old-fashioned idea that they would keep their liberty by staying as casual labour, able to pick their ship and pick their skipper, able to stay in bed on a Monday morning, not go off with one ship to sea, but perhaps get the next one. But those are nineteenth-century attitudes, and we should regard our modern ships as floating factories.
      In a factory on shore these men would have all the terms and conditions secured by, say, miners under the National Coal Board. We must try to get them for men who go to sea. When afloat they are denied the conditions provided by legislation for their fellow union members and their fellow workers ashore. On the quayside, indeed, members of the same union get far better conditions. Let us be blunt about this. They are literally—financially and physically—denied the rights enjoyed by their fellow workers. They are second-class citizens. One need only compare the terms of service and working conditions of miners. In terms of insurance for wives and dependants, for example, there is no comparison. The National Coal Board is of course a nationalised industry which sets standards.
      What are we asking of the Government and of the Minister? I quote from what has become almost a Bible for us,"Fishing: the Way Forward", which states plainly, simply and factually:
      "A fishermens' employment scheme, as envisaged by the T and GWU, would provide for continuity of employment, a regular minimum income, sickness and injury benefit, a pension and severance payment fund."
      That is hardly a revolutionary proposal. It is merely akin to what the majority of their fellow workers accept.
      This scheme—and I hope that the Minister will knock this down if he thinks that it is a skittle that should not stand up—could and should be administered by a national fishing labour board. Its members could be scheduled and slotted in, to include vessel owners, union leaders and so on. It is not impossible to think in terms of local port

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      boards administering the scheme, as the union envisages. They would do all that is done elsewhere. They would have a register of their workers. Any vessel owner who wished to employ fishermen, not being part-owners of his vessel, would be asked to register as an employer of labour in order to employ fishermen on the official list. What is the objection to that? Why are we not getting ahead with a civilised scheme of this nature for these men who go to sea in ships in such dangerous conditions?
      9 pm
      My hon. Friend the Member for Kingston upon Hull, Central spoke movingly about a certain vessel and a certain set of happenings. He referred, of course, to the"Gaul". I think that in 1976 we had lost three vessels in 10 days—the"Ross Cleveland" and two others. Then we lost the"Gaul". My hon. Friend the Member for Kingston upon Hull, East put the case very plainly, simply and factually. As Members of Parliament, as parents and as local councillors, the community of Hull has thought for years that there should have been a better settlement. As has been said, we have had petitions, and we have done what we could. As Members of Parliament, we have met, and shall continue to meet, the BUT.
      I end by saying to the Minister of State—who, I hope, has been paying attention to what I have said, and who I know is a humane man—that if only he will give us not just his blessing, but any help that he possibly can in this thorny and contentious matter of settling moneys for the loss of the men in the"Gaul", he will earn himself encomiums in Hull and its neighbourhood.
      Mr. Austin Mitchell: The arguments for this amendment are well known. They have been excellently and movingly put by my hon. Friends the Members for Kingston upon Hull, Central (Mr. McNamara) and Kingston upon Hull, East (Mr. Prescott) from the other side of life's great divide—the Humber.
      Any Member of Parliament from a fishing port knows of the problems which the amendment is meant to tackle. He knows of the desperation of men who are thrown on the scrap-heap but who want to continue fishing. For them, fishing is a way of life, and that is no reason why their enthusiasm for it should be exploited in the way that it has been. They want to continue fishing, but are unable to do so through no fault of their own. One can imagine the desperation of such people who suddenly find that they are not entitled to compensation or redundancy payments or to any of the benefits which other sections of society receive. It seems to the fishermen that some of those benefits are extremely generous. However, nothing comes to them.
      That kind of shock comes in waves to Members representing fishing ports. As each crisis hits the fishing industry, and as more vessels are laid up, another wave of people face the same problems which should have been solved five or 10 years ago. Any Member representing a fishing port knows of the sort of social security problems which fishermen run into in the course of the alternation between work and unemployment which is part of the pattern of fishing.
      Sadly, this is a short-sighted industry. When things are going well, it does not want to introduce the kind of reforms that are necessary for its long-term future and which would give security to those who work in it. As a result, as soon as things start going badly, the crisis is enormously increased by the failure to prepare for it by
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      introducing the kind of decasualisation scheme which should have been introduced some time ago. In that sense, it is an industry which has not known its own interests. However, this House should be aware of those interests and should do something about them. Certainly Governments have a responsibility to lead the industry in the direction in which it ought to go.
      It is tragic that the agreement, which was brought together in the last period of the Labour Government, has still not been implemented. In the 1980s, fishermen are still second-class citizens in many respects. Apart from the casual nature of the job, as my hon. Friend the Member for Kingston upon Hull, East pointed out, the last two tranches of aid given to the industry have not trickled down to the fishermen. I hope that in the next batch of aid Ministers will ensure that in some measure at least it is operating aid which goes to those working in the industry as well as to the owners.
      The amendment relates to decasualisation for people who have no security or who receive no compensation. They are totally at the mercy of the employer in a contracting, shifting industry. They are desperate to remain in the industry. We are trying to hang the responsibility for the implementation of a scheme on the Sea Fish Industry Authority. We would not be doing so had the Government acted earlier. The fact that we are doing so at this late stage shows how desperate the need is and how anxious we are to break the log-jam which seems to have built up over this apparently simple and straightforward reform which still, after all these years, has not been implemented.
      This is a question of humanity, decency and obligation to those who have devoted their working lives to the industry. They deserve something better from it than what they have been getting over the last few years. If attaching the responsibility to the Sea Fish Industry Authority is the only way of achieving it, it is vital that we do so.
      Mr. Wall: A strong case has been made out for some form of decasualisation. The hon. Member for Grimsby (Mr. Mitchell) was right to point out that when the fishing industry was prosperous it did not want it. The skippers, mates and crews were earning quite good pay and were prepared to take the luck of the draw. Now, through no fault of their own, the industry—certainly the distant water industry in Hull—is in bad shape. I am particularly worried that no redundancy pay is available to these men. That is unique, for the reasons that have already been given.
      Having said that, I should like to know whether any investigation has been made into the cost of introducing decasualisation in the industry. I think that the hon Member for Kingston upon Hull, Central (Mr. McNamara) will agree that, given the industry's state, it could not pay for that. I wonder whether he, or anyone else, has estimated the costs involved.
      Although the hon. Gentleman has made out a strong case, and although his case will receive sympathy from this side of the House, I wonder whether this legislation is appropriate. As my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) said, perhaps an employment Bill would be more appropriate. The Government should give consideration to this issue, but I doubt whether the present legislation is appropriate to deal with it.
      Mr. Buchanan-Smith: In Committee we had a good debate on this subject. Given its importance and the human factors that lie behind it, I am glad that the hon. Member for Kingston upon Hull, Central (Mr.McNamara) has returned to it.
      I am sorry if the hon. Gentleman feels that what I said in Committee about the stage of discussions was misleading. He made that remark tonight and I have been unable to check the position. I shall follow the matter up and find out what the position is. I am sure that the hon. Gentleman realises that I did not want to mislead the Committee or the House.
      I point out to the House, and particularly to my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie), that I shall draw the attention of my right hon. and hon. Friends in the Department of Employment to this debate. As my hon. Friend the Member for Haltemprice (Mr. Wall) rightly said, that Department has the prime responsibility for such matters.
      I should like to respond sympathetically, but I return to what I said in Committee, and to what my hon. Friend the Member for Haltemprice has said. No matter how important the issue is—I recognise that it is very important to those who have spoken in the debate and to those who work in the industry—we must ask whether it is appropriate that this Bill should deal with the matter. More specifically, we should ask ourselves whether we should use the Sea Fish Industry Authority.
      Mr. Prescott: Nobody else will do it.
      Mr. Buchanan-Smith: It is not a question whether no one will do it, but whether the Bill is the correct vehicle. If the will is there, we must find the correct vehicle. However, the creation of a new vehicle does not necessarily change the circumstances. This is primarly a matter for the Department of Employment.
      As I pointed out in Committee and on an earlier amendment, we did not envisage that the new authority would have regulatory powers. They are implied in the operation of a decasualisation scheme. Therefore, to include that power, as the hon. Gentleman seeks, would run against one of the principles of the functions of this body.
      It is important to bear in mind that the document of the Transport and General Workers' Union, entitled"Fishing: The Way Forward"—to which the hon. Member for Kingston upon Hull, West (Mr. Johnson) referred—recommends that a National Fishing Labour Board should be set up. It would be a specific, not a general, body. To judge from the document, this was regarded as a matter of specific responsibility for employers and employees.
      9.15 pm
      Although as a result of the amendment that we have agreed, the Sea Fish Industry Authority will have on it eight representatives of the industry, they will not be solely the representatives of employers and employees. Those serving on the authority will be much more widely drawn from the industry as a whole. Given these wider functions and the wider membership of the authority, I do not think that the authority or the Bill is the correct vehicle to achieve the objectives to which hon. Members have referred.
      I have looked at the matter since the amendment was tabled, and since the debate on a similar amendment in
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      Committee, but I am sorry to have to advise the House that my view has not changed. Notwithstanding that, I shall draw the debate and its implications to the attention of Ministers in the Department of Employment. Despite the importance of the subject, I must advise my right hon. and hon. Friends not to accept the amendment.
      Mr. McNamara: I shall not detain the House long, but I should reply to a number of points.
      The hon. Member for Aberdeenshire, East (Mr. McQuarrie) spoke of the problems facing the share fishermen in his constituency. I do not know whether he was present in the Chamber when my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) referred to the same problems that he faced over the treatment of share fishermen during the latest stoppage. I understand from what the Minister says that he will draw the attention of Ministers within the Department of Health and Social Security to this matter. It seems to me, as an outsider with no involvement with share fishermen, to be a strange procedure when every ship has to be taken as a test case and one member of the crew has to be treated as a test case before a satisfactory solution can be achieved. With a couple of hundred vessels involved, it will take a heck of long time for the commissioner to reach a decision and then for it to be passed down.
      I am not sure how I could draw an amendment to meet the Minister's desires. The amendment I proposed in Committee was too broad because it included share fishermen. Now an amendment that excludes share fishermen still does not satisfy him. I understand the honourable Gentleman's reason. He could almost be a Social Democrat. One does not know exactly where he stands on these matters.
      The hon. Member for Haltemprice (Mr. Wall) asked me about the cost of a redundancy scheme. Such a scheme has not been priced yet. One has not been able to lay down any criteria in view of the length of time this matter has dragged on since the last cod war. The principle behind the decasualisation scheme that was being examined was the establishment of a permanent register. With a permanent register, one would have a pool of fishermen. One would be able to examine it to decide who was taken off and who should remain on and what should be the terms of compensation offered. The essential factor was the establishment of the pool. With a register established at the start, both sides could go to the Government, to say whether it had too many or too few and that compensation was needed to settle the matter. That would follow a system of decasualisation.
      My hon. Friends the Members for Kingston upon Hull, East (Mr. Prescott) and for Kingston upon Hull, West (Mr. Johnson) and I discussed this matter a lot at the time of the cod war. We believed that, at that time, we could have achieved a viable scheme by working on the discharge books. We were sorry that people in the industry did not think the scheme would work. We believed, together with our former right hon. Friend, the Member for Grimsby, the late Anthony Crosland, that we had worked out a specific proposal.
      The Minister said that this Bill was not a suitable vehicle. It is not a question whether it is a suitable vehicle; it is a question of the political will. If there is political will on behalf of a Conservative Government or a Labour Government, a lift can be hitched. This is a vehicle on

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      which we could easily hitch a lift. We would be happy not to have a national fishing body. We would be happy to have the new authority if it were to introduce decasualisation. We are not tied to any specific form of management, although we want employees and employers to be represented. We are not wedded to any particular title—
      "What's in a name? That which we call a rose
      By any other name would smell as sweet."
      We want a scheme of decasualisation. If the Government have the political will to introduce such a scheme, that could be done.
      The Minister felt that in an earlier speech I was accusing him of misleading the Committee. He took mild exception to that. If I have accused him of misleading the Committee—I shall read the words that I used—I immediately withdraw the accusation. I merely suggest that a scheme was agreed by both sides. It was necessary only for the Government to introduce it. Problems suddenly arose that had not been envisaged. It was suggested that alterations might need to be made.
      The scheme appeared immediately after the general election, at a time when there was no great encouragement to introduce decasualisation. The Government did not push the scheme. They have not given it a degree of priority and they have not given reasons for not seeking to implement it.
      Speeches have been made across the great divide. Fortunately, the divide will soon be bridged and we shall be able to offer refuge to those from Grimsby at Hull. My hon. Friend the Member for Grimsby (Mr. Mitchell) might be the first refugee.
      The fishing industry is basically the only industry in Britain that remains to be decasualised. The work force is dwindling and decasualisation is merely a matter of will and purposefulness. Given the demoralised state of the industry, decasualisation could come from the House with all-party support, even from this Government.
      I urge the Minister and his right hon. and hon. Friends to reconsider their position between the ringing of the Division bells and the closing of the doors and to give us a majority.
      Question put, That the amendment be made:
      The House divided: Ayes 91, Noes 148.

      Division No. 95]

      [9.25 pm

      AYES

      Archer, Rt Hon Peter

      Eadie, Alex

      Booth, Rt Hon Albert

      Eastham, Ken

      Brown, Hugh D.(Provan)

      Ellis, R. (NED'bysh're)

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

      Evans, John (Newton)

      Campbell-Savours, Dale

      Ewing, Harry

      Clark, Dr David (S Shields)

      Fletcher, Ted(Darlington)

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

      Foster, Derek

      Coleman, Donald

      George, Bruce

      Concannon, Rt HonJ, D.

      Gilbert, Rt Hon Dr John

      Cowans, Harry

      Ginsburg, David

      Crowther, J. S.

      Grant, George(Morpeth)

      Cryer, Bob

      Hardy, Peter

      Cunliffe, Lawrence

      Harrison, Rt Hon Walter

      Dalyell, Tam

      Haynes, Frank

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

      Hogg, N. (EDunb't'nshire)

      Deakins, Eric

      Home Robertson, John

      Dean, Joseph (Leeds West)

      Homewood, William

      Dempsey, James

      Hooley, Frank

      Dewar, Donald

      Hughes, Mark(Durham)

      Dixon, Donald

      Hughes, Robert (Aberdeen N)

      Dobson, Frank

      Johnson, James (Hull West)

      Dormand, Jack

      Jones, Barry (East Flint)

      Duffy, A. E. P.

      Jones, Dan (Burnley)

      Dunwoody, Hon Mrs G.

      Kilfedder, James A.

      354

      Leighton, Ronald

      Park, George

      Lestor, Miss Joan

      Powell, Raymond (Ogmore)

      Lewis, Arthur (N'hamNW)

      Prescott, John

      Lewis, Ron (Carlisle)

      Roberts, Albert(Normanton)

      Lyons, Edward(Bradf'dW)

      Robinson, G. (Coventry NW)

      McCartney, Hugh

      Silkin, Rt Hon J.(Deptford,)

      McDonald, Dr Oonagh

      Silverman, Julius

      McElhone, Frank

      Skinner, Dennis

      McKay, Allen(Penistone)

      Spearing, Nigel

      McKelvey, William

      Spriggs, Leslie

      McNamara, Kevin

      Stewart, Rt Hon D. (W Isles)

      McWilliam, John

      Strang, Gavin

      Marks, Kenneth

      Tinn, James

      Marshall, D(G'gowS'ton)

      Wainwright, E. (Dearne V)

      Marshall, Dr Edmund (Goole)

      Welsh, Michael

      Mason, Rt Hon Roy

      White, Frank R.

      Maxton, John

      Whitlock, William

      Maynard, Miss Joan

      Wigley, Dafydd

      Millan, Rt Hon Bruce

      Woolmer, Kenneth

      Miller, Dr M.S. (E Kilbride)

      Morris, Rt Hon J. (Aberavon)

      Tellers for the Ayes:

      O'Neill, Martin

      Mr. George Morton and

      Palmer, Arthur

      Mr. Austin Mitchell

      NOES

      Alexander, Richard

      Gray, Hamish

      Alton, David

      Griffiths, Peter Portsm'th N)

      Ancram, Michael

      Grist, Ian

      Arnold, Tom

      Grylls, Michael

      Aspinwall, Jack

      Gummer, John Selwyn

      Atkins, Robert(Preston N)

      Haselhurst, Alan

      Banks, Robert

      Hawksley, Warren

      Beith, A.J.

      Heddle, John

      Benyon, Thomas(A'don)

      Hogg, Hon Douglas(Gr'th'm)

      Berry, Hon Anthony

      Holland, Philip(Carlton)

      Best, Keith

      Hordern, Peter

      Bevan, DavidGilroy

      Howell, Ralph(N Norfolk)

      Biggs-Davison, John

      Howells, Geraint

      Blackburn, John

      Hurd, Hon Douglas

      Braine, Sir Bernard

      Jopling, Rt Hon Michael

      Bright, Graham

      Kimball, Marcus

      Brinton, Tim

      Lang, Ian

      Brotherton, Michael

      Lawrence, Ivan

      Brown, Michael(Brigg &Sc'n)

      Lawson, Rt Hon Nigel

      Bruce-Gardyne, John

      LeMarchant, Spencer

      Bryan, Sir Paul

      Lloyd, Peter(Fareham)

      Buchanan-Smith, Alick

      Luce, Richard

      Buck, Antony

      Lyell, Nicholas

      Bulmer, Esmond

      MacGregor, John

      Carlisle, John (Luton West)

      MacKay, John (Argyll)

      Carlisle, Kenneth(Lincoln)

      McNair-Wilson, M'('bury)

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

      McQuarrie, Albert

      Chapman, Sydney

      Major, john

      Churchill,W.S.

      Mates, Michael

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

      Mather, Carol

      Clark, Sir W.(Croydon S)

      Maude, Rt Hon Sir Angus

      Clarke, Kenneth(Rushcliffe)

      Mawby, Ray

      Colvin, Michael

      Mawhinney, Dr Brian

      Cope, John

      Maxwell-Hyslop, Robin

      Cormack, Patrick

      Meyer, Sir Anthony

      Corrie, John

      Miller, Hal(B'grove)

      Crouch, David

      Mills, lain(Meriden)

      Dorrell, Stephen

      Mills, Peter (West Devon)

      Douglas-Hamilton,Lord J.

      Moate, Roger

      Dover, Denshore

      Molyneaux, James

      Dunn, Robert (Dartford)

      Morgan, Geraint

      Dykes, Hugh

      Murphy, Christopher

      Elliott, Sir William

      Myles, David

      Faith, MrsSheila

      Neale, Gerrard

      Fenner, Mrs Peggy

      Needham, Richard

      Fletcher, A. (Ed'nb'ghN)

      Nelson, Anthony

      Fookes, Miss Janet

      Neubert, Michael

      Forman, Nigel

      Newton, Tony

      Fraser, Peter (South Angus)

      Onslow, Cranley

      Garel-Jones, Tristan

      Osbon, john

      Goodlad, Alastair

      Page, John (Harrow, West)

      Gorst, John

      Page, Rt Hon Sir G. (Crosby)

      Gow, Ian

      Page, Richard (SW Herts)

      Gower, SirRaymond

      Pawsey, James

      Grant, Anthony(Harrow C)

      Penhaligon, David

      355

      Pollock, Alexander

      Tebbit, Norman

      Prentice, Rt Hon Reg

      Temple-Morris, Peter

      Proctor, K. Harvey

      Thatcher, Rt Hon Mrs M.

      Renton, Tim

      Thornton, Malcolm

      Rhodes James, Robert

      Townend, John (Bridlington)

      Roberts, M. (Cardiff NW)

      Wall, Patrick

      Rossi, Hugh

      Waller, Gary

      Sainsbury, Hon Timothy

      Ward, John

      Shaw, Giles (Pudsey)

      Warren, Kenneth

      Shepherd, Colin (Hereford)

      Watson, John

      Skeet, T. H. H.

      Wells, John (Maidstone)

      Speller, Tony

      Wells, Bowen

      Spence, John

      Wheeler, John

      Spicer, Michael (SWorcs)

      Wickenden, Keith

      Sproat, lain

      Winterton, Nicholas

      Squire, Robin

      Wolfson, Mark

      Stainton, Keith

      Younger, Rt Hon George

      Stanbrook, lvor

      Stevens, Martin

      Tellers for the Noes:

      Stradling Thomas, J.

      Mr. Peter Brooke and

      Taylor, Teddy (S'end E)

      Mr. Donald Thompson.

      Question accordingly negatived.

    Clause 5

      RECORDS FOR LEVY PURPOSES
      9.30 pm
      Mr. Buchanan-Smith: I beg to move amendment No. 9, in page 5, line 9 after 'records', insert
      'and to furnish to the Authority such information'.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this we may take Government amendment No. 10.
      Mr. Buchanan-Smith: The amendment provides a power under which persons liable to pay the authority's levy can be required to send to the authority information about their levy liability. Under the clause as drafted, persons can be required to keep levy records, but in order to assess their liability for levy the authority must send its officers to the premises in which records are kept.
      That would clearly be a large task, and it would be expensive for the authority to employ appropriate numbers of inspectors. Of course, the cost would have to be met out of the levy. To simplify the bureaucracy that would be involved and to minimise the cost, amendment No. 9 gives power to require information about the levy to be sent to the authority. Amendment No. 10 makes it an offence to furnish false information in so doing.
      The White Fish Authority has a slightly different power, in that it can require information to be sent to it, and failure to supply that information when requested can lead to punishment. All that we are doing here is giving the new authority the same powers as the White Fish Authority. At the same time, we hope to reduce bureaucracy and expense. I hope that the amendment will commend itself to the House.
      Amendment agreed to.
      Amendment made: No. 10, in page 5, line 29, after 'record', insert 'or furnishes any information'.—[Mr. Buchanan-Smith.]

    Clause 6

      BORROWING POWERS
      Amendments made: No. 11, in page 5, line 41, after 'of, insert 'the aggregate of (a)'.
      No. 12, in page 5, line 42, after 'section', insert
      'and
      (b) sums borrowed by another person and guaranteed by the Authority under section 3(1)(f) above'.—[Mr. Buchanan-Smith.]

Clause 20

  PROHIBITION OF TRANS-SHIPMENT OF SEA FISH
  Amendment made: No. 15, in page 15, line 29, leave out from 'section 6' to the end of line 30 and insert
  'for the words"under this section" in the second place where they occur there shall be substituted the words"under this subsection", and after that subsection there shall be inserted—
  "(5A) If any sea fish are—

  (a) trans-shipped into a vessel in contravention of an order under this section; or

  (b) trans-shipped from a vessel in contravention of such an order, the master, the owner and the charterer (if any) of the vessel shall each be guilty of an offence under this subsection.".'.—[Mr. Buchanan-Smith.]

  Clause 21
  PENALTIES FOR OFFENCES
  Amendments made: No. 16, in page 16, line 38, leave out 'or 5(1)' and insert:
  ', 4A(3), 5(1) or 6(5A)(a)'.
  No. 17, in page 16, line 42, after '(9A)', insert ', 4A(6)'.
  No. 18, in page 17, line 2, leave out '6' and insert', 4A(7)or(8), 6(5) or (5A)(b)'.
  No. 19, in page 17, line 8, after '(9A)', insert', 4A(3) and (6)'.
  No. 20, in page 17, line 9, after '6', insert '(5) and (5A)(b)'.
  No. 21, in page 17, line 18, after '(9A)', insert 'or 4A(3) or (6)'.
  No. 22, in page 17, line 29, after '6', insert '(5) or (5A)(b)'.
  No. 23, in page 17, line 36, after '(9A)', insert', 4A(3) or (6)'.—[Mr. Buchanan-Smith.]

  Clause 22
  ENFORCEMENT OF ACT OF 1967
  Mr. Buchanan-Smith: I beg to move amendment No. 24, in page 18, line 33, leave out from beginning to 'search' in line 34 and insert—
  (bb) take copies of any such document;
  and, is he has reason to suspect that an offence under this Act has been committed, he may also—'.
  Mr. Deputy Speaker: With this we are to take Government amendment No. 25.
  Mr. Buchanan-Smith: The amendment relates to an important matter. In Committee my hon. Friends the Members for Aberdeen, South (Mr. Sproat) and Aberdeenshire, East (Mr. McQuarrie) pressed me regarding the powers that British sea fishery officers would have to search premises. They felt that the powers were too wide and could encroach upon the liberty of the individual. I undertook at that time to see whether a way could be found to limit the powers. This amendment is by way of response to the very reasonable and fair point that my hon. Friends made in Committee.
  It was apparent in Committee that the real concern was about the power to search premises, as distinct from the power to make routine inspections. I make that distinction.

  357
  I have considered the matter carefully, and I feel that some limitation on the absolute power to search premises is desirable. As a result, the purpose of the amendment is to limit that power to those occasions when a British sea fishery officer has reason to suspect that an offence has been committed.
  I appreciate that my two hon. Friends were seeking to protect the rights of the individual. I am equally concerned in the amendment to protect those rights. But it should be remembered that we have a responsibility as well for the conservation of fish stocks. After all, the future livelihood of fishermen depends on an effective conservation of fish stocks and on how effective we are in ensuring that catch quotas are observed. The effectiveness of catch quotas and any accompanying quota management measures must entail a lot of checking of documentary evidence. Thus, in considering the powers that were needed to ensure effective levels of enforcement, I have had to strike a balance between the need to protect the rights of the individual and the need to protect the future fishing opportunities for United Kingdom fishermen.
  I believe that we have struck the proper balance in the amendment I appreciate that my hon. Friends would have liked me to go further, but I ask them to bear in mind the other considerations that are involved, and I hope that they will consider that we have struck the correct balance.
  Mr. Donald Stewart: A small point arises in connection with these excellent amendments, which I shall support. It concerns the general application of the powers. I take the point that was raised about individual freedom, and so on. The general manager of the Stornoway Pier and Harbour Commission has asked me to discover whether the commission's premises are covered by
  "any premises (other than a dwelling house)".
  Will the Minister say whether harbour authorities and similar undertakings would be liable to searches of this kind?
  Mr. Sproat: I rise to thank my hon. Friend the Minister of State for responding in this way to the arguments that we advanced in Committee. It is certainly true that without these amendments the powers would be extremely wide. A sea fisheries officer could apparently enter premises covered by the clause and could compel not only the master of the business, but his wife, his child and anyone else to do what that officer wished. It is good that the powers have been clarified and narrowed in this way, so that it is now a question only of the officer's seeing documents and copying them, if necessary.
  My hon. Friend has not gone as far down the road as my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) and I would wish, but we believe that half a loaf is better than no bread. We should still like search warrants that are obtained for the purposes of this clause to be signed by justices of the peace. Nevertheless, we appreciate that my hon. Friend has at least met us half way, and if experience shows that these powers are being abused no doubt our constituents will contact us quickly and we shall look at the matter again. In the meantime I thank my hon. Friend the Minister of State and express my support for the amendment.
  Mr. McQuarrie: I associate myself with the words of my hon. Friend the Member for Aberdeen, South (Mr. Sproat). The point raised by the right hon. Member for Western Isles (Mr. Stewart) was the very point that
  358
  worried us—the fact that sea fisheries officers would have the right to enter any premises other than a dwelling house. We saw that as an erosion of freedom for a business person whose premises would be entered as of right by a sea fisheries officer.
  In Committee the Minister was kind enough to indicate that the reason for the clause and for clause 23, and the reason he has now altered paragraphs (c) and (d), is that if there were to be routine inspections they could be carried out as normal, but if it were suspected that a fishing business were acting contrary to the Act the officers would be able to enter the premises and obtain the necessary information.
  I am pleased with the Minister's careful drafting in paragraphs (c) and (d) because by his draftsmanship he has answered half our fears. He has removed the problems created by paragraphs (a) and (b).
  May I urge my hon. Friend carefully to monitor these provisions once the Bill becomes law so that if there is any suggestion of abuse of those powers under paragraphs (a) and (b) he will look at the matter again? I thank him for reconsidering the matter and bringing forward the amendments, which remove most of the fears that my hon. Friend and I had expressed.
  Mr. Buchanan-Smith: I am grateful for the welcome that the amendments have received. I assure my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) that the powers and the way in which they are exercised will be monitored in the normal course of events. If there are any abuses we shall seek to deal with them.
  The right hon. Member for Western Isles (Mr. Stewart) asked whether the harbour offices at Stornoway would be covered by this provision. I refer him to clause 22 where the proposed new subsection (2A) says:
  "Any such officer may—
  (a) enter at any reasonable time any premises (other than a dwelling-house) used for carrying on any business in connection with the operation of fishing boats or activities connected therewith or ancillary' thereto or with the treatment, storage or sale of sea fish;"
  The premises that can be entered are defined in that subsection.
  9.45 pm
  I have been in the harbour office at Stornoway on occasions, perhaps even with the right hon. Gentleman. I cannot say whether any of the activities described are carried out at that office. If they are, the office will be covered by the legislation. I shall look more closely at the matter and let him know whether the office will be covered.
  A limitation is provided, which means that each case must be judged on its merits. If any of those activities take place at certain premises, the power to enter applies. I hope that that provides some clarification for the right hon. Gentleman.
  Amendment agreed to.
  Amendments made: No. 25, in page 18, line 39, leave out from beginning to 'seize' in line 41.
  No. 26, in page 19, line 14, after 'on', insert
  'and the equipment of, the vessel'.—[Mr. Buchanan-Smith.]

  Clause 23
  BRITISH SEA-FISHERY OFFICERS
  Amendments made: No. 27, in page 21, line 11, leave out second 'or'.
  No. 27A, in page 21, line 12, after '1967', insert
  'or section (Enforcement of provisions as to trans-shipment) of the Fisheries Act 1981'.
  No. 28, in page 21, line 23, at end add—
  '(6) After section 10(2) of the said Act of 1968 there is inserted the following—
  "(2A) Any person who on any vessel within British fishery limits—

  (a)fails without reasonable excuse to comply with any requirement imposed or to answer any question asked, by a British sea-fishery officer under section (Enforcement of provisions as to trans-shipment) of the Fisheries Act 1981;

  (b)prevents, or attempts to prevent, any other person complying with any such requirement or answering any such question; or

  (c)assaults any such officer while exercising any of the powers conferred on him by that section or wilfully obstructs any such officer in the exercise of any of those powers;

  shall be guilty of an offence.'".—[Mr. Buchanan-Smith.]

  Clause 24
  JURISDICTION
  Amendments made: No. 29, in page 21, line 26, at end insert '4A'.—[Mr. Buchanan-Smith.]

  Clause 28
  EXEMPTION FROM CONSERVATION LEGISLATION
  Mr. Buchanan-Smith: I beg to move amendment No. 31, in page 24, line 2, leave out from beginning to 'by' in line 4 and insert
  'provision of the Salmon and Freshwater Fisheries Act 1975 mentioned in column 1 of Part I Schedule 4 to this Act by reason of any act specified in relation to that provision in column 2 of that Part which is done'.
  Mr. Deputy Speaker: With this we may take Government amendment No. 37.
  Mr. Buchanan-Smith: This is a complicated matter, and it may be helpful if I explain it briefly to the House.
  Clause 28(1) exempts fish fanners from certain provisions of the Salmon and Freshwater Fisheries Act 1975, which are designed to protect wild stocks of salmon, trout and freshwater fish. The provisions currently affect all fish farms. We discussed the matter in Committee, and there was general agreement that it was time to release fish farmers from unnecessary restriction. The point was raised in consultation before the Bill was introduced, and we sought to include a provision in it.
  The amendments to clause 28 and schedule 4 limit the scope of the exemption as appropriate to fish produced by fish farming, and to waters used exclusively for farming. As I said in Committee, we received representations to the effect that clause 28(1), as drafted, could give rise to difficulties. I was persuaded by those representations. As those who served on the Committee know, I promised to bring forward a suitable amendment.
  I received representations on two specific points—first, that the position of fishing with rod and line was not clear, and, secondly, that the unacceptable netting of wild stocks of fish from rivers for fish fanning purposes should be
  360
  exempted. It was not our intention that either of those practices should be exempted. The amendments make it clear that fishing with rod and line is not exempted, and that the exemptions relating to nets and the netting of fish are restricted only to the taking of farmed fish and the use of nets in waters used exclusively for fish farming.
  I hope that the amendments meet the concern that has been expressed.
  Amendment agreed to.

  Clause 33
  FISHERIES OFFENCES ON RIVER TWEED
  Mr. A. J. Beith: I beg to move amendment No. 32, in page 27, line 1, leave out clause 33.
  It must be unusual for an hon. Member to find in a Bill a clause which relates exclusively and wholly to his constituency. I am almost tempted to inquire whether this might be a hybrid Bill on that account and thus take us back into the area in which we were with the Aircraft and Shipbuilding Industries Bill.
  One of the distinctive features of this clause is that it brings a piece of Scottish law into England. There are precedents for that and I shall refer to them in a moment. I am sure that it is something that appeals greatly to the leader of the Scottish National Party, the right hon. Member for the Western Isles (Mr. Stewart). It is not the sort of thing we normally expect from the Government, as I shall argue in a moment, although there is reasonable precedent for some of the things that they are trying to do. What is perhaps most puzzling and surprising is that it has nothing to do with the White Fish Authority, with sea fisheries or with fish farming. Therefore, everybody was slightly surprised to find it in this Bill at this stage.
  When I consulted the court officials and solicitors in Berwick, they were horrified to find that this piece of important legislation affecting them might have escaped their notice entirely, because at least one of them admitted frankly to me that he would never have dreamt of looking at a Bill which changes the constitution of the White Fish Authority for the latest definition of the law on the river fishery of salmon in the Tweed. That is what this clause is about. It is perhaps a warning that we should be careful about how we carry out legislative work of this kind in order to ensure that those involved can check the legislation.
  The Minister has just referred to representations that he received on a previous clause. He has very properly responded to the representations and as a consequence has modified what could have been a technical difficulty. That is right and it is a natural process of government. It is very hard to do that if a clause affecting a wholly different area is introduced not on Second Reading but at Committee stage, especially when it arises very late in the Committee stage and is picked up only if hon. Members are particularly zealous to watch for things of this kind. Therefore, I am bound to ask why the clause was not in the Bill on Second Reading. If the Government recognised the need for it, they could surely have included it in the Bill on Second Reading.
  They did not see fit to consult anybody about it. The Secretary of State, who is in his place, defended his decision on the ground that he was correcting an oversight.

  361
  The fact that a new clause corrects an oversight is no excuse for not consulting anybody about it, otherwise one runs the risk of compounding the oversight with even more oversights and making the matter even worse than it was to start with. I hope that he will not erect that into a principle of Scottish Office practice.
  That reminds me that it is the Scottish Office which deals with the bit of England with which we are concerned. When I table questions hoping for a reply from the always cheerful hon. Member for North Angus and Mearns (Mr. Buchanan-Smith), I find that they are all transferred to the Secretary of State for Scotland.
  I have said that the Minister said that he did not need to consult anybody because this clause merely corrected an oversight. He cannot get away with that. It was not an oversight at all. My hon. Friend the Member for Inverness (Mr. Johnston) pointed out on Second Reading of the Freshwater and Salmon Fisheries (Scotland) Bill in 1975 that it applied only to the Scottish and not to the English parts of the Tweed. My right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) dealt with it in detail in the Committee stage of that Bill.
  The Minister, who was, I think, the hon. Member for Glasgow, Provan (Mr. Brown), defended in some detail the fact that the Government had made the decision not to extend the provisions of that Bill to the English part of the Tweed. At that stage I made inquiries of the Government and of the Clerks of the House because I was concerned that penalties could be applied to citizens of England by means of a Scottish Bill which was dealt with in this House entirely through Scottish procedures—the Scottish Grand Committee for Second Reading and the Scottish Standing Committee for the Committee stage. Quite rightly, no attempt was made to extend to England that Scottish Bill which was going through exclusively Scottish procedures. It would have been foreign to the procedures of the House had that been done.
  The then Government took the view that uniformity was not necessary along the Tweed and that the progress of the Bill would be impaired if they had to use United Kingdom procedures and thereby widen its scope. It could not be claimed to have been an oversight. It may have been a misjudgment; it was not a mistake. Everybody knew what was happening and realised what the consequences might be. Indeed, they were fully pointed out by several Liberal members at that time.
  The clause involves the practice of treating a piece of England for salmon fisheries purposes as if it were in Scotland. That is not new. It has been done in River Tweed legislation over many years. The Freshwater and Salmon Fisheries (Scotland) Act 1976 could be said to be a departure from the practice which had gone before in that it applied penalties exclusively on the Scottish side and left the English law unchanged with different penalties and slight differences in the definition of offences. It is not unreasonable that the Government should now propose to change that situation by putting the English side of the Tweed on the same basis as the Scottish side.
  When I discovered that that was the Government's intention, I had to try to obtain information on how they intended to draft the clause and its implications. That had to be done hastily by written questions in four or live days. I reiterate that is not a helpful way to introduce complicated legislation. The Minister, whilst recognising that his staff would have to move fast to answer some of those questions, must also have recognised that fishing
  362
  was a sensative issue and that salmon fishing was a very sensitive issue. The risk of the slightest error giving rise to enormous complications must be avoided in legislating in this area. I had many queries about it which I had to pursue by means of written questions. It was important to establish that, for example, it did not affect drift net fishing beyond the mouth of the Tweed and that it did not create new offences of a wholly different kind. We certainly ought not to take the risk of an oversight the other way. The effect of the clause as it now appears will be to increase fines for offences in the English parts of the Tweed. However, it will also remove custodial sentences from punishments. There will no longer be the sanction of a person being sent to prison for a second offence in certain categories as was the position previously. This may be the Scottish Office's contribution to the Home Secretary's campaign to reduce the prison population. Perhaps I should not comment on that. However, that is a feature of the legislation to be noted. It removes the risk of a custodial sentence for a second offence of poaching and the option of trial in the Crown court except on appeal.
  It is sensible that the laws regulating salmon fishing on the Tweed should be uniform along the whole length of the river which is in part in Scotland and in part in England and represents the boundary between England and Scotland. It is obvious that it is one river. Therefore, we should organise the regulation of fisheries in it on the basis of a single corpus of law. I do not object to that principle. However, the Government must recognise that hon. Members have a duty to look after their constituents' interests. The process of legislation ought to ensure that that can be done in a reasonable way and not rushed, as. I feared.
  That is why I tabled this probing amendment. I shall not seek to prevent the retention of the clause in the Bill.
  Mr. Buchanan-Smith: I am grateful for the spirit in which the hon. Member for Berwick-upon-Tweed (Mr. Beith) moved the amendment. I should like to make it clear right away, as I think he will accept, that there was. no intention of being discourteous to him by not consulting him and others in his constituency about this matter. If the hon. Gentleman has been inconvenienced in any way I apologise to him and, through him, to any of his constituents who might have felt that we were jumping matters on this issue.
  I find myself in a slightly invidious position as a Member representing a Scottish constituency on the north side of the Tweed and a Minister in a United Kingdom Department supporting a clause that extends Scottish legislation to the south bank of the Tweed.
  The notes which have been drafted for me to use in answering the amendments are interesting. I am advised to advise the House that this is not a significant Scottish encroachment. That is a rather felicitous way of putting it. Therefore, I hope that the House will not feel that I am encroaching on England by having had to move this provision in Committee, or by having to defend it now on the Floor of the House.
  The hon. Member for Berwick-upon-Tweed (Mr. Beith) is right in saying that no indication of this provision was given on Second Reading.
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That, at this day's sitting, the Fisheries Bill may be proceeded with, though opposed, until any hour.—[Mr. Cope.]
  Question again proposed, That the amendment be made.
  Mr. Buchanan-Smith: The reason why there was no indication was that it was only as a result of a relatively recent decision by the Berwich magistrates' court that the anomaly regarding the 1976 Act was brought to our attention. There were specific representations about that matter, some of which we did not receive until after the Bill was drafted, and some of them not until after the Second Reading. Given the fact that a Fisheries Bill is going through the House and that there is a gloriously long title anyway, covering everything from sea fish authorities to regulations, to fish farming, to cetaceans and all sorts of other interesting things, this is obviously a sensible way to try to correct the matter.
  Like the hon. Member for Berwich-upon-Tweed, I can only guess at the intentions of those who drafted the legislation and put the legislation through the House in 1976. As a Minister in a successor Government, I have no means of finding out what those intentions were. I can only guess, as the hon. Member did, that in legislative terms it was intended to keep the River Tweed as a single entity on both banks, because the River Tweed has been treated as one river system coming under Scottish legislation from as long ago as 1868 and 1902, and more recently in 1951.
  364
  In the 1976 Act the penalties applying to the south bank of the Tweed appear to have been overlooked when that legislation was drafted. The hon. Member saved me having to go through my brief tonight by answering and ackowledging the reasons.
  Mr Beith: We should place on record the fact that the Act of 1976 could not have extended penalties to any part of England unless it had been put through different procedures. For the protection of my constituents, we should make it clear that someone did not forget to include those provisions but that it was recognised that to extend the Act to England would involve different procedures. Those procedures were not used.
  Mr. Buchanan-Smith: I note the hon. Member's point. However, I do not intend to go into the merits of that matter. I explained it in Committee and the hon. Member acknowledged the reasons why that had taken place, and believed that they were sensible and right.
  I apologise to the hon. Gentleman if he has been inconvenienced by the way in which the matter has been handled. I thank him for the spirit in which he moved his amendment, in anticipation that he will ask leave to withdraw it.
  Mr. Beith: I thank the Minister for his courteous reply. I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

  Clause 38
  FINANCIAL PROVISIONS
  Amendments made; No. 33, in page 28, line 15, leave out 'making loans to the Authority' and insert
  "providing financial assistance to the Authority (by way of loan, grant or guarantee)'.
  No. 34, in page 28, leave out lines 23 to 25 and insert 'under this Act'.—[Mr. Buchanan-Smith.]

  Schedule 3
  WHITE FISH AUTHORITY AND HERRING INDUSTRY BOARD: TRANSITIONAL PROVISIONS
  Mr. Buchanan-Smith: I beg to move amendment No. 36, in page 34, line 48, at end insert—
  'Other statutory functions
  .—(1) The functions of the White Fish Authority and the Herring Industry Board under—

  (a)section 31(12) of the Harbours Act 1964 (consultation on objection to ship, passenger and goods dues); and

  (b)rule 124 of the Fishing Vessels (Safety Provisions) Rules 1975 (appointment of inspectors and surveyors),

  are transferred to the Authority, and those enactments are amended as follows.

  (2) In section 31(12)—

  (a)for"the White Fish Authority or the Herring Industry Board" there is substituted"the Sea Fish Authority"; and

  (b)for"the Authority or as the case may be the Board" there is substituted"the Authority".

  In rule 124—

  (a)for"the Sea Fish Industry Act 1970" there is substituated"the Fisheries Act 1981"; and

  (b)for"the White Fish Authority or the Herring Industry Board" in the first place where those words occur, there is substituted"the Sea Fish Industry Authority" and in the second place where they occur, there is substituted"or the Sea Fish Industry Authority'".

  (4) Anything which when this paragraph comes into force is in process of being done under section 31(12) by or in relation to the White Fish Authority or the Herring Industry Board may be continued by or in relation to the Authority; and any appointment under rule 124 made by either of those bodies before this paragraph comes into force shall have effect as if made by the Authority so far as is necessary for continuing its effect.'.
  This is one of those horribly lengthy amendments which, were the hour not fairly late, might cause hon. Members to wonder what was meant and press for
  'Provision of 1975 Act
  Section 2(2) (talking etc. of unclean or immature fish).
  Section 3(1) (use of seine or draft nets).
  Section 3(2) and (4) (minimum mesh of nets).
  Section 5(1) (use of explosives, etc.)
  Section 5(4) (possession of equipment for purpose of contravening section 5(1)).
  Section I9(2)(a), (4)(a), (6) and (7) (close seasons and close times for various fish).
  Section 22(1) (sale etc. of fish at certain times of year).
  Section 23(1) (export of fish at certain times of year).
  Section 27(a) (unlicensed fishing).
  Section 27(b) {possession of equipment with intent to use it for unlicensed fishing).
  explanations. In fact, the purpose is fairly simple—to transfer to the new Sea Fish Industry Authority two functions currently exercised by the White Fish Authority and the Herring Industry Board.
  The first function arises under the Harbours Act 1964. When objections are raised to the level of harbour charges, there is a statutory procedure for considering them. Among the relevant provisions is a requirement that if the harbour charge under consideration is of concern to the WFA or the HIB, the authority or the board should be consulted before a decison is taken on the charge. It seems appropriate that the new authority should take on the same role.
  The second function covered in the amendment arises in this way. At present, the staff of the White Fish Authority or the Herring Industry Board carry out surveys for the Department of Trade. This function is of benefit to the industry, since the surveys are carried out in the course of the authority's or board's inspection work on grant and loan projects. I see the hon. Member for Kingston upon Hull, Central (Mr. McNamara) smiling. He referred to this point earlier.
  The carrying out of this function by inspectors of the HIB and the WFA has meant that the number of inspectors could be kept to a minimum. Thus, financial savings are passed on to the fishermen by means of a reduction in fees for surveys carried out by staff of the authority or the board.
  This is obviously a sensible practice, and the amendment will enable the new authority to take it on. The point was overlooked at earlier stages. I hope that, with that brief explanation, the House will accept the amendment.
  Mr. McNamara: I have but one observation to make. The Minister has now confirmed the point that we made earlier, that there were other safety matters which were being undertaken, and there was therefore no reason why our amendment should not be accepted.
  Amendment agreed to.

  Schedule 4
  EXEMPTIONS FOR FISH FARMING
  Amendment made: No. 37, in page 35, leave out lines 5 to 15 and insert—
  Exempted acts
  Taking, killing or injuring or attempting to take, kill or injure or buying, selling or exposing for sale, or having in possession fish produced by fish farming.
  Shooting or working a seine or draft net in waters used exclusively for fish farming.
  Taking or attempting to take fish produced by fish farming.
  Using an electrical device in waters used exclusively for fish farming.
  Possession of an electrical device for the purpose of using it in waters used exclusively for fish farming.
  Fishing for, taking or killing or attempting to take or kill (otherwise than by a rod and line) fish produced by fish farming.
  Buying, selling, exposing for sale or having in possession for sale fish produced by fish farming.
  Exporting or entering for export fish produced by fish farming.
  Fishing for or taking (otherwise than by a rod and line) fish produced by fish farming.
  Possession of an instrument (other than a rod and line) with intent to use it for fishing tor or taking fish produced by fish farming.
  Provision of 1975 Act
  section 28(7) (infringement of byelaws), so far as relating to any byelaw made for a purpose mentioned in paragraphs 21, 23, 24, 25, 26 or 28 of Schedule 3.
  Mr. Buchanan-Smith: I beg to move, That the Bill be now read the Third time.
  I know that the right hon. Member for Barnsley (Mr. Mason) wishes to speak on Third Reading, but I should like to say a few words at this stage. I believe that by setting up the new Sea Fish Industry Authority, with the service which it can give to the industry, and by bringing to an end the uncertainty which has existed over the future of the two authorities which it will replace, we shall help to bring substantial benefit to the industry.
  I take this opportunity to put on record again my thanks to those who have served on the White Fish Authority and the Herring Industry Board for the good service which they and their staff have given over the years. I pay tribute also to the patience which they have exercised until Parliament eventually came to a decision to unite the work of the two bodies in one authority. Given the record of the two original bodies, I am certain that the new authority, which I certainly wish well, will start from a firm and excellent base and from that base should be able to continue to give good service to the industry.
  I come now to one or two specific provisions in the Bill which are of particular significance. The first relates to control and conservation, penalties and enforcement. The powers which we are taking in relation to fishing vessels of other countries and the greater speed with which we ought to be able to act under the provisions of the Bill will, I believe, be of great importance, since conservation measures, quotas and everything else are worth nothing unless we can apply them effectively and swiftly.
  The other matter is fish farming. It has been described as an infant industry. A number of minor steps have been taken in the past to assist it in legislation, but I think that this is the first time that in a Bill of this kind a number of provisions have been brought together to help fish farming. I hope that this will be the start of a greater appreciation of the part that the fish farming industry can play in our economy.
  With those few words, I commend the Bill to the House.
  10.10 pm
  Mr. Roy Mason: As we move to the Third Reading of the Bill, I, too, pay tribute to the services rendered by the Herring Industry Board and the White Fish Authority. We paid tribute to them on Second Reading and we echo those tributes as we reach the final stages of the Bill.
  The Sea Fish Industry Authority is now being established, but I must tell the Minister that it is still not in the form that the Opposition would have wished. We still believe that our proposal for a smaller, independent authority, backed up by an expert consultative body, would have been better. The new authority now being forced upon the House will have a mixture of independent members and representatives from the fishing industry. The Minister assured us that he has found confidence in the industry on this particular form and make-up. At this stage, we shall have to accept that from him.
  Exempted acts
  Any act committed—

  (a)in waters used exclusively for fish farming; and

  (b)in the case of a bylaw made for the purpose mentioned in paragraph 21 or 25 of Schedule 3, otherwise than with a rod and line.'.—[Mr. Buchanan-Smith.]

  On consultations with a wide range of sectional interests, who collectively will have a great deal to say about promoting the efficiency of the industry, the Minister has so far been unable to indicate a consultative body of any kind. Even at this late stage, therefore, we still have no knowledge of the make-up of the authority or of any consultative system. If the Minister intends to make a winding-up speech on Third Reading it would be most helpful if he could enlighten us a little more on that.
  I believe that the Bill has been much improved in Committee, especially through the amendments moved by my hon. Friends but also because throughout the Committee stage the Minister was listening to the many suggestions that were made. On Report a number of valuable amendments were therefore made, which the House has welcomed today. The list includes parliamentary accountability on directives and in examination of the authority's borrowings, the tightening of the law on the transhipments of fish, Klondiking operations and the licensing of vessels—a whole batch of new amendments that have undoubtedly improved the Bill. We hope that the transhipment loopholes have now been effectively blocked.
  Having perused the names of the members of the Committee, and having read the report of all of its sittings, it is clear to me that it was an effective Committee stage. If we have had an effective Report stage, it has been because the Committee was composed of very knowledgeable Members of the House.
  The Bill recognises that the fishing industry has changed considerably in recent years. Our deep-sea fleet has been drastically reduced. Our inshore and middle-distance fleets have grown in numbers, and there has been a geographical switch in operational strength, so that at least 50 per cent. of the United Kingdom fishing fleets now operate from Scottish ports.
  Within that growth of smaller vessels, however, fear is developing in the industry that foreign vessels are increasingly being registered under the British flag—that there are flags of convenience within the British shipping fleets. According to reports, Spaniards and Scandinavians are already moving in. A considerable number of foreign vessels have registered in our ports. We ought to know from the Minister when he replies to what extent that is really happening. How many of those ships have registered in our ports in order conveniently to take advantage of our fishing limits, our sharing quotas and, above all, of Government loans and grants to the industry? I know that Government action is required to stop this, but I should like to know what powers the newly established Sea Fish Industry Authority will have to deal with matters of that kind.
  I hope that the Minister will not shackle the new authority. In Committee and on Report my hon. Friends pressed the need for some degree of permanence and security for the men in the fishing industry. I hope that the Minister will encourage the authority in that spirit of change and try to increase the betterment of the whole industry.
  While we recognise that on training and safety the Sea Fisheries Training Council, the Board of Trade and the Health and Safety Executive are primarily involved, we would wish the authority to be encouraged to support speedier changes for the betterment of the whole industry. By that we draw attention to the share fishermen and the inshore fleets, which, unlike the deep—sea trawling fleet, are not so well organised. Their job condition as a whole must be much progressed in order to match normal conditions established by other major industries.
  I turn to clause 13, in part II. If, flowing from a common fisheries policy deal, money is to be made available from the Common Market and matched by Government grants, I hope that there will be cash for fishermen who have already suffered, and may suffer further as a result of the deal. I hope that some thought is already being given to helping some of our fishing communities as a possible result of a CFP deal.
  I also hope that the new authority will be called upon to examine unfair practices that operate against United Kingdom fishermen. I hope that there will be regular monitoring, so that the Minister can be kept informed, with evidence, in order to alert the Commission and the Council of Fisheries Ministers.
  The timing of the Bill is most appropriate in anticipation of the CFP deal. Part II could quickly be brought into use if the new fisheries policy necessitates restructuring the United Kingdom fishing fleets with the aid of Common Market cash. The Minister knows the pitfalls, and so do we. He must not sell sections of our fleet for the short-term attraction of a cash deal. What is on offer by way of scrapping grants, laying-up premiums and the building of new vessels must be agreed by the industry as a whole. We recognise that that is difficult, but that is the goal.
  In order to give the authority a good start and a basis for its work in the future, it would be laudable if, next week, at the meeting of the Fisheries Council, we could obtain agreement on our basic aims. The Bill helps us towards our first objectve of conservation—to conserve fish stocks effectively. Secondly, in alliance with the 40 EEC inspectors or enforcement officers agreed in the CFP talks, the Bill establishes our sea fishery officers, another useful addition in preparation for a common fisheries policy.
  The Bill contains powers relating to the allocation of finance to the industry. We are therefore ready to take advantage of Common Market grants and loans in the wake of any agreement.
  We have made some progress on conservation and in the gradual build-up of some controls, and I hope that as the Bill proceeds to enactment we shall see Common Market agreement that will give us satisfaction on total allowable catches, controls over access in our 12-mile coastal belt, and the dominant preference that we seek up to 50 miles.
  If in his negotiations the Minister can obtain satisfaction for the whole industry, the Bill will prove invaluable to the United Kingdom fishing industry. We all fully appreciate the difficulties and the strong nationalistic views that still prevail in the fisheries talks, but if the Minister can maintain the support of Parliament and the various sections of the industry, and press on to their satisfaction, it may well be that the fishermen's
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  frustration, anger and long-standing patience will not have been in vain. I have pleasure in supporting the Third Reading.
  10.18 pm
  Mr. Sproat: I am sure that the whole House will echo the words of the right hon. Member for Barnsley (Mr. Mason) about what we hope will come out of the common fisheries policy. As someone who has expressed during the Bill's stages some doubts and scepticism about certain parts of the new Sea Fish Industry Authority, I welcome the fact that it will be set up.
  The fishing industry desperately needs a period of stability, confidence and unity of aim. The new authority, with its eight members from the industry, can contribute greatly to those three ends. I wish the new authority well.
  10.20 pm
  Mr. McNamara: The Bill will do a great deal to organise the industry and to establish it on a sound footing. However, I am not as optimistic as some hon. Members about what will emerge from the common fisheries policy—should such a policy come about. Some of the powers that will allow us to take advantage of any benefits that may come from the policy will hang in limbo until after the French elections, if not longer.
  In terms of the Bill's social content, a marvellous opportunity has been lost. The authority will not merely administer the industry as if it were so many computer models, but will organise the lives and livelihoods of many of our constituents. My hon. Friends and I raised some points that represented the considered opinions of fishermen's representatives throughout the country, which have been expressed at fishing conferences—held by my union and others—over the years. Positive steps have not been taken over accidents, decasualisation and many other matters.
  The opportunity has not been taken to rectify some ancient wrongs. Generally, the new authority has the support of all hon. Members, of most, if not all, of the representatives of the working people, and of many of the owners. If there is to be a separate representative for the Six Counties of Northern Ireland on the new Sea Fish Industry Authority, there should be a representative of the working people. It is not sufficient to represent the managers and owners. There must be someone to represent the interests of those who work in the industry.
  One part of the Bill has not received a great deal of attention. Nevertheless, it is a welcome step—as far as it goes—in the right direction. I refer to the provision for the preservation of whales, dolphins and similar sea animals. If the provision is interpreted generously, and if the Minister's powers are used not in a restrictive but in an expansive manner, it will prove to be an important measure. We have concentrated on the fishing industry and perhaps we have ignored the public's great interest in the safety of these great creatures of the deep. In so far as we are able to look after them in our waters, this will prove to be a welcome development which should be recognised as such by the British people.
  10.23 pm
  Mr. McQuarrie: I echo the words of the right hon. Member for Barnsley (Mr. Mason). In particular, I should like to refer to clause 2, which provides:

  371
  "(1) It shall be the duty of the Authority to exercise its powers under this act for the purpose of promoting the efficiency of the sea fish industry and so as to serve the interests of that industry as a whole.
  (2) In exercising its powers under this Part of this Act the Authority shall have regard to the interests of consumers of sea fish and sea fish products."
  Under the Bill the powers are wide and they will reduce the fragmentation of the industry. The provision will give an uplift to those in the fishing industry. I say without any disrespect to the WFA and the HIB that this has been awaited by the industry for many years. There has been a feeling that there should be one body to serve the industry as a whole. The wide powers given by the Government in the Bill will be welcomed by the fishing industry, both offshore and onshore.
  The industry as a whole has welcomed the Bill as it has progressed through Second Reading, Committee and Report stages. I congratulate my hon. Friend the Minister of State on the excellent manner in which he has directed the Bill through its Committee and Report stages and his tremendous work today in sitting in the Chamber throughout the Bill's Report stage and Third Reading. He has shown his complete faith in the Bill and deserves the congratulations of the House.
  10.25 pm
  Mr. Robert Hughes: I echo the words expressed from almost every quarter of the House in commendation of both the White Fish Authority and the Herring Industry Board. We should remind ourselves that both the authority and the board, the people who work for them and their connections with the industry, have done a great deal for the industry. I had personal experience before coming to the House of working with the industrial development unit based in Hull. I know the contribution that it made to develop fishing and fishing methods within the industry. We owe a debt of gratitude to those who worked in and took part in the running of both bodies.
  I also welcome the establishment of the new Sea Fish Industry Authority. It begins its life because of changed circumstances. Never in the history of the fishing industry have there been such uncertainties and such fears for the future expressed by people working at sea and on shore.
  The crisis in the industry is represented by the experience of a friend of mine whose name I shall not give because it would be embarrassing for him. He began business between eight and 10 years ago and always managed to make a decent living out of the industry. Now, for the first time in his life, he is faced with mounting debts to the extent that he cannot afford to leave the industry. If possible, he would leave, because he believes that the future is so bleak. Many people within the industry take that view. They would leave if they had the financial wherewithal to pay their debts. I believe, however, that the future of the industry may be better than some think.
  The Bill as it stands gives wide powers to the new authority. I confess that in one or two areas I should like to have seen it possess greater powers both in terms of marketing of fish and in terms of safety. Nevertheless, it has wide powers in terms of aid to the industry. I hope that those who govern the councils of the new body will start work by taking the view that the industry is not one sectional industry. Looking at the industry as a whole and taking account of the needs and aspirations of those who
  372
  go to sea and fish and the needs of the processors and whoever else is involved in the industry, I hope that it will be remembered that the industry cannot succeed and cannot live without those who work in it as fishermen and those who are employed in the processing factories.
  One of the disappointments is that the aid so far given to the industry has gone almost entirely to the owners and little, if any, has made its way to ordinary fishermen. I hope that the authority, if it takes all these factors into account, will earn the reputation of being as good for the industry as the two bodies that preceded it. I give the new authority my good wishes and hope that it will be a success.
  I hope that the industry, in 10 years, partly as a result of negotiations and partly as a result of the new body, will be a much healthier and much better place for those who work in it, for those, we hope, who will consume the fish, and for catchers and processors.
  10.30 pm
  Mr. Buchanan-Smith: With the leave of the House, I shall respond to the debate. I thank the right hon. Member for Barnsley (Mr. Mason) for his kind words of welcome to the Bill and for his acknowledgement of the work that has gone into it in Committee and on Report. I thank him for his courtesy.
  The right hon. Gentleman asked me about appointments to the authority. The procedures that we shall follow will be subject to consultation with the industry's representative organisations. It is important that we take those organisations along with us. We shall consult the industry on those who might be considered for appointment.
  The authority will have power to set up consultative committees if it wishes to do so. I wish to leave it with the discretion and responsibility to establish its own consultative bodies in whatever area and form it feels appropriate.
  The right hon. Gentleman referred to flags of convenience—an issue that in not directly within the remit of the authority. Regulatory powers rest with Ministers. The authority will be able to undertake any studies that it wishes and to report to Ministers as it thinks fit. There is genuine concern about flags of convenience. Studies are being undertaken by the Department of Trade, and officials in my Department are involved. My right hon. Friend the Minister of Agriculture, Fisheries and Food will be entering into discussions with Ministers in the Department of Trade. The system can be subjected to abuse and we shall be considering ways in which it can be tightened.
  The right hon. Gentleman talked about the common fisheries policy and the Bill's financial provisions. Far more important than anything that may be available financially to the industry, as a result of a settlement, is a framework for access and quotas. Those are the real issues that will allow the industry to live and prosper in future. That future does not rest merely on the injection on money. I am glad that the right hon. Gentleman emphasised that, and struck that balance. We must get the proportions right when considering what is really important to the industry.
  I thank the hon. Member for Kingston upon Hull, Central (Mr. McNamara) for his comments on what has been done to promote whale protection and the protection of smaller sea mammals, such as porpoises. We have taken

  373
  advantage of the Bill to make a sensible extension to existing powers, in the hope that we shall see these species properly conserved and properly cared for.
  I thank those who participated in Committee and on Report. The attitude of hon. Members on both sides of the House towards the Bill has been constructive at all stages. I have found it an enjoyable Bill to pilot because of the cooperation that has been forthcoming from both sides of the House. As a consequence of the constructive manner that has been adopted we shall send from the House a better Bill than was brought to it, and for that I thank all those who have taken part.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

  International Development Association (Finance)
  10.34 pm
  The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd): I beg to move,
  That the draft International Development Association (Sixth Replenishment: Interim Payments) Order 1981, which was laid before this House on 20 February, be approved.
  I hope that it is not impertinent of me to congratulate you, Mr. Deputy Speaker, on your appointment and, with respect, to welcome you on your arrival in the Chair.
  I move the order in the place of my hon. Friend the Member for Banbury (Mr. Marten), the Minister for Overseas Development, who is on an official overseas visit to aid projects. He hoped and expected to be back in time for the debate, but it has been somewhat brought forward, which is a good thing in itself. I am forced to take the place of my hon. Friend.
  The House will recall—and this is the starting point of our present discussion—the draft order that was approved on 17 June last year. That order authorised the United Kingdom to take part in the sixth replenishment of the International Development Association. A very large sum is involved. The total United Kingdom contribution to the sixth replenishment will be £555 million, promised over three years from 1 July 1980 to 30 June 1983.
  My hon. Friend explained in June last year, when submitting the order, why we felt it was right to contribute that large sum to the IDA. He explained that the IDA is an affiliate of the World Bank which gives loans on highly concessional and highly favourable terms to the poorest countries in the world. The House may like to know that over 60 per cent. of the IDA loans go to Commonwealth countries.
  My hon. Friend also made it clear on that occasion—this is the key to our present debate—that the replenishment of the IDA depended on necessary legislation being passed in the United States Congress. He added that if that legislation were not carried the replenishment could not be effective and the order which the House approved in June could not be given effect. Unfortunately, that is what has happened.
  Up to now there has been no American legislation and, therefore, there has been no sixth replenishment. Replenishment of the funds of the IDA has not, in the jargon, been triggered. It has not been able to start. As the House would expect, that has put the IDA in a difficult position. As has happened before in previous replenishment operations, the suggestion was made to the major donors that there should be a bridging operation to tide the IDA over the gap.
  We felt it right to join in the bridging operation needed to allow the IDA to continue its work. The terms of that operation were published and laid before the House in Cmnd. 8156 on 19 February. The bridging operation is already in effect and about half the donors, including most of the large ones, are taking part. Consequently, the IDA has enough funds to maintain its existing programme until the beginning of April. Our proposed contribution embodied in the draft order would extend the programme for several weeks beyond that.
  The draft order authorises Her Majesty's Government to contribute £185 million to the bridging operation. That

  375
  is equivalent to the first year tranche of what we would have contributed to the sixth replenishment. If the draft order is made, we propose to deposit at once a promissory note for about £92 million, which would be half the sum authorised in the draft order for the bridging operation. That would be a sensible way of handling the matter. That is in line with what several other donor countries are doing. It means that the British Government would shoulder a reasonable part of the burden created by the hiccup, or gap, in the replenishment operation.
  The essentially technical arrangements that I have described will have a substantial impact on a matter that I know is of great interest to the hon. Member for Glasgow, Queen's Park (Mr. McElhone) and to the House generally—that is, Britain's 1980 aid performance measured as a proportion of GNP. It is worth explaining why, because this is the kind of technical point that occasionally can go astray.
  It was decided recently by the development assistance committee of the OECD, which organises these statistics, that the promissory notes deposited with certain international financial institutions, including the IDA, which is much the largest of them, should count towards the annual total of development assistance. That means that they should count in the calculation of aid performance measured as a proportion of GNP.
  The House will understand from the explanations that have been given that we have not, during the calendar year 1980, put in a promissory note representing one-third of our commitment to the sixth replenishment of the IDA simply because the replenishment has not been triggered. Therefore, that promissory note has not been lodged and will not count as part of our aid performance during 1980. We are still a little way away from the stage where we can give the House even a provisional figure for our aid performance measured as GNP during 1980 because both halves of the statement are still somewhat uncertain.
  The hiccup over the replenishment of the IDA will mean that the figure of aid measured as a proportion of GNP for 1980 will be substantially lower than it would have been if the replenishment had gone ahead without difficulty. This is a technical point. We are talking not about a reduction of money spent in aid, but about a reduction in money promised for that aid through the IDA machinery through no fault of our own.
  Mr. Frank Hooky: I do not understand this point. I think that the Minister said that by depositing the note that counts as part of the annual aid contribution. If, because of forces outside our control, that note is not valid, that must surely release funds that can be spent in other directions. The Minister cannot have it in both ways, counting it in favour of our aid figure if it is valid, by saying, if it is not valid, that the money is not free to be spent on other things.
  Mr. Hurd: If the hon. Gentleman reflects on the matter, he will admit that an aid programme cannot be run on those lines. We are asking the House for authority to issue the promissory note which would normally have been issued during 1980. Now, with a delay of several months only, we are going ahead. We should look remarkably foolish if we had in some way committed that
  376
  sum last year and then found ourselves, as we do now and as we knew we would, in the position of having to commit it over again.
  We are trying to warn in advance of the figures that this technical delay in the lodging of the promissory note will affect the figure of our aid performance in 1980, when it emerges, as a proportion of GNP. That alteration will not be a true measure of what has been spent on the aid programme. It is simply a technical result of the way in which the development assistance committee requires us to present the figures.
  I turn to the future. I am glad to tell the House that the United States Administration have now told the IDA that they propose to ask Congress to authorise the full United States contribution to the replenishment. The American appropriations under the plan to be submitted to Congress will run behind schedule for the first two years, but at least they will be enough to start the replenishment. It is not for the House or the Government to say when Congress will approve the Administration's proposals. When it does the replenishment will begin, although late, and the bridging operation will be finished. I fear that the House will then have to approve a new order. We believe that it is best to proceed with absolute correctness. The draft order approved last June will not suffice in those circumstances. A fresh order will be required when the replenishment begins.
  If the House approves the order tonight, the money contributed by Britain under the bridging operation will be attributed to us in credit for the first year of the replenishment. It will be a book-keeping transaction. When replenishment begins we shall be credited with the amount of the promissory notes made under the bridging operation.
  These are technical matters, but it is necessary to put them to the House because they are the justification for asking it to approve a new order when in essence it has already discussed the matter last June. The basic point is not technical, however. Large sums of money are involved, which is an important political and economic point. We have a major international programme—the largest multilateral programme for the great majority of recipients in the poorest countries. It was threatened with interruption, which could have been serious.
  In theory, it would have been open for us—if we had been as mean-minded as is sometimes suggested—to take shelter behind the problems of the United States Government. It would have been open to us to have refused to take part in a bridging operation. We did not take that step as we did not think that it would be in the interests of Britain and its contribution to world development. We accepted that we had an interest and a responsibility to ensure that the IDA could continue work that we believed to be good. I hope that the House shares our judgment and that it will approve the order.
  10.49 pm
  Mr. Frank McElhone: May I take this opportunity to offer you my sincere congratulations on your new appointment, Mr. Deputy Speaker? You have always been a highly respected Member of the House. I have no doubt that you will bring a great deal of respect to the Chair. I wish you well.
  I shall not attempt to repeat the arguments advanced by my right hon. and hon. Friends when the House debated the same subject on 17 June last year. I was not present

  377
  during that debate, but on reading the report of the proceedings it appeared to me that my right hon. and hon. Friends were in no way satisfied with the Minister's answers. If he checks the Official Report I am sure that he will agree with me. We support the order, but I want to take the opportunity to ask several relevant questions and to follow up particularly the last comments of the Minister.
  The hon. Gentleman mentioned the difficulty that has led to this debate. As I understand it, from the memorandum to the report of the Select Committee on Statutory Instruments:
  "The replenishment has not come into effect as intended because of the failure of the United States Congress to authorise the United States' contribution".
  I am pleased that the Minister indicated that that promise has now been made. From discussions with colleagues who are very experienced in this matter, I understand that promises have been made before by Administrations in the United States and difficulty has then been experienced in getting the replenishment through. I therefore look at that promise with a certain degree of caution. It is a pity that the Prime Minister did not take the opportunity to raise this matter when she was discussing many things in Washington last week. It would have been of greater benefit to the image of this country than discussing support for the United States in its policy towards El Salvador.
  Cuts in aid from the United States as a major contributor are extremely serious and have an effect on the attitude of other countries. That is why this is important. I have already made the point to the Prime Minister's Parliamentary Private Secretary, as I know that neither he nor the Prime Minister will be present tonight.
  As a major contributor to this association we should take some responsibility for its projects. I therefore hope that the Minister will take note of some of the questions. If we are providing the substantial sums of money that he indicated, I hope that he will agree that responsibility for the way in which the money is allocated is a major part of our function, because we are a governor of the association as well as a part I contributor.
  The latest report of the IDA that is available in the Library is that for 1978. On reading it I was rather disappointed to learn that parts of the programme concerning education, water and sewerage and population seem to have a very low priority. I acknowledge that agriculture has the highest priority, and I am not complaining about that, but the other three important elements of any Third world programme have a very low priority.
  I refer the Minister to page 24 of the IDA report of that year. Talking about project appraisal it says:
  "Project appraisal involves more than saying 'yes' or 'no' to a proposal. It requires detailed investigation of at least six different aspects of the proposal: economic, technical (including environmental), managerial, organisational, commercial and financial."
  I should like to touch briefly on two of the criteria for the allocation of the money. I ask the Minister if he would reply to me—not tonight—regarding a very serious issue raised in The Observer and The Vole magazine last weekend about the dumping of pesticides in Third world countries. These do enormous damage. In the IDA report this question is asked:
  "Will the project have adverse effects on the environment of the country or on the health and well-being of its inhabitants?"
  So that organisation itself poses the question how our money and money from other countries will be used. The
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  Minister should look at The Observer and The Vole magazine. The House is indebted to these two publications for highlighting that matter.
  There is another important matter. One of the major criteria in allocating money is an economic investigation of projects to ascertain the number of jobs that it will create, and the rate of return. I hope that that is not acceptable. The IDA is part of the United Nations development programme, in one sense. I was disturbed to read in The Observer last Sunday that in Nepal children of 7 years of age are working a nine-hour day as labourers carrying 20lb loads of gravel for 30p a day. I ask the Minister to investigate that report.
  If the Minister expects the Opposition to support an order for £555 million of the British taxpayers' money to be allocated to the IDA, the Government, as a governor of the association, have the responsibility to investigate such reports. It is soul-destroying to read such reports and it is abominable to have to talk about them. I hope that they will be investigated.
  Finally, I should like to touch on the beguiling explanation that the Minister sought to give on another matter. I should like to get from him the answer to a question that I put to him a few days ago: what is the net amount of official development assistance for the calendar year 1980?
  The total amount coming through the aid programme, whether to multilateral programmes, such as that of the IDA, or bilateral programmes, which are especially important to the poorer countries, will represent a dismal picture. It is all very well to say that we did not get the promissory notes tacked on to the 1980 programme because of the failure of the American Congress to agree, but we know that the Minister or his right hon. Friend will have to make a dismal announcement.
  We know that these promissory notes are deposited with the Bank of England, with the rest of the contributions, to make up the total amount expressed as a percentage of GNP. During the period of the Labour Government it was not counted in that way. It looks better for the Government when done in this way. Therefore, I ask the question, to which I am sure he knows the answer—if not, he can get it from the box before the debate is concluded: will he either confirm or deny that the net amount of official development assistance for the calendar year 1980 is not above 0·34 per cent. of GNP?
  I do not wish to appear petulant, but when the hon. Gentleman responded to the debate on the Brandt report in December, in the course of which I put four specific initiatives to him, I did not receive a reply from him at the Dispatch Box and I have not received an answer by letter. It is discourteous to the House not to reply to a member of the Opposition, whether he be a Front Bencher or Back Bencher. I hope that that message is not lost on him or on the people advising him.
  I press the Minister to give me an answer now. It will be painful medicine, and it will cause dismay throughout the Third world and to committed people in this country. Bad medicine is easier to swallow at this time of night, but it will cause a great deal of dismay not only to people in this country but to the Third world.
  10.59 pm
  Mr. Nigel Spearing: Mr. Deputy Speaker, I should like to echo what has been said by my hon. Friend the Member for Glasgow, Queen's Park (Mr.

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  McElhone) about your presence in the Chair. We are sure that you will not only maintain the high standards to which we are accustomed but give Back Benchers the benefit of the doubt when doubt arises.
  Yesterday the House dealt with the nuclear sword, and this evening those of us who are interested are dealing with the ploughshares. As the Minister said, the International Development Association contribution of Britain is perhaps the most important, significant and, I am sure, major part of our multilateral contribution. Therefore, it befits a little more examination than we have given it up to now. The sum of £500 million, even over three years, is substantial.
  Although, as my hon. Friend the Member for Queen's Park has mentioned, there is an annual report for 1978 in the Library, will the Minister enlighten us a little more on the current programme? We have before us today Cmnd. 7900, which is the sixth replenishment document, issued by the executive directors on 15 January 1980. However, that document relates largely to the collection of money. It tells us what countries are contributing what sums. There is not much indication of the past and future distribution of those moneys. When we have these debates, we usually debate a White Paper relating to payment of sums.
  Will the Minister say whether there is any opportunity to discuss how the money is used other than in these debates? The control of the House over its moneys is exercised at the time of voting the money, and that time is now. I take it that the Minister will probably say that this is the occasion—and perhaps a future occasion, if we have one, as he said.
  Paragraph 1 of the report on the IDA, Cmnd. 7900, says:
  "The development projects financed by IDA must meet the same economic and financial standards; the procedures for credit appraisal, approval and supervision".
  Those are the same as the other projects which are financed by the International Bank for Reconstruction and Development or the World Bank. I suggest that that is all right, within reason.
  However, everyone knows that the soft loans, which are the speciality of the IDA, are for those nations which have the minimum resources. Where natural resources are limited, most effort is required to provide reasonable standards for the people of those countries. Those people are often in the most remote areas about which least is known, from which cash or kind returns are already low and whose inputs, or the inputs required, need to be much greater in order to provide any measured return.
  I have no doubt that the criteria applied to the IDA loans are not the same as those applied to the IBRD or World Bank loans of the other type. However, I question whether the difference is sufficient. Will the Minister give us particulars about that matter, either now or at some other time.
  Understandably and properly, in paragraph 8, the report states, with reference to the least developed countries, that
  "despite some large urban concentrations, the bulk of the population lives in rural areas and it is the investments necessary to raise agricultural output that will be crucial for achieving faster growth and alleviating poverty."
  The report states that 46 per cent. of the lending and 45 per cent. of the operations are in the agricultural and rural development sector.
  In paragraph 10, the report states:
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  "Extending across all sectors is an attempt to design IDA projects to increase the income and employment opportunities of those in the poorest income groups. This trend is exemplified by IDA lending in rural development for projects aimed to expand output of small scale farmers and tenants and bring the land less into the productive process."
  Mr. Bowen Wells: One of the main purposes of the IDA, as I understand it—I wonder whether the hon. Gentleman agrees—is to make available what would in our society be described as equity capital. Small businesses and small agricultural operators cannot work and cannot guarantee to repay loans at the interest rates which have to be applied by the World Bank. The IDA gives that opportunity, and it is not necessarily to the poorest countries and the poorest people. It is the people with initiative and enterprise who simply cannot be financed in any other way. This is the importance of the IDA subscription.
  Mr. Spearing: I think that I would half agree with what the hon. Gentleman says, but the point he makes—that it depends upon those with initiative and enterprise to get things off the ground—is at odds with the point which I have just quoted, which means that it is those who have least to provide who need aid most. Without going further into the matter, I must point out to the hon. Gentleman that the very objective of the IDA itself in the macro-scale has to be repeated on the micro-scale on the ground if the IDA is to achieve its aims, and what I am not sure about is whether that happens in the application of similar criteria.
  I was about to say that the Labour Government's White Paper,"More Help to the Poorest", Cmnd. 6270, reflected that philosophy in Britain's aid programme. My information is that there has been a modification in that regard in respect of the United Kingdom's aid programme itself, and I draw to the Minister's attention the report of the former Select Committee on Overseas Development regarding aid to India, in which a number of recommendations were made to follow that very type of policy. The Government's response was not encouraging.
  I shall not go into that now since that is not the purpose of this debate, but I put it to the Minister as one of the points which he should now consider and perhaps pass on to his hon. Friends, because it illustrates what my hon. Friend the Member for Queen's Park said about the ironic fact that our debate tonight, and indeed the recycling of this contribution, is necessitated by the attitude of the United States.
  I do not say that that is the attitude of the President of the United States. It is clearly at present a matter for the American Legislature. But the fact that nothing was said by the Prime Minister on her return from the United States about a possible conversation on issues relating to the North-South dialogue was a notable omission from that announcement. It was not just what the President said but what was not discussed which was of great significance. For the Prime Minister, or, indeed, President Reagan, to think of Western security only in terms of arms—which was the clear impression which the House received on her return—shows how narrow the horizons of that gentleman and the right hon. Lady seem to be.
  I notice from the report that El Salvador is a contributor to the IDA, as are many other perhaps less well founded countries, but it does not figure in the list of recipients. Ghana does, and so does India. I wonder why that should

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  be. Is it that the regime in El Salvador was not particularly willing to have the sort of project in which the IDA specialises?
  If we are to ensure that there is freedom from want, that there is freedom from fear, if there is to be freedom from exploitation and if there is to be real security, the activities of the IDA are much more likely to supply those benefits than are the activities of military advisers. That is at the heart of what is perhaps one of the major debates in this country today. We have witnessed a considerable increase, and a quite proper increase, of interest in matters relating to the North-South dialogue.
  I have been told by colleagues that the number of meetings which they have been asked to attend and address where people come and respond to what is popularly known as the Brandt report is a marked feature of British life today. It is significant that this has occurred at the same time as the Government, as we heard last night, are preparing to spend not £500 million but goodness knows how many more millions, albeit over a much longer period, on something entirely negative. I believe that that is against the present predilections and interests of the British people. I have tried to show that if we want real security and freedom, attending to the matters to which the IDA attends is much the more likely way to achieve them.
  Mr. Edward Lyons: Does my hon. Friend agree that, if one could achieve some degree of multilateral disarmament, the amount of money that would be freed for assisting the underdeveloped countries would be vastly greater than it is today? One of the great prizes that would result from disarmament—either entire or to a degree, mutually agreed—would be that those vast resources could rejuvenate large parts of Africa and Asia, including perhaps getting rid of sleeping sickness and other terrible diseases which also damage productivity so greatly in those areas.
  Mr. Spearing: I entirely agree with my hon. and learned Friend. I am saying that we should start with equivalent concern at the outset. But it is clear from the events of the last few days that the Government do not have that in mind.
  IDA is one of the brighter spots, all being well and America permitting. I am not sure that that great nation, which itself was in the forefront of the fight for freedom against an overseas autocracy to which it was subject, has fully grasped the world dimensions that it now has to face. I hope that the American Administration will learn quickly. I am sure that certain members of our own Administration will try to help them learn. I hope that the House of Commons will do so at the same time.
  My final point relates to a nation which does not appear in the IDA report because I do not think that it existed on 15 January 1980. I refer to the independent nation of Zimbabwe. In that country, many of the problems of the world can be seen almost in microcosm. They include disarmament, to which my hon. and learned Friend the Member for Bradford, West (Mr. Lyons) referred. A number of people there are certainly not disarmed, and that country certainly needs to see them disarmed, as indeed does the world as a whole. Within that country's own boundaries, the geographical and income divisions between North and South are reflected. It is a country which has great potential for development, but in which large numbers of people live in conditions comparable with those that the IDA fund seeks to alleviate.
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  I realise that on a per capita basis Zimbabwe may not qualify in quite the same way as other countries, but the tables show that India benefits from the IDA as being in the dualistic category, so it may be that in the future Zimbabwe, too, will benefit from the sixth replenishment.
  I hope that in the short time at my disposal I have put to the Government some of the discontents of people who are by no means pacifists in the strict sense of the term. Whatever one's personal views, I think that the majority of people in this country are not of that description. But I also believe that by far the overwhelming majority would wish to see Britain's economic effort placed behind activities such as that pioneered by the IDA because therein is real security and real freedom. Through activities of that kind, we can ensure that those who peddle arms and alien political philosophies will not have the justification or excuse which unfortunately in many places they at present have.
  I am not sure that the Government have yet taken that point of view. I hope that in succeeding debates on issues of this sort the Government will begin to understand that. I hope that in the not-too-distant future the same will apply to the United States of America.
  11.15 pm
  Mr. Frank Hooley: As a fellow Methodist, it gives me particular pleasure to congratulate you, Mr. Deputy Speaker, on assuming the Chair and joining a long line of distinguished Methodists in that place in the House. I wish you a long and happy tenure of office.
  I welcome the fact that the Government have taken part in this bridging operation in the IDA. I certainly welcome the order. However, the reasons for having to introduce it are quite deplorable. The failure of the United States Congress to live up to its international obligations in this respect—I say"obligations", although I accept that this is technically a voluntary contribution—is quite deplorable and highly damaging to the image of the Western world.
  In fact, after the refusal to ratify SALT, refusal to take part in the IDA must rank as one of the most short-sighted acts of policy since America failed to join the League of Nations in 1919 or thereabouts.
  Mr. Hurd: Has the hon. Gentleman thought about the Soviet contribution to IDA?
  Mr. Hooley: We are dealing with the reasons for bringing the order before the House. As the Minister explained, the failure of the United States Congress to authorise the United States contribution is directly relevant to that. I say"Congress" because, as the Minister fairly said, the United States Administration have recommended this once already, and the new Administration are recommending it again. Therefore, the fault lies firmly in the laps of the Representatives and Senators in the United States Congress. It is quite deplorable that it has failed on this occasion, as it failed so disastrously to ratify SALT, with what may be appalling consequences for the world at large in the near future.
  In fact, as my hon. Friends said, it is depressing that when the Prime Minister came back from Washington, so far as I recall—I am subject to correction—she had absolutely nothing to say on the subject of the replenishment of IDA or, indeed, of Washington's attitude

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  to the North-South dialogue at large. However, there was a long diatribe on the subject of the rapid deployment force and weapons, armaments, and so forth.
  Whereas the American Administration have suddenly found it expedient, within a short time, to pour hundreds of millions of dollars into supporting a corrupt and discredited Government in El Salvador, they have over the past six months or more failed to authorise this replenishment to the IDA, which would do far more for democracy and peace and the well-being of the ordinary people of countries such as El Salvador than sending military advisers by the dozen, score, or 50 and pouring in money in order to back up a discredited regime.
  I understand that a fair number of the donors to the IDA are taking part in this bridging operation. I very much welcome that. In my speech in June last year I referred to the rather poor performance of Japan and West Germany, but I am glad to say that since that date both countries have announced substantial increases in their aid programmes. That is a welcome move, particularly from two such important and wealthy OECD countries.
  It is, therefore, even more regrettable that this should be offset by a failing on the part of the United States of America and, to some extent, by our prediction of cuts in the aid programmes. It is a great pity that Congress has not yet taken the necessary action. We are approaching the important summit meeting in Mexico. I assume that the United States of America will take part in the summit. Indeed, I gather that the United Kingdom will also take part.
  The United States of America will not approach that summit in a strong or helpful position if its contribution to this very important international fund remains unratified. From the Minister's statement, I was not sure whether the American Administration were simply making a recommendation to Congress in the hope that the replenishment would be made or whether there was an indication that Congress would fulfil its obligation to stump up the money. During our last debate on this subject we were told that the American Administration had made that recommendation. It was hoped that Congress would play its part. However, in the event that did not happen.
  I turn to a specific point that was raised during last June's debate but to which we did not receive an adequate answer. The Minister for Overseas Development said:
  "We have therefore agreed with IDA management, with the understanding of the other donor countries, a special arrangement whereby the drawings against our contribution will be lower than they would otherwise have been for the first six years.
  That formula will enable us to reduce substantially the cost to public funds over the next few years of contributing to the replenishment."
  In other words, although the promissory note would be deposited for the full amount, there appeared to be a private understanding that we would not pay out the money, or that the IDA would claim only a limited amount of money against that promissory note.
  I sought some clarification in that debate. I made the following observation:
  "Clearly, if for some reason the drawing by the IDA were limited by some informal understanding, which is not on the record and which is not even explained to this House, we might find that instead of our aid programme including, say, £50 million to the IDA in a particular year, the effect was about £25 million. Then we would come to the end of the financial year and, lo and behold, to our surprise, the aid programme would
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  have again been underspent by £20 million or so, instead of its reduced aggregate being spent right up to whatever the new figure is.
  We need some clear explanation of these limitations on drawings, what the practical effect will be and, in short and simple terms, what is likely to be our expenditure against the aid programme on the IDA—I emphasise 'expenditure', not 'commitment'".—[Official Report, 17 June 1980; Vol. 986, c. 1486–96.]
  I do not recall receiving a clear explanation from the Minister about the extent of the financial commitment within the aid programme in respect of the promissory note. I understand that the promissory note will be deposited and that that constitutes a commitment by the United Kingdom to stump up £184 million. However, the Minister pointed out that there was some private agreement about the limitation on the drawings by the IDA. I wonder whether the bridging operation also includes that agreement. If so, to what extent? What impact will it have on our disbursement? Presumably, there will be nothing in the current financial year, as we are practically at the end of that. However, it would presumably have some effect on the financial year 1981–82.
  We would need to be assured that underdrawing might be offset by expenditure elsewhere. I take it that the Treasury will certainly not permit any overdrawing. We need to know the effect of this commitment to the IDA in cash terms in 1981–82, although I fully support the order and feel sure that it will be approved without opposition from the Labour Benches.
  11.25 pm
  Mr. William Hamilton: I add my congratulations to you, Mr. Deputy Speaker, on your appointment. As a fellow North-Easterner, I expect preferential treatment in subsequent debates in the House!
  It would be remiss of me to compare the motivation for this debate with the motivation for debates that occur on many other occasions in the House. Most hon. Members who are present are genuinely concerned, on what I hope is a non-party basis, with the problems of the underprivileged sections of the world. There are hundreds of millions of people who will not be sleeping tonight in a bed and who will not know when they will get their next meal. I am sure that I shall have the support of Conservative Members when I say that it is a relief to get away from the internal squalor of my own party's theological discussions—I put it as mildly as I can—and listen to a debate of this kind.
  I must compare the atmosphere tonight with the atmosphere engendered by the Prime Minister when she reported on Monday on her return from the United States. She reminded me very much of a female Hitler—the bellicose noises that she made, the sabre-rattling, the phraseology, couched in militaristic terms, against the Soviet Union and against anyone who dared to challenge the authority and the power of the United States. It is one of the great attractions of this House that one can move from the atmosphere created by a Prime Minister whose policies are in ruins around her and who, because of that, has to make bellicose noises about the threats from outside to what we are discussing now.
  The threat to world peace is not what the Prime Minister described on Monday. It is not from the Soviet Union. It is the indescribable poverty and misery and deprivation of three-quarters of the world's population. The IDA and

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  other bodies are trying to tackle this problem, but they are not even scratching its surface. This Government will go down in the records, irrespective of the complete failure and ruin of their domestic policies, as the Government who failed to meet the challenge of the Third world. The name of this Government is mud in the Third world. At the same time that they come to the House and say that they will spend £5,000 million over 15 years—it will be a lot more than that—on a militaristic weapon against an unknown enemy, they say that they cannot afford 0·7 of 1 per cent. of total GNP to help hundreds of millions of starving people. It is an obscenity for which the world will never forgive us.
  My hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) said that the 1980 figure would be 0·34 per cent. of the GNP. The Minister had better say whether that is right. We expect an answer, and we shall find out in due course whether there is any substance in that suggestion. Certainly the figure is well below the 0·7 per cent. that is the recognised minimum target throughout the developed world.
  Mr. Robert Rhodes James: If £5 billion is spent over 15 years on the Trident missile programme, on present projections we shall be spending £13 billion on overseas aid in that period.
  Mr. Hamilton: I cannot challenge those figures now, but I hope that the hon. Gentleman will give me chapter and verse. I very much doubt that they are facts. But let us assume for the sake of argument that they are. What conceivable defence is there for spending those enormous sums on military might when there are massive problems in the world? There are no civilised grounds for that kind of priority.
  My hon. Friend the Member for Newham, South (Mr. Spearing) talked about people flocking to meetings throughout the country, not on military might but on development of the poverty-stricken world, which is crying out for such resources to be devoted to it. I wish to quote from an article in The Times on 24 February; I am sure that the Minister has read it. It was headed:
  "West needs to refine strategy for Third World, report says".
  The article told of a study produced by the British Atlantic Committee's defence and overseas policy working group, whose chairman is Marshal of the Royal Air Force Sir Neil Cameron. The document is entitled"A Global Strategy to meet the Global Threat: A British Initiative". The article in The Times said:
  "A more constructive overseas aid programme, freer trade—with an end to creeping protectionism'—more effort in the areas of peacekeeping and disaster relief, are also among proposals put forward."
  My next quotation answers in part an intervention by the Minister. I agreed with him when he asked one of my hon. Friends"What about the Soviet Union?". Although I am criticising our aid programme, we should compare it with that of the Soviet Union. The article continues:
  "the West should also ensure that it gets the credit"—
  for whatever it is doing, however little we are doing.
  "Few realize that it already provides 30 per cent. more aid than does the Soviet Union—two-thirds of whose aid is military equipment anyway."
  The Opposition are here to criticise the inadequacies of the Government's policies, but we must put them in their context to answer those other critics on the Left who
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  pretend that we are doing nothing—certainly not as much as other people. It is important to put the Soviet Union's activity in that context.
  The article says that the working group proposes a"transatlantic forum", whose first purpose
  "would be to stem the Soviet advance in the third world, where the Russians have built up a 'spectacular' capacity to interfere with the flow of oil, raw materials and trade. They now have many more airborne troops than the United States, and could land 50,000 men in 1,000 aircraft in the Gulf within 48 hours."
  I presume that it was that kind of threat that induced the Prime Minister to say in America that we were prepared to put an advance force in the Gulf virtually at a moment's notice.
  I do not believe, and large numbers of people in this country do not believe, that that military response is the answer to the major world problems that we are facing. I am sorry that the House is so thinly attended and that we are discussing this matter at so late an hour. The response that we ought increasingly to be making to the world problem is not in terms of military hardware, but in terms of financial and technical aid to people who are crying out for it and who have no use for military equipment, sophisticated or otherwise. If the debate serves no useful purpose other than to focus attention on that problem, it will not have been in vain.
  11.36 pm
  Mr. Hurd: This has been a short but interesting debate, and I should like to reply briefly to some of the points that have been made.
  I came to the conclusion that one or two of the speeches to which I listened, including that of the hon. Member for Glasgow, Queen's Park (Mr. McElhone), must have been written on the assumption that the Government were refusing to take part in the bridging operation and were turning their back on the IDA. One would have thought that, however grudgingly, the Opposition would welcome the Government's policy in this respect, and I suppose that the reason why they did not was that it contradicted many of their criticisms of our general attitude to these matters. Given the fact that this is a major decision, involving large sums of money, with which, to judge from the speeches, the House agrees, one would have thought that there would be a welcome for it. The hon. Member for Sheffield, Heeley (Mr. Hooley) was the only person who had the grace to say that. I should not claim this on many occasions, but I think that for once we are entitled to have a certain need of praise.
  The hon. Member for Queen's Park, in a reasonable and agreeable way, raised a number of detailed points. I am sorry if he feels aggrieved because I did not answer his last speech in detail. I have looked it up. There were a number of controversial proposals—some of which have been dealt with in other speeches—about Southern Africa and EDF. I apologise for the delay, but I shall write to the hon. Gentleman on the specific points that he raised.
  The hon. Gentleman spoke this evening about the priorities of education, water/sewerage and population. Taking the World Bank and IDA together, one finds that the three sectors of education, water/sewerage and population accounted for large sums of their lending, namely, 10 per cent. or $1,200 million in the year to 30 June 1980. I think that that shows the priority that they give to these subjects, and they agreed two years ago to a rise in education lending to about S9 million a year. By

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  a decision of the board in July 1979 health and population aid are being expanded, and the bank will concentrate on primary health care.
  We accept that we, as a leading member, have a responsibility to comment on the technical and economic aspects of the projects, through our director, when they come to the board, and this applies to bank and IDA-financed projects.
  Mr. McElhone: I discussed this matter with World Bank officials in Washington not long ago, and they pointed out that only 4 per cent. of the World Bank programme has been allocated to education. I think that education is a primary factor. These figures might be wrong, but on looking at the 1978 report I was disturbed to see that compared with the assistance provided by other regimes to the Third world education and water/sewerage have a low priority, and population control is not even mentioned.
  Mr. Hurd: I have already given rather more recent figures than those that the hon. Gentleman has quoted. I shall make inquiries about 4 per cent. for education. However, it is difficult to assess priorities among these desirable projects.
  As for pesticides, I seem to recall that The Observer article referred to the FAO and not the IDA. The Nepal scheme is nothing to do with the IDA. It is the responsibility of the UNDP, or another United Nations agency. I shall undertake an investigation and tell the hon. Gentleman what we know about these matters.
  The hon. Members for Queen's Park, Newham, South (Mr. Spearing) and Heeley talked about America. It is not reasonable to ask me to add to what I have already said. The United States Congress did not act during last year. The new United States Administration, contrary to some press predictions, have decided once again to submit to the United States Congress legislation for the sixth replenishment. I cannot say whether Congress will deal with that swiftly or whether it will approve it in its entirety—these are not matters for me—but we hope that it will do so. We were told of the policy decision by the new Administration before my right hon. Friend the Prime Minister went to Washington. It was already in the bag as part of the Administration's policy. I do not think that there is any mystery or difficulty about that.
  The hon. Member for Heeley is usually fair about these matters, but he was using dark and violent adjectives about the United States when the Soviet bloc was absent from these helpful activities. It is not fair for us to criticise the United States because there is a hiccup in the large sums that it provides for this and many other enterprises, without directing some of our adjectives to those who take no part in these matters and whose aid efforts are directed to an amazing extent to the distribution of arms and military equipment.
  The hon. Member for Heeley pressed me legitimately on the question of what my hon. Friend the Minister for Overseas Development said in June about the arrangements that have been made to reduce the drawings on our contribution to the sixth replenishment. My hon. Friend explained in June that these arrangements, which are set out in the Command Paper, would reduce the drawings on our contribution during the first six years to 7·6 per cent. of quarterly drawings instead of 10·1 per cent., and that
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  that difference would be made up in the last four years of the period over which drawings under the sixth replenishment are expected to last.
  I have already described the financial arrangements for the bridging operation. They are not affected by the arrangements for the full replenishment, which my hon. Friend described in June and which I have repeated.
  It is not possible to give figures for the exact cash spending under these arrangements in any given future year, but I can say that the effect in 1981–82 is certain to be very small.
  Several hon. Members, especially and most eloquently the hon. Member for Fife, Central (Mr. Hamilton), ranged widely with your permission, Mr. Deputy Speaker, and dealt with the crucial balance between the efforts that we and our allies make in security and economic development. It is correct to say that there is great interest among British people in this issue, especially among the schools, universities, Churches and charities. I welcome that. The more that we can discuss important matters and move away from some of the artifical sparring that vexes us all, the more any real politician should welcome it. I do, and I think that all my hon. Friends who take part in these discussions outside the House welcome it also. The more one discusses these matters the more one gets away from a simple feeling that the only measurement is the measurement of official aid. Of course that is a factor and, with the poorest countries, an important factor, otherwise we should not be discussing the order. But it is not the only one, as is becoming clear.
  The hon. Member for Glasgow, Queen's Park (Mr. McElhone) twitted me—I do not complain, and I was not surprised—about the aid performance and the ratio to GNP. The figures are uncertain, and I shall not give uncertain figures tonight. The hon. Gentleman did not question me when I explained why, in one important technical respect—which falls directly into the debate, because it is concerned with the IDA—the figures will be substantially lower than they would have been if there had not been this hiccup over the IDA. The hon. Gentleman and his hon. Friends are in possession of that fact. When the figures are out we shall watch carefully whether they play fair or explain this important technical consideration to their hon. Friends.
  The hon. Member for Fife, Central made a great deal of noise about how disgraceful it would be if the figure were low. I am not sure whether he was in the House when I dealt with the matter, but if he was he has already forgotten. There is a great task of education before the hon. Member for Queen's Park, who is fully seized of the importance of the technical argument. We shall see how he discharges that responsibility.
  Mr. McElhone: The Minister is trying to do a difficult job with the best spirit that he can muster. Like the rest of the Government, he is acutely embarrassed. Will he help his Prime Minister? The right hon. Lady has a supplementary answer burning a hole in her memory because of the way she described the aid handout. She is greatly disturbed by the figure. If the Minister will not tell us the truth, let him help the Prime Minister and tell us the shocking figure. It will be easy for him, because it is late at night.
  Mr. Hurd: My right hon. Friend needs no help from me. I am doing my best to explain the basic facts that underly the figure in one important respect, when it is possible to produce a reasoned estimate of what it is.
  Quite apart from the arguments about human suffering that the hon. Member for Fife, Central deployed, it is true that world stability depends to a substantial extent on the efforts made to relieve world poverty, not just by us but by the oil producers, OPEC and the others. There is a connection. If there were no such connection we should not be making the substantial effort that is illustrated by the order.
  The hon. Member and his hon. Friends should not claim that this is the be-all and end-all. It is no good telling the people of Afghanistan that their problems are caused by inadequate expenditure by IDA, the World Bank or the other agencies of the United Nations. That is nonsense. In Zimbabwe economic assistance is enormously important, but the pressing need is to prevent the outbreak of a new form of civil war. What we are doing in the way of military training to a large extent comes under our defence budget, to which the hon. Member for Fife, Central is so passionately opposed. What we are doing in Zimbabwe is just as important as the lead we have given in giving economic aid to that country. These things must be considered together, if one is talking about the real world and not a world of fantasy.
  Mr. James Johnson: The Minister goes to Africa, as I do. Is it not his experience, when he talks to local people in Khartoum, Lagos, or anywhere else, that they are disappointed with our performance—that it is not what they expect? They feel that we have done better in the past. We are doing less and less, on the excuse of the economy at home. Are not they calling out loud for teachers and for other help with the English language, which is vital for our merchants exporting goods?
  Mr. Hurd: That is not my experience. I have not been to Lagos but I have been to Khartoum and I have had discussions with the President on exactly these matters. I know that in Khartoum, where we are proposing to put a lot of money into the new power station, which is crucial for the life of that city, so far from disappointment or the kind of grudging remarks that come in abundance from the Labour Benches, we find a great deal of appreciation. Of course, they would like us to do more. That is natural. We should like to do more. I do not accept the argument put rather crudely from the Opposition Benches about our name being mud. That does not accord with my experience.
  A clear balance is required. If we are to have a stable and more decent world there must be political activity, an economic effort—of which this order is an illustration—and a sustained, sensible and intelligent effort on security. In discussing one, do not let us dismiss the need for the others. It is in that spirit that I ask the House to approve the order.
  Question put and agreed to.
  Resolved,
  That the draft International Development Association (Sixth Replenishment: Interim Payments) Order 1981, which was laid before this House on 20 February, be approved.

  Humberside (Electoral Arrangements)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thompson.]
  11.51 pm
  Dr. Edmund Marshall: I am grateful for this opportunity of drawing to the attention of the House an order made by the Home Secretary on 6 February entitled the County of Humberside (Electoral Arrangements) Order 1981 which is Statutory Instrument 1981 No. 167. It is a statutory instrument for which there is no parliamentary procedure, so it has not been formally laid before the House, and it has been made in the exercise of the Home Secretary's administrative powers and responsibilities.
  The effect of the order is to bring in new electoral divisions for the elections of members of Humberside county council on 7 May this year and thereafter for probably about 15 years. The electoral divisions which have applied since 1973 are abolished by article 3( 1) of the order.
  The order implements in full and without modification report No. 407 of the Local Government Boundary Commission which was first submitted to the Home Secretary on 2 December 1980, as amended by a correction sheet dated January 1981. The date on the correction sheet is important because the Home Secretary is required by section 51(2) of the Local Government Act 1972 to allow six weeks to expire between his receipt of the report from the commission and any action by him on the basis of the report. In this case there certainly were not six weeks between the receipt of the correction sheet in January and the making of the order on 6 February.
  That point might not be important if the corrections simply arose from typing errors or misnomers in the original report. But certainly one of the corrections relating to the Kingsway electoral division of Scunthorpe added to the area of that division and it could be construed as a material amendment to the contents of the report. It may be that only the courts can decide whether six weeks should have elapsed between the submission of that correction and the making of any order based on the report. But no doubt the Minister of State will ponder on that point and take the advice of the Attorney-General.
  One criticism of the order relates to the names given to the new electoral divisions specified in the schedule to the order. I was surprised to find that three of the 75 new electoral divisions proposed for Humberside have been given the same name—Park. There is to be a Park ward in Grimsby, in Cleethorpes and in Kingston upon Hull. Imagine the confusion if more than one constituency represented in the House has the same name. Complications will arise because three electoral divisions for Humberside will have the same name. For example, when candidates are nominated for elections the nomination paper must include the name of the electoral division for which they are nominated. One could argue that it is not clear for which of the three Park wards a candidate is being nominated. That could lead to further complications.
  Two electoral divisions are to be named Ferry. One will be in Glanford and the other in Kingston upon Hull. It is clear that in the repetition of the names of electoral

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  divisions the Local Government Boundary Commission made a real mistake in its report, which has been carried over to the order made by the Home Secretary.
  I turn to the geographical areas of the new electoral divisions outlined in the report. I shall give the House one example. In my constituency the map demonstrates clearly the geographical absurdity of some of the electoral division boundaries. The Minister knows, because I referred the matter to him previously, of the absurdity of the Mid-Boothferry electoral division which consists of 19 parishes stretching from Pollington, Gowdall and Snaith in the west to Crowle and Amcotts in the south and east. Although those 19 parishes form a continuous land mass, they are not connected by any public highway passing through the electoral division. In the middle of Goole Moors, between Rawcliffe, Snaith and Cowick on one side and Goole Fields and Swinefleet on the other, there is no road, nor even a cart track. Pedestrians could perhaps get through by following the line of a long disused railway, but they may be trespassing by doing so. To travel by road between the two halves of the Mid-Boothferry electoral division requires either going through two other divisions, Boothferry, West and Goole, or going outside the county altogether through Thorne in South Yorkshire.
  The two halves of the Mid-Boothferry division belong to distinct communities, with Crowle in the former area of Lincolnshire looking towards Scunthorpe and Snaith looking towards Goole in the old West Riding of Yorkshire. It would not be feasible to hold a count of any election for that division within the division itself. Almost certainly the ballot boxes would have to be taken to the town of Goole. It might be some considerable time after the close of polls before they all safely arrived.
  Another odd feature of the electoral divisions for the Boothferry part of Humberside is that no division consists entirely of parts of the town of Goole. Part of the town is to lie in the Boothferry West division, and part in the Goole division. Both divisions take in parishes outside the town. The map shows that the electoral divisions around Goole are nothing other than a carve-up, with strange boundaries cutting through the centre of the town. They fail to reflect any community interest. They ignore the social cohesion of the town.
  I was grateful, together with some of my hon. Friends, for the opportunity to meet the Minister to talk about the geographical defects of the proposals. It is a real disappointment that following that meeting the Minister, who is a reasonable man, immediately endorsed the commission's proposals without modification. He might have made some modification to overcome these difficulties that I have talked about in Boothferry. I know that the alternative scheme which I put to him for Boothferry when I saw him involved more varied electorates for the various divisions. As I explained then, the unusual shape of the county, plus the presence of three tidal rivers—the Trent, the Ouse and the Aire—prevent one from getting numerical perfection between the divisions without involving some geographical absurdity, as the order does.
  I have now had the advantage of obtaining the 1981 electorate statistics for the whole borough of Boothferry. On the basis of those figures I have been able to improve
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  on the scheme which I put to the Minister earlier. I shall be pleased to send him details of that improved scheme after this debate, if he wishes.
  If it is the numerical factor which has most influenced the Home Secretary in endorsing the Boundary Commission's proposals, then he has perpetrated two monumental howlers elsewhere in the county, in Hull and in the Cottingham area. If my hon. Friend the Member for Kingston upon Hull, West (Mr. Johnson) succeeds in catching your eye, Mr. Deputy Speaker, he will no doubt elaborate on the electoral disparities between the divisions which have been proposed for Hull, varying in the 1984 estimates from 4,835 in West Bransholme and 6,641 in Marfleet to 11,473 in Pickering. No doubt my hon. Friend, if he has the opportunity, will explain how this has come about.
  The biggest howler of all relates to the electoral divisions which are proposed for the Cottingham area of the borough of Beverley where two electoral divisions are specified, namely, Cottingham North and Cottingham South, which are in 1984 expected to have 10,725 and 6,167 electors respectively. That major disparity between adjacent wards has come about apparently because on some relevant map which was used in the drawing up of the proposals polling districts were wrongly numbered, with the result that over 2,000 electors were included in Cottingham North when it was thought that they were being included in Cottingham South. That in itself should be sufficient grounds for the Home Secretary to have considerable disquiet about the order and to consider revoking it.
  In the light of all these discrepancies in terms of the procedure, the nomenclature, the geographical and social composition of the electoral divisions, and especially the numerical considerations, this order really is a curate's egg. In my view, the discrepancies have occurred because the whole procedure has been rushed through by the county council itself, by the Local Government Boundary Commission which held no local public meeting on the proposals, and by Home Office Ministers so that they would be in a position to implement the changes at the elections in May of this year.
  When the Home Secretary made the order, the electoral registers were already being printed. The registers for Boothferry borough, of which I have one part here, are marked on the front with the names of the old county electoral divisions which have existed since 1973. That point, which I know is covered in the order, shows the eleventh hour timing of the Home Secretary's action.
  All told, the difficulties which I have described mean that the Minister of State needs to think again about the order and especially to take the advice of the Attorney-General about some of the legal aspects. Unless the order is changed, the difficulties that I have described could persist for 15 years.
  I appreciate that the Minister may be unable to tell the House tonight what he will do about the order, but, in view of the very short timetable before the county council elections in May, I request that he should let me know within the next fortnight the outcome of his further consideration of the points that I have made. As far as I am aware, the only way in which a new order can be made to iron out these difficulties is for the present order to be revoked and replaced by a new one or for the Home

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  Secretary to call for a fresh report from the Boundary Commission. It seems to me that one of those two courses must now be taken.
  12.5 am
  Mr. James Johnson: I gladly avail myself of this chance to punctuate the eloquent case made by my hon. Friend the Member for Goole (Dr. Marshall).
  The Minister saw a deputation of Humberside Members of Parliament. Obviously he could not give us an answer then, but we may get one tonight; I do not know. At that time we told him that in the city there was vehement opposition to this matter. Now it has vastly increased at all levels. The feeling is that the Tory county council is blatantly gerrymandering. There is no doubt in people's minds that the new boundaries will tilt the odds in favour of Conservative candidates.
  The Minister knows that I based the Hull case on two issues. The first concerned two maps that had been before the civic and parliamentary sub-committee of Hull city council. One was a detailed map of 7 December 1979. That was put before my colleagues on the city council and accepted Without amendment. We expected that to be the map used in the final submission, but it was later found not to have been the map that was used. An amended map had been submitted without the authority of the Hull district council. The other map came to the county council after the special committee had made its final decision. It is fair to assume that our colleagues at local level would not have passed the second map, as they had already passed the first map that was not used.
  The second issue concerned the change in housing policy, which tilted all the figures given by my hon. Friend. The county council's policy was fundamentally changed at the beginning of 1980, when the city fathers decided to abandon all council house building east of the River Hull. There will therefore be a progessive mutilation of the figures between now and 1984. Six of our city wards will be out of balance. Those wards, already mentioned by my hon. Friend, are Marfleet, West Bransholme and East Bransholme, St. Andrews, Pickering, Newington and, last of all, Cottingham.
  The Hull Daily Mail, which is never helpful to the Labour Party, said:
  "A second glaring error has been discovered in the Humberside boundary review recently approved by Home Secretary Mr. William Whitelaw."
  I warn the Minister, or, rather. I caution him, that he should look at all these matters very carefully because of the high feeling now mounting within the city.
  12.8 am
  The Minister of State, Home office (Mr. Patrick Mayhew): I am grateful to the hon. Member for Goole (Dr. Marshall) for giving me this opportunity to dispel any misconceptions which some of the residents of the county of Humberside in general and of the city of Kingston upon Hull in particular may have about the reasons why my right hon. Friend made an order giving effect to the Local Government Boundary Commission's final proposals for new electoral arrangements for the county in full at the elections in May. Much as we all respect his knowledge of electoral matters, however, I must rebut the suggestion that my right hon. Friend acted improperly in making such
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  an order or failed to give due consideration to all the representations which he received against the commission's proposals.
  The hon. Member for Goole referred to the meeting which he had with me, when I was glad to listen to the representations that were made. I shall come to the consequences which would flow from the elections in May 1981 being fought on the old boundaries, and the over-representation on the county council that would have resulted in the opinion of the Boundary Commission as expressed in the report.
  Mr. John Prescott: It is arranged for a Tory county council victory: it is a fix.
  Mr. Mayhew: I understand that the hon. Member for Kingston upon Hull, east (Mr. Prescott), who intervened from a sedentary position, may wish to see the elections in May 1981 for the whole county council fought upon an electoral register that is grossly disproportionate to the overall distribution of the electorate. I understand that he has partisan reasons for wishing to see that, but, as he will know, the Local Government Boundary Commission is totally independent of this or any Government, and rightly so. My right hon. Friend must satisfy himself that the commission, in making its report and recommendation, has acted within the criteria laid down by the statute. That is his function, and he has no other.
  The hon. Members for Goole and Kingston upon Hull, West (Mr. Johnson) have encroached fairly substantially on my time, so I may not have an opportunity to comment on all the points which I should like to comment upon. The hon. Member for Goole complained about the rejection of his alternative proposals for new electoral divisions in the borough of Boothferry. He fully explained those proposals to me when he came to see me, and I listened with care to what he had to say. The proposals were carefully compared with the commission's proposals for the area, but were found to offer no clear advantage over the latter, which seemed to be generally acceptable to the local residents. They also provoked strong objection from the local borough council.
  The hon. Member did not refer to that tonight. He said that there were numerical disparities. Four of his proposed divisions achieved broadly similar standards of representation to the commission's proposal, but one division with an electorate and entitlement of 10,443, on 1984 electoral forecasts, would have had a significantly poorer standard of representation than that provided by all the commission's proposed divisions for the borough.
  The hon. Member's scheme has not had the benefit of scrutiny by the commission or by local interests. His claim that it reflects local ties has not been more closely tested. It was objected to by the local council.
  I listened with interest to what the hon. Member said about the correction paper and the six weeks point. I shall consider carefully what he has said. He did not raise that point with me before. I shall see what consequences flow from it. However, he cannot expect me to deal with a point tonight which has not been raised before.
  I also listened with interest to what the hon. Member said about my right hon. Friend's decision to implement the commission's proposal in full, after our attention had been drawn to the possible effect of a planning decision taken by Kingston upon Hull city council in March 1980 on the forecast electorates on which the commission's

  395
  proposals for new electoral divisions in the city had been based. Before giving details of the reasons for that decision, it may be helpful if I remind the House of the respective roles of the commission and my right hon. Friend the Home Secretary in providing new county electoral arrangements.
  The Local Government Boundary Commission is currently engaged in a review of the existing electoral arrangements for all the English counties which it is obliged to carry out under schedule 9 to the Local Government Act 1972. Its practice in such matters is to give notice of its intention to conduct a review of a particular county and to ask the appropriate county council to prepare a draft scheme for new electoral arrangements.
  The scheme is then sent to the commission, which considers it and any related comments before formulating and publishing its own draft proposals. The commission then considers any representations received against those proposals before formulating its final proposals for new electoral arrangements for the county, which it submits to the House Secretary in the form of a written report.
  Six weeks must then elapse before the Home Secretary may make an order giving effect to the commission's proposals, which he may implement in full or with modifications. Where he decides on the latter course, he may also direct the commission to conduct a further review of the electoral arrangements and to make revised proposals with respect to those arrangements. The statutory delay of six weeks is, of course, intended to enable interested parties to make representations against the commission's final proposals to the Home Secretary, who takes them into account before deciding whether to implement them in full or with modifications.
  In reaching his decision, the Home Secretary is obliged, and so is the commission, to comply so far as is reasonably practicable with the rules set out in schedule 11 to the 1972 Act. These provide that the number of local government electors shall be, as nearly as may be, the same in every electoral division of the county having regard to any change in the number or distribution of local government electors of the county likely to take place within the period of five years immediately following the consideration of the county electoral arrangements.
  I should add that my right hon. Friend also attaches great weight to the views of the commission in considering what final form the new electoral arrangements for a principal area should take, and that he is generally reluctant to modify its final proposals unless he is satisfied that there are very strong grounds for doing so. This is because the commission is an independent body with considerable experience in dealing with such matters which quite properly takes pride in its integrity, and I hope that the hon. Member will agree with my right hon. Friend that the commission and its staff are to be congratulated on the way in which they perform their difficult and frequently contentious task without showing favour to any side.
  I turn to now to the specific matters raised. The commission announced its intention to conduct a review of the existing electoral arrangements for the county of Humberside in October 1979 and published its draft proposals in July 1980. These were based on a draft scheme submitted by Humberside county council on 12 March 1980, with several modifications, including some
  396
  to divisional boundaries within the city of Kingston upon Hull suggested by the local city council. The only representations against those proposals, as they affected Kingston upon Hull, came from the city council, which asked the commission to rename five divisions.
  The commission subsequently renamed four divisions in accordance with the city council's wishes before formulating its final proposals for new electoral arrangements for the county, which it submitted to my right hon. Friend on 2 December 1980.
  The House will appreciate, therefore, that there was widespread satisfaction in Kingston upon Hull with the commission's proposals for the new electoral divisions within the city. Indeed, it was not until 8 January this year that we received our first and only representations against the commission's final proposals for the new divisions in the city.
  These came from the Labour group on the city Council and were actively supported not by the city council but by the hon. Members for Kingston upon Hull, East, Kingston upon Hull, Central (Mr. McNamara) and Kingston upon Hull, West. They urged us to defer implementation of the commission's proposals pending investigation of the possible adverse effect of the decision to postpone house building in the eastern areas of the city taken by the city council. This decision was made only eight days after submission of the county council's draft scheme to the commission on the forecast electorates for 1984 on which the commission's final proposals were based.
  I must say that we have always accepted that this planning decision would possibly have some adverse effect on the 1984 forecast electorates for parts of the city. Indeed, it was for that very reason that I instructed officials to investigate the matter as soon as it was brought to my attention, and to ask Humberside county council officials, without prejudice, to see whether new proposals could be prepared for three of the divisions which achieved a more even standard of representation on the basis of 1984 electorates than might otherwise be provided if the commission's proposals were implemented in full, and which were locally acceptable. This course was intended to assist my right hon. Friend in deciding whether it was practicable to modify the commission's proposals to meet the objection which had been raised.
  The subsequent scheme submitted by the county council did in fact appear to provide a more even standard of representation on the basis of 1984 electorates for the divisions affected by the planning decision than the commission's proposals. But the meetings which later took place between my officials and representatives of the county Labour group and the civic and parliamentary subcommittee of Kingston upon Hull city council revealed that it was totally unacceptable to them. The former thought that the scheme was only marginally better numerically than the commission's proposals, and both expressed concern over the scope of the suggested modifications and their possible breach of strong local ties.
  What also emerged from the meeting with the civic and parliamentary sub-committee, however, was that the city council took grave exception to the possible implementation of these modifications at the stroke of a pen in view of the time and effort which it and other local interests had spent before and during the review in trying to obtain new county electoral divisions which were generally acceptable throughout the city; second, that no member or official of the city council had considered it necessary to inform the

  397
  county council or the commission of any possible effect of its planning decision on the 1984 forecast electorates which had already been supplied, because the project had only been postponed and not cancelled and that the house building programme in east Hull had not been abandoned but merely postponed. Indeed, the city council impressed upon my officials that it was its fervent wish to revert to the original building plans so soon as economic conditions or Government policy made it possible to do so.
  My right hon. Friend therefore concluded that the proper course in such circumstances was to implement in full the commission's proposals for divisions within the city and the remainder of the county.
  We take the view, as apparently did the city council, which said nothing about postponement of the building programme, that the Local Government Act 1972 does not
  398
  envisage the commission's proposals being modified at every change of policy by a local authority which takes place after a review has begun. To take any other view would mean that the commission would find it virtually impossible ever to complete its present review of the electoral arrangements for all the English counties.
  My right hon. Friend attached importance to the fact, to which the commission drew attention in its report, that the county would otherwise have been over-represented by no fewer than 24 county councillors, 10 of whom would have come from Kingston upon Hull—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-one minutes past Twelve o'clock.

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  Ulster Defence Regiment
TRANSPORT
  Melton Mowbray (Inner Relief Road)
  Melton Mowbray (Inner Relief Road)
AGRICULTURE, FISHERIES AND FOOD
  Common Agricultural Policy
  Common Agricultural Policy
  Shellfish (Importation)
  Shellfish (Importation)
ENVIRONMENT
  Water Rates (Rebate Scheme)
  Water Rates (Rebate Scheme)
  New Towns
  New Towns
  Rating System
  Rating System
  Council Estates
  Council Estates
  Industrial Cities (Rejuvenation)
  Industrial Cities (Rejuvenation)
  House Building
  House Building
  Council Houses (Condensation)
  Council Houses (Condensation)
  Older Houses (Inner Cities)
  Older Houses (Inner Cities)
  Hazardous Waste
  Hazardous Waste
  Agricultural Land
  Agricultural Land
  Water Authorities
  Water Authorities
  Hostels and Lodging Houses (Fire Precautions)
  Hostels and Lodging Houses (Fire Precautions)
  Rates
  Rates
  Vacant and Under-used Land
  Vacant and Under-used Land
  Local Authority Manpower
  Local Authority Manpower
  Local Government Financing
  Local Government Financing
  Council House Building (Oldham)
  Council House Building (Oldham)
  Public Sector Rents
  Public Sector Rents
  Rate Support Grant
  Rate Support Grant
  Inner City Area Partnership Committee (Liverpool)
  Inner City Area Partnership Committee (Liverpool)
  Environmental Health Officers Association
  Environmental Health Officers Association
  Rescue Archaeology
  Rescue Archaeology
  Conservation Areas
  Conservation Areas
  Buildings of Historic or Architectural Interest
  Buildings of Historic or Architectural Interest
  Disabled Persons
  Disabled Persons
  Empty Properties
  Empty Properties
  Block Grant System
  Block Grant System
  Building Regulations
  Building Regulations
  Local Authority Expenditure (Statistics)
  Local Authority Expenditure (Statistics)

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Hereford.
The Duke of Roxburghe—Took the Oath.

Air Fares: Discounted Tickets
Baroness Burton of Coventry: 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 are now in a position to state their policy on the availability and sale of discounted air tickets and, if not, when they expect to make an announcement.
The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne): My Lords, as I have said on many occasions, we believe that the problem would largely disappear if legitimate low fares were accepted by our international partners. We have been making some progress and will continue to take all reasonable steps to that end.
Baroness Burton of Coventry: My Lords, as the Minister last week told a conference in London that the civil aviation industry was one of the last bulwarks of protectionism, may I ask why the Government—in spite of the Minister's reply—are still sitting on the sidelines, knowing full well that last year five million tickets were sold through the bucket shops in this country at discounts of up to 60 per cent?
Lord Trefgarne: My Lords, the bulwarks of protectionism, to which I referred, have been erected by the international community, not by me. It is therefore for the international community to pull them down. I hope that it will soon do so.
Baroness Burton of Coventry: My Lords, that is wonderful, because we can deal with that tomorrow. May I ask the Minister—pending tomorrow—whether he would not feel able to help the legitimate agencies? As this protectionism exists—the noble Lord, Lord Trefgarne, himself has said so—does he not feel that the Government should do something to help the legitimate agents to sell these tickets which mean the loss of so much money for them?
Lord Trefgarne: My Lords, if the noble Baroness means that I should authorise the sale of tickets at fares other than those found in the international agreements and agreed with our international partners—in other words, in clear breach of the international agreements into which we have entered—then I must disagree with her.
Baroness Elliot of Harwood: At what point, my Lords, does an international agreement which is breaking all the laws receive the consent or the approval of the member Governments? Surely when the law is being broken the international agreement can no longer stand.
Lord Trefgarne: My Lords, an international agreement is the law, as I understand it; and, therefore, tickets which are sold at other than the fares agreed with our international partners, or without the conditions that we have authorised, are themselves sold in breach of the law. As I have told my noble friend—and, indeed, the noble Baroness, Lady Burton—several times, although there is clearly a breach of the law on these occasions, it is a very complex and technical matter and it is not one that would be easy to persuade a court on.
Lord Leatherland: My Lords, does this mean that the Conservative Party no longer believes in free competition?
Lord Trefgarne: My Lords, I am mystified as to how the noble Lord arrives at that conclusion.
Lord Paget of Northampton: My Lords, should we not express a little gratitude to those who are successful in cheating our international obligations when those obligations are obviously misguided?
Lord Trefgarne: My Lords, I am not sure who the noble Lord thinks is misguided in this matter. When these international agreements were arrived at—in some cases very many years ago—they were considered right and proper at that time and we of course agreed to them. The situation has changed radically in the past 10 or 15 years—particularly more recently—and that is why we now seek to change these agreements.

The Neutron Bomb
2.41 p.m.
Viscount Hanworth: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the deployment of the neutron bomb raises any new issues of principle given the implication of the Government's Answer to a Written Question (Official Report, 12th February 1981, col. 400) that the bomb is merely a variant of existing nuclear weapons.
The Minister of State, Ministry of Defence (Viscount Trenchard): My Lords, technically, the neutron bomb raises no new issues of principle. It is, as the noble Viscount observes, only a variant of nuclear weapon design, with special characteristics, which offers one possible way of enhancing NATO's ability to deter a massive Russian armoured attack on Western Europe. But it is understandable that any new nuclear weapon of whatever kind should be a matter of public concern.
Viscount Hanworth: My Lords, I thank the noble Viscount for that reply. Does he realise that he has made exactly the points that I wanted made? May I therefore leave it to any other noble Lords to ask further questions; I shall not ask a supplementary question on this occasion.
The Earl of Kimberley: My Lords, may I ask my noble friend whether it would be in the interests of this weapon—which I believe is the enhanced radiation weapon—if it was always called that and not this slang of "neutron bomb" which, in the minds of the general public, implies something like the bombs that were dropped on Nagasaki and Hiroshima, which it is not?
Viscount Trenchard: My Lords, I agree with my noble friend that perhaps the technical description would be less emotive than the term "neutron bomb" has become.
Lord Shinwell: My Lords, is the noble Viscount the Minister aware that I am very grateful for the indulgence of the noble Viscount, Lord Hanworth, and I have his permission to ask a supplementary question? As there appears to be a great deal of mystery about the neutron bomb, may I ask this on behalf of the general public and Members of your Lordships' House? Do the Government intend to manufacture the neutron bomb and if possible, in an emergency, to deploy it? What is the possible effect? Does it blast and, if it blasts, what is likely to be the effect of the blasting? Also, what is it going to cost? There is a great mystery about it. Can we not be fully informed?
Viscount Trenchard: My Lords, Her Majesty's Government have no intention of manufacturing the neutron bomb and are not doing any development work upon it. It is being considered again, along with every other aspect of United States defence, by the new Administration and they have promised to consult their allies as a result of any conclusions they reach. So far as deployment is concerned, I would say to the noble Lord that apparently the main purpose perceived by military commanders is in deployment against massed formations of tank offensives. That clearly indicates a deployment in the regions where such an attack is liable rather than in this country.
Regarding the nature of the weapon, my technical knowledge is extremely weak but it is an enhanced radiation weapon, which means, as I understand it, that it has fewer of the characteristics which knock down physical things and more of the radiation. But this is essentially a matter of degree and it is, as I said in reply to the original Question, essentially another version of a nuclear weapon.
Lord Brockway: My Lords, does the Minister remember that his late right honourable friend Reginald Maudling described the nuclear bomb as "the final abuse of God"? Is it not a fact that the neutron bomb would negate the whole of creative evolution in destroying not only all human beings but all life, birds and nature, leaving only material things? Should such a weapon be accepted by those who
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believe in the value of life and in human universal identity?
Viscount Trenchard: My Lords, I think all weapons, and above all nuclear weapons, are so horrific as almost to defy imagination. I do not think there is anybody in Her Majesty's Government or in this House who does not think that; and I do not think that the noble Lord, if I may say so, has any monopoly of thoughts in that direction, nor any monopoly of working towards arms control on a balanced basis.
Earl Cathcart: My Lords, would my noble friend confirm that the Warsaw Pact countries also have the capability of deploying neutron bombs?
Viscount Trenchard: My Lords, it is believed that they know how to make such weapons; but I invite your Lordships to consider the role that military commanders see for such a weapon to use against a massed armoured attack, and that it is clear that the Russians are not expecting a massed armoured attack from the West.
Viscount St. Davids: My Lords, is it within the noble Viscount's memory that the Popes once condemned the invention and manufacture of crossbows as the final abuse of God?
Viscount Trenchard: My Lords, it is not in my own memory, but my father, speaking at the Cambridge Union in 1925, said that the aeroplane was the most offensive weapon ever invented and that if he had the casting vote he would say "abolish the air". He did not have the casting vote; and we cannot disinvent nuclear weapons, either.
Lord Avebury: My Lords, if the Minister says that the main purpose of the neutron bomb is to deter a massed armoured attack, will he recall that in an answer given to me by one of his colleagues it was said that 300,000 laser-guided anti-tank weapons could be purchased for the amount of money that is being spent on Trident? Would not the noble Viscount therefore consider whether we should advise the Americans that very large quantities of these weapons could be deployed with the money which would otherwise be spent on the development of the neutron bomb?
Viscount Trenchard: My Lords, I think our allies, the United States, with their military advisers, and Her Majesty's Government, with all their military advisers, are quite capable of considering all the pluses and minuses of these awkward but necessary decisions to be taken in the world in which we live.
Lord Paget of Northampton: My Lords, would the noble Viscount say whether I am correct in interpreting his answer as saying that the neutron bomb is less a matter of principle than of target probability, and that, since the neutron bomb would obviously be a very high target probability for the Russians, it is OK by us so long as it is deployed somewhere else?
Viscount Trenchard: My Lords, I think that the first part of the noble Lord's suggestion in his supplementary question is a statement of military appreciation as it stands. What I intended to convey in one of my answers in relation to the second part was that, if the perceived military use of this weapon is of a tactical nature to destroy particularly a large-scale offensive of tanks, then its applicability clearly is to those who see a threat of a large-scale attack of armoured vehicles, and I do not think that the Russians do see such a threat. In the hope that we have reached the end of this subject, I just want to take the opportunity of saying once more that the Americans are only considering this weapon along with all their other weapon options, at a moment when they are reviewing their defences and at a moment when they are reviewing a possible initiative to continue the SALT arms control discussions.
Lord Hale: My Lords, can the noble Viscount say precisely what role this weapon is intended to play in defence? Furthermore, are we really correct in talking about defence, in view of what the noble Viscount himself said in answer to a previous supplementary question a moment or two ago?
Viscount Trenchard: My Lords, I think that all weapons that are being considered by the alliance are for defensive purposes. On this one, I want to say again that there is no current US intention. There is a statement that they are considering it and that they will consult us if their considerations lead anywhere at all.
Viscount Hanworth: My Lords having forgone my supplementary question, may I now ask the Minister this: Will he confirm that the neutron yield is probably four or five times that of the conventional bomb but, bearing in mind that the blast effect and other effects go as a square, we are still getting from the neutron bomb a very substantial blast effect and effects from other factors of the bomb?
Viscount Trenchard: My Lords, as I said earlier, it is a question of degree. The noble Viscount is quite correct. The radiation effect is greater, but the blast is smaller. I cannot comment on the exact figures that the noble Viscount mentioned.

The Closed Shop: Local Councils
2.53 p.m.
Lord Harris of Greenwich: 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 their attitude towards the closed shop policies of the Sandwell and Walsall district councils; whether they regard the disciplinary action that has been taken against Miss Joanna Harris and her colleagues in Sandwell and Mrs. Joan Cooper and her colleagues at Walsall as being lawful; and if not whether the Secretary of State for Employment and the Secretary of State for the Environment
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propose to warn the local authorities concerned that their members are putting themselves at risk of being surcharged by the district auditor.
The Minister of State, Department of Employment (The Earl of Gowrie): My Lords, the Government have strongly condemned Sandwell Metropolitan Borough Council's disgraceful closed shop policy and affirmed their support for those whose jobs have been threatened. From reports, it appears that Walsall Council may be behaving in a similar manner in relation to their employees, and if this should be the case the Government would be equally forthright in condemning Walsall Council's policy.
It is clear that Sandwell Council are deliberately infringing the statutory rights of their employees under the Employment Act 1980. In such a case, it is open to anyone to raise the matter with the district auditor who may decide to investigate and the result could well be a court order holding individual councillors responsible to repay the expenditure from their own resources.
Lord Harris of Greenwich: My Lords, in thanking the Minister for that reply and hoping that his reply will get a great deal of publicity, particularly in the areas of the two local authorities concerned, may I invite him to ask the Secretary of State for the Environment formally to warn the local authorities concerned of what is contemplated? Does he not agree that what is contemplated in the case of both these local authorities is a disgraceful attack upon the civil liberties of these women, who are taking up a position under immense pressure from their employers? In this situation, is it not right that the members of the local authorities should be formally warned by the Government, that the Government themselves will draw these matters to the attention of the district auditor, because only in those circumstances is it likely that they will, in fact, avoid dismissing these women who, then, will have only claims for compensation?
The Earl of Gowrie: My Lords, the Government, as my Answer implied, have made their disapproval and condemnation quite unconditional. The remedy which the noble Lord postulates is, of course, available to the people concerned as a result of the Government's own legislation.
Lord Rochester: My Lords, is the noble Earl aware that recent events at Sandwell have made it more difficult for those of us who, while deploring the illiberalism of closed shops, have opposed their immediate abolition on practical grounds, and that we find it increasingly difficult to maintain that position in the light of such events?
The Earl of Gowrie: My Lords, those who abuse the law inevitably put pressure on legislators of all political complexions to up the ante and strengthen the law. There are, of course, dangers in this kind of escalation. The necessity is that laws be put on the statute book not simply as a result of parliamentary majorities, but overall public consent.
Lord Lee of Newton: My Lords, does the noble Earl find it passing strange that there should have been such huge publicity around these two issues, while all the hundreds of people who have been dismissed for joining trade unions have passed without comment?
The Earl of Gowrie: My Lords, I do not think it is strange, in view of our history. We are an intensely litigious country, zealous about civil liberties and we have a very active press.
Lord Taylor of Gryfe: My Lords, would the noble Earl say whether the ruling of the European Commission on Human Rights in the British Rail employees' case has any relevance to this case?
The Earl of Gowrie: My Lords, as the noble Lord will be aware, even as I talk a previous closed shop case is being heard in Europe. Therefore, I do not think it would be proper for me to make any comment upon it at the moment.
Lord Elwyn-Jones: My Lords, is it correct to say that this is an intensely litigious country? I do not think we are, unfortunately for lawyers, and I hope that not too much encouragement to litigation will be given in the House, bearing in mind the gross pressures on the courts to deal with such litigation as already exists.
The Earl of Gowrie: My Lords, I am sorry that the noble and learned Lord and his colleagues are under such pressure and doing so badly.
Lord Harris of Greenwich: My Lords, may I ask the Minister this final question: If the Minister argues, as I understand he does, that what the local authorities here are doing is unlawful, why does the Secretary of State for the Environment not formally warn members of the local authorities concerned that he will draw these matters to the attention of the district auditor?
The Earl of Gowrie: My Lords, I have to confess that I do not know the answer to that, except to say that the Government collectively have made their view perfectly clear. Furthermore, I am not a lawyer myself, but I do not know whether it would be proper for the Government, as it were, to bring an action of that kind.

Trident: Cost
2.58 p.m.
Lord Beswick: 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 is the estimated expenditure on the Trident project in the years 1981–82 and 1982–83.
Viscount Trenchard: My Lords, estimated Trident expenditure in the year 1981–82 is expected to be in the order of about £60 million. It is not possible to predict at this stage, with any accuracy, expenditure in
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1982–83, although I can say that it will certainly not approach 1½ per cent. of the defence budget.
Lord Beswick: My Lords, while recognising that Her Majesty's Government appear to have dismissed the most formidable arguments that were made against the Trident project in this House last week, will the noble Viscount not agree, however, that even on the modest figures which he is now suggesting will be incurred in the two years referred to in my Question, it is a fact that but for the Trident programme the RAF could have had the conventional aircraft for example the Hawk trainer, about which I spoke on 22nd January?
Viscount Trenchard: My Lords, we have been over this ground in reply to questions which the noble Lord and other noble Lords have asked and, indeed, in the debate which he mentioned. I believe that it is not a case of the Government dismissing the very interesting, well argued points of view which were raised in that debate. I believe we have answered them, and I hope I shall get further opportunities to answer them in more detail.
Turning to what the money could be spent on if it were not spent on Trident, obviously there is substantially more than one answer but the point which needs to be remembered all along is that Trident is no more than a maintenance and modernisation of our strategic nuclear deterrent and that over a longer period than Polaris it will absorb the same sort of percentage of the defence budget.
Lord Beswick: My Lords, I am not disposed to argue the major case to which the noble Viscount referred in the latter part of his answer. I ask him the simple question: Would it not have been possible to keep within the defence budget and still to order the conventional aircraft to which I referred?
Viscount Trenchard: My Lords, the noble Lord has at his fingertips the exact cost of the number of Hawks concerned and I do not, but the figures are as I have described. It would have allowed £60 million more next year, although we have an overspend of our budget this year, which the noble Lord also knows quite well. But if the overspend on an expanding budget were to be maintained at the level at which it is, then we should have £60 million more for other uses.
The Earl of Kinnoull: My Lords, can my noble friend say whether any offset arrangements were made at the time of the Trident contract?
Viscount Trenchard: My Lords, I think that is a separate question, which I shall be glad to answer if my noble friend will put it down.

Wildlife and Countryside Bill [H.L.]
Lord Skelmersdale: My Lords, on behalf of my noble friend Lord Bellwin, I beg to move the Motion standing in his name on the Order Paper.
Moved, That the amendments for the Report stage be marshalled and considered in the following order, vizt.:—

Clauses 1 to 8

Schedules 1 to 4

Clauses 9 and 10

Schedule 5

Clause 11

Schedule 6

Clause 12

Schedule 7

Clause 13

Schedule 8

Clause 14

Schedule 9

Clauses 15 to 29

Schedule 10

Clauses 30 to 38

Schedule 11

Clauses 39 to 42

Schedule 12

Clauses 43 to 47

Schedule 13

Clauses 48 to 56

Schedule 14

Clause 57—(Lord Skelmersdale.)

On Question, Motion agreed to.

Unemployment
3.3 p.m.
Lord Peart Lord Peart rose to call attention to the unacceptable levels of regional unemployment; and to move for Papers.
The noble Lord said: My Lords, I beg to move the Motion standing in my name on the Order Paper. Before we debate the Motion itself, may I appeal to noble Lords to make short speeches. About 30 Members of the House wish to speak. No doubt both long and short speeches will be made but, as always, I shall try to be concise and not to overdo it.
I believe this debate to be an important one. I should like to congratulate my noble friend Lord Lee of Newton, who took the initiative within my party and thought that this would be the Motion which another place would develop in depth. For many years I represented West Cumberland, but I am going to speak for the North of England, a region which has suffered over the years. Of course it has had its triumphs but now there are pit closures. Collieries which employed large numbers of men have been closed down. I think of collieries on the East Coast and also in Northumberland and my own former constituency of Workington. I know what tragedies lie behind the figures. Noble Lords should get those figures from the Employment Gazette which is in the Library. Details are given there of every region and of the rise in unemployment in many of them, especially in the North of England area with which I am dealing: the Tyne, Newcastle, Wearside and Consett, which was destroyed "at a stroke", if I may use the famous expression of one Tory Prime Minister.
I do not know whether noble Lords read the speech
1388
of Mr. Heath which appeared in The Guardian of Thursday, 6th November—
"Former Prime Minister's criticisms strike a chord with Tory left wing. Heath attacks catastrophic monetary policy".
I hope that every Conservative Peer will read the full speech. It is a strong indictment of Government policy. The Government have created a situation of nightmare proportions which I think is partly due to the Government's blind adherence to a catastrophic monetary policy. This is what Mr. Heath was attacking when he made his speech. The Government must change their mind. The Government must do another U-turn, otherwise many of our great industries in the North will be considerably affected, with disastrous consequences and high unemployment figures. The figures are still growing, as I know only too well.
What a contrast to the period when a Labour Government came to office in 1945! I never thought that I would again see villages and townships in my native Durham affected by Government policy such as we saw in the early 1930s: desolation, with towns like Jarrow—which became so famous as a result of the Jarrow March—murdered. When we discussed Consett quite recently I thought how similar that situation was to communities where in many cases they were making a profit. People forget this. In the North, dealing with Workington, I can point to the closure of very large factories and to a steel works which still has its problems. Maryport was a famous seafaring town many years ago. There we created virtually a new society. We repaired the ravages of the Tories in that area. I was always proud to be in that Government, to represent my constituency in that Parliament and to speak for the people of Workington.
What a difference there was when we first came to power! I can remember what the then Chancellor of the Exchequer, Hugh Dalton—I quoted him the other night in our forestry debate—said about the regions. It was so important. He said that he would provide money for the regions with a song in his heart. That Labour Government repaired not only the ravages of the war but the ravages of misrule before the war. It became a new and better society. People became more buoyant. They felt there was a future for them. We had the benefits of a health service which we created and which we were very proud of. I suspect that the Tories will still try to clip the health service and not to give it its full place in the community. They believe in private practice rather than in ordinary socialised medicine, if I may use that term.
We created a new society, a new fabric. We built roads—for instance, the A66, a great road which goes past Bassenthwaite Lake, which many people know. It provides a lifeline for West Cumberland and for the traffic which goes to Teesside and to other parts of the Northern region. We created an infrastructure. Now these areas are being attacked and run down. Factory after factory in the Northern region has been closed. This is a tragedy, similar to the one which we saw, as I said, in the 1930s.
It is also a tragedy for another reason. Unemployment has a great effect on our youth. Unemployment among the young is rising. They are the future of our country. It was the youth of our country who, when the war came, rallied to the cause, produced essential

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weapons and fought in the fine regiments of those areas. They were patriots in the best sense. It is a tragedy to see unemployment raising its ugly head in these areas. Only a Government can stop it. I believe this Government have created that unemployment, and it is the indictment which I make today. The noble Earl may shake his head but if he examines it he will understand what I mean by it.
Many of our young people, forced to leave school without qualifications, due to a new law concerned with social security—I have here a letter which appeared in the Guardian; I will not read it out but it indicates how there are now difficulties for young people who are forced to leave school without qualifications due to a new law concerned with social security. I am very glad that the Guardian has taken this up and highlighted it. Of course we welcome the Youth Opportunities Programme, designed to give unemployed youth work experience, set up by the Manpower Services Commission. It has its defects; due to a lack of worthwhile apprenticeships and because of the destruction of the manufacturing base they are being forced into the consumer and retail industries. I am not criticising these two industries, but I believe we should have our industrial base secure in both those regions. West Cumberland took the initiative and it is setting up an apprenticeship scheme, but, all the same, some are still being exploited in the retail trade by unscrupulous employers.
Many people must accept the fact that if we have unemployment and we have the destruction of our industry it has repercussions on other great industries. I speak for agriculture. I believe that agriculture has thrived because we had a thriving industry and because we once had a Government who brought in a new concept of assured markets and guaranteed prices. We have never let the farming community down, even though a Labour Government was sometimes very critical of the giving of subsidies to the farming community. I believe that it is important to have a healthy industry and a healthy agriculture, and that is what I have always tried to talk about and to effect in my political life. I know the noble Lord, Lord Soames, and I am sure he will agree with me on that. He was a distinguished Cabinet Minister in agriculture and has wide experience, and he knows the importance of the industry to the country.
So I would argue that here and now we must say "stop" to Government policy. There must be a U-turn; there must be a change, otherwise there will be darkness again for thousands of people in our country. I said that I would set a good example by making a short, concise speech. There are 30 people with their names down to speak today, and therefore I believe it is right that I should set a good example. I do so now but I believe that this Motion is important and it is an indication that we want to see a change in policy. I beg to move for Papers.
3.13 p.m.
The Earl of Gowrie: My Lords, the noble Lord the Leader of the official Opposition introduced this debate with passion and conviction, although he will not be surprised that I found his speech short both on diagnosis and on treatment of the evils of unemploy-
1390
ment. But I congratulate him on attracting so many speakers, a testimony to the anxiety which our acute manpower crisis is causing. As the Employment Minister, I can assure everyone that the Government will listen and will study everything said because we are intensely aware of the problems and difficulties which unemployment brings to many people and the real anxiety caused by threats of redundancy. We are as anxious for lasting solutions as anyone and we are quite open to advice. I am very much looking forward to the maiden speech of the right reverend Prelate. He brings us his special knowledge and concern for Liverpool, a region almost permanently afflicted with too much high unemployment.
The noble Lord, Lord Peart, has framed his Motion to concentrate on the regional effects. Our economy is, of course, regionally less well balanced than the economy of, for instance, Germany, whose major productive cities—Hamburg, Hanover, Frankfurt, Stuttgart, the Cologne-Dusseldorf complex, Munich—present an enviable geographical balance and industrial mix. Successive Governments of this country have had regional aid policies to try to correct our imbalance although it seems to me that most economists nowadays—unaffected perhaps by political considerations—are beginning to wonder whether transplanting industries from industrial areas to areas with less manufacturing tradition is always such a good idea. Of course, I recognise that at a time of high unemployment regions where unemployment is traditionally high may suffer proportionately: indeed their portion can increase by a kind of multiplier effect.
But in these opening remarks I want to concentrate, if I may, on unemployment generally and deal with regional issues in answering any questions put to me when I come to wind up. It is also true to say that at least one good thing about the present levels of unemployment is that pretty well everyone in the country is sharply aware of it. I really do not think we are two nations about this issue any more.
Areas like the West Midlands which have become used to high employment are suffering very badly and even the affluent suburbs of the South East are aware that unemployment threatens, if not parents, at least their children who are coming out of school in unprecedented numbers, early in this decade, only to face a very severely restricted job market. So I honestly do not believe that any part of our society is complacent, or indifferent or unaware of this manpower crisis, and certainly everyone wants to see it solved.
Like any great issue it is, of course, a matter of fierce political controversy. Yet at least one important thing that has happened recently is that there is increasing awareness that the full employment policies which were run by both major political parties from 1945 to 1974 are no longer being delivered by British Governments of either political persuasion. Because high levels of unemployment are politically unpopular, as well as wasteful in human and economic terms, this failure to deliver full employment argues that something more profound is going on than simple failure to come up with the right policies. When we add to this the knowledge that unemployment is a major problem in all the developed industrial economies of any significant size (it is of course, still easier to control employment if you govern a small country) it does

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seem to me important that we put the politics on one side for a moment and try to agree on both diagnosis and cure.
We have had many macro-economic debates recently and I do not propose to spend much time analysing the causes of unemployment or, to be more precise, analysing the reasons why ensuring high levels of employment by manipulating demand is no longer an option enjoyed by modern Governments. The reasons are not complex. Let me itemise them quickly. There is the downturn in world trade induced by competitive deflationary policies by Governments and these are following competitive inflationary policies by those same Governments, which in turn stemmed from the desire of the Western democracies to hide from their electorates the full consequences of the OPEC price rises, which have been nearly 2,000 per cent. since 1973.
There is the currency instability which OPEC has created and the refusal of the energy producing countries to reinvest their petro-dollars in the manufacturing capacity of the West. There is the rise of highly disciplined and competitive capitalist economies in the Far East. There are the demographic factors—the 'sixties baby bulge hitting the job market before the World War I baby bulge comes off it, and a huge increase over the past 20 years in the number of women who have entered the job market.
We in Britain have to consider all these things as well as the slowing down of inevitable structural change in industry as a result of the attempts of previous Governments to save jobs where they could not be saved for long as a result of restrictive labour practices by powerful unions and pay settlements out of line with productivity and the need to retain profits for investment. And we have to correct investment famine in manufacturing industry due to inflation and the profitability of financing high Government spending as well as the way in which high Government spending pre-empts resources for new and existing industry. I do not believe that these causes are subject to serious disagreement by analysts of widely differing outlook. The dominant reason for the fall in employment levels has been this inflation-led recession in the Western world. I am not passing the buck here, because we as a nation have contributed to the Western recession, and we cannot as a trading nation isolate out ourselves from its effect. So I am afraid that a substantial and lasting improvement in employment levels is largely dependent upon an up-turn in world trade and on our own competitive response to it.
I stress this matter of an improvement in our own competitive response, because, of course, I am not saying that it is a matter of wringing one's hands and sitting around until world trade picks up. The House will know that the Government's policies have two overriding aims. The first is to continue to bring down domestically induced inflation; and the second aim, and one can hardly separate it, is to improve the competitive position of our industry and to bring it into line, as it were, with the very successful and very competitive bits of our economy: agriculture, to which the noble Lord paid tribute, retailing, financial services, for instance, as well, of course, as the many sections of industry that are themselves still successful.
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Now, in the control of domestically induced inflation the Government have been successful, and we are determined not to surrender our success. If we were to do so, the terrible inroads which inflation makes on profitability and investment would continue to cut away existing jobs, and, just as bad, continue to prevent new jobs from being created. I am sure that the public opinion polls are accurate when they indicate that many people would like us to give priority to unemployment and not to inflation. But the trouble is that unemployment and inflation go together like a horse and carriage. So do interest rates and inflation. We recognise the burden on industry and on employment levels of high interest rates. But remember that to get a real rate of return on investment, and to make investment worthwhile, you have to discount the level of inflation.
I am sometimes told that this is difficult for people to understand. I disagree. We all understand it in terms of our own planning and our arguments over the annual wage round. It is called keeping up with the cost of living. Investment, on which output, productivity, wealth and employment all depend, has to keep up with the cost of living also.
Then there is the Catch 22 question that faces all modern Governments. High Government spending to help industry—think of the regional aid and the money given to Leyland or British Steel—means high interest rates that squeeze industry. The Government have to compete in the money markets for the financing of our deficits and of our borrowing. One of the reasons we have to contain public spending, therefore, is our desire to see lower interest rates, so that we do not compete with industry for precious resources and crowd out jobs. Of course, if inflation continues to moderate, as we expect, it should be possible to cut interest rates further, and the welcome fall in the exchange rate over the past few days appears to be anticipating this. I am, of course, aware that the squeeze on manufacturing exports caused by the high pound has been very severe. It has cost jobs. We have never pretended that counter-inflation—which is the economic equivalent of putting yourself on a severe diet after years of self-indulgence—is other than painful, nor that it can be accomplished without a transitional rise in unemployment as the tight money squeeze takes effect.
How, then, does one protect employment levels while currency stability is being achieved? The answer again, I think, is not complex. There has to be a response in pay bargaining. Here the strong pound has helped rather than hindered as people in this country perceive inflation almost exclusively in price terms. The strong pound helps reduce price inflation and is, therefore, partly responsible for the sharp fall in wage demands. Unions have been adapting to a falling rather than rising price curve in the present wage round. So far, I can report, the average settlement has been 9½ per cent. in the private sector and 9 per cent. in the public sector. Of course, in terms of our present productive capacity, and in terms of the world recession, this is still too high overall. But it is a remarkable improvement in this economy to see wage settlements being achieved below price inflation. It is at last beginning to sink in that excessive pay claims do threaten jobs, one's own job as well as other people's.

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In recent weeks union leaders have joined with industrialists in calling on the Government to lower interest rates and ease the pressure on the pound. As I have said, we hope to do this. But unions must not expect to recover in wage rises the price rises which a more competitive pound would bring. If they do so, we shall not be able to shield them from the consequences of more unemployment.
The central purpose of this Government, the moral ground on which it stands, so to speak, is that people do in the main act responsibly once cause and effect are not concealed from them. We are all human and subject to human pressures, and no one pretends that progress in this direction is as swift or as even as one would like. But I have to say that, far from being depressed, I am astonished and gratified at the speed at which reality is now sinking in. I also have to say that what is depresssing is the call by some members of the Opposition for artificial and, in this world climate of very low growth, quite unsustainable reflation of demand.
From the end of the IMF period of Mr. Healey's chancellorship in 1977 to the general election in May 1979, the previous Government doubled their public sector borrowing requirement. That was the U-turn from their own monetary control and cash limit policy. Real earnings rose by 14 per cent. over inflation, and that was by far the fastest growth since the war. That was intensely inflationary, and we are still suffering the hang-over from that wages binge, as well as the disastrous and inherited 1979–80 wage round. Yet, in spite of all that reflation, unemployment only fell by rather less than 10 per cent. in the initial stages, and at a cost of rising sharply later on. There are enormous dangers in stimulating a manufacturing economy which has been as uncompetitive as ours. You suck in imports and you suck in other people's unemployment.
Another problem we face is that in many industries we have had to cut our workforces drastically to bring them in line with international manning levels. I think most people agree that unless we do this we shall find ourselves priced out of world markets, with the inevitable result that more jobs will be lost in the long run. Of course, we have to do this in a humane and civilised way. One of the reasons why the Government's financial strategy has had to relax rather more than we would like is that the cost of buying people out of declining industries is very high. So is the c of the consequent unemployment and other benefit
But it is altogether false logic to argue that this kind of expenditure could somehow be saved by continuing to postpone the painful transitions which industries like Leyland and British Steel have to make, and which hundreds of private sector industries have to make. The unemployed are paying heavily for the Labour Government's attempts to postpone changes that were bound to be imposed on our economy by our position as a world trading nation. And the reason why I have great confidence in our economic revival is that, now that these changes are at last taking place, albeit at high social and financial cost, British industry is now better equipped for international competition than it has been for many years. That is why it is so essential that we do not see yet another
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British Government abandoning its economic strategy in the face of political and other pressures as counter-inflation takes effect.
I would remind the noble Lord, Lord Peart, that this strategy is very close to that of the Government of which he was a distinguished member at the period of their greatest success against inflation. Of course, all of us are aware as practical politicians that the pressure is always greatest just as the results are beginning to come through.
In my job I am well aware of the difficulties for individuals of counter-inflation policy and the transition from an antiquated to a modern industrial economy. I have acknowledged the social and financial cost. I have acknowledged that the Government have had to adapt the speed at which we can move in our strategy. So we are doing what we can through regional aid, through industrial support and through our special employment and training measures to help industries and individuals. It is the purest political cynicism, and it will in time rebound badly on the perpetrators, to suggest that we are in some way an uncaring or hard-hearted Government, or that monetarism—which means only living within your means—is an unethical doctrine or one that was not used by the previous Government.
Without the Government's assistance to the nationalised industries—and on them depend the fortunes of myriad private concerns—unemployment would, of course, be nearly a million more again. Of course a lot of the money we spend on the nationalised industries involves modernisation, buying surplus labour out and preparation for eventual sale. But job protection is also a factor and without the special employment measures a further 300,000 people would be added to the register. These measures are helping about 1 million people.
The rise in the birth rate plus the manufacturing decline, plus the terrifying fact that over the last 10 years, with output excluding oil rising on average by less than I per cent. a year, we have increased wages by 320 per cent.—all this is the root cause of unemployment: not monetarism, Keynsianism or even Seventh Day Adventism! As the old bit of the Labour Party well knows, and as the new bits are likely to find out, there is no magic policy to deal with this other than painfully, other than making the move from the old high-manned, low wage, low investment industries to the new low-manned, high wage and high technological industries. They make the wealth and the wealth makes the employment. But as we change gear from one kind of industrial society to another, individuals and groups do, of course, get caught in the machinery. So I shall end with a group for whom I have special responsibility within the Government.
This is an acutely difficult time for all young people seeking work and I include those with relatively high educational attainments as well as the less well qualified. In this country the immediately post-war "baby bulge" joined the relatively buoyant labour market—particularly in the service sectors—of what now appears to be that pre-historic time, the swinging 'sixties. The baby bulge of those same 'sixties, to which I have to confess I contributed, is suffering now the horrid irony of coming on to the labour market in a world changed

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out of recognition by the crisis of energy supply and energy monopoly, and by the growth of competitive capitalist economies outside the West. I published some years ago a small poem about Biba's boutique in the 'sixties which reads pretty oddly today. It ended:
"No war now, no one poor under thirty,
All the cold war babies dressed to kill".
That nostalgic prosperity was not founded on better industrial health: that prosperity was founded on cheap primary products (and poorer producer nations) and very little competition outside the West. But now we have our own wits, our own skills and to a much greater degree our own resources to depend on. The labour market is still very successful.
We must remember that while youth and school-leaver unemployment continue on an upward trend and cause the deepest anxiety, the majority of young people who seek to enter the labour market do so successfully. The majority of those who are not initially successful, and who therefore join our special programmes, do in their turn go into real jobs at the end of the work experience which the public services provide for them. Of over 700,000 young people leaving school for work last summer, the proportion still unemployed is around 20 per cent. That is too high, but it is still a good record of achievement of the programmes.
When you consider the older unemployed there is a continual flow of people on and off the register between our rather obsessional monthly counts and still well over a quarter of a million people leave the unemployment register each month, most of them for jobs or training. How things turn out in the longer run will depend on how we adapt to a different industrial society and the success of overall economic policy. But unless we continue with the process of adaptation none of us may be in any doubt that the surge in unemployment will itself continue unabated and that the increases will fall disproportionately on young people, on the disadvantaged and on the long-term unemployed.
All that said, young people do need to know that there is hope and that there are vacancies. Even now at the trough of recession we are immensely short of people equipped to work in the electronics industries, in information technology, in service engineering and in traditional skilled manual crafts. All these arc wealth creating, and other jobs—too varied and plural to mention—depend on wealth creation. I am sometimes told that the transferable skills on which modern industrial employment depends ask rather a lot of people—that they need O and even A-level maths and things like that. I can only say that while this mix of skills includes abstract competence, manual dexterity, acceptance of responsibility and sensitivity to other people, all those same kind of skills are required in the process of learning to drive a car and millions of people can do that.
In a remarkable maiden speech to this House on 27th November last at column 223, the right reverend Prelate the Bishop of Lincoln said with all his experience as an industrial chaplain for many years:
"If I do not speak about the extreme importance of the revival of our economy as a national priority, it does not mean
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that I do not recognise it as an absolutely fundamental priority for us all. Having said that … I should like to go on to say that I have grave doubts—and they are not undocumented and I think that they are not unshared—as to whether we shall ever get back to the full employment, as we knew it for the first time in history, in the 'fifties, 'sixties and early 'seventies of this century.
"With modern manufacturing and service industry developing as it is at present, and as it needs to develop to be competitive, I cannot see that it will ever need to employ the number of employable people in our land. After each recession, as this country has recovered, there has been, each time, a larger pool of unemployed people. Therefore, the crucial political, social and human question, and therefore the crucial ethical question, is what is to be the fate of those people who our industries, as we know them at the moment, are unlikely ever to need to employ".
I could not put it in a more cogent or less doctrinaire way than that. But while I recognise the crucial, political, social, human and ethical question, as the right reverend Prelate puts it, I do believe that the labour market is an immensely rich and varied and subtle mechanism. If the competitive and the wealth creating side of the equation is got right, then the other side will do most of the work, if not all of the work. Even at the trough of this recession, and with all our problems, the labour market in this country is employing 21·5 million out of 24 million. And we would be naive if we pretended that the informal or black economy did not exist. Of course we have no intention of leaving the whole thing to markets, as our support for the work of the MSC demonstrates. But the labour market is still a beautiful and successful mechanism and it is still doing its job in difficult conditions.
In concluding I in no way wish to minimise the difficulties we are facing and I know that we shall continue to face in 1981, not least because the greatest number of school-leavers since the war will come on to this difficult labour market at the end of this summer. Apart from the world wide recession which is affecting all Western countries, we have our own particular problems to which I have referred. As the Prime Minister said, there are no easy answers, but I believe that when the Government's policies are worked through we shall have a much stronger economy and a much better base from which to take advantage of any upturn in world trade. Inflation is falling fast at present and despite the pound, which I am glad to say has also eased, our share of world trade is holding very well. There is every reason for confidence if we do not, at great cost, continue to postpone changes that are bound to come in any case, and if we do not continue down the primrose path of paying ourselves more in wages and social benefits than our production allows. To go for the alternative cost of reflation at this time would lead to our industry becoming more and more uncompetitive, would draw in additional imports, and would, in the end, result in still greater unemployment for the country. No better tomorrow lies that way.
3.40 p.m.
Baroness Seear: My Lords, the last thing I want to do is to turn the debate on this extremely important and serious subject into a crude battle. On all sides of this House and throughout the country there is deep anxiety about the level of unemployment. It would be absurd to imagine that the Government are not as concerned about the issue of unemployment as are any other group in this country. They would be

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lunatic politicians if they did not mind about unemployment, and they would be inhuman monsters if, as individuals, they did not care about what is happening up and down the country.
Moreover, of course, although as the noble Earl, Lord Gowrie, has indicated, the causes of our unemployment are, in my view, exacerbated by the extremes of monetarism which the Government have applied, they stretch back a long way and are very deep-seated. This afternoon we do not wish to have yet another general economic debate, but we all know that the decline of British industry set in in the last quarter of the 19th century, and the modern Conservative Party can hardly be blamed for that. Indeed, I believe that I have to admit that there was a Liberal Government during that era. Perhaps their time is coming again; perhaps they will do better.
Of course, failure to reorganise industry and failure to tackle the necessary restructuring of industry, which could so much more easily have been done in the more prosperous days of the 1950s and 1960s, is a failure of both the Conservative and Labour Governments that we have had throughout that time. So this is an issue which should transcend ordinary party politics and on which it ought to be possible for us to reach a high degree of agreement on all sides of your Lordships' House.
However, having said that, the time is coming when the Government must take fresh action to deal with the unemployment problem with which we are now confronted; partly because the position is even more serious than the figures which we have been shown would lead us to believe. It is well understood that those figures leave out of account quite a number of people who are, in fact, unemployed: women who do not register, partly because they are not in a position to claim benefit and partly because they believe that there is no point in registering because there are no jobs to be got. They leave out of account many older people who have retired or who have given up the attempt to get a job, not because they want leisure, but retirement has been pushed upon them because there was no other option for them. They know—as the figures show all too well—that beyond a certain age the attempt to get a job is, in many parts of the country, totally futile, and they have given it up. Therefore, in fact, the figures understate the extent of unemployment today.
Moreover, some unemployment is being masked by the efforts—in many ways, of course, highly desirable efforts—of the Manpower Services Commission. A number of youngsters are employed in the youth opportunities schemes who are, in effect, unemployed. It is better that they should be so employed than that they should have nothing whatever to do. But if we were really doing our sums in a hard-nosed way, many of those jobs would not be included as full employment jobs. Indeed, the opportunities of the youth employment scheme, valuable though they are, can lead to a further disadvantage later on. It is very sad that it is necessary to terminate after 12 months in many of the schemes. There are parts of the country today where a youngster will receive an opportunity under the YOP schemes, only to find at the end of the year that he returns to a family or to a district where no one is working and that the experience of employ-
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ment is temporary, transitory and makes precious little difference to his ultimate employment prospects.
I know that the noble Earl, Lord Gowrie, has pointed out that many of these youngsters obtain jobs, and that is true. But many of them do not. During the youth employment scheme opportunity many of them do not learn anything; it is not a training that they receive. It does not contribute to their ability to get jobs, or to get jobs and to hold them when the time comes, when the economy recovers and when the demand will be for people with skills, which they have not been acquiring under the opportunities that they get today. Some have acquired skills, but many have not.
In fact the position is understated rather than overstated. Of course, in the regions—and it is, as I understand it, to the regions that this debate is primarily addressed—in some areas unemployment is becoming the norm. This is an extremely dangerous position to arise. Moreover, the costs of unemployment today are becoming hideous. It is not only the amount of money that the Government have to pay out in unemployment benefit, supplemented by social security benefits, but the social costs of unemployment are very difficult indeed to calculate with any kind of accuracy. I would not pretend to do so. I know that there have been elaborate attempts to give precise figures for the social costs of unemployment. But they certainly are real and they must be high. When we think of the anti-social practices into which youngsters, particularly those who are without employment and without hope of employment, inevitably drift and what that involves in terms of damage to property, of care for youngsters when they are convicted of damage and of illegal actions, and of the behaviour of many totally despairing groups among the ethnic minorities, all those add up to social costs which have a human and political effect of a disastrous kind, but which also have a real, high financial cost.
Therefore, unemployment is more serious and exceedingly expensive, and the time is coming when the Government must be prepared to make some further effort to alleviate it. It seems to me that, first and foremost, the Government should take certain immediate actions. I do not believe that there is any one thing that the Government can do, or any two or three things which will bring about a great change in the total position. But I believe that there are a number of things which, taken together, could make quite a considerable contribution. First and foremost—and we wait with expectation for next week—could the Government not cut the employers' national insurance contribution, which is a straight tax on employment? Could they not cut it advantageously in the regions of high unemployment? This would be the best encouragement to employment in the regions, because it would be encouragement for labour-intensive industry rather than for capital-intensive industry.
One of the legitimate criticisms of previous help in the regions is that it has tended to encourage capital-intensive industry to set up in the regions in areas where what is needed is labour-intensive employment; whereas a reduction of the employers' national insurance contribution is a direct encouragement to employment or a removal of discouragement to employment, which is what the employers' national insurance contribution

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is. Would it not be possible for the Government to consider, at any rate as regards the regions, exempting national insurance contributions of both employers and employees for all youngsters under the age of 21? As the noble Earl has said, we have a particularly acute problem of unemployment among the young, and that problem is particularly serious from a social and human point of view. If it were possible to say that, at any rate in the regions, employers could employ people under 21 without paying social security contributions, this would he a considerable help in encouraging the increased employment of youngsters.
There is no doubt that the high level of pay to young persons at the present time has been a real disincentive. We have talked often in this House about the example that Germany has given in dealing with its young persons coming out of school. One must say that one reason for the lower level of unemployment among German youth is that it costs employers in Germany proportionately a great deal less to employ their young people than it costs employers in this country. So that some adjustment of national insurance would do something to redress the balance and therefore help in the employment of these young persons.
These are things which could immediately be done. So too—and one hopes again that we shall see something of this in the Budget next week—would additional concessions to the small employers who can, in aggregate, absorb a considerable number of people. If every small employer in this country took on an additional young person, our problem of the employment of young people would be considerably reduced. Is it not possible, along with the other reasons for encouraging the small employer, to give special concessions here so that they could be given additional assistance in relieving the unemployment problem?
These are things which the Government can do immediately and which we very much hope the Government are going to do next week. But there are of course other things. I take the point of the noble Earl, Lord Gowrie, that the Government have had to cut back on expenditure in order to reduce the public sector borrowing requirement. But surely the time has come when the Government can distinguish between what used to be called above the line and below the line expenditure. For economies on above the line expenditure, we on these Benches are very much behind the Government. There has been a great deal of waste expenditure. We have to live within our income. That is fine. But with regard to below the line expenditure, today it is ridiculous to economise on the investment which will only cost us far more when we have to do it, and it is inevitable that we shall have to do it sooner or later. It will, however, cost us far more when we have to do it. Our failure to make this investment at the present time is costing us very dear indeed in terms of employment.
It amazes me that the Government Front Bench do not make this distinction. The press, the informed press, the CBI, the TUC, up and down the country have been saying "Borrow in order to invest". Surely the time has come to do this now, and to do it without further delay. Look at the things which could be done: development of the railways; development of energy saving equipment; development of insulation
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of houses. All these are ultimate cost savers. It is an economy to do it, and to do it now before the prices rise. The spin-off in terms of employment of investment of this kind is the best way of creating employment. It is far better than more money in the youth opportunities schemes of only temporary value.
So start now, with no further delay, to see that the investment which we shall have to make sooner or later is put in hand, and therefore will have employment consequences. But there is a further kind of investment, and I regard it as investment every bit as much as investing in the infrastructure, and that is the investment in people. I know that the noble Earl, Lord Gowrie, believes in the importance of training as much as we on these Benches believe in the importance of training. I know that he regrets—and he used the last paragraphs of his speech to emphasise this—youth unemployment, the problem of school-leavers, every bit as much as we do.
It is my belief that the time is coming when we have to treat the 16 to 19 age group as if it was not in employment at all. Youngsters should be based on jobs indeed, because they need the experience of being employed, but that time should be spent in learning, in acquiring skills and knowledge. The time and money should be invested in the youngsters, so that they turn out as people with skill and knowledge to develop the new industry which the noble Earl, Lord Gowrie, and we on these Benches want to see developing in this country, and developing as soon as possible.
If we do not make these investments, when we succeed in the restructuring of the industry, when we develop the high technology industries, the information industries and the rest which we want to see developed as much as he does, there will not be the manpower and the womanpower there to do the jobs which require to be done. The noble Earl, Lord Gowrie, knows as well as we know that we fail in this country to produce youngsters in sufficient quantities with the skills and knowledge that they are going to require; that they need now, but that they will need far more when the economy begins to recover. A really dramatic effort to take the 16 to 19 year age group out of the problems of unemployment and into the problems of further training based on employment would be the biggest single contribution to the reduction of unemployment, and to the reduction of the social problems associated with unemployment in the regions and in the country as a whole. That would be the single biggest contribution that the Government could make, and we implore them to make it soon.
3.57 p.m.
The Lord Bishop of Liverpool: My Lords, as this is the first time I have addressed your Lordships' House I ask your indulgence for any shortcomings in my speech. As Bishop of Liverpool I have a privileged view of a region deeply affected by unemployment. I see a community deeply hurt by those high levels of unemployment which have been experienced over many years. In Merseyside this is not simply part of a cycle, a bad dip in trade, although the losses of firms that we have experienced recently are so damaging that we wonder sometimes what industrial base will be left to pick up that upturn in trade.

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I think, for example, of Spoke. Two years ago in 1979 Dunlop, a large employer in Spoke, closed. I hear today that the redundancy money is just about spent. When you come to that moment in a community, the ability of a community or a family to stand up for itself is severely damaged. If you ask how young people in an urban community have found a job, your Lordships will know that frequently it has been through "Uncle" or "Auntie" knowing someone who knew about an opening. If the elders in your family have been made redundant they can offer no help. That adds to that dangerous sense of powerlessness in a community.
Last night in Liverpool the Church leaders of all our main denominations were together, as we regularly are. I told them I was to make my maiden speech in your Lordships' House today on this subject. They asked me to speak on their behalf—for they of course also see other parts of the community—about the deep hurts being inflicted by unemployment. In that context, dare I say that as I have looked forward to membership of your Lordships' House I have hoped that the day may come when all the main Churches may be represented in this House?
Archbishop Worlock and I, at the request of the city council of Liverpool, have been down to London twice just lately as part of a delegation to meet the Minister of Agriculture, and later on our own to see the chairman of Tate and Lyle. Perhaps there has been some surprise here at the strength and unanimity of the voice with which representatives of every part of life in Liverpool have spoken about that closure. Is it surprising? Nearly a quarter of Tate and Lyle's production workers come from the Vauxhall area, where, according to the chief planner of Liverpool, the current unemployment figure is 46 per cent. All areas where inner city people live—and I am thinking both of the inner city itself and of those great corporation estates on the edge of Liverpool—seem today to have what you might almost call a basic figure of unemployment of some 30 per cent.
However, there are some encouraging signs in Liverpool. For example, with the help of Inner City Partnership, small advance factories have been built. Last year Liverpool was saying they could not build them fast enough to keep up with the demand, and that was very good news. We have leaned too much for a long time on the larger businesses, but your Lordships will be aware that it will take a lot of small businesses to replace the 1,500 jobs lost at Tate and Lyle and a further 1,500 lost at Courtaulds announced since then; 7,000 redundancies have been announced this year in Liverpool, not Merseyside—that is, in just two months—making 33,000 in the last five years. No wonder there is deep fear about whether there will be an industrial and commercial base to catch the upturn in trade. No wonder there is fear that, if you agree to a shake-out of over-manning—which is, no doubt, very reasonable and important—not only you but your son will have no job to go to.
The burden of changes in the market and technology falls unevenly on individuals and communities. It suited this country to have a great seaport on the West side of England. The industries of the North and Midlands, and Britain as a whole in war, needed Liverpool. Now Liverpool finds itself in the wrong
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place for trade. This Government and their predecessors have rightly intervened to help. Inner City Partnership has put substantial sums into the city and great hopes are pinned on the Merseyside Development Corporation. Yet I dare believe that the Government need do more to help industry and commerce. I hope that the leaders of industry and commerce will ask more questions when they hear, as I hear so often, destructive stories about Merseyside workers' militancy, for if they ask more questions they will, I believe, find that many firms make a very good living in Merseyside.
The burden of changes brought by technology adds to people's fears and those fears will not be put away by dogmatic statements; for example, the idea which is often produced to end a discussion that new technology always produces more jobs. I doubt if the history of the third world would substantiate that statement. We need new technology, but we also need appropriate technology and the appropriate mix, perhaps of high technology and, in places, intermediate technology. When we choose, as I know we must, to use high technology, we must count the whole cost of using it in our community. In my heart of hearts I agree with the right reverend Prelate the Bishop of Lincoln, in that I do not expect that we shall ever again have full employment in the old terms. I wish we could admit that; for we could then begin to debate what we shall one day have to discuss, namely, what a civilised society should do for those who are not needed in the market.
But even if I am wrong about that, there will be an awful lot of people in places like Merseyside in the next 10 years at least who will need opportunities that will not just happen for them. I hope we shall not he told that those out of work should all move to more favoured districts. Very large numbers of people will never move, perhaps because they lack the self-confidence or the skills or perhaps because they value family and community more highly. Perhaps your Lordships may think their set of values not entirely wrong. Those who move whenever we say, "There are jobs over there", will always be those who have more self-confidence, the get-up-and-go people. Many of them will move anyway. But, if too many move, the imbalance of the community is heightened and the risk of creating a community of the "left behind" grows.
If what I have said about the next 10 years is in any way true, it makes the character of the special programmes of the Manpower Services Commission very important. I deal with that from day to day because I am chairman of the Merseyside and Cheshire Special Programmes Board, and I wish to pay tribute to the staff of the MSC. The expansion has been of a quite astonishing scale over the last five years and has produced a remarkable flexibility. As for the scale of the operation for which my board is responsible, in the last month—we had our board meeting on Monday—2,500 young people have entered the programme in Merseyside and Cheshire. As chairman, have seen good projects sponsored by employers, local authorities and voluntary bodies. I see young people being given a good experience of work disciplines, a new view of their own abilities and a chance to try out a whole variety of different experiences and to have a new view of the community in which they are growing up. But of course the hardest part is when, in Merseyside,

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a very high proportion must, after 12 months, go back to the dole.
The Minister knows that his comment about young people finding jobs after 12 months is rather too optimistic in Merseyside. One cannot measure the success of a programme by who gets a job at the end of it, because that depends on the district, and there are some good projects where, sadly, well over 50 per cent. are going back on the dole at the end of them.
The basic youth opportunities programme has not changed much since it was introduced in 1976, but the scene outside has changed greatly. We on my board—I believe, rightly—have put a great emphasis on trying to find the right kind of experience and training to offer to those whom we perhaps unfortunately call "low achievers". We must continue that, but, as has been said, there are a growing number of youngsters with perhaps three O-levels coming into the programme.
I would make two points about the directions that I hope the temporary programmes may take. The first is about what we might call meaningful training. I understand the fear that if the state offers too much training, industry and commerce might then withdraw from offering training at all. I understand the philosophy which says, "You should provide only the skills which industry and commerce know they will need". But that would lead to offering the bulk of skills training where industry and commerce are already strong. How does an area like Merseyside break out of its double-bind when industry says it cannot come because there will not be the necessary pool of skills and the pool of skills cannot be created because industry is not coming? We are receiving requests from local authorities which want to help on a large scale—on Monday we heard of Sefton, Merseyside, wanting to help in offering training and skills—and I hope we may be allowed to offer more in that direction.
The second point I wish to make about the special programmes is that I hope we may be able to have more adult places, and I would remind your Lordships that "adult" simply means over 18. The new CEP—with all the initials, I have forgotten what that means—in replacing the STEP programme, has a very small-scale operation. I will explain how small. We in Merseyside and Cheshire receive the lion's share of the North-West's places; we receive more than the whole of Yorkshire and Humberside together. That is 2,800 places. But we have 50,000 unemployed in the priority groups of long-term unemployed. My board on Monday was trying to work out some priorities between possible target groups for CEP, and that is very difficult in such a tiny scheme.
When somebody has been out of work for 12 months it is much harder for him to find his way back into work. It is my hope that your Lordships will recognise that the burden of change, especially unemployment, falls unevenly on individuals and communities, that we should explore every avenue of sharing those burdens more fairly and that as a nation we should debate honestly the long-term implications of unemployment in an advanced technological society.
4.10 p.m.
Lord Taylor of Gryfe: My Lords, it is an honour and a pleasure to be the first to congratulate the right
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reverend Prelate on his excellent speech, based on his wide experience and his very deep concern about this miserable subject of unemployment. The right reverend Prelate appeared with great distinction on the playing fields of England, and today he has shown that his skill as an opening bat has not deserted him. I sincerely hope that while on subsequent occasions he may be relegated to being a tail-ender, he will not be discouraged from participation in further debates in the House of Lords.
This is a debate about regional economic policy, but regional economic policy must be seen within the total framework of the general economic strategy; and perhaps like the Leader of the Opposition I may be tempted to quote Mr. Heath. I am not sure whether he is part of the new bit or the old bit of the Conservative Party. But Mr. Heath said recently:
"I Find that I am not entirely alone among those in the Conservative Party who worked for its victory who are worried about the present situation. One of our intentions after the 1930s was to ensure that the Conservative Party was never again considered to be the party of unemployment. I ask my honourable friends to think seriously about that in our present circumstances".
I am sure that the concern expressed by Mr. Heath is shared by the noble Earl, Lord Gowrie. I am a great admirer of the noble Earl, Lord Gowrie. He speaks with great erudition and great conviction. Similarly, I am also an admirer of the noble Baroness, Lady Seear, who speaks with great knowledge and such practical good sense, and perhaps I may be permitted to follow some of her arguments in discussing the general macroeconomic situation.
If there is one theme that seems to obsess the present Prime Minister, it is the theme that: "I could have cut income tax by 4p in the pound were it not for the amount we are paying out for nationalised industries. Extra public spending would not reduce unemployment. It is a recipe for more inflation and fewer jobs". That is an oft recurring theme in the Prime Minister's repertoire.
Less borrowing by the nationalised industries means greater unemployment and increased expenditure on social security. One unemployed man, married with two chidren, increases Government borrowing by £6,006 a year. Taking into account the tax revenue lost, the unemployed are costing the Government at least an extra £7 billion per annum—and are producing nothing. Surely that is a basic cause of inflation—there is paid out £7 billion without producing any wealth at the end of the day.
As the noble Baroness, Lady Seear, so clearly stated, the difficulty about the present Government in their economic strategy is their failure to distinguish between capital and current spending. Printing money to pay higher wages in the public sector would be wrong, and I think that it is right for the Government to hold the line on Civil Service pay. But spending for investment is precisely what Britain needs. The Government are fuelling inflation by failing to make the distinction between investment and consumption.
The money squeeze has reduced production—which is just as sure a way to increase inflation as is an increase in money supply. We have many examples of an increase in the money supply encouraging production without inflation, provided that the money is channelled to investment. The Japanese ran a money supply target not unlike our own between

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1974 and 1977, and there was an increase of 14.7 per cent. Theirs did not lead to inflation like ours. That was because the money went to investment credit, which grew at the rate of 11 per cent., while Government and local debts amounted to only 3.8 and 0.8 per cent.
By failing to distinguish between money for consumption and money for investment, and by making a false distinction between public and private investment, the Government are not necessarily cutting inflation. In my view we must become much more pragmatic and flexible in this field, and it should not be beyond the wit of the Treasury to devise schemes for a greater participation of private capital within the nationalised sector, so that we have a practical example of a mixed economy working with a greater involvement of private capital. The rigid targets of the PSBR must be examined again with a view to achieving that end.
I served for a number of years on the British Railways Board, and I am conscious that supporting the electrification programme—a programme involving about £700 million—would immediately set the engines going in GEC, BICC and a number of other firms and this is so necessary at present. How much more sensible is that than the paying out of social security to the extent of £7 billion per annum and producing no wealth.
I make that general comment about economic strategy, but I wish to say a few words about the main subject of the debate, which is regional policy. I have found in the South of England that it is fashionable to say that regional policy has not worked, and I am delighted that the Government have committed themselves to regional policy and that by means of the Bill before your Lordships yesterday, the Industry Bill, have increased the financial support for the Scottish and Welsh Development Agencies; in the case of the SDA from £500 million to £700 million.
We must from time to time take stock and look very critically at the incentives for regional policy and at the instruments that we employ. I believe that the incentives have been just about right. I also believe that we must look at the Scottish Development Agency and clearly define its terms. It has not been an unqualified success, because I think that politicians tend to judge such agencies on a very short time-scale, and one or two difficult and unfortunate investments tend to he inflated in the public press to the detriment of their overall performance.
So let us be a little patient regarding the development agencies and let us be clear as to what we expect them to do. Immediately after the setting up of a Government agency of this kind, whether it be the Welsh Development Agency, the Scottish Development Agency, or the NEB for that matter, pressure is applied on the agency to become a rescue organisation. The agencies are under continual pressure to take over unfortunate situations and lame ducks. In order to assess these organisations it is, I believe, important to have separate accounts. That would distinguish the work of the agencies in rescuing certain firms, because of the social implications involved, from their other role of financing and supporting success.
I think, too, that we have to be clear that these
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agencies are not burdened with the responsibility of imposing industrial democracy, or even becoming a form of creeping nationalisation. The first and foremost task of these organisations in the present situation is to encourage industrial regeneration, identify growth, back success, encourage joint ventures where they are necessary, encourage mergers and work with the financial institutions in the countries in which they operate to extend long-term capital support. If industry has suffered from anything it is the fact that there tends to be in the financial institutions a rather shorter view of industry and its prospects than is the case in Germany or in Japan. So the SDA and the Welsh Development Agency, and the NEB, have a positive role to play in encouraging financial institutions in that direction.
The development agencies must also be the main instrument for attracting inward investment. I know there is a finding in the Scottish Select Committee that this work should not be pursued by the Scottish Development Agency but that the embassies abroad should be the centres for the attraction of inward investment. I should like Members of your Lordships' House to read a lecture recently delivered by Alan Lord, now chief executive of Dunlop but formerly a senior official at the Treasury, in which he distinguishes between the resilience, the energy, the enthusiasm and the cost-consciousness of industry as against the rather different climate of operation in the Civil Service. I do not believe that the embassies can be the instruments for attracting inward investment. I believe businessmen have got to talk to businessmen, and that can be best done through agencies like the SDA, the Welsh Development Agency and so on.
Inward investment is not only very important because it attracts new industry: the impact of inward investment by American and Japanese companies on the whole standard of management in some of the areas which have been depressed, like some of the poorer areas of Scotland, is tremendously important in that it injects a new interest, a new excitement and new ideas. So I hope that the inward investment function of these agencies will be an important factor in regional development.
Last month I happened to be in Japan talking to some of the companies which are considering coming to this country, and I believe that in this connection we are pushing at an open door. The Japanese are highly sensitive to the criticisms which are now being made about their large-scale imports into the EEC, and many major companies are looking for centres to establish production units in the United Kingdom and elsewhere in Europe. I spoke to one company, the Nippon Electric Company, which had decided to come to Livingston in Scotland. I said, "Why did you decide to come to Livingston, as against some of the other new towns? There is a good deal of competition in the electronics field around Livingston, near Edinburgh". They said, "That is precisely why we came to that site—because you have established there a climate for new technology, for new ideas, for electronics and so on. We will not go to the depressed areas, where we would inherit traditional attitudes in industrial relations. We look for new areas, where you can create a new kind of environment"
Regional policy is in fact working in Scotland, and

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Government intervention in this field is not to be discouraged. The oil industry, thanks to the intervention and direction of the Off-Shore Supplies Office—Government intervention—now supplies 72 per cent. of the total requirements of the North Sea from United Kingdom sources, many of these jobs created in Scotland. Indeed, the oil industry is now bigger than the coal industry in Scotland. It employs 100,000 people. Similarly, in electronics. We are getting a changed emphasis in the economy of Scotland. There are now 30,000 jobs in electronics. It is bigger than shipbuilding or steel. So we are in fact moving from the dying basic industries into the new developments. This is done by Government support and Government encouragement, and long may that continue to be so.
But the people of Scotland, too, are not neglecting their own opportunities. Last week I attended a lunch at which Prince Charles presented awards to industry. This was a competition organised by the Scottish Council—and the noble Lord, Lord Polwarth, is one of my colleagues in that organisation. The Scottish Council went round to the banks and the oil companies and collected £250,000 to award as prizes for new ideas and small businesses. They said, "Let us have a national competition. If you have a bright idea for a new industry, submit it". There were over 2,000 inquiries originally for the scheme, and of that number 730 people—small companies, businessmen, scientists and others—took the trouble to apply. The awards were made last week. There were a number of awards in each of the regions of Scotland. Industry and the banks in Scotland have agreed that they will continue to support these ideas by seconding finance officers and other personnel to encourage the small man in areas where his experience may be limited.
So I believe that in the development of regional policy we have not only to encourage the Government in their macro-economic strategy, but we have also to try to create within the regions a new atmosphere towards inventiveness, and try to switch over from the old industries. I live in the shadow of Linwood, a dying town, but I think it would be foolish for me to go to Linwood and say, "We will fight for the retention of Linwood", because the market is against it at the moment. At the same time we have an obligation to go to Linwood and say, "What new industries can we attract to create opportunities for employment?" I hope that this debate in your Lordships' House will encourage the Government in well-doing and may spark off some ideas and encouragement to relieve this terrible problem.
4.28 p.m.
Lord Thorneycroft: My Lords, I welcome this debate and the opportunity to contribute to it, not least for the opportunity to hear the right reverend Prelate the Bishop of Liverpool in his maiden speech, when he spoke with great knowledge and understanding of the bitter problems of the great area over which he ministers. I join with the noble Lord, Lord Taylor, in saying that I hope we will hear him on other occasions—and I join with the noble Lord, Lord Taylor, on many other matters, too. One of the encouraging things about this debate is the remarkable degree of unanimity and understanding with which a great
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subject has been treated.
My Lords, I suppose this is the gravest and most complex problem with which we have to deal. We could almost leave out the word "regional", in a way, because there is no region in this country, nor is there really any section of the community, which is not affected by what we speak of here. Unemployment has been rising inexorably under all parties and all Prime Ministers for 20 years. I think it is worthwhile remembering that. And in each cycle the low point has been higher and the high point has been higher—and that is something which has social consequences, to which the right reverend Prelate referred.
That is the background of the debate, and I do not mean by that there is nothing that anybody can do. I mean that the causes and cures of this affliction lie, to some degree, beyond the ordinary techniques which politicians debate about or apply in these particular circumstances. In this scene I would speak, and speak briefly, on only two aspects. One part of the problem is the ability or inability—very often the latter—in this country to adjust fast enough to a very rapidly-changing technological and trade pattern. If you fail to move fast in a very rapidly changing world, then you soon lose out on any advantages that might be available. The other part is outside this country. The upsurge of oil prices in 1979–80 was almost more dramatic than that in 1973, but it has had a vast effect on the trading patterns of the world and our ability to sell abroad. This is something which has resulted in a world recession of a major size and magnitude, and it is that world recession which is the whole backcloth of the problem that we are talking about.
I want to make a few comments about those two problems—and, to start with, about the recession. The recession will end. Recessions do end. I think it is wise that we should be careful how we approach that thought. Stock building will start again. And may I observe that coming out of a recession can sometimes be almost as painful as going into a recession. Do not let us think that it is going to be that simple, with imports beginning to be sucked in and a whole different range of problems started. But do not let us do anything that hampers our ability to take the fullest opportunity of the situation that then develops. Above all, then we shall need sound money. We shall need to be winning the battle against inflation and it will be vital that we hold on to any competitive advantages that we have.
The ability of a country to fight a recession varies. The strong do best. The Japanese do very well, indeed. The Japanese, without any—or virtually any—energy reserves at all, without oil, virtually without coal, without anything, by sheer drive and determination to increase their competitive ability, hold themselves up, set an example, to the world and become almost something that we in Europe are afraid of because of the force of the competition that they can deploy in the export markets of the world outside. The weak do worst. Here we must confess wherever we sit that we are among the weak. And why? We went into the recession uncompetitive, uncompetitive not just in the public sector but in the private sector, too. Not always, of course. Agriculture?—all right, competitive. And many of the services. But in the main,

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in manufacturing, let us confess that we went in with a competitive ability substantially below that of most of our principal competitors abroad. And, in the public sector, over-manned, under-productive.
And we had all those problems on our shoulders before we started. We had had three years of an incomes policy. It had broken down and we were faced with what happened then—an enormous upsurge of wages. And there were people all round, Government, private employers, imitating one another, paying 20 per cent. increases in wages, wages that they could not conceivably claim that they could afford to pay, which resulted within months in very substantial losses of jobs—as many warned them at the time. Unlike Japan, we had developed a very different and very strong trade union movement. Indeed, we had recently strengthened it. It had developed for itself a very wide range of restrictive practices and practices generally none of which was conducive to rapid adjustment in a changing world. We were the low paid, the unproductive and the unagile of the community. I say those things because if you want to have a lesson on what is not the way to enter a recession, that is not the way to enter a recession. Let us not blame each other. Let us blame all of us. That is the way we work.
The question—and I am going to be very brief—is this: what do we do? I think we stop swearing at one another! I do not think that any of us has much justification for swearing at anything, to tell the truth. I think that too many things have gone wrong. And it is not as though any of us—and this is one thing which has emerged from this debate—is standing up and saying that he has the solution to the problem. I certainly am not. I am saying that many of the causes are beyond what we can alter.
There is one other "don't". It is: do not institute a general reflation of the economy. Nobody has suggested that. The noble Baroness, Lady Seear, did not suggest it. Do not go and do that, because, if we were to take financial and economic measures which would get inflation really moving again and wages up, and all that, then in the long term it would mean a loss of jobs and even in the medium term it would render us quite incapable of taking advantage of the end of the recession when it comes.
Borrowing? Of course, borrow! Sometimes people talk as though Governments do not want to borrow. I never in my life knew of a Government that did not want to borrow. They borrow right, left and centre. The only problem is that there comes a point when you have borrowed so much that it is difficult to borrow very much further—and one must accept the fact that the more you borrow the higher the mean lending rate (or whatever it is called) goes up. This is also a factor in dealing with the situation on jobs and the rest. But by all means spend. People may make many accusations against Her Majesty's Government, but a failure to spend money is not very high on the list at the present time. And I make no apology for them spending money. It may be difficult politically at this moment to stand up and say that they were right to back British Leyland on the day that they came out with a £400 million loss for last year. But, talking about the regions, what about the great West Midlands region where I was brought up, where I learned to admire the variety and skills with which they tackled so
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many occupations and the contribution they made to the country? Ripping British Leyland out of that or watching it collapse—with all the small businesses around it where the components are made—would be a tragedy of a major order.
Let us not criticise one another for doing what has to be done. Politics is about doing what has to be done. It is not about economic theories of any kind. Politics is doing what has to be done, sometimes in a world which you would not particularly have chosen. By all means let us encourage private businesses. I am more of an optimist than many about the job-creation aspects of encouraging small business. If you study what happened in the United States of America, a great part of their job creation has come not from General Motors but from small businesses. It has come from thousands of small businesses. The difference between America and us is not in the size of the big businesses but in the number of the small businesses. So I agree with the noble Baroness, Lady Seear, in what she said about that subject.
I was fascinated to hear the right reverend Prelate talking about advance factories. It is amazing that even at this moment, when so much is going against us, small advance factories are being snapped up. People are actually starting to do work. In his Merseyside may I comment on one other aspect: great firms like Pilkingtons which are established and have the knowledge and the know-how, are going to immense lengths to help, assist, teach and give advice to small businesses starting up in their areas. That situation of the strong helping the weak and the large helping the smaller, is something which is of great importance and assistance to us.
Let us do anything we can to temper the Employment Protection Act. We want small businesses to employ people. "Employment Protection Act" sounds a lovely name. Small companies are firmly of the belief that if they have virtually to marry the people that they employ, then they are not prepared to employ them. This is their attitude. We have to deal with human beings. Do not let us apologise if we scale it down still further.
Let us maximise the assets that we have. For example, energy. My noble friend Lord Gowrie represents both employment and energy—and much else, but those two certainly—in your Lordships' House. May I ask the employment part of him to take the energy part and give it a fairly stiff lecture. I should be deeply grateful. I am not asking that we should try to subsidise energy as the United States of America does. I am bound to inform him that there is industry after industry, and activity after activity in this country which is not getting bulk supplies of energy on the same scale as competitors overseas. It just is not happening, whatever we say.
Although I am frightfully good on the public platform and deal skilfully with all the answers that I have—and I am prepared to go on—it would help me very much indeed if a rather more convincing statement was capable of being made. I believe that constructive intervention is an "in" word in the Conservative Party today. I am a constructive interventionist. If the energy side of the noble Earl could start to operate in that direction, it would have the support of both sides of your Lordships' House.

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I agree with maximising the use of labour, too. In London, for example, the rehabilitation of old houses is a labour-intensive activity; but it is an immensely successful activity. It saves a lot of other things and it is amazingly sensible. We must do that; we must train; and, above all, we must stay in Europe. The noble Lord was talking about Japanese investment. People will invest in this country. The attraction of this country—apart from the fact that it has a Conservative Government and a few other things—is that it has skilled workforces available and a huge market on its doorstep. We must hold on to this. Do not let us have any talk or suspicion that we might be losing that market in any way at all. It is one of the great pluses that we have.
That is really what I wanted to say. There are things that Governments can do; but, by Heaven! there are a lot of things that everybody can do. It is not all a matter for Governments, but for industry, the CBI and the unions. Somehow or other we must turn this country into one a little more suited to the century in which we live and with rather fewer restrictions. The CBI produced 50 points the other day and I was happy to see the majority had nothing whatever to do with government at all; they had to do with industry, management and unions.
We should look at the rules about employing apprentices. It does not take seven years to teach anybody everything. Methods of making it easier for young people to go into work are matters which require consideration by management and unions. We need new approaches by banking, in the loans and provision of capital for small businesses. We need different approaches in training and education in this country. This is a national job, and that is why I was so delighted to participate in a debate on a subject which your Lordships were quite plainly treating as a national problem.
4.45 p.m.
Lord Rhodes: My Lords, it is always a pleasure to listen to the noble Lord, Lord Thorneycroft, whom we respected and heard so often in the House of Commons. But before I continue with what I have to say, may I say to the right reverend Prelate the Bishop of Liverpool that we liked what he had to say, we liked him and that he could have done a very useful job just about now in Barbados. I was Lord Lieutenant in Lancashire for some three years and I grew to love Liverpool. During those three years I visited Liverpool 153 times at various functions. We hope that we shall have the pleasure of listening to the right reverend Prelate on many occasions in the future.
I never approach this subject without deep emotion; but I am trying to stifle it this afternoon. I never think of it without asking myself: where are we going to get the inspiration to give us the moral strength to be able to treat the unemployed as valuable citizens in the community? This is surely what all this is about.
All round the North-West there are advertisements displayed of this nature:
"On the orders of BL, 1·2 million square feet of factory space at Speke".
"In accordance with instructions from BICC, 325,000 square feet at Kirby".
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"Meccano wishes to dispose of 245,000 square feet in Liverpool".
"Courtaulds offer 263,000 square feet, 200,000 square feet, 218,000 square feet and 850,000 square feet".
So it goes on and on.
These are good, modern factories. Many are single-storey buildings. Numerous engineering plants are for sale equipped with modern craneage and up-to-date engineering facilities. I saw an advertisement the other day for one factory for which ICL had no more use at a rental of 3p per square foot. It has been recently air-conditioned, carpeted and fitted with sprinklers. In Liverpool there arc 6½ million square feet available. In Manchester the figure is 8 million square feet.
These buildings are throwing long black shadows over the manufacturing industry of the North-West. Empty space means no work. Set against this for manufacturing industry there is the commercial market. The commercial market is firm. It tells the story far more graphically than ever I can as to what is taking place because manufacturing industry is losing out while service industries arc not. People believe we can run this country on service industries and perhaps a little bit of manufacturing, but they are making a big mistake. We cannot. If you think you can run this country on service industries you automatically assume that we have 17 million to 20 million too many people in this country. We hear that the service industries are marvellous and that we have to adapt ourselves to the sophisticated, modern techniques, making electronic equipment, and so on. Right. But we have to have bread and butter besides cake, and a lot of our industries are bread and butter industries. It is no comfort to a cotton worker coming out of employment to know that service workers are still being recruited to jobs with index-linked pensions.
I will not go over the problems and the reasons for the recession and what has taken place—everybody has seen that in the papers time and time again—but these empty factories mean unemployment, and unemployment means less production. Employees in my area, in the North-West, fell by 100,000 in the year to September 1980 and over three-quarters of the job losses were in manufacturing. But paradoxically the rapid fall in output and employment has been accompanied by a continued buoyancy in consumer spending, which rose in the North-West to a record level in 1980. What does that mean? It means that we are buying foreign. Average living standards have continued to rise as a result of the strong pound and the ability to buy cheap imports.
In the North-West region 329,500 people are officially out of work, out of a total for the United Kingdom of 2.460,300. But figures can be made to prove anything, and the figures in the Gazette last week give a very misleading picture. Figures published last week showed that employment had fallen by 1,122,000 jobs since June 1979. The number of jobs lost has exceeded the numbers registering for the dole because, as the noble Baroness, Lady Seear, said earlier, many have given up hope of ever finding another job and retired early. What it amounts to is that 270,000 people who lost their jobs between July 1979 and December 1980 have not signed on as unemployed. They have given the job up. So for the official figure of 2,460,000 one should read 2,730,000—two and

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three-quarter million.
The noble Earl, Lord Gowrie, mentioned people coming on to the labour market according to the census figures at the rate of 200,000 a year. A lot of those are not included in the official figures in the Gazette. So it is nearly 3 million now. We are stuck with this totally unacceptable number of jobless and, what is worse, a massive decline in the numbers of potential jobs. Young people now, when they come to middle age, will have a lot to say about this generation which has got us into this mess.
From the general to the particular, this situation can be multiplied by as many times as there are towns in the North-West. Take a town like Oldham, which I know well. One in nine have no paid work to go to. That is the official figure. It is expressed as a percentage, according to the Gazette, of 11·5, which coincides with the official figure for the country as a whole. The real situation is far worse in that for every Oldhamer without a job there is another Oldhamer working short time. Three thousand workers, or 90 per cent. of the remaining workforce in textiles, in Oldham are working less than a full week. In engineering the picture is even worse. There are over 5,000 on short time in Oldham, and on top of this 1,000 further jobs are to go in redundancies already announced.
I turn now to the more constructive side of it. Manufacturing industry is facing a dilemma we have never encountered before in my lifetime. Never do I remember a situation where we have a cyclical recession and one which affects the very structural base of our industry simultaneously. We manufacturers have grown used to cyclical recessions; we regarded them as temporary setbacks which could be taken care of as and when trade revived. For instance, in the textile trade the length of time between peak and peak was of the order of three and a half years. The length of time varied according to the particular industry of course, but never before do I remember a recession of this kind.
The dilemma is to know how much of an industry is going to survive. This has been highlighted in recent days by ICI's results last week. Their big loss-maker has been the fibres division. It would take the judgment of a Solomon to come up with an answer as to whether or not in present circumstances our domestic fibres industry can survive at all. The time has arrived for the Government to declare their policy on some of these issues. For instance, do the Government believe that it is imperative that we, as an industrial nation, should have a fibres industry? Are they prepared to declare that we are going to keep a textile industry in this country? If so, what are they doing about it and how do they propose to create the conditions in which the industry can thrive?
One of the disadvantages of EEC membership is that we cannot negotiate nationally on import penetration. Every developed industrial country in the western world has an element of protection for existing textile industries, but most of our European partners have allowed their textile industries to go by default, particularly Germany. As action on protection needs the political support of all the members of the EEC, we naturally find it very hard going to get any backing at all. So in the textile trade we face a situation where
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we have partners in Europe who are indifferent to our plight. Free circulation in countries with a small textile industry is a boon, but to us it can be a nightmare. Brussels is inadequately staffed and negotiations there on our behalf are bound to be weak and feeble. The Government must take a tougher line. And what about those firms which are nearly going out of business because of interest rates and the other handicaps they have suffered during the last year or two?
What should be done now? I reckon we should have a register of those firms which have gone out of business showing what has happened to their order books, and we should ascertain whether any of the business could be transferred to firms which continue in being. Steps should be taken to identify imports coming into this country illegally. I drew attention in a previous speech in November to what was going on in Europe, preparatory to Greece joining the Common Market. I then drew attention to the fact that a firm in this country was able to produce electronic equipment which would identify imports into this country, as and when they reached the top quota level. This has been adopted by Greece. If Greece can take it, why cannot we? The idea has come from this country. A young firm in Farnborough is able to do this, and it would take a lot of the steam out of the criticism of allowing imports into this country. What is good enough for Greece should be good enough for us.
I want to finish on this note. We must be competitive. Our productivity must be as good as, or better than, anybody else's. We are a good way behind. Forming new parties will not get us out of this trouble. No party in this country will get us out of this trouble, if it is not able to inspire the unions to put their weight behind the determination to exist and to succeed. That applies to noble Lords opposite as well as it applies to us, and the sooner we get it into our heads that this is a necessary component of what the future holds in store, the better. It can be done, but time is running out. It will be very difficult to get back again industries which have gone so far down. All we can hope is for a change on the part of the Government, which could come next Tuesday, and I hope that what the CBI, the unions and everybody else, except the Government, has been saying then comes to pass.
5.3 p.m.
Lord Kilmarnock: My Lords, unemployment is lamentable nationwide, and even more lamentable, as the Motion suggests, in those regions where it strikes most cruelly. It is disheartening to read in the latest Manpower Services Commission quarterly report that it is still at its highest in assisted areas where a concerted attack is being made on it. All the same, I must enter a note of dissent with the noble Lord, Lord Peart, in the attribution of the whole responsibility to the Government—I think he said that the Government have created a situation of nightmare proportions—because it seems to me that this rather obscures the real issues, or a large part of them.
In saying this, I do not seek to defend the Government's policies, to which some percentage at least of the alarming figures are due. The question is: for what percentage of unemployment can the Government be directly blamed? It would appear from their policy that some credence has been given to the relationship

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between wages and unemployment, known as the Phillips' curve, from which a further series of suppositions of feasible combinations of unemployment and inflation are derived. Of the various combinations of these two factors, which the theory postulates, the Government have undoubtedly chosen—or had until recently—a trade-off yielding the lowest inflation rate. This has undoubtedly had a considerable effect on unemployment. But of what magnitude?
Various estimates have been made. According to a recent commentator in The Times, the Government's policy could mean that every 1 percentage fall in inflation was achieved at a half per cent. decline in national output and a rise in unemployment of well in excess of 100,000. Giving the Government the benefit of the doubt, let us take 100,000 for each 1 per cent. decline in inflation and let us accept that this has come down from 20 per cent. approximately last summer to 13 per cent. approximately today; that is, by 7 per cent. This particular trade-off yields us 700,000 unemployed. This is lamentable indeed. But it is a questionable assumption and it is not the whole story.
In a valuable annexe to their last labour market report, the MSC writes:
"If we wish to redefine unemployment to include unregistered unemployed and those who would be unemployed but for special measures, our estimate for Great Britain is that the figures would be about 3 million: 2·32 million registered … 300/350,000 unregistered and 357,000 covered by special measures".
The latest figures of registered unemployed have now risen to 2·42 million, which gives us something over 3 million on that calculation. So we are talking of 700,000 to 800,000 unemployed who might conceivably be attributed to Government policy, or perhaps a quarter of the total, and this is probably an exaggeration.
When the Opposition in another place seeks to lay all the blame for the whole amount on the Government they are doing us less than a service, because they are obscuring the real issues and the real challenges. I honestly do not believe, nor do I believe that they believe, that a simple change of Government would stem the tide, nor that had they been in office they would have been able, except at crippling cost, to reduce unemployment to an acceptable or tolerable level of, say, half a million or even 1 million on the register in present circumstances. So I repeat that I am saying none of this to condone the Government's classical market clearance philosophy, or to detract from the humanitarian concern of the Opposition, which I share. But to be fair, it must be roundly stated that even a Labour Government would have found itself with a large and growing unemployed population.
That takes us to the recession and I was interested to hear the noble Lord, Lord Thorneycroft, say, cheerfully, that the recession will end; recessions do end. But on what does he base this assurance? The first thing to do, surely, is to try to classify it with a little more precision. I see that the noble Lord, Lord Kaldor, is down to speak, so perhaps he will be able to assist us. What kind of a recession is it? Is it just a cyclical one of the 9- to 10-year variety which is identified by some economists? If we are tempted to call it a downswing, are we not caught up in the semi-
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incantatory magic of words, which leads us to presuppose a corresponding upswing, without any foundation but wishful thinking?
If there is to be an upswing, what will make it happen? Does the machine just go round and round, like a fairground Big Dipper in which we patiently sit? Or is this so-called recession a trough, in one of those 45 year-long cycles identified by other economists? And when does a recession become a depression or a slump? Is it different in kind and magnitude from any that we have experienced before? Is it curable simply by leaving market forces to do their work?
The short answer to the last question is, obviously not, as has recently been demonstrated. Much has happened in the 200-odd years since the publication of The Wealth of Nations. The Government have already recognised this to some extent, in the steps they have taken to support British Leyland and British Steel. Possibly, like the noble Lord, Lord Davies of Leek, before his speech on redundancy payments last week, they have been boning-up on their Schumpeter, when he says—I quote from Capitalism, Socialism and Democracy, page 90:
"… there is certainly no point in trying to conserve obsolescent industries indefinitely, but there is a point in trying to avoid them coming down with a crash and attempting to turn a rout, which may become a centre of culmulative depressive effects, into an orderly retreat".
So the need for orderly retreat is now recognised. But what position is the orderly—or now less disorderly—retreat to fall back on? How, when and where is the next campaign to be planned?
If we leave all new investment to market forces, what happens? What does the market like? What do the pension funds, the banks and the other institutions like? They like nice fat, juicy properties—incidentally, fuelling inflation—and they like works of art. They dislike manufacturing industries with a dubious future. Once the principle of state intervention is accepted—or the practice without the principle—it is surely of vital importance where it is applied. I want to make it quite clear that I am not advocating the Government's becoming a direct employer of last resort by increasing employment in the public services. I am not suggesting their spending their way indiscriminately out of a slump. But I am suggesting that they should prime the pump by direct investment, or by matching venture capital at certain potential growth points, some of which are identified in this report on industry, which I have in my hand, by the British Conservative Group in the European Parliament, under such headings as environmental equipment, energy, energy conservation, aerospace, information, micro-electronics and so forth. These were some of the points which were made earlier by the noble Baroness, Lady Seear, with which I very strongly agree.
For goodness sake, let some of the savings the Government expect from the reduction in Civil Service manpower, which they have undertaken to make, be spent at the cutting edge of the economy, in which I would include education, training and retraining. So, after the orderly retreat, surely there must be a planned advance. But even supposing some such initiatives are taken and that fresh industries do take off, what about demand? It was also Schumpeter who wrote:

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"The capitalist engine is first and last an engine of mass production, which unavoidably means production for the masses …".
And Schumpeter was that arch-romantic of capitalism who mourned the passing of the old-style entrepreneur. Surely he is an acceptable text, even for the noble Lord, Lord Cockfield.
If we do not distribute income as widely as possible in our own country, demand will be slack and business in all sectors will fail. This is not just a question of demand-inflation or demand-reflation, which I think the noble Earl, Lord Gowrie, spoke about. It is a question of the maintenance of a reasonable level of demand by spreading wages reasonably widely. Wealth can only be created by the sale of goods and services. The same goes for the world at large. Are we not constantly reminded that we are a nation of exporters? But to whom, in a situation of depressed world trade, are we to export?
This brings me to the third world. I do not want to turn this debate into a platform for the Brandt Report, with some of which I disagree. I am inclined to doubt whether the Bretton Woods institutions can play the role envisaged for them, but there is no doubt whatever in my mind that the recession, depression, slump or whatever you wish to call it has to be studied against the background painted in broad strokes by Herr Brandt and his colleagues and that our aid programmes should be seriously reviewed and possibly upgraded against that background. What the Prime Minister dismissed in another place as handouts may well be the essential blood transfusions necessary for a revival of world trade.
I know that it is difficult to persuade textile workers in Lancashire that they should contribute to rural infrastructure or population programmes in Bangladesh, but the fact remains that the gross national product per capita in Bangladesh in 1978—I do not think it has changed much since—was 90 dollars and that in our country, despite all our troubles, it was 5,030 dollars, or over 50 times as much.
If anyone asks what is the connection between these figures and regional unemployment in this country, the answer surely is clear. These figures are hardly an equable or indeed viable basis for the expansion of world trade upon which we are constantly told we have to rely for our very survival. So it is very much to be hoped that the Government will go to the forthcoming meeting in Mexico in a constructive spirit.
This debate has been less contentious so far than I had expected, and this is a matter for congratulation. I was glad to hear the noble Lord, Lord Thorneycroft, say that we must stop swearing at one another. We shall get nowhere—this is quite correct—by one of the major parties indiscriminately putting all the blame on the other, and vice versa. That is nonsense. It simply distracts us from thinking seriously about possible remedies. Where these charges have been levelled—and the other place has been much more culpable than this one, I am happy to say—they have opened up the ground to the Social Democrats (I say this with respect to the noble Lord, Lord Rhodes) which is where an awful lot of people would like to be, given half the chance. The major parties should take note. The writing is on the wall.
5.15 p.m.
Lord Keith of Castleacre: My Lords, I should like to begin by congratulating the right reverend Prelate the Bishop of Liverpool on his most excellent maiden speech. Unemployment, I think we are all agreed, is probably the greatest social scourge in this country today and is likely to remain so for a number of years to come. As the noble Baroness, Lady Seear, so rightly said, the problem of unemployment is not new to us; it has been with us for many years. We used to have masked unemployment, by which I mean underemployment: low productivity, accompanied by low wages, which enabled us to have two or three times as many men to do a specific job compared with some of our most efficient competitors.
Inflation, rising costs and the high level of sterling have made us increasingly uncompetitive in many fields. This has been exacerbated by the current recession, which is worldwide, and has forced industry to shed labour at an unprecedented rate. It has only done this in order to survive. It is of little solace to tell ourselves that the entire world is suffering in the same way to a greater or lesser extent. However, it is interesting to note—the noble Lord, Lord Thorneycroft, drew attention to this—that those countries with the highest productivity are suffering least.
It seems to me that it is a great pity that we still tend—although we have not done it in this House today—to treat our own desperate problem in terms of adversary politics. It is a matter of economic fact that high inflation has always been followed by a recession and high unemployment. Some six years ago we reached an inflation rate approximating 30 per cent. We now have 2½ million unemployed. If it were not for all the other underlying factors in our industrial life, we could, I think, expect this figure to drop substantially as the world economy picks up. But I do not expect this to happen unless we can all get together and much improve our productivity. Personally, I support the Government's economic policies, for I believe that inflation is our greatest threat. And we shall not get unemployment down or, indeed, prevent it from continuing to rise until we can beat inflation.
Many people on both sides of industry are calling for a reduction in interest rates and a lowering of the exchange rate. I believe, on balance, that the time has come when we can afford some reduction in the MLR, but when advocating this reduction we have to remember that the public sector borrowing requirement is being buoyed up by three factors. First, revenues are depressed as a result of the recession and poor company profits and, therefore, poor taxability. Secondly, unemployment is causing very substantially increased amounts to be spent on social security payments. Thirdly, the nationalised industries have become an ever-increasing drain on the Exchequer.
Whether the exchange rate has anticipated a substantial fall in MLR is hard to say, but I think that to a large extent it has. By that I mean that a cut in MLR in the near future will not necessarily bring down exchange rates much further. Those advocating this course and its consequent effect upon exchange rates must not overlook the fact that the Government have to fund their deficit and also that the lowering of the exchange rate will have an adverse effect upon inflation. It is said, though I cannot prove it, that a

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10 per cent. reduction in the exchange rate will cause approximately a 5 per cent. increase in the inflation rate in our present circumstances. Notwithstanding this, I still advocate a reduction in MLR.
The economy is rather like an Atlantic liner. It takes a long while to slow down but, having slowed down, it takes an equally long while to accelerate again. This reduction in the MLR is probably the most important and immediate single step which we can take.
Much is said in various places about putting a great deal more money into the economy. The danger here lies in the fact that we have just sucked a lot of money out of the economy, and if we put it back again, we shall probably revive inflation and the last stage could well be worse than the present. Incidentally, where is the money to come from? The Government's room for manoeuvre is severely limited. It has little money available to help the private sector, after the demands of steel, shipbuilding and the like. I think we are in danger of spending too much of our available resources on those sectors of industry which cannot be regarded as having substantial growth prospects, some of which are destined to become an even greater drag on our more profitable and progressive industries as time goes on. Unemployment—its causes and its cures—are complex and long term and, if I may say so, it is a pity that we cannot agree on a course of action and stick to it. Industry in this country has been for far too long a political football.
We require more investment. Equally, we require greater use to be made of existing investment. We require greater productivity, which can be brought about by greater flexibility in work practices and manning. We are all in this together—politicians, managers and the workforce. The unemployment problem, long-term, will be solved just as much on the shop floor, as it will in these buildings. So far as the regions are concerned, I believe (I am sorry to say this) that much of the vast sums of money spent on regional aid since the war has been long-term unproductive. I believe that the time has come to rethink our regional strategy on a long-term basis and to do this is in a bipartisan manner. I hope the Government will take the initiative in this matter.
5.23 p.m.
Lord Blease: My Lords, in this debate reference has been made to the steeply rising and disastrous levels of unemployment with which we are faced today in all regions of this country. Unfortunately, as a region the Northern Ireland jobless situation looms largest because the patterns in the rates of unemployment in Northern Ireland are greatly influenced by the fluctuations in economic activity in Great Britain. We in Northern Ireland have today the highest numbers unemployed since the early thirties. The figure for unemployment last month—February—was 17·3 per cent., comprising 21·2 per cent. males and 12·1 per cent. females. This compares with 9·8 per cent. for Great Britain with 11·8 per cent. males and 7·0 per cent. for females.
However, as with the unemployment statistics for other regions, there are within each region great variations in the rates of unemployment for the sub-
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regions. For example, while the overall rate for Northern Ireland is 17·2 per cent., the male rate for unemployment in Cookstown is 36·9 per cent., in Dungannon it is 36·8 per cent., in Londonderry it is 31·2 per cent., in Newry it is 35·1 per cent. and in Strabane we have the appalling rate of 44·4 per cent. of males unemployed.
When we consider the unacceptable levels of regional unemployment we cannot ignore the awful sense of hopelessness, human misery and utter despair that exists in streets where there are rows of households where no adult male has a paid job. Even in the city of Belfast, we have wide variations in the rates of unemployment as between local government wards, with West Belfast having rates in excess of 40 per cent. I listened carefully to what the noble Earl the Minister said, and I believe I heard him correctly when he disputed the concept of two nations. Unfortunately, I believe that we have two nations emerging today; namely, a nation of the employed and a nation of the unemployed; a nation of workers and a nation of the workless.
The Earl of Gowrie: My Lords, I am most grateful to the noble Lord for giving way. I simply wanted to remind him of what in fact I said, which was that in terms of awareness of the phenomenon and problem, we are no longer two nations. Everybody, including those who live in the affluent suburbs of South-East England, is having some contact, either directly or through their children, with unemployment. It was in that context that I said the concept of two nations was breaking down.
Lord Blease: My Lords, I thank the noble Earl, and I stand corrected. However, horrific as these official figures are, the Northern Ireland Committee of the Irish Congress of Trade Unions claims that the statistics so far as Northern Ireland is concerned are "underreported". In a memorandum submitted last August to the Prime Minister, Mrs. Thatcher, the Committee stated that the figures ought to include the numbers who are part-time workers and a category of unemployed married women and also those who are temporarily unemployed. I think the noble Baroness, Lady Seear, and others mentioned this in connection with the total compilation of figures of the unemployed.
I think it is important in a Northern Ireland context to stress that, in proportionate terms, if these figures were reflected throughout the United Kingdom, they would equate to over 4 million unemployed. Surely no Government could persuade even their own party that their industrial and economic policies were working for the benefit of the country if such figures applied to the whole of the United Kingdom. While the heaviest unemployment in Northern Ireland is found among the textile, the construction and the processing industries, there is evidence in Northern Ireland that the recent steep increases in redundancies have pervaded the various levels of management specialists and the professional and executive categories of employment.
A few weeks ago I had the harrowing experience of talking with an executive manager aged 52 years who had just been told that he was redundant. The £18,500 position he had held for over 16 years was axed, along with some 300 other of the company's

1421
management personnel and artisans. He is one of the many top and middle management personnel who finds himself for the first time a shocked, sacked victim of the Conservative Government's measures to strengthen the economy and to correct the underlying industrial weaknesses.
In the last four months, unemployment in the United Kingdom among managers and executive specialists has soared by 57 per cent., with some 130,000 higher grade executives and technologists looking for positions. I would suggest that already we sec signs of the managerial revolution on its way and a lot of re-thinking is being done by top management and others. But, in connection with Northern Ireland, it means that those persons in that category, whom we consider make a tremendous contribution with their skills and expertise, are being faced by these problems, and we are being denuded of the skills that will be required should the economy begin to take off.
Your Lordships will not need me to remind you that unemployment is a human tragedy. Hidden within every statistic there are thousands of individuals who suffer personal demoralisation and psychological distress. There can be no doubt that it is the unemployed and their families and the socially disadvantaged who are bearing the main burden of the Government's policies in dealing with the recession. Think of the despair and the sense of hopelessless that can arise among unemployed people in a region such as Northern Ireland, where last month the figures indicate that 25 per cent. of those unemployed—25,142—were out of work for over one year, and where 47 per cent., or 47,024, have been queueing for the dole for six months or longer. In the course of the past year the needs of the long-term unemployed have been shamefully neglected and ignored. It is these long-term unemployed who suffer most from the brutal effects of high unemployment, with its inevitable consequences of extreme poverty, personal demoralisation, family stress, and, sadly, as we know, at times the complete breakdown of family life. The right reverend Prelate the Bishop of Liverpool mentioned this in his maiden speech.
On 18th February the Northern Ireland Minister of State, Mr. Adam Butler, announced the establishment of a new Action for Community Employment scheme. It is stated that this scheme would provide 450 jobs for long-term unemployed adults in Northern Ireland in its first year. While I welcome this scheme, I can only repeat what others have said, that it is too little and too late to make any impact. I should also wish to add that the whole scheme will requite careful monitoring and scrutiny in close co-operation with the trade unions, especially unions with membership in the construction industries.
While unemployment among any section of workers is to be deplored, a particularly disturbing feature is the sharp increase in the number of young people without jobs. In the province some 42,928, or 43 per cent., of the unemployed are under 24 years of age. While in February there was a slight decrease, there are still some 9,396, or 9·5 per cent., of the unemployed who are under 18 years of age. This level of unemployment among young people represents a disgraceful waste of resources, both in terms of
1422
human resources and in terms of financial and technical resources which have been committed to their education over the years. This, of course, is true of the position of young people throughout the whole of the United Kingdom.
There is, however, another aspect to the problem as far as Northern Ireland is concerned. Here I quote from a document issued by the Northern Ireland Committee of the Irish Congress of Trade Unions:
"The young unemployed who live in circumstances of cumulative social disadvantage, in terms of poor housing and lack of recreational facilities, become potential prey for the godfathers of violence and recruits for terrorist organisations, or they themselves become the victims of violence".
My Lords, I believe there is fairly conclusive evidence that oppressive levels of unemployment are themselves a contributory factor to violence in our community, leading to death and destruction. The Northern Ireland Committee of the Irish Congress of Trade Unions are convinced that urgent remedial action designed to tackle and eliminate the scourge of unemployment would in itself have direct beneficial results in the security situation and in easing community tensions. The effects of unemployment are cumulative. These lead to even greater social deprivation and to what some have termed a "poverty culture".
My Lords, is it not a crime against humanity, against little children, that in Northern Ireland, where we have the worst housing conditions and the most serious overcrowding in the United Kingdom, we have at the same time some 24,000 construction workers without jobs?—that is, one half of the total skilled labour force in the construction trades in Northern Ireland are idle. Is it not a crime against suffering humanity to read in an official report of a Government appointed committee the following?—and here I quote from the report of the Subcommittee on Personal Social Services for Blind, Partially Sighted and Hearing Impaired People, published in December 1980. These are the words in the conclusions:
"Our study has indicated that the provision of personal social services tailored to meet the specific needs of the blind and partially sighted has deteriorated over recent years.…The main difficulty and basic reason for this situation is shortage of personal social services staff with specialised training. We found a similar lack of suitably trained specialised staff when examining services for the hearing impaired people.".
The suitably qualified persons are available, but they are not being employed.
May I again quote from an official report, the report of the Advisory Committee on Infant Mortality and Handicap in Northern Ireland, which was published last September. This was a committee appointed by Lord Melchett in December 1978, when he was the Minister of State for Northern Ireland. The report was entitled the Baird Report and I quote from page 72:
"There is still a greater proportion of children in Northern Ireland dying before the age of one year than in Great Britain and most other economically developed countries. Socioeconomic deprivation is associated with low income and, in most instances, poor housing conditions. Both factors influence infant morbidity and mortality and it is essential that action is taken to alleviate these problems".
We may ask, what action do we have from the Government? The set reply, certainly, that I have seen and have received, and which I sometimes think must come out of a word processing machine, is: "In view of the present financial climate the Government are unable

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to commit resources. They are, however, sympathetic to the problems."
The levels of unemployment in the regions are unacceptable and we strongly urge the Government to root out the cancer of regional and structural unemployment. We realise that action will be required at at least two levels: first, there must be immediate and short-term measures; secondly, there should be undertaken in consultation with regional representative interests the activation of coherent and comprehensive policies to ensure effective and sustained dynamic regional economic development. I would agree wholeheartedly in putting forward those two forms of action. But, as stated already from both sides of the House, a genuine partnership needs to be fostered between the Government, the Opposition and the representatives of industry at all levels. I believe that that goal of genuine partnership has to be fostered and promoted by the Government. Other regions will have the forms of action that are most suitable to their needs.
I should like in conclusion, to say what is required as immediate action for Northern Ireland. First, there needs to be effective co-ordination of all the organisations and representative interests involved in the promotion of productive employment. Secondly, there must be urgent discussions and decisions on the issues concerning supplies of energy, with the objective of ensuring that Northern Ireland industries are placed in a fair competitive position. Thirdly, some provision is needed to ease the high internal transport charges and to ensure a fair competitive position concerning passenger and freight transport between Northern Ireland and Great Britain. Give the regions a fair opportunity to compete and contribute to the well-being of the whole of the United Kingdom.
5.38 p.m.
Viscount Watkinson: My Lords, we should all be grateful to the noble Lord, Lord Peart, for raising this very important issue, and I think it is only natural that he, and the noble Lord, Lord Blease, should highlight the problems of particular regions. It so happens that when I was Parliamentary Secretary to the Ministry of Labour I was asked to make a special study of regional unemployment, because, to show that despite what some people say, nothing changes, the then Conservative Government had inherited a serious unemployment problem from the preceding Labour Government. I was asked to go to Lancashire and North-East Scotland and many other places to look into the problem. I shall not bore your Lordships with what I found, but shall say only that I became convinced then, and I think I remain convinced now, although that study took place a long time ago, that regional problems are dependent on the health of the economy as a whole. I certainly agreed with my noble friend Lord Gowrie when he said that, and other noble Lords have also said it. But by that I do not mean to try to minimise what I believe is a very serious moral problem, and I think that it is high time your Lordships' House discussed it at length.
If I may say so, I wonder whether the Government and all concerned realise clearly enough that it is a kind of special problem for Britain and that, when
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the recession eases—and I agree with my noble friend Lord Thorneycroft that it will, although there do not seem to be many signs of it yet—we shall still have residual problems, such as the problem of gross over-manning still not weeded out and the narrowing of our industrial base due to the so-called benefit of having North Sea oil. Moreover, as the recession eases and the economy picks up we shall see ever more clearly the effects of the job-shedding capabilities of electronic micro-miniaturisation of one kind or another.
I think that your Lordships would all agree that our level of productivity is still too low and still makes us somewhat uncompetitive in many export markets. It is also rather a wry consideration, which the Governor of the Bank of England pointed out the other day, that, while the so-called benefits of North Sea oil tend to cushion our quite disastrous position in many industries, they are of course spurring on those nations like the Japanese and the West Germans who do not have access to their own indigenous oil to greater efficiency and greater efforts and thus to becoming greater competitors for us in third world markets.
We all know that in the past we have invested too much of our national wealth in a bureacracy that we really cannot afford and, I am afraid, in social services which we cannot afford in some degree as well, and not enough in job creation by putting money into more creative and more long-term developments. So we have a problem, and I think that it is worth saying that it is a particular problem for us in Britain. I do not think that we should be surprised about it. I do not want in any way to introduce a contentious note into what has been a very uncontentious debate, but really this was evident in the term of the last Government. When I had the benefit of the quite large research capacity of the CBI behind me as president, I remember saying advisedly a number of times—and it is on record—that we should have over two million unemployed if we did not mend our ways. So the present Government have, in fact, inherited most of this problem. They certainly have not created it. They have, of course, also inherited much of the policy of trying to meet it, as the noble Lord, Lord Thorneycroft rightly said. I think that they are doing it very well and I do not see what else they could do. So I hope that this is a subject on which we can somehow in our rather strange democracy find some common ground.
There is no single economic nostrum that will effect a cure. It is too serious to be a political shuttlecock. If I were an unemployed man or woman in Liverpool—and we all listened with deep sympathy to the very remarkable speech of the right reverend Prelate, who knows what he is talking about in that area—I should not be very interested in a party battle about unemployment, but I might be very interested in seeing some kind of debate in the nation as to how I might hope to have a job in a year or so. I believe that it would be much more encouraging for people who are out of work if they felt that those of us who have some responsibility in public life were bending our minds to try to see how we can create as many jobs as possible in years to come. Full employment, maybe not: but more employment there clearly must be.
That, I think, means that we might have to think

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through again some of our industrial strategy. We may have to consider awkward matters like earlier retirement. I know that the Government have just said that that is totally impossible because it is too expensive, but I am not sure that we shall not have to think about that. Another matter that we might consider is one year's public service for school-leavers to give them a chance of a year's useful employment in some way, as happens in some other countries in the EEC. I only give those as examples, trying to show that there must be some new thinking in the long term if we arc to cope with this problem, because I fear that it may go on much longer than most of us would wish and we ought to be preparing for that time.
I think that a rather good example—and it just so happens that it is a good example—of what I mean is that later this week the CBI will be publishing a very important discussion document on how, after months of discussion among all its members up and down the country, it sees the situation and what it thinks should be debated and discussed about our industrial strategy for the future. If I may say so, I think that it has been very wise, and perhaps a lesson to us all, not to put this forward as any kind of cure-all or strategy, but purely as a question for discussion—discussion, I hope, with the trade unions, because I could not agree more with the noble Lord, Lord Rhodes, that, if we cannot somehow persuade the trade unions to take a more co-operative and more forward-looking attitude to the whole problem of how we are to restructure employment, we shall never succeed in it and nor will they.
Therefore, I hope that this initiative of the CBI will be welcomed and I hope that it will do something to continue this type of national debate on how we can find a solution to what is a serious moral and personal problem. Unemployment is about people: it is not really about politics or about economic policy. It is about a man who feels ashamed because he has not got a job or somebody, as another noble Lord said, who, because he has no job, cannot any longer help his son or his daughter to get one either. That is what it is all about. It is in my view a serious enough situation to call for a more national response and, if I dare say so, a more united response than we bring to some of our national problems.
Of course I do not want to go into details in what I hope will be quite a short speech, and I certainly do not want to preview what the CBI will be saying tomorrow or the next day. If I had a favourite request it would be that the Government should cut the national interest surcharge, the insurance surcharge, and I strongly support the noble Lord, Lord Thorneycroft, in what he said about the inequitable burden of energy costs compared to that borne by many of our competitors. Whether they fudge it or whether they do not, the fact is there and I hope that the Government will look at it.
However, I do not want to get into details; I do not want to talk as such about regional problems although, if I may say so to the noble Lord, Lord Blease, as someone who still has business contacts in Northern Ireland, who was stationed there in the last war and who knows and likes it very well there is an almost desperate situation for many men and women there who want to work, but it is the broad national policy
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that must be right. I am not for a moment suggesting that the Government should change their present policy. I think that on the whole it is right. But some how I think they must support it with a rather better consensus—for example, they must persuade the trade union movement that there is some sense in continuing what many people feel is a fairly tough policy. It must be tough and it will be painful.
In my view, 1981 will be a very painful year indeed, with small signs of light at the end of the tunnel. However, we must go through it and I think that steps should be taken to try to persuade the trade union movement that they, too, have an interest in sticking to this policy and seeing it through to success. If we present them with the facts they are, on the whole, reasonable enough men—at least in private—and able to accept that those are the facts and are true; and, although perhaps they would never admit it in public, that might well condition their views in private. I believe that there is a job to be done there and if the CBI paper makes a small contribution to that and helps the debate to go forward with the TUC in the NEDC or anywhere else, then that is all to the good.
I have been around for quite a long time. I have been in politics and I have been in industry. I have been in the CBI. I do not know what you would call the CBI; it is neither one nor the other. I have worked happily with many Prime Ministers, including Mr. Callaghan, who I think tried very hard to get a proper policy of wage restraint, and we should all be better off if he had succeeded. I think that our present Prime Minister deserves our support in trying to get through an immensely difficult and painful policy, but a policy to which I do not think any viable alternative is presented by any other party at this moment. So there we are.
However, what depresses me is that we have not succeeded. In this House it seems easier to get a broad, reasonable consensus as to what has to be done. That is not echoed in the world outside. It was not echoed in Glasgow the other week when the Leader of the Opposition led a great march through that city. Therefore, I think that we have to do some rethinking of our industrial policy and strategy. Although what the CBI says—and, on the whole, the CBI speaks for a fairly large section of private industry, and its members are having a very rough time (the roughest time that I have ever known since I have been in business)—will not be good for the CBI and its members, I very much hope that it may perhaps do a little to stimulate this kind of discussion that we have had here this evening and which I think we so desperately need throughout the body politic, the body economic and the body industrial of our nation. If we could achieve that, I should feel happier about encouraging those people who are now out of work that there is still something to look forward to, that it will not always be like this, and that maybe in 1982 there will be a real chance of this country making real progress again.
5.52 p.m.
Lord Evans of Claughton: My Lords, I hope that the noble Viscount, Lord Watkinson, will not mind if I do not follow his speech precisely because, as he said, he has covered the general problems of unemployment.

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I wish, without apology, to concentrate my remarks on a particular regional problem; that is the North-West area, and in particular Merseyside.
In that context I very much welcome the maiden speech made by the right reverend Prelate the Bishop of Liverpool. It was a remarkable speech; it was of great strength and assistance to those of us who live and work in the Merseyside area. I must say that I shall remember his speech for a long time and I hope that the words he said will be very carefully noted by the noble Earl the Minister. In spite of reorganisation of local government, the ecclesiastical authorities did not follow, and although the right reverend Prelate is the Bishop of Liverpool—and I live on Merseyside but not in his area—nevertheless I was very glad to hear the valuable words that he uttered, with the considerable experience that he has of the great problems that we suffer on Merseyside.
To echo remarks that other noble Lords have made, it seems that the problems of some of our regions—and the remarks made by the noble Lord, Lord Blease, about Northern Ireland are, of course, special remarks because Northern Ireland's problems are special—are very serious indeed in terms of unemployment. Those of us who live and work on Merseyside have had to come to the conclusion that at present they appear to be endemic; major closures of large industries are taking place at an absolutely sickening pace in that part of the country.
The last statistics, which are recent ones, for February 1981 for the Merseyside Special Development Area—which covers an area slightly larger than Merseyside County Council and includes Ellesmere Port—show unemployment at 15·8 per cent. overall. The percentages in some parts of Merseyside, particularly the inner urban areas, are of course very much greater, and are also much greater among young people and ethnic minorities. We on Merseyside have a different problem as regards ethnic minorities in that the majority of the ethnic minorities are people who have not come to this country recently, but have perhaps lived on Merseyside for six, seven or even eight generations. Nevertheless, despite the fact that they are even more native Merseysiders than I can claim to be—my family having lived there for only three generations—they still suffer a greater element of the problems of unemployment than do their non-coloured, co-natives of Merseyside.
In February 1980 the number unemployed in the region was 91,008, which included—and I think that this is very significant—3,562 school-leavers. In February 1981, the following year, this figure had risen to 109,487 unemployed, including 5,425 school-leavers—an increase in 12 months of 18,479, which includes an increase of 1,863 school-leavers. In addition to this, the Merseyside Chamber of Commerce economic survey for the last quarter of 1980 revealed that 55 per cent. of companies responding to their questionnaire were working at less than 80 per cent. capacity, and only 15 per cent. of industries on Merseyside were working at full capacity. I know that the noble Earl the Minister is very much aware of this. He was kind enough to brave the dangers of coming to Merseyside to speak at the Liverpool Luncheon Club, so I am sure
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that he is aware of the problem. But I do not apologise for repeating the very desperate cancer of the problem that we have on Merseyside.
In December 1979, 74 per cent. of companies on Merseyside were working at more than 80 per cent. capacity, while only 45 per cent. were working at more than 80 per cent. capacity in December 1980. In 1981 so far—and the year has hardly started—there have been 6,900 redundancies on Merseyside and in the last six months 11,400, coming mainly from Vauxhalls, Tate and Lyle and Courtaulds, in the last two months. In addition to the closures, there have been significant reductions of work forces in Lucas, Girling, Austin Packaging and Plessey.
Against this, without any exaggeration, tragic background, on 17th February 1981 the Department of Industry announced the allocations from the European Regional Development Fund. This is the first 1981 allocation and relates to four industrial and 225 infrastructure projects located in the United Kingdom assisted areas, and, of course, very welcome it is from the European Community. But the figures reveal some very interesting and significant regional variations. If we take the unemployment figures for the various assisted areas as at 11th December 1980, we get what I believe are some very interesting and rather disturbing anomalies. The Northern region of England had at that time 175,949 unemployed and received per capita of unemployed £728 in aid. Scotland, with 261,760 unemployed, received £635 per capita. Wales—for which I have some personal sympathy—with 138,003 unemployed, received £691 per capita unemployed; and the special case of Northern Ireland, with 93,752 unemployed, received per capita £975. At the same time the poor old North-West, which includes Merseyside and Liverpool, with 322,415 unemployed, received only £321 per capita. I am not saying that those crude statistics prove that there is a deliberate policy of differentiation against Merseyside, but I think that they are significant and worth considering in the context of the very serious and desperate problems of Merseyside.
Despite these discouraging statistics, the local agencies have been struggling heroically to stop the pouring away of the region's lifeblood. The City of Liverpool and the four other district councils are all working desperately to get new jobs in one way or another. The county council, of which I am a member, has itself taken many initiatives. We have an economic development office which is active in co-operating with and co-ordinating a wide range of organisations and agencies to encourage regeneration, and 5,000 new jobs have been created in the last year.
Financial incentives in the form of wage subsidy schemes over and above Government grants are being provided by the county council for small industries. Loans are being made to small companies and entrepreneurs who are seeking to start new businesses. Because of being new to industry and therefore not able to get assistance from our rather traditionally minded banking, system—any of us who read the new paper recently will realise that our joint stock banks are not nearly as generous or as helpful to new industries as they are on the Continent—they are providing assistance to those industries who do not have a track record that the banks could, as they are at present constituted, support.

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As the right reverend Prelate mentioned, we have, with the approval of the Government, recently set up a company first of all to create employment by raising Manpower Services Commission funds to carry out environmental improvements; secondly, to train unemployed school-leavers in basic skills at a rate of 1,000 school-leavers a year, which is only touching the surface of the problem but is an important contribution to providing skills, which we all agree is one of the most important things required in relation to our present industrial problems. We are creating 1,000 jobs for school-leavers during a year, so that they will at the end of that period have a skill. They will not necessarily have a job, but they will have a skill.
Thirdly, we are undertaking new economic initiatives in conjunction with—and again I would suspect that this is a matter the Government would welcome—the private sector of industry. We have set up the Merseyside Innovation Centre jointly with the University of Liverpool and the polytechnic to help local companies to take advantage of new technological advances, so that secure employment prospects for the future can be provided. We have co-operated with the Pilkington Glass Company in the St. Helens Trust to create new skills for the people in the St. Helens area.
Yet, despite what I hope your Lordships will agree is a considerable exercise in self-help, the canker of unemployment spreads on Merseyside. The closure of Tate and Lyle and Courtaulds is to many Merseysiders virtually the last straw. The Treasury pointed out in its economic survey published in early February that every unemployed person costs the taxpayer approximately £3,500 a year in lost tax and unemployment and social security benefits. On this basis the two closures at Tate and Lyle and Courtaulds will cost the taxpayer about £10 million this year, without taking account of redundancy payments and so forth, and without taking account of the misery, uncertainty, and the secondary unemployment that this brings about, and the feeling of being a second-rate citizen, which the people in long-term unemployment suffer so much.
On Merseyside we are in desperate straits, and I do not think that mutual recrimination helps the unemployed. Much of the rhetoric and confrontation politics is at its worst in the debate on unemployment. We hear that under Labour there were 1,500,000 unemployed, and under the Tories there are 2,500,000 unemployed. This kind of rhetoric does not help the unemployed. If it is only 200,000 unemployed the unemployed person is unemployed and he is suffering terribly. This continual rhetoric about tuquoques, that this is the fault of that Government or the other Government, is creating an atmosphere of increasing bitterness and resentment among not only the unemployed but the people witnessing the problems of the unemployed throughout the country.
The monetarist policies have in my opinion exacerbated the problem. Mass marches through the centres of Liverpool and Glasgow do not alleviate the problem. I wonder sometimes, when the revival comes, whether employers will not say, "Gosh, perhaps we had better not open a new industry in Liverpool or Glasgow because there is a crowd of troublemakers there who spend their time matching up and down". That is precisely the image we do not want on Merseyside. We have not got a bad employment record. There is
1430
a thing called the Merseyside image: the image of people always on strike.
We have a record, of course, of casual labour and very bad conditions indeed, and uncertainty of any permanent employment on the docks, and so on, but we on Merseyside have not got a bad record of strikes and industrial unrest. Very often because of our gallows sense of humour—if you live on Merseyside you have to have a sense of humour!—we possibly contribute, by the success of our local comedians, in drawing attention to local problems which are not serious. We have no worse a history of industrial unrest on Merseyside than any other area or region in this country. But I sometimes think that we rather enjoy drawing attention to ourselves and making jokes, which makes a small number of people a large amount of money and probably gives a great deal of pleasure, but in fact gives a totally false picture of industry on Merseyside.
As a solicitor I act for a number of firms which are very prosperous and have never had any strikes at all. If your Lordships, and particularly the noble Earl the Minister, look at many of our companies on Merseyside, you will find that they have no problem about strikes at all in a very wide area. We are glad of the help that we have had from the development corporation. As your Lordships may know, I personally would have preferred that this was done through local government sources. We are pleased and somewhat apprehensive about the proposal to set up an enterprise zone in Speke.
What I ask is that we do not use this debate, or debates in another place, or throughout the country, as a kind of numbers game. It is not going to benefit the unemployed at all. We ought to be looking at the kind of initiatives that can be taken, such as my noble friend Lady Seear, for instance, mentioned. Also—and I must make this criticism—Members in another place for the Merseyside region, unlike the North East Members, do not tend to work together. There is not any joint Conservative, Labour and Liberal body of Merseyside Members working together. They all seem to meet separately.
I would hesitate—in fact I have not got the courage—to tell them, or to try to knock their heads together, but they do operate separately while the North East MPs, possibly because they are nearly all Labour, tend to operate together. Nevertheless, there is a lot that the local Members of Parliament could do. The local authorities on Merseyside, working hard as they do, tend, as the noble Earl's right honourable friend the Secretary of State for the Environment found in the inner urban areas, to squabble a little among themselves. But that again is part of the Merseyside image, of which the Government should not take too much notice. We do all get on very well really, but we tend to squabble rather publicly. The Members of Parliament in another place and the local authorities have a duty to work together.
At the end of the day we must look to Government resources to assist us much more than they have done in the past. Much has been done; a great deal more has to be done. What I want to underline is that we, as a county council on Merseyside, have tried every possible initiative to encourage new skills and new jobs. What we look for is encouragement from the

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Government to bring new industry and new initiatives to Merseyside.
6.10 p.m.
Lord Davies of Leek: My Lords, we have had an interesting debate so far, although in some ways it has been like a half-baked cake. I say that because an effort has been made to get an economic debate going, plus a regional and area debate, along with a debate designed to defend comedians in times of trouble on Merseyside and elsewhere. Max Boyce, considering his record, should get extra payment from the Government for keeping down the tempers of the Welsh in the working men's clubs of Wales. I know only too well the place of the stage and comedians when nations are at war or are otherwise in trouble. That is a worthy state of affairs and noble Lords in all parts of the House will agree that we need them.
I cannot understand why noble Lords generally, in taking part in this debate, have not realised that there is nothing very new in what we are talking about. My old grandmother used to say to me, "Save things for a rainy day, boy bach". With that in view, I have saved this copy of a Daily Mail publication entitled The Economic Crisis foretold by the Daily Mail, 1921–1931. Here is a real encyclopaedia of truth. Dated 22nd February 1930, it starts by referring to, "The swift effective remedy"—I have heard something about that in this debate—and says:
"Between 20,000 and 25,000 members of the United Empire Party were enrolled in 'The Daily Mail' branch in one day. With unemployment leaping up week after week, and now in excess of 1,500,000; with works and mills closing down; with taxation rising and an inexpansive revenue, the nation is coming to realise that some swift, effective remedy must be applied without delay, if we are to avert disaster".
Let us see how the new party, as it then was, intended to avert it:
"The three old-fashioned parties"—
talking about the party opposite and these Benches, apart from a small bunch sitting somewhere else, but I shall not go into that—
"have nothing to propose and no help to offer in this crisis of our existence. The United Empire Party, on the contrary, has a definite and practical constructive plan".
What was that plan?
"Subsidies to the farming community".
The noble Viscount was not so sure about giving social welfare to farmers or anybody else.
"Heavy duties on foreign manufactured goods".
We have been moaning not just in the pottery industry but in the axle of industry in the West Midlands, about the EEC subsidising energy. The booklet goes on to talk about preference within the Empire, but we smashed that up by joining the Common Market. It goes on:
"Ruthless economy … Firm defence of British interests",
Later it goes on to deal with what it describes as "grandiose imperial schemes" and the House should take especial note of this because what we are getting today is a repetition of the past:
"Great economies were possible in many directions, but the easiest and quickest of them all was to stop the steady drain of millions of pounds a year for grandiose Imperial schemes which this country in its present state of impoverishment simply cannot afford"
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I wish the Government today would take note of that, bearing in mind the £5,000 million they intend to spend on all sorts of new weapons and so on. It goes on:
"When South Wales is reduced to making public appeals for charity; when Tyneside is living on the dole; when the textile mills of Lancashire and Yorkshire are working little more than half time; with many of our blast furnaces shut down, it is an almost unbelievable scandal that the Government should still be squandering the nation's money upon the swamps of Singapore and the deserts of the Near East".
The river of history still runs, though not always between the same banks; they are the same old problems. The fact of it all is that the system of society we call business is breaking down all over the world. In my view, the present crisis is deeper than that of 1931 and will last longer. For the first time, South-East England is beginning to see the effects of unemployment as it never saw them before. Yet at this time we are lily-livered enough not to stand up to the subsidising of energy, coal and oil, in the Common Market, but instead leave our own manufacturers out in the cold having to fight when we are producing the cheapest coal in the world; ours has a subsidy of only £1·062 compared with a subsidy of £34 a ton in parts of the Common Market. Unless we take sovereignty back into our own hands, how can we expect to stand up to that kind of competition, and I am all for fair competition.
I do not want to bore the House—it is dangerous to do so—with a long speech. Nor do I want to recite masses of statistics which many noble Lords know as well as I do. If necessary I could supply detailed statistics for the whole of the West Midlands, for Stoke-on-Trent and for my area. I will not do that but, to be fair, I must mention a few points where the Government have been helping and where, I am pleased to say, some of the wets have succeeded; the rising damp in the Cabinet is now so high that some of them will need lifebelts to escape.
There are different problems today and, to exemplify that, let us consider North Staffordshire, which I know well and which, although a Celt, I had the opportunity for about 35 years to represent, and I owe a lot to the people of that area. Because of them I have been able to live a most interesting life, a life which I would not swap for that of a millionaire, having served in both the other place and now here. Do we hear the cry that we do not possess the skills? Of course not. You cannot find more skill anywhere than that displayed in the British pottery industry, the skill possessed by, and demonstrated in the fingers of, the people who work in it. Is it the fault of the trade unions? Some of the most effective and least arrogant or militant unions to be found in the British trade union movement are in the pottery industry.
Is the management weak in the North Staffordshire potteries? In fact, management there is strong. Not only that, it is constructive and rubs shoulders daily, as does management in the textile industry, with the people working in the potteries. Consequently, it is not the old béte noire of most of the ultra conservative people; it is the reality of the world crisis that is losing markets for the British pottery industry. The noble Viscount knows perhaps better than most of the appeals the manufacturers have made and the need to get industrial energy to the source of production.

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Consider Wedgwoods, which I know well, and some of the other potteries. They have transformed their potteries to meet modern technological needs, but they are using expensive fuels. Nye Bevan said we had an island of fish and coal yet were poor. Were he alive today he would say we have an island of oil, gas, fish and coal yet are suffering the problems of the workhouse.
Why is it that, come what may, we do not stand up to the Common Market and say, "We are going to get industrial energy to the bases of construction so that we can compete in world markets"? If we do not do that, we shall be ruined, and we are already going that way. Whether or not the lady is for turning, she must be made to spin right now on this issue, but I had better not develop that theme any further. Although I have spoken for only eight minutes I do not want to occupy too much of the time of the House, so I will not speak for more than about 11 minutes.
I regret that the Minister is temporarily not in his place. The noble Earl, Lord Gowrie, is extremely able and states his case clearly, 99 times out of 100 doing so without venom. I am delighted to see that the Government have announced a grant worth £3½ million to deliver raw materials to the pottery industry. I will not go into the scheme in full, but the grant is to bring china clay to a suitable place in the potteries so it will be cheaper to run it to the various potteries which need that clay, thousands of tons of which we export from Cornwall. Sidings and new railways will have to be established. That is a new step in a new direction and that £3½ million boost to the industry in Stoke-on-Trent will not be misspent.
Now I come to my favourite topic, agriculture. For many years I represented an area containing 3,000 farms, 1,400 of them under 30 acres. As a Welshman I know how tough farm work is, and I know how tough coal mining is, too. The position of agriculture in this country must be thought about. The recession and the increase in the numbers of unemployed—the workless—are reflected in agriculture. In particular this can have repercussions and indirect effects on the incomes and prosperity of the small acreage farms; and so it is in North Staffordshire. Only this week Staffordshire farmers called on the local MPs for help. Incidentally, I should say that there is co-operation among the North Staffordshire MPs. For years I worked closely with the Conservative Member for Stone. When there were common problems he would turn up with us at the factories. We looked into the problems, irrespective of the party point of view. I have in mind, for instance, Hugh Fraser who has represented Stone for 30 years or more. I have in mind other Conservatives, too. So there must not be gained outside an impression that Conservative, Labour, and Liberal Members in the other place do not co-operate in their local areas when facing the kind of problems that are universal.
The National Farmers' Union has asked for something to be done for the farmers in Staffordshire who are:
"appalled at the attitude of the Minister of Agriculture in supporting the lower price increases proposed by the EEC Commission, knowing as he does that the industry's real income fell by 24 per cent. last year".
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All the farms to which I refer are contiguous or adjacent to town areas. Once there is depression in the towns and villages, it is reflected in agriculture. Therefore, when we are discussing unemployment, we also must discuss the increased unemployment among agricultural workers throughout Britain. It would be a sad blow to Britain's health if we were to lose these great producers of our food.
Having made those remarks, I think that I can leave some of my other points for another day, since I am sure that we shall have an opportunity for a full economic debate. I wish to conclude by making an appeal on behalf of the small businessmen. The noble Baroness, Lady Seear, made an excellent appeal in this respect, and I believe that more help should be given in this area. I should like to repeat this week's figures for the number of workers involved in redundancies in industries employing 10 people or more in England, Scotland and Wales. In England the figure is 520,692, in Scotland it is 84,169—small businesses smashed!—in Wales the figure is 55,209. As was rightly said by the noble Baroness, and by the right reverend Prelate (in an excellent speech), it takes many small businesses to employ, say, 10,000 people. We should keep our eyes on these people. I feel sure that the people of England and British Governments will evolve a way to help us out of the crisis, but we must realise that it will take a long time, and the people and their politicians will have to be patient.
6.24 p.m.
Lord Boardman: My Lords, it is always delightful to follow the noble Lord, Lord Davies of Leek, whom I had the privilege of following on many past occasions in another place. I am sure he will forgive me if I do not go into detail on the arguments that he raised. Of course the level of unemployment is a matter of wide concern, as has been expressed throughout your Lordships' House, and naturally I share that concern. However, I believe that we should put the figures in perspective, and, as has been said, we should realise that they form part of a world recession. Though it may be of little consolation, our figures may not look so bad when compared to those of other countries. Of the nine countries in the European Community (excluding Greece), two of them (Belgium and Ireland) have levels of unemployment higher than ours, and three of them (France Denmark and Italy) have figures approaching ours. In the past few months the trend has been rising in those countries. That is no consolation, but I believe that, in looking at our own problem here, it is right that we recognise that it is part of a larger problem which, as previous speakers have said, arises against a background of world recession and rising oil prices.
Of course, in some areas of this country the problems are particularly severe, and in a magnificent maiden speech the right reverend Prelate rightly drew attention to the particular problems of Liverpool, as indeed did the noble Lord, Lord Evans of Claughton. Those problems are of very special concern.
I entirely share the concern that has been expressed regarding the problems facing the youth, and I was delighted to hear my noble friend Lord Gowrie refer to the support that is continuing, and that is to be increased, towards finding opportunities for youth.

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This is very important, as indeed is the training and retraining of adult workers who have become unemployed.
We should not forget—though perhaps the noble Lord, Lord Davies of Leek, did so—the importance of the European Community and the contribution that it has made to this situation. Apart from its substantial financial contribution to training and retraining and towards the rationalisation of our industry, the Community is essential to us if we are to have any real prospects of recovery and growth as part of the European scene. I believe that those who have said—as the noble Lord, Lord Davies of Leek, tended to say—that there was a disadvantage here have got their sums completely upside down.
What is the answer? None of us can claim to have it. The answer is certainly not massive reflation—and I do not think that that has been suggested in any part of the House today. All the evidence of history shows that the post-war Keynesian policies have produced an upward trend in both inflation and unemployment. The two have gone hand in hand. Should any of your Lordships wish for better evidence of that fact, I would refer you to the January issue of the Journal of Economic Affairs, which puts the arguments very clearly and concisely. Keynesian policies, certainly in today's world climate, would create distortions both geographically and in industrial sectors, and would make inflation and unemployment worse.
It is perhaps worth noting that the industries which in the past have received most aid are those that are now creating the greatest levels of unemployment. I have in mind the steel industry, and indeed as a Minister I was responsible seven or eight years ago for giving that industry very large sums; and unemployment is now flowing from that. What I say now is not to criticise the decision made then, nor to criticise the decisions made in the past few months. Circumstances led to those decisions, and had decisions not been made to grant subsidies, the impact felt elsewhere would have been very grave.
I feel some concern about certain of the Government measures today. If one discriminates in favour of someone then, to my somewhat simple mind, that almost inevitably means that one is discriminating against another section. In the case of the steel industry we have seen that the support and subsidy that is being given to the British Steel Corporation is understandably being interpreted by the private sector as discrimination against it. I hope therefore that the concern I feel regarding the enterprise zones will not be justified. The zones represent a bold, imaginative gesture, but in so far as they create new employment within particular areas, we must be careful to ensure that they do not create unemployment immediately outside those areas. We must ensure that there is not a risk of businesses just outside the areas of the enterprise zones being imperilled by the subsidised competition that will be created within the zones.
While being critical, perhaps I may follow the point made by my noble friend Lord Thorneycroft on the question of energy prices. I believe that industry has carried an excessive burden in this respect for far too long; and I believe, too, that it has added substantially to the levels of unemployment. At last this
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seems to be appreciated. I say "at last" because many of us with some experience of this have for a long time been arguing with the Government and with others as to the pricing policy adopted, particularly against the larger energy users, who are almost invariably also the larger employers; and I know that noble Lords opposite have used powerful arguments on the same lines over quite a long time. I recall, when I was president of the Association of British Chambers of Commerce, putting forward the arguments as to the impact that our energy pricing policy was having on industry and commerce some year or so ago and it is a matter of some regret to me that it has taken so long before the penny seems to have dropped—because I understand from a report which has only recently come out that it is now conceded that our heavy energy users have been paying too much for their energy. I hope that this is something which will be put right quickly. It is unimaginable that the French or the Germans, if they were in our happy position, would have adopted the policy that we have pursued here.
I believe, too, that there is a case, as has been said—the noble Baroness, Lady Seear, and others have referred to it—for looking rather carefully at the public sector borrowing requirement and the break-up and analysis of it. In government as in industry, I believe, as has been said earlier this evening, one is justified in borrowing for infrastructure, for capital expenditure; whereas I believe there is seldom a case for borrowing to pay the wages. I recognise from previous experience that this creates certain problems within government by way of presentation and the like, but I believe that underneath that there is some sort of thinking that should be further developed within government, and which could have a favourable impact in the longer-term upon unemployment.
Having made my criticisms, my Lords, may I extend my full support to the general policies which the Government are adopting in this crisis, in this difficult period? The Government, in a short period, are attempting to break out of an environment which has brought us lower and lower in each cycle. It is an environment which I believe is hostile and contrary to the will and spirit, and indeed the history, of the people of this country. I believe that this is our economic Alamein. But as casualties mount, as good firms die and as innocent people are put out of work, pressures on the generals are mounting to retreat or to change their strategy. In my view it would be fatal to do so, because in our hearts, I believe, most of your Lordships know, as do most people in their hearts, that there is no other way. I sense that despite the setbacks that there have been on some parts of the front the worst is nearly over, but there is a long hard slog ahead. It will require courage and it will require compassion—compassion for those who become the casualties—to see this through; and these are qualities which I believe we in your Lordships' House should be and will be willing to support.
6.35 p.m.
Lord Taylor of Mansfield: My Lords, the first thing I should like to do is to congratulate the right reverend Prelate the Bishop of Liverpool on his maiden speech. I have known him in other spheres. As a matter of

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fact, I have been a great fan of his, quite honestly, as a wielder of the willow; and in congratulating him I would say that even if he does only half as well as a bishop and as a Member of this House he will do very well indeed.
My Lords, by coincidence I think today's debate is somewhat related to a television series that begins tonight. It is about a man who was a Member of this House and of the other place, and it is called The Life and Times of David Lloyd George, known latterly as the first Earl Lloyd-George of Dwyfor. I think that what I am going to say in this connection has some relationship to our debate today. The authoress who has made the investigations and carried out the research for this programme is, first of all, a compatriot of Lloyd George, a Welsh lady, and in the current issue of the Radio Times she tells us that after all this research and this investigation she has reached a conclusion. She says:
"I believe that if Lloyd George had headed the 1929 Government my father"—
that is, the lady's father—
and millions of others would have got out of the dole queue several years earlier than they did".
I know that is going back quite a long time, and I mention it only to indicate that in the same old dole queue the numbers are nearly as big as they were in the days of Lloyd George and the queues arc getting as long as they were in the late 'twenties and early 'thirties. What the historian of the future will say about the present position I do not know, but I believe it will not be very flattering.
However, I want to make a few general remarks about the tragedy of unemployment, particularly as it affects the individual. I know that this scourge has collective as well as individual repercussions, but I want, if I may, to talk about the individual repercussions. It goes back a long time, to when I was a member of the old Board of Guardians, which was abolished in 1930. I was doing the fortnightly visit of the hospitals and the casual wards, which were used for vagrants. Some people who were not too sympathetic used to refer to them as a domicile for tramps. On one particular occasion there was a man who had had a night's accommodation in the work-house, in the vagrant wards, and he was scrubbing floors—on his knees, mind you. I said, "Good morning", to him, and he rose and said, "Good morning, sir". Mind you, like him I was in the ranks of the unemployed, as well as being a member of the Board of Guardians. I said to him, "What are you doing here?" "Oh," he said, "I'm from the shipyards of the North-East, and I am unemployed without dole. I am here because I refuse to impose upon my father, who, too, is unemployed but who, unlike me, gets the dole". I said, "Where are you making for?", and he said, "To the hopfields of Kent, to earn a few shillings to help me as far as the immediate future is concerned".
For me as a young man that was a very emotional experience. From that day till this unemployment has frightened me; it has been a nightmare. I undertook within my own soul that what I could do, either by word of mouth or by action, to remove this scourge of unemployment from our nation I certainly would do. I asked this young man, "What part of the
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North-East do you come from?" He told me and I concluded—and this will strike a note in some minds—that he might have been from the Palmer Shipyards at Jarrow which was one of the names linked with the marches of the unemployed in 1930. I remember this young man saying to me—and I think it important to relate it—"You know, sir, to be unemployed is disappointing and frustrating. Normal, legitimate, personal ambitions are right down at zero and the light of hope burns very low; it is only a mere flicker." That man expressed the tragedy of what it was to be unemployed. He was right. How justified he was in his bitterness and frustration. I bade him, "Good morning." I was in sorrowful mood. I do not think that while memory lasts shall I forget that particular episode which impressed on my young mind the necessity of doing all that one could to avoid, at any rate, mass unemployment.
There seems no flicker of light at the end of what is a long dark tunnel. Hope becomes less and less, social values tend to become eroded and anger and bitterness develop in such fertile ground as unemployment. Today there are millions of wage-earners, and also a large number of workers in the modest-salary bracket, who are apprehensive about losing their jobs. Believe me—and I am sure that we all know this—they do not relish the prospect of joining the unemployed at the labour exchange. But we all know that every day now the media announce that this or that factory is to close with the loss of any number of jobs up to thousands. These folk are put on the roads. The tragedy is that, if the economic pundits are anything to go by, the avalanche of job losses is to continue and it is forecast that by the end of this year the figure will be, officially, 3 million. The unofficial figure would include the people who are not registered, such as married women; and that might be anything from half a million to I million extra. That gives us some idea of the astronomical size of the problem with which the nation is confronted at the moment.
I have given a little study to the figures in the Ministry of Labour Gazette. They provide anything but enjoyable reading; for behind the collective figure of almost 2½ million, there is the individual, there is the family with the individual and the domestic problems to cope with. To think that one in 10 of the British workforce are now without a job! Over the month of January this year, 5,600 a day joined the dole queues. This hardly seems believable. And there seems to be no end in sight at the moment. I could not gather a glimmer of hope from the speech made by the noble Earl, Lord Gowrie, that there would not be further redundancies and closures of factories and works.
I want to say one or two words about the region from which I come—the East Midlands. In the South-East, the increase in unemployment over the last 12 months has been 92 per cent. In the East Midlands, it has been 103 per cent. That is the region from which I come and I want to say a word or two particularly about Mansfield; that part of it referred to as the Exchange area. Normally that particular area is not dependent on one industry and we have always been thankful for that. That was one of the tragedies of Wales—one or two industries, steel and coal; that was all. And when anything happened there was a

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colossal figure of unemployment. Although we have diversity of industry—textiles, boot and shoe, engineering, metal box—and have had these for many years now, and although the preponderant industry is the production of coal (in which at the moment there is no unemployment) the area over the past 12 months has had an unemployment increase of 103 per cent.
When I got home last weekend the local paper was waiting for me. In big, black type the headline reads—and, my Lords, I exhibit it here and you can see this headline—
"Mansfield Jobless Total Soars Again".
The area as I have said is diversified in industry. I should like to quote a part of the article. Incidentally, this is not a Socialist or Labour paper but the local paper. It says:
"Gloom and doom shrouds the Mansfield area with the release of the latest unemployment figures this week".
A graph accompanying the article shows how the figure has risen from 3,800 in January 1980 to 6,226 in February of this year. There are 403 vacancies; and 176 of those are for census interviewers—jobs which will only last a few weeks and which do not touch the problem at all.
I shall conclude now with a quotation from the Guardian from Monday of this week in the light of what I have said about what is taking place nationally:
"The Government must endeavour to take honest stock of its policies and draw the only possible conclusion, a substantial shift of strategy is required. More than one million have lost their jobs in 18 months. Output has fallen at twice the rate anticipated even by the Treasury a year ago. Factories are producing less than during Mr. Heath's three day week and even less than in 1967. Company liquidations are at record levels. These are tangible signs of economic mismanagement since the wartime coalition promised that our Government would never again allow mass unemployment to afflict Britain".
What a picture! What a scenario! The Government want to give some time and attention to our own country and pay less attention to the economic theory of monetarism as proposed by Milton Friedman.
6.52 p.m.
Lord Polwarth: My Lords, in terms of numbers we are now exactly half way through the speakers' list. I hope for the sake of your Lordships that we are slightly further than that in terms of total time. I shall certainly do my best to obey the injunction of the noble Lord, Lord Peart, on the subject of brevity. May I apologise in advance to my noble friend who is to wind up, and to the noble Lord, Lord Ross of Marnock, that I must leave before the end of the debate because of a long-standing function that I would find it difficult to miss this evening.
I have been most impressed by the deep feeling on all sides of the House about the gravity of this problem. I have been even more impressed by the comparatively little scoring of party points in the course of this debate. There has been a great deal of coming together of minds. There is a rather sobering realisation that no one party and no one section of the community bears total responsibility for the very difficult problem that we have, and I think that there is a widespread realisation that though we may be an
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island geographically, we are not an island and cannot be one in the present-day economic world. We should remember that nearly every other country in the Western world is faced with rising unemployment even if the figures are not as high as ours.
There is even considerable concern at the moment, for example, in France. Last week, the Prime Minister there was announcing a package of measures for the short-term problems of unemployment which bore a striking resemblance to those being introduced or already introduced by our own Government.
I should like to concentrate my thoughts a little towards the problems of Scotland. I find myself very much in agreement with what has been said from the opposite Benches by the noble Lord, Lord Taylor of Gryfe. In Scotland the level of unemployment is indeed unacceptably high. There has been a long and depressing list of redundancies and closures announced which I do not need to go over in detail, culminating in the impending closure of the Linwood plant of Talbot, the Peugeot subsidiary. I know that there are more to come. We must be concerned and anxious about the future of the steel industry in Scotland, even with the package announced last week.
There is a slightly less depressing side to the situation in Scotland, and we must remember this. In past recessions, the rate of unemployment in Scotland has regularly risen to at least 50 per cent. above that of the United Kingdom as a whole and, on occasion, to double the rate of the United Kingdom as a whole. At present, at an adjusted figure of 11.6 per cent., it is only 20 per cent, above the United Kingdom figure. While that is cold comfort, it is much less bad than it might have been. We owe this partly to the effects of the oil industry, of which we have already heard this afternoon; and an interesting fact—again partly due to the oil industry—that with previous regular depopulation, particularly from the Highlands, we now find by contrast that over the past 10 years the population of the Highlands and Islands Development Board area has risen by 7 per cent.—no fewer than 21,000 souls, which is not so bad.
We have heard today of some of the new projects. The noble Lord, Lord Taylor, spoke of the new Japanese electronics venture coming to Livingston. The Timex company are about to embark on making the new "flat" television, as it is called, in Dundee, which will at least safeguard a thousand jobs. The Racal electronics firm are expanding at Newbridge, and Glenrothes has really become the boom electronic town of the United Kingdom.
I remember 25 years ago discussing with Dr. Beckman in California whether he would set up a plant in Glenrothes. He did, and today I am delighted to hear that the company is about to build a second plant. At Clydebank—one of our blackest spots—the French owned UIE company have obtained another order for a jack-up rig. Rolls-Royce have an order for £130 million worth of aero-engines to be built in East Kilbride and Livingston.
All is not gloom, and I suggest that there is a moral here for the United Kingdom. All of these are high technology industries, and it is thanks to the efforts that have been made by Scots in Scotland over the past quarter of a century in trying to attract this type of industry to Scotland and develop it there, that we have

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seen these results. We have already to some extent been through the fire and we are well placed for the future.
I agree entirely with the noble Lord, Lord Taylor, on the subject of Talbot at Linwood. I remember talking with the late Lord Rootes, who at that time was most enthusiastic about opening a motor plant in Scotland. All of us up there saw this as our great salvation. Here was a marvellous new industry that was going to have all sorts of spin-offs and benefits for the Scottish economy. I remember at the time meeting a leading American industrialist who happened to come from Detroit. When I told him this, he said: "I cannot think why you want a motor industry alongside you in Scotland".
I have come to the conclusion that he was right. I do not believe that production line work of this type is in the Scottish character. The Scot is by nature independent—some would call it other things, I know. I believe he is much happier and much better at exercising his skills in an individual way. This is where things like electronics and the new technology industries are far more what we should be after. We should forget about the motor industry and concentrate on new industries.
On the general policy, I believe that the Government would be quite wrong to do a U-turn, as they are sometimes being urged to do. As my noble friend Lord Gowrie said, inflation is still our biggest threat and we are at the same time at last beginning to see results in bringing it down. The medicine is working, but at the same time I believe the time has come to start reducing the dose. I was glad to hear the noble Lord, Lord Thorneycroft (in a very unorthodox kind of Conservative speech) recommending a greater degree of pragmatism and flexibility. In this I entirely follow him.
Could I suggest a few items on my prescription list for the Government's consideration? Like so many other speakers, may I suggest that we get rid of the national insurance surcharge? It is a tax on employing people and we want to employ people. I believe that we should seriously consider reintroducing a form of regional employment premium. It was a grave error to abolish this at the beginning of our term of office. It did a great deal, I know—and I have spoken to industrialists who were affected by it—to cause employers to retain labour and to keep people in employment without necessarily increasing their costs. I believe, like so many other noble Lords, that we should concentrate on cuts on current spending in the public sector. It is still much too high. Also, let us be more flexible on spending on investment. Here I would speak particularly of the railways, not merely in terms of the work they will give to manufacturers and contractors, but it will be a great benefit if we can achieve more electrification of the other line to Scotland and within Scotland. I also think the Government should reconsider the de-scheduling of certain assisted areas which is proposed from 1982, not necessarily treating them identically but in the light of circumstances.
I hope that the Government will give full backing to the Scottish Development Agency. I know it is the subject of controversy within the Conservative Party as
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regards its necessity or desirability. I believe it has done and is doing a good job, and I would agree with the noble Lord, Lord Taylor: let it go on with the job of attracting industry from overseas. The kinds of people who go on these missions are people with direct experience. They are far more likely to succeed than the members in our posts overseas. I say that with no disparagement to them, because they can give a good deal of help and back-up in the operations. So let the SDA get on with that job now that they have taken it over from the Scottish Council.
Finally, on the pricing of energy, which so many speakers have mentioned, it really is ludicrous when we have such great advantages in energy supply and costs that we should not enjoy them. I almost admire the tenacity of certain Ministers in defending or maintaining the position that we were not at a disadvantage. I notice this attitude has been changing lately. I even read that one Minister, I believe yesterday, was complaining rather querulously that the French and the Germans were actually subsidising their industries to our disadvantage, and that this was against the rules. I think that the only way to deal with this kind of thing is to respond in kind. It is simply no good trying to play cricket with people who not only do not wish to play cricket but have not the faintest notion of the rules, to start with. And how the French must be laughing at us!
Those are a few rather rebellious thoughts, but I believe that we should not get too depressed. There is light at the end of the tunnel even if it is not, as somebody once said,
"a train coming in the opposite direction".
I believe that the regions, and Scotland particularly, represent a great opportunity. Let us seize the chance offered by this period of depression and "slack" to muster and redeploy our resources and to make the most of them, particularly with the high technology industries. Let us get on with providing the right kind of education and training for our young people so that they can man these industries in the future and give us back our edge competitively. The wheel will turn in time, certainly if we stick to the policy of killing inflation. And when it turns there will be great opportunities. I think the regions have a great part to play in making us once more a world industrial power.
7.4 p.m.
Baroness Fisher of Rednal: My Lords, I hope that the noble Lord who has just spoken will accept the fact that I shall not be following him. My knowledge of Scotland is very limited, but perhaps I might say that my knowledge of the West Midlands is quite extensive, after spending over 20 years in public life in that area. In the past, of course, the West Midlands has been a wealth creating region. It had relative prosperity and job security for the people in the region. It has been able in the past to assist in the more depressed areas of the country, but in the West Midlands we are no longer that rich parent. We have come to the same stage, unfortunately, as some of the more depressed areas in the country.
I shall have to be very careful, like the noble Lord, Lord Rhodes, who said, I think, that he becomes very emotional upon this particular subject. I also become emotional on it and I am trying tonight not to be so;

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but when one lives among the people, as I do in Birmingham, and sees the women shopping, when one goes round the markets and sees people who are looking now for the best bargains, this is when it strikes home to you what it is all about.
I think what we have to recognise—and other noble Lords have said this—is that there is a very human aspect to unemployment. I think it was the noble Lord, Lord Thorneycroft, who said, "The recession will disappear". The noble Lord, Lord Polwarth, also said that better times would come, but the bitter memories of those who have suffered in the recession will stay. That is the unfortunate part about regional unemployment, and especially in the North-East and in Wales. The bitterness those people have to suffer will not be eradicated in one generation or in two. The Conservative Party must recognise that when the recession is over they will not get rid of those bitter memories and will obviously put the blame, rightly and truly, at the door of the Conservative Government.
It is no good noble Lords saying "ifs" and "buts" on the other side when they speak. I believe it was the noble Viscount, Lord Watkinson, who said that when we go to Liverpool they would rather hear what is going to be happening in the future. Those people are not worrying about the future; they are worrying about what is happening tomorrow, next Friday and the Friday after, the amount of money they are going to have, and the lowering of their standards. But I do not want to speak about Liverpool, because the right reverend Prelate the Bishop of Liverpool did that. I do not know all the cricketing terms, but he did not knock this maiden over by his speech! I thought it was very well done, and we congratulate him on it.
Unemployment in the West Midlands is now rising more rapidly than in the rest of the United Kingdom. The February figures last week showed that the unemployment situation is now 11·7 per cent. as against 9·5 per cent. in November and only 5·6 per cent. 12 months ago. These are cold statistics. They clearly show how the recession is affecting the industrial heartland of Great Britain. I use that term because Great Britain depends upon the West Midlands for its export potential, which is the greatest contributor of any of the regions in the country. There is a real fear that the West Midlands, with its heavy dependence on manufacturing industry, could suffer irreparable damage if the Government do not change their monetarist policy. Other noble Lords have said that you translate these cold statistics into individual men and women, and you translate them in the West Midlands to a great variety of manufacturing. As regards vehicle manufacturing, I think everybody believes that the West Midlands just has British Leyland in its midst; but although it has a great vehicle manufacturing industry it also has a great drop-forging industry and a great carpet industry. In fact, in Kidderminster is the largest concentration of carpet industry in the world.
The noble Lord, Lord Davies of Leek, mentioned the Potteries and the famous firms that are there. Also in Birmingham—and I know the area very well, because I represented it for a very long time—there are more small businesses than in any other part of the country. Some of those small businesses are in
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the famous jewellery district of the city. I can speak with experience, because I am a member of the Board of Guardians of the Assay Office, as is a noble Lord on the Government Benches. Last year was a very bad one for those small businesses in the jewellery district, because of the high price of gold. But this year the position is even worse and production, much of which is work with export potential, is 50 per cent. down.
Noble Lords have been speaking about young people. May I give your Lordships the latest figures for the City of Birmingham. They show that there is a total of 8,674 young people, between the ages of 16 and 18, in that city who would be working if work were available. But the latest figures from the careers services in January showed that there were 143 vacancies. How do you share out those jobs between nearly 9,000 young people who are waiting for work?
Noble Lords need to recognise that working in manufacture is not a sub-standard way of earning a living. That type of work has been a much despised part of the British economy. Because people get dirty hands in their work, they are considered in some circles to be a little sub-standard. One of the things which this Government could do quite easily is to make sure that manufacturing is given its proper status in the professions of this country.
The West Midlands workers are said to have metal running through their veins, instead of blood. The West Midlands is a real reservoir of skilled workers in many industries. They are a resilient group of workers. In the main, they are tough and, perhaps, very plain-speaking which does not always go down too well with some people. They are plain-speaking not only as employees, but as bosses in industry who say, on so many occasions, that Whitehall does not understand anything about manufacturing. But these people have a reputation for working, hard, very often in very dirty jobs, and working all through the night on shift systems. They are a very self-reliant group of people, whom one quickly learns to admire if one travels further North than Watford. I say that with the kindest sentiment, but I feel that there is a London mentality and a South-East mentality which does not readily understand regional problems.
In the West Midlands we have survived the worst economic depressions over the past 10 years without any Government aid. In the past, we in the West Midlands have not been fortunate, not only with Conservative Governments but also with Labour Governments, and we have not been able to get IDC certificates to expand industry. We recognised that they ought to go to the more unfortunate regions. But the West Midlands itself is now one of those unfortunate regions, and it behoves the Government to recognise that if we lose the industry of the West Midlands we shall lose a tremendous export potential.
I think that one noble Lord on the Cross-Benches mentioned the Brandt Report. The basic thesis behind its findings is that the cutting back of aid is no way to help the world's economy and to cure the recession. I want to draw the attention of the Government to the fact that their policies also help to create unemployment. I have university researches which show that, in the main, small firms benefit from aid programmes and the Government cut of £100 million

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from bilateral aid programmes has had serious repercussions on them.
The findings of the university researches show that one company in five that gained aid orders employed fewer than 100 people. Almost half the companies which one won orders under bilateral aid employed fewer than 200 workers. Therefore, it seems that the Government are cutting what we call public expenditure on aid programmes and, at the same time, are speaking eloquently about how they are trying to help small businesses, but that because of their policies they are doing exactly the opposite. Because of the cutback in the aid programme, there is a cutback in the orders which small businesses are able to get from bilateral aid. Therefore, I say to the Minister that it is important that the Government look at their policies and at their repercussions. Might I venture to say to the Government that they should take a pragmatic view of small businesses. I do not despise the efforts to help small businesses, but if we feel that they are so necessary to the economic recovery of the country, could we not appoint one Minister—call him the Small Businesses Minister, if you like—and one department with direct contact—
The Earl of Gowrie: My Lords, I am most grateful to the noble Baroness for giving way. We do, in fact, have a Minister for Small Businesses. He is my honourable friend the Parliamentary Under-Secretary at the Department of Industry.
Baroness Fisher of Rednal: My Lords, I thank the noble Earl for that comment. But I think he would agree that the Department of Trade, the Department of the Environment, the Department of Industry and the Department of Employment all claim to have some concern for the small business sector, and it is shared between various junior Ministers. But in Birmingham and the West Midlands we also have what we call the well-managed companies, the large companies—the ICI group, the GKN group, Lucas, Metal Box and other such companies. What are they saying about the Government's policy? Noble Lords have mentioned two or three problems. But what these companies are saying is that they are confronted with weak demand, for which the Government must take some responsibility. The noble Earl shakes his head, but when I speak to the Chambers of Commerce and to industrialists they tell me not only about energy problems, but about the high interest rates and all the other factors which are within the purview of the Government.
They say that excess capacity and short-time working push up their unit costs. They have high fixed costs. They are large organisations which are geared to a greater output than they have at the moment, because of the weak demand. But they cannot bring down their unit costs, because they are geared to a high demand.
Many of these large industries have recorded the great loyalty of their workforce. They are not criticising them for shoddy workmanship or poor output. They are not criticising them. In fact, they are doing just the opposite. They are saying how loyal they have been. Therefore, it behoves Government Ministers to stop saying that workers are pricing themselves out of jobs by asking for extravagant wage increases. If the Government will look at the findings which have been published by the Department of Health and
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Social Security they will see that the vast majority of the unemployed were low paid workers when they had work. Government research shows that it is not the workers who are pricing themselves out of jobs. It is those lower down who, unfortunately, are now out of work.
I apologise for speaking at great length. I accept the great sympathy which the noble Earl, Lord Gowrie, has shown for the young unemployed, but at present great concern is being expressed about the future of the training boards. No doubt the noble Earl knows that 500,000 apprenticeships are being run by the industrial training boards. I wonder whether he could enlighten us tonight about what is to happen to those boards? If the noble Earl cannot do so, is he able to assure us that those 500,000 young people with apprenticeships will not suffer by the Government amalgamation of industrial training boards with some other organisation?
When the noble Lord, Lord Thorneycroft, spoke, he seemed to fail to understand that the Government's action in cutting back the housing investment programme has meant not only that local authorities cannot build houses but that they have no money with which to carry out renovations or make old houses decent to live in. If he feels so strongly about this point, why did he not come to this Chamber when we discussed the Housing Bill and convince his noble friends on the Conservative Benches that the right thing to do was to support us on this side of the House when we said that not only would people suffer but that the industry would suffer: that there would be a spin-off effect from the Government's policy of cutting back on housing? Not only do you cut-back on your construction workers who number one-fifth of the unemployed males in the country; you also cut back on the production of things like baths, toilets, window frames, paint and timber. You cut back on all those manufactured products. The same applies to the cutback in education. You do not cut back only on the number of teachers in schools and on nursery school provision. The education cutbacks do not stop at the head teacher's desk. They affect the book publishing firms and the factories which are producing school furniture, foolscap paper and other paper for use in education.
I could go on, but noble Lords may think that I have spoken for quite long enough. It is true to say that in the West Midlands the local authorities are doing everything they possibly can to help to create employment. This includes the West Midlands county. In certain circumstances, they give loan guarantees to small firms. They also operate rate relief schemes. We are fortunate that in Birmingham we have the University of Birmingham and the University of Aston, both of which are involved in a number of immediate and future schemes to help industry. It may interest the noble Earl to know that the University of Aston has published a very good paper on the grave shortage of engineers who are being trained in the universities of this country. We have to accept that if there is a shortage of engineers, we shall be short of many things when the recession is over.
There is plenty of gloom around in the West Midlands. Despondency and waiting for better times are no part of the mental equipment of the workers, the local

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authorities and industry in that area. We ask the Government to recognise that there are problems. Noble Lords have amplified some of the needs and the way that they can be met.
I am very pessimistic. My pessimistic view is expressed quite clearly by the CBI's regional director in the West Midlands. He said only yesterday that, the most grim news in the West Midlands is still the labour market, where we expect very large numbers of redundancies in the next two or three months—numbered in thousands.
That is a very sobering thought for the Government. It is important that they should recognise that the unemployment figures throughout the region show that their economic and industrial policies are not working. What we are asking for is not only that the Government should receive documentation from the CBI and study it but that they should also seriously consider documentation from the TUC. That is the only way in which we shall work together to make Britain viable once again.
7.28 p.m.
Lord Balfour of Inchrye: My Lords, I feel I owe an apology to the House, and particularly to the noble Lords yet to speak, for intervening now, but it is through an administrative slip from which we all periodically suffer. I undertake not to stand for very many minutes between the other speakers and the House.
I feel that we are all particularly grateful to the noble Lord, Lord Peart, the Leader of the Opposition, for giving us this opportunity to have this most interesting and constructive debate. I speak as a full supporter of the Government and their economic policies, but I must admit to some misgivings concerning the future. I put these in the simple form of questions to the Minister, to which I hope he will be able to give a reply that will reassure not only my humble self but many Government supporters outside this House. I hope that we shall receive replies which will satisfy us.
First, we are winning the battle of inflation but, when won, will the battlefield be scattered with the corpses of industries which will not rise again? There are already many which are mortally wounded. Secondly, when the battle is won, will the price of victory be such that industries, great and small, cannot find capital for restarting and rebuilding their enterprises? What inducements will there be for capital investment if the battlefield is so scattered with corpses and with those who are gravely injured? Where will the capital come from? Will the revived industries be able to accept the present levels of taxation for industry? I do not know. That is one of the questions on which I hope we shall hear something from the Government.
My third question is this. In the battle of inflation are we losing the battle for employment? When the recession passes (as it will) shall we be left with a labour force, widely dispersed, many of them suffering from years of unemployment and often with skills lost? It is really impossible for the Government to give a positive answer to my fourth question because it depends upon world conditions, but the Government have experts. It is: For how long do the Government think the present recession will last? I read constantly
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the learned sayings and declarations of various expert bodies of economists, and they all vary. Some say that the recession is passing; others say that it is getting worse. What is the Government's view on this?
Lord Kaldor: That it is getting better!
Lord Balfour of Inchrye: My Lords, what do the Government think that the figure of unemployment may rise to? It is not all gloom. I was reading in the Hansard report of another place in a debate on unemployment in the South where the Minister, Mr. Norman Tebbit, shed a beam of light on the darkness and gloom, saying that there will probably be 6,000 new jobs created in the South, spread over the next two years. That is comforting, but that is very small compared with the grave redundancies we see every day in ICI, in Courtaulds and in other great enterprises.
My fifth question is this: In seeking to reduce inflation by strict money control will many of our home markets of great industries continue to suffer from imports from Europe, the USA and Asia and therefore the essential home markets for industry to be lost, possibly for ever? Then there are textiles, a topic about which the noble Lord opposite knows so much more than I do. However, 100,000 jobs were lost in the year 1980. The motor-car industry is struggling to revive with the taxpayers' money—your money and my money. Surely there should be some control over limitless foreign imports in selected trades. I believe that some control of imports is part of the official policy of the party opposite, but it does not matter to me whether it is or not. I am personally convinced that there should be some limitation of imports in certain selected trades.
My sixth question is this—and the Minister will be glad to hear that it is the last one. During this time of recession should we not reconsider for the special cases a policy of not accepting virtually without limit certain classes of imports? GATT—the General Agreement on Tariffs and Trade—was formed in a different economic world to that in which we live today. The pure milk of free trade has been diluted. GATT rules are twisted, bent and openly defied by other countries in their endeavours to protect their own national interests within their own frontiers.
The Government's reply to this is always one word—retaliation. If we control our imports from a country they will not like to buy our airliners. That is, broadly speaking, the defence for continuing free imports. Surely the answer is that, if we produce the best article at the right price, we need not fear retaliation because it will be sold in the market requiring that article. I do not believe we should be deterred from looking at special cases by the bogey of retaliation. I am not in any way suggesting a system of general tariffs or general limitation of imports, but for the sake of employment and industrial survival at a time of world recession I am suggesting that certain cases should be granted some quantitative control of their imports.
I conclude with these words: we have had recessions in the past and we have overcome them. In the great recession of 1921, after World War I, there were conditions very similar to those existing today. There

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was a strong pound, unemployment was rising and the traditional free trade country was for the first time forced to abandon the pure doctrine of free trade to protect some vital and vulnerable industries. The safe-guarding of Industry Bill was introduced by Mr. Stanley Baldwin when he was President of the Board of Trade in July 1921—an awful long time ago!—with these words:
The object of the Bill, of course, is to prevent loss of employment ".
My Lords, I would leave in the minds of your Lordships the thought that history repeats itself.
7.38 p.m.
The Earl of Halsbury: My Lords, our debate is taking place on the initiative of the noble Lord, Lord Peart, whom we thank for it, because the locust years are now yielding their harvest of Dead Sea fruit. How often have I not asked your Lordships, in rhetorical mood, do we have to be cold, hungry and unemployed before we come to our senses?—because if that is the way we insist on having it, that is the way it will have to be and, my Lords, that is the way it now is. A world depression has found us out. We, with one of Europe's weakest, softest economies, are having to endure a long overdue shake-up of our shortcomings.
The noble Lord, Lord Thorneycroft, dealt with this so well that I do not think I need enlarge on what he said, beyond adding one thought: alas! that the massive structural unemployment that is now with us has been brought on in great part by the mistaken efforts of those who have striven so hard to avoid it but employed all those means which ensured its arrival in due course.
It has happened before in my lifetime. Only those who, like myself, arc running up to their middle 70s or older were of full age, having attained their majority, and in employment in October 1929. The signal lamps had shifted during the summer from amber to red in conformity with a massive transfer of what we now call "M/" across the American economy from the sector which financed agricultural and raw material production to Wall Street for the purposes of financing a boom and some rather grotty loans to Europe. Inflation in one sector, deflation in another, Stock Exchange prices rose, agricultural prices fell. When the bubble burst—and this is the point—those funds did not flow back again as a normal response of the system to an imbalance. Something else happened instead. It always does.
A little German merchant bank which financed the textile industry, called the Norddeutsche WolleKamerei—I remember seeing it all in the Evening Standard as the run up to the wicket of failure—failed and cannoned into the Credit Anstalt, which failed and cannoned into an American merchant bank, which failed and cannoned into other merchant banks, and brought down the entire system like ninepins. Over three years—monetarists can well take note of this—half the M3 in the United States was sterilised and went out of circulation, and all of this of course reacted on our economy here. At the trough of the depression in 1932 somebody asked Keynes, "Has there ever been a depression like it before, and how long did it last?" "Yes", said Keynes, "It was known as the Dark Ages and it lasted 400 years".
The years of the 'thirties were years of disaster, as
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dramatised, and as experienced by many, though not all. But they were also years of redeployment in industry. From the trough of the depression annual growth in real terms, real wages, was 3 per cent. By the end of the decade four-fifths of the dwellers in slums had been rehoused, while industry and employment shifted away from the old mining centres, which were its natural location, as electrical consumption quadrupled during that decade and made industrial costs increasingly independent of the location of industry. That, of course, was what set up the industrial migration. The industries with which we entered World War II had been transformed out of recognition from the industries with which we entered World War I.
Then again in 1970 the system, the economy, did not respond as it should have when the Heath Government liberalised credit; a pre-election post-pay freeze wage-inflation was already gathering momentum. The new money created by liberalisation of credit did not go into industrial investment. It went into a housing boom. The system did not respond as was expected. Something else happened instead. Now today, as the Government struggle to reduce inflation as a prelude to increasing investment, the system is again not responding as briskly as could be wished. Something else is happening. It always does.
We have built into the system indexed pensions and redundancy payments, and scales of unemployment relief which are keeping consumer expenditure up just at a time when the Government are trying to reduce it for redeployment as investment. Did anyone ever question whether the scale of what we were providing could be afforded in a major recession—that is, at the only time when it was going to be needed? Did anybody suppose when it was set up that it would actually be a barrier to Government therapy which could control the economy? The noble Earl has my sympathies. He struggles in the toils with the consequences of what we ourselves have done with the best of motives. Like the victims in a Greek tragedy, all those who have done the wrong things for so long in order to avoid unemployment have brought it on the heads of those they have tried so hard to protect.
My Lords, what was it that Roosevelt did that rescued the situation as he found it in 1933? He made massive infrastructural investments with borrowed money. That is what Mr. Len Murray wants the Government to do today. It is what the noble Lord, Lord Taylor of Gryfe, has pleaded for in his contribution. Why would it be wrong for the Government to do now what it was right for Roosevelt to do then?
Lord Kaldor: My Lords, may I just say that the British National Government in 1932 is a better example than Roosevelt in America?
The Earl of Halsbury: My Lords, that may be, but I chose Roosevelt as an example, and if the noble Lord will permit me, I will construct my speech in my own way and choose examples of my own selection. I repeat, why would it be wrong for the Government to do now what it was right for Roosevelt to do then? If the demand on the capital goods sector falls below its potential output at full employment the wage packets in that sector cannot load the demand on the

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consumer goods sector and produce full employment there. Investment is the overall clue to full employment. My Lords, I survey the House of Peers, from prince to pensioner. Which of you ever bought a blast furnace to play with? Only investors do that. But for 36 self-contradictory years since the war we have treated profits which generate investment as a dirty business and those who make them as anti-social. We kill the goose that lays the golden egg as we go along. Whatever you can say, pay increases are still leading inflation and fuelling its continuance. If Mr. Murray had his way and if the noble Lord, Lord Taylor of Gryfe, had his way, the Rooseveltian trick would not work. The paper money that saved the American situation in a gross deflation would only leak back from the capital sector to the consumer sector in an inflationary environment. That is the essence of the matter, as I see it, and why the solution of the noble Lord, Lord Taylor of Gryfe, does not apply in this case. So we must reconcile ourselves to the shakeout continuing. We never could have maintained those over-manning levels indefinitely in any sort of competitive environment. We have been living a fantasy life and now we have got to face reality.
Viscount Caldecote: My Lords, if I may ask the noble Earl a question, is he really saying that investment is a bad thing?
The Earl of Halsbury: My Lords, on the contrary, I am saying it is the only thing, but it is the one thing we have legislated ourselves out of; a position to invest in.
Viscount Caldecote: My Lords, the noble Earl criticised Lord Taylor of Gryfe, who was advocating it.
The Earl of Halsbury: I was saying it cannot be done in the way he wants at the moment. A trading nation such as ours cannot ignore its terms of trade. If they turn against us our standard of living must decline, or we must work harder, or we must work more effectively through rising productivity. In such circumstances it is futile to suppose that we can make someone else pay our share by putting in for a compensatory pay rise. It is sometimes said there are only two sentences you need to learn in a foreign language when travelling abroad. The first is, "My friend will pay for the drinks". That is no basis for a policy. The second is one with which I will not trouble your Lordships this evening.
To turn to practical politics, there is a mechanism which we could use if only we would study it, and that is the retirement/recruitment mechanism. It provides a painless redeployment rate of 2½ per cent. per annum, 25 per cent. per decade. At this rate we could by now have redeployed—it is a fantastic thing to think of—90 per cent. of the immediate postwar employment pattern. You cannot, of course, turn a coalminer into a doctor or a schoolmaster, but you can turn his or some other miner's son into either. If a miner retires and is not replaced, while a miner's son is recruited into some other employment, the effect is the same. That is one of the things we have to learn how to do
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continuously instead of periodically and panic-wise.
Whatever can be managed can be mismanaged. Whatever can happen does happen sooner or later. Our task has always been, and we have not discharged it, to formulate fall-back plans against our own or someone else's mismanagement. Governments, in the plural—eeny, meeny, miny, mo; I do not care which they are—are all transient epiphenomena on the time-scale of the processes they are required to control. From time to time we must suppose ourselves faced with a mismanagement situation whose roots lie far too deep for identifiable recriminations but whose result is unemployment that has to be coped with. Premature retirement for all and earlier pensionability can switch on a relatively painless relief mechanism. One year's retirement, at 64 instead of 65, can mop up between a quarter of a million and half a million unemployed. Later recruitment to industry in the post-educational years by employment on some kind of national service, removal of the waste rubbish and the coal-tips of the last century and so on, would mop up a like amount per age group.
But if the plans do not exist in advance, if the mothballed earthmovers and the people who train people how to use them are not waiting in reserve in advance of the slump, it will be too late to improvise them when the slump is irreversibly peaking as it is now about to do. No such plans or equipment now stand waiting for someone to press a button, so what cannot be helped will have to be endured and the innocent will pay for the guilty as they always do. It is a very sorry business.
But since something is better than nothing, "Improvise what we can" should be the motto of the Government. Youth opportunities?—Yes; reduce the bank rate?—Yes, as far as we can reduce it without turning it into negative interest; reverse over-valuation of sterling?—Yes, if it can be managed; re-price energy?—Yes, if it can be managed, and so on. We must sweat it out.
It appears that massive industrial redeployment is paid for by individual hardship. One thinks of the enclosure movement which modernised our agriculture. One thinks of the Industrial Revolution itself, the Russian collectivisation of the peasantry and the redeployment of industry triggered off by the Great Depression. They were all painful.
Now the rectification of the overmanning levels has been triggered off by other mechanisms: the rise in oil prices which unsettled a West already strained inflation-wise by the ill-judged United States' attempt to pay for the Vietnamese war without increasing taxation. All those statistical processes, unplanned and unprepared for, have wrought untold individual mischief. But let us put evil to good account as the noble Lord, Lord Polwarth, recommended and as we did earlier in the thirties. I was very glad to see so eloquent a spokesman for Merseyside in the right reverend Prelate the Bishop of Liverpool. That was where I spent the first depression. I am glad that somebody still has his eye on it even if it gives me a deja vu feeling.
Must our collective lack of foresight, our inability to plan and our failure to control be forever coupled to the long, long tale of man's inhumanity to man, which is just as disastrous when it rises out of incompetence as

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when it rises out of malevolence? In the words of the popular song, "When will we ever learn?"
7.53 p.m.
Lord Jacques: My Lords, first I should like to congratulate the right reverend Prelate on his maiden speech. I think that it reflected the man as we have known him over the years. I would also congratulate the noble Earl on the considerable skill which he showed in getting over the great difficulties in presenting a plausible case for Government policy. I should now like to state the opposite side of the story.
Every Government must spend their way out of depression. The choice is not whether they should do so or not; the choice is how they will spend their way out. In so far as they spend their way out in unemployment benefits, they spread gloom and they foster demoralisation and discontent. But in so far as they spend their way out on capital assets which will increase the efficiency of the country in future, they spread buoyance and inspire confidence in the future. It is tragic that so much of our national resources is going in unemployment benefit and in aid to industries which are struggling more than they need have struggled. That is in part due to the Government's economic policy which has been so narrowly-based on tight monetary control. I am speaking of facts and not of what has been said in the last few days.
The Earl of Gowrie: My Lords, I should not intervene from a sitting position. The fact of the matter is that it has been based on rather untight monetary control.
Lord Jacques: My Lords, the Government's policy as we have been told from time to time, has been based very narrowly and very strictly on tight monetary control. It is also due to the Government's attitude to industry. I would not go as far as to say that it has been an attitude of confrontation; but I would say that it has been an attitude of unwillingness to co-operate, an attitude of being dogmatic which is reflected in the rhetoric, "There is no other way—there is no alternative", when everybody who is not blind knows that there are alternatives which are worthy of consideration.
The first object of Government policy was to reduce inflation. But at the same time as they were exercising tight monetary control they were increasing those things which increased the retail price index. They increased VAT, they increased energy charges to the consumer and they increased mortgage interest. Those increases were all reflected in the retail price index. In due course they were reflected in wage settlements. Consequently, in spite of the reduction of inflation in the last few months, inflation is still well above what it was when the Government took office. We all take some comfort in the decline over the last few months. We hope that that decline will continue. But let there be no mistake, any continuation of the decline in inflation cannot be due to the Government's tight monetary control, because, in fact, the supply of money last year was running at twice the rate of the target. Therefore, it must be due to other reasons, which we have been saying to the Government during the last 20 months. The Government's second objective was to insist upon a shake-out—a shake-out so that we achieved greater efficiency. That shake-out has gone far too far. Even the most efficient firms
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are suffering. Let us take ICI as an example. ICI is suffering not only because of structural changes—I will grant that it is in part due to structural changes—but also because of the Government's monetary policy. The high rate of interest, the over-valuation of the pound and the loss of markets for perfectly competitive products in normal circumstances produced by ICI—
The Earl of Halsbury: My Lords, I hope that the noble Lord will allow me to intervene. Would he agree that ICI has just coughed up £95 million in redundancy payments?
Lord Jacques: My Lords, it might have coughed up £95 million in redundancy payments. That just spells out what I am saying. It is a perfectly competitive and efficient firm and yet it has redundancies on a substantial scale. I have in mind, for example, an enterprise of which I have first-hand knowledge. That enterprise has been planned during the last five or six years at a capital cost of £9 million. Every possible step was taken to ensure that the very latest methods and the most sophisticated methods were used in order to get the absolute minimum unit costs. The enterprise commenced business last year. It has attained the output which was expected, but it is showing a loss because of excessive interest charges which it has to pay upon the capital. That enterprising firm is having its reserves depleted and frittered away in excessive interest charges.
The Earl of Gowrie: My Lords, what is an excessive interest charge?
Lord Jacques: My Lords, an excessive interest charge is one which is high because it is unnecessarily inspired by Government policy.
Viscount Caldecote: My Lords, may I interrupt—
Lord Jacques: My Lords, just a minute, the noble Viscount has either made his speech or will get an opportunity to do so. It is now my turn. There you have an example of a firm which, during the last decade, has been planning this and has taken every step to get the absolutely perfect, sophisticated methods to achieve the lowest unit costs. It has attained the output required, but it is losing money because of Government policy. Our industries have been suffering for far too long from the over-valuation of the pound. It should have been part of Government policy to bring the pound into line with the domestic price levels. But instead the Government have used all their powers and all their resources to maintain the value of the pound.
I will admit that in part the value of the pound is due to the depreciation of other currencies. But I must also say that there is more money than ever before seeking a secure haven for a short period because of the high price of oil. The pound has that security because of North Sea oil. We have been foolish enough to attack that short-term money with high rates of interest. Instead, we should have been doing as some of our EEC partners do; that is, we should have been taxing the interest, instead of offering a higher rate. Loss of business to firms that are suffering from

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the over-valuation of the pound means that their unit costs are increased. Consequently, in the same way as success breeds success, so failure breeds failure. They are so intent on maintaining their survival that they are having to cut back in research, development and investment, and in some cases they are abandoning markets. The Government's monetary policy has gone far too far.
I shall be constructive and suggest alternatives. First, we ought to reduce drastically the rate of interest. No matter what the side consequences are, the advantages in getting down the rate of interest will be far greater than the disadvantages which we might suffer. Coupled with that, we must use everything that is within our power to get the pound in line with the domestic price level. That is only fair to our own industries. As long as we allow the pound to be above the domestic price level, we are bleeding dry our industries.
Secondly, North Sea oil tax receipts should go into a fund for the redevelopment of Britain; they should not be given away to private industry or to public industry, but should be loaned at low rates of interest on the basis that we select those industries for loans which will give the best results to Britain, not merely in the short-run but in the long-run. The problem is in spotting the winners. We shall make mistakes, but it is better than squandering North Sea oil as part of the tax receipts. If the diversion of the North Sea oil tax receipts into a special redevelopment fund means that we have to increase the PSBR, so be it; it is far more important that our people should know that the benefits from North Sea oil will be used for the benefit of the country in the future and will not be frittered away in part of Government's revenue.
Thirdly, we must make changes in our banking system. We must encourage our banks to lend to industry on a long-term basis. We must encourage our banks to give preferential rates of interest to industry, and preference, for example, over consumer credit. Consumer credit is far less important than investment in industry. The Government can do that. All they have to do is to tell the banks that they will share the risks with them in relation to industry if they will give industry long-term investments, and if, at the same time, they will give industry lower rates of interest. By sharing the risks, the bank has an incentive to do this, and the Government are putting themselves in a position where they are entitled to insist upon that being done.
Fourthly, we must get rid of the national insurance surcharge to employers. But we must go further than that. Our position is now completely altered and it is time that we had a joint investigation by Government, trade unions and employers to examine the present taxes upon employment, and to see how far they should be altered because of the changes in our economic situation. For too long we have been discouraging the employment of labour and encouraging the employment of capital. Our position has changed, and we must re-examine it.
Fifthly, on training, we must give a high priority to those skills which require years to acquire and less priority to those skills which can be learned in a matter of weeks. We must also give some priority to the skills
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required by the newer industries, on the lines put forward by the noble Baroness, Lady Seear. My final suggestion is this. There is evidence to show that unemployment moves in the same direction as money earnings per unit of output. Unemployment can therefore be reduced by lowering the wage and price inflation and by raising productivity. The time has come when the Government should go to both employers and unions and say that they want consultations with a view to having a joint, agreed policy for the purpose of minimising unemployment. That is the way in which we can save our industrial base. These are strong remedies, but we have a very urgent problem.
I was due to speak on unemployment in the South-West until I heard the noble Earl, Lord Gowrie, when I thought that I would prefer to state the opposite side of the case. In a matter of two minutes I should like to say something about the County of Cornwall. We all know Cornwall as a good place to have holidays. But when we have debates on unemployment we tend to overlook a place like Cornwall because it is remote in distance and has a relatively small population. But for many years Cornwall has been suffering from high unemployment. The latest figure is that in Cornwall there is unemployment of 14·8 per cent., and one half of that is long-standing. The other half has developed in the last few years, and more especially during the period of this Government.
The local people, and in particular the county council, are doing everything within their power to attract industry; and I have had a look at the work which they are doing, and am attracted by the quantity and the quality of the work that is being done. They are also co-operating with the neighbouring county of Devon. They have set up a bureau for the purpose of attracting industry from abroad to both counties. I am also satisfied that they have received substantial aid from central Government of both parties, and especially from central Government agencies. I would pay particular tribute to the Development Commission for Rural Areas. It has built 31 small factories in Cornwall, 26 of which have been occupied. In the past few years there has been a good record in trying to mitigate the problems of Cornwall. All I can do at this stage, as unemployment becomes more and more a national problem, is to plead with the Government not to forget Cornwall, but to bear it in mind as one of the places that requires attention.
8.11 p.m.
Viscount Caldecote: My Lords, the noble Lord, Lord Jacques, made a forceful and sincere speech. I should like to put a slightly different point of view from his, but not entirely, for I very much agree on many aspects of his speech. The noble Lord, Lord Jacques, suggested that the shakeout in industry was not necessary. I would disagree entirely on that point. In my experience British manufacturing industry has been desperately overmanned for years. If we are going to increase our productivity to make ourselves competitive, as you will see later in my speech, I believe that that shakeout has been absolutely essential. The noble Lord mentioned also a company of his acquaintance which he said was paying excessive interest.

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There are two reasons for paying excessive interest. One, because rates are too high, and the other because you have too much borrowing, and I suggest that perhaps the firm of his acquaintance has borrowed too much and it was not only because the interest rates were too high. There are two sides to that question.
Unemployment is a very emotional subject because it affects people and family life. As the noble Lord, Lord Thorneycroft, said, it is not just a regional affair, it affects people all over the country. It is important to look at the issues realistically and to seek practical solutions with a clear understanding of the background of the problem. I started my life in industry building ships on the North-East Coast. I heard many terrible first-hand stories of the unemployment in the 1930s. Terrible because it was long-term unemployment, and it led to enormous personal and family hardship. I made many friends among those wonderful Geordies on the North-East Coast.
The spiritual damage came from a feeling of utter hopelessness; of no one caring; of not being wanted. The physical damage in those days was terrible too because the dole was inadequate and the housing conditions were often appalling. Today the physical hardship is not too serious because of the welfare payments that the unemployed receive, and the better living and housing conditions. It is still a problem for those who lose their jobs, but it is not the catastrophe that it was in earlier days. But the spiritual damage is still there, particularly among young people, and it remains desperately serious. It rapidly increases with the length of unemployment. I do not think there is any point in pretending that unemployment, particularly long unemployment, is not a terrible thing, to be avoided if we possibly can. But as the noble Lord, Lord Thorneycroft, reminded us, unemployment has been on a rising trend in Britain for years. It is also now a serious problem elsewhere in Europe, and particularly in Germany where it has not been a problem before.
Unfortunately, we in Britain, for reasons which other noble Lords have mentioned today and which I shall not repeat, have added to our problems in many ways and we have lost a big share of world trade that we used to have. In addition to those longer-term factors it is a fact that Government action in controlling money supply and inflation, high interest rates, and the like, has had a major short-term effect on home demand for products made in British industry. It is important to appreciate the result of this. Early in 1980 two things happened. Consumers foresaw difficult times ahead. They preferred to save rather than to use their rising incomes in consumption. The savings ratio increased over a few months by some 2½ per cent.
In many companies stocks had been high at the beginning of the year for tax reasons, and in the High Street shops saw no increase in sales and they reduced their orders on the wholesalers. So the de-stocking started. The orders on the wholesalers decreased; the orders by the wholesalers on the manufacturers decreased; the orders by the manufacturers on the raw material suppliers like BSC and ICI decreased. The whole process gathered momentum, with the resulting
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massive cutbacks in employment that we have seen, leading to a serious increase in unemployment, super-imposed on the long-term world trend to which other noble Lords have referred.
It is now a very worrying situation. But there have been benefits from all this sacrifice and hardship. Prices are rising much more slowly because of intense competition for available business. In my view—perhaps an oversimplified view—the main reason why inflation has come down is that companies, manufacturers, with rising costs have not been able to put up their prices because of the competitive position and the lack of orders.
Pay settlements in industry have come down to a much more reasonable level, and I hope that the financial sector will follow the example of manufacturing industry in that way, and the public sector too. Inflation is coming under control. Manufacturing costs are coming down. When demand increases, as I hope it will at the end of this year, our productivity will be much greater than it was before, our costs will be down, and we shall be very much more competitive, provided of course that we continue to have sensible pay settlements, as the noble Earl, Lord Gowrie, has pointed out. Then we shall be able to obtain more orders at home and in the export markets, and that is the prize that we can hope to win. Everyone in responsible positions in industry has a solemn duty to strive to win that prize, for there is no inherent merit in closures of factories or reductions in job opportunities.
So, my Lords, we must ask—and this is a fundamental question of this debate—could we have made these vitally necessary changes in attitudes, in use of resources, in improved productivity and competitiveness, without going through this dark, grim valley of unemployment? I would answer to that question emphatically "no"; we could not have achieved these necessary results without going through this period of hardship. I do, with great respect, disagree in that connection with the noble Lord, Lord Peart, who introduced this debate with such sincerity.
We must also ask the question, how much longer can industry continue under these present conditions? How much longer can we afford the loss of thousands of jobs each day? Perhaps six months? Perhaps nine months? But not longer than that. If no effective action is taken soon 1981 will be another year, or perhaps the first year, of really lower consumer demand, much less investment and, I am afraid, ultimately falling exports, which have held up amazingly well so far. If unemployment is not to rise to unacceptable levels, if long-term damage to industry is to be prevented, action must be started now to reverse the downward trend, for any action takes quite a long time to come through to effective results.
There must be no let-up on the anti-inflation policy; no U-turn there. That would cast away the results of all the sacrifices that we have endured over the past two years. That means constant pressure on lower costs through pay restraint, improving productivity, and on reducing unproductive Government expenditure. But industry needs help too—needs it desperately, from lower real prices by national monopolies; from lower interest rates; lower taxes on energy and fuel, and on employment, as other noble Lords have stressed. That

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help is urgently needed now, and I hope we shall see the beginnings of it in the Budget next week.
In addition to continuing pressures on these rather well trodden paths, we need some more fundamental initiatives if we are to get out of our present difficulties and overcome this period of stagnation and rising unemployment. I would mention two which could, I believe, be quickly effective. The first is related to investment in nationalised industries, and here I support warmly the points made by the noble Lord, Lord Taylor of Gryfe. Instead of concentrating on the difference between investment in the private and public sectors, is it not time we started to differentiate clearly between wealth-creating investment, whether in the private or public sector, and all other expenditure under Government control?
That is a distinction between wealth-creating investment wherever it is and wasteful revenue expenditure. It seems that the Treasury have a dogma that one cannot separate Government expenditure into two different kinds, capital and revenue. If we took that view in industry we should be considered criminally negligent and incompetent. I cannot see why, now that Government are deeply involved in wealth-creating industry, in the nationalised industries, the same view cannot be adopted in Government affairs.
There is a vast pool of private sector savings. In 1979 it increased by £17½ billion and in 1980 it is estimated that it will increase by a further £20 billion. We should concentrate all our efforts on encouraging a large proportion of that flow of savings into wealth-creating projects here at home. We should free the nationalised industries from all constraints on raising capital that is not guaranteed by the Government; they should be freed from all constraints on raising capital for profit-earning, wealth-creating projects. Until demand returns in the private sector, private sector companies will be short of cash flow themselves for investment, so in the meantime let us get things going again by looking at wealth-creating investment in the public sector, with the investment provided from the private sector.
There are many opportunities in the national monopoly industries—in telecommunications, transport and energy—for this sort of profitable investment. Many projects have already been fully evaluated and have been found to give a very satisfactory rate of real return. If we could move in that direction and provide that investment, it would give a great stimulus to industry very quickly right throughout the country. I have no doubt that the vast experience of the London financial market could find ways and means of doing that, if only the Government would let them off the hook and accept the principle of distinguishing between capital and revenue.
The rigid control of Government revenue and welfare capital expenditure is as essential as ever it was and, in that connection, the PSBR is still important. But, as I say, let us get away from the dogma that capital expenditure in the public sector can be damaging, but not in the private sector. Action in that way could help us to break out of the present depressing down-ward spiral of falling investment because of excessive PSBR, leading to greater Government expenditure
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related to unemployment, and less money available for investment. We could restore confidence quite quickly, consumer spending might pick up again and, with it, job opportunities. Of course there would be risks involved, but I believe there is a far greater risk involved in not taking some kind of action on those lines. Happily, I believe Government thinking is moving in that direction. I hope it will move that way a lot faster in the next few weeks.
There is another initiative by the Government which I believe would also give a valuable and quite quick stimulus to employment in the realm of small companies. I have no doubt that the Budget will make changes that will give some financial advantages to small companies. However, I urge the Government to look again, as my noble friend Lord Thorneycroft suggested, to see what might be done to remove restrictive regulations from small companies employing, say, fewer than 10 people, for instance on the conditions of employment and dismissal, for planning purposes and even in health and security.
I believe we must go as far along that road as we possibly can, and it might even be necessary to establish a new kind of small company—the unregulated private company—and it might be necessary for employees taking jobs in such a company to sign a statement to the effect that they understood they were going into a company where they would not be so well protected by all the regulations as they would be if they went into a big company. I believe many people would prefer to work under those conditions than not to have a job at all. Those are perhaps somewhat unconventional ideas, but I hope the Government will look at them on the principal that when one is in a very difficult position one should not rule out anything, however peculiar it looks to start with.
I have much sympathy with the noble Lord, Lord Balfour of Inchrye, on his point about import control. However, I fear the retaliation that might result from it. Would it not be better to make it absolutely clear to every Government department—the Customs and Excise, the people who certify products for use in this country and the like—that their first duty is to help British industry and not to play the Queensberry Rules? As I say, new initiatives are needed if the difficulties which are associated with rapid change are to be overcome. We are all aware of the immense cost of unemployment, in financial terms and in terms of human misery. Action is needed now. It is owed to those who are suffering the effects of unemployment. The vast majority of British people want something to be done as quickly as possible provided—I repeat this—that it will not lead us back along the path of inflation. The will, spirit and skills are there, but how long will they last?
I conclude with a little story which I am sure will warm the heart of the noble Baroness, Lady Fisher of Rednal, because it comes from the West Midlands. I was visiting a factory there the other day which had suffered very large redundancies and I said to one of the shop stewards, "I am afraid you have had a very rough time in the last few months", and she replied, "It is all right. We will pull through ". I thought that was rather splendid and I was proud to be associated with people who took that sort of attitude after the time they had been through. We can pull through and

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we will, but we need action this day if 1981, probably towards the end of it, is to be a year when things look up and we can look with more confidence to the future.
8.28 p.m.
Lord Underhill: My Lords, in view of the number of speakers to follow and in deference to your Lordships, I will refrain from dealing with the national issues for three reasons: first, because one cannot deal with them adequately in only a few moments; secondly, because my noble friend Lord Jacques expressed much better than I could the views which I hold; and, thirdly, because I wish to put some figures on record. I recognise that behind every figure are human beings, as other noble Lords have said. In that connection, when we talk about a shake-out, we must realise that that involves human beings. It means privation, impoverishment, disillusionment and bitterness. We must always bear that in mind and I recognise it when I say I wish to put some figures on record.
My noble friend Lady Fisher of Rednal said there was a London and South-East mentality. If there is such a thing, those who live in London and the South-East had better start to think again. This area is often regarded as the fortunate region and, as of January, the region still had the lowest percentage unemployed of any region, 6·8, the next lowest being East Anglia with 8·1.
We recognise that some regions have unemployment percentages almost twice that of London and the South-East, but unemployment in the South-East is increasing at a very rapid pace. Between October 1979 and October 1980 unemployment in the South-East, excluding Greater London, increased by 59 per cent., compared with the national average increase of 51 per cent. Because of the greatness of the population as compared with other regions London and the South-East naturally have a much higher number of unemployed. Over half a million people are now without work in the London and South-East area; that represents a fifth of the unemployment total of the United Kingdom.
In the area of Greater London alone the number of people unemployed in February was 249,000. That represents an increase of 86 per cent. since the Government came to office in May 1979, and in the 12 months of 1980 the increase was no less than 70 per cent. That is for Greater London alone. The closures and lay-offs do not give the full picture, because many employers cut staff by not filling vacancies, and naturally that has an additional serious effect on the labour market. In Greater London the number of vacancies available through employment offices, job centres and careers offices total only 16,000. Remember I said that unemployment in Greater London totalled 249,000. The number of vacancies notified through those offices involves a drop of 77 per cent., compared with the vacancies as in May, 1979. In fact throughout the whole of the South-East region the number of vacancies is only 33,000 approximately, with 500,000 unemployed.
The run down of British Leyland will obviously affect the situation and hit the South-East region in Abingdon and in Oxford. There has already been the closure of the Park Royal bus-making plant, with
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over 600 jobs gone. Another substantial closure was the Firestone tyre plant at Brentford, in West London, with 1,500 jobs lost. The very enterprising toy making works of Lesney's at Hackney suffered the loss of 800 jobs.
I shall not bore your Lordships by detailing other closures, but there is quite a list of closures or lay-offs involving concerns affecting various numbers of men and women, ranging from 250 to 2,000 in each case. Most of the area of the South-East outside Greater London has been regarded by many people—this is the South-East mentality—as one of some affluence, but unemployment is also hitting those counties. Although Berkshire, Hertfordshire, Surrey and West Sussex, for example, have only roughly half the national average of unemployed, East Sussex, Essex (which happens to be my county) and Kent each has 9 per cent. unemployed—that is only 1 per cent. below the national average. These are areas that have been assumed by most people to be affluent.
However, even those figures hide the true situation in some areas. Local areas where the unemployment rate is more than the national average of 10·2 per cent., where the rates are between 10·5 and12 per cent. include Ramsgate, where male unemployment is almost 15 per cent., Southend, Chatham, Hastings, and the Isle of Wight, which has 4,000 unemployed—a rate of 10·5 per cent. I should like to give two other examples. Male unemployment is particularly heavy in Margate, where the rate is 24 per cent., and in Sheerness, where it is 17 per cent.
Even Slough, which for very many years has been regarded as a magnet for labour, is being hit. Although unemployment there is still only 6 per cent.—I say "only" but a rate of 6 per cent. represents many tragedies—it is the worst rate there for very many years. Since November 1979 there has been short-time working by 31 firms in Slough, and another 80 firms have had redundancies involving from 12 to 240 workers. Even Milton Keynes, our latest new town, is being hit with 8 per cent. out of work.
To return to Greater London, although the overall figures are very disturbing, they conceal some very bad black spots. For instance, London Dockland has an unemployment rate of 10·6—that is above the national average. There are local areas as bad, or very much worse. I have the figures as at December 1980 for the areas covered by the local employment offices in Greater London. I shall not weary your Lordships by giving them all, but I think that I should quote a few. I shall give round figures. In Hammersmith there were 7,800 out of work, but notified vacancies totalled only 300. In Hackney—those of your Lordships who know London will know where these places are—there were 7,800 unemployed, with 250 vacancies. In Holloway the total was 7,500, with 240 vacancies. In Marylebone the unemployment total was 7,400, but there were no vacancies, and in Brixton the unemployment figure was 5,700, with 77 vacancies. One could go on and give other figures.
A noble Lord mentioned that in another place Mr. Tebbit had said that 6,000 jobs will be found in the South-East in the next two years. That would be useless—well, not useless; even one job is valuable. But in relation to the problem of 500,000 unemployed, and hearing in mind some of the figures that I have

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mentioned, it is pathetic. It has been said that many firms in London have found problems in recruiting and retraining the right type of labour. Yet I understand that three skill centres, at Enfield, Kidbrooke, and Poplar are to close. I should like the noble Earl to confirm whether that is so. If it is so, I hope he will say whether the Government will reconsider the matter, since in view of the substantial number of unemployed such closures are the last thing that should be done at this time.
Many noble Lords will have noted reference to the Youthaid Group report, which stated that,
"there is a disproportionate burden of unemployment which is being carried by young blacks. This is recognised as a major injustice and a serious social problem".
Many of the areas in London with the highest numbers out of work—and they include some of the areas to which I have referred, with heavy unemployment, and hardly any vacancies—have a high proportion of youth unemployment, in particular among the ethnic minorities. I think most noble Lords will appreciate that that situation presents grave dangers. Therefore, I am pleased to note that the Home Secretary is to carry out an inquiry which may have some effect on this serious problem, which could involve very great dangers for race relations in particular areas of Greater London. As one moves about, particularly in Greater London, one sees throughout the area property after property of small and medium-size firms up for sale or to let. I see different examples of such properties each day as I travel to and from your Lordships' House.
I recount all those details—I recognise that there must be policies to deal with them—in order to place on record the fact that this area of comparative affluence is at the moment being affected by unemployment possibly more quickly than most other regions. Unemployment in the area is rapidly worsening. I mention these facts so as to emphasise the need for policies to be taken—policies which may have to be very drastic—in order to deal with the situation.
I do not believe that one can assume, as some individuals do, that at some time the recession will pass over. In view of the time, all I would say on this issue, is that sometimes a prod must be given in order to move a recession. Despite what people say about Keynesian policies being out-of-date, there needs to be created a demand, because nobody will produce goods unless there is a demand for them. I hope that the Government will take into consideration very seriously the suggestion which has been made by noble Lords in all parts of the House, that the Government ought seriously to consider the policy of public borrowing in order to get investment in constructive jobs, which will provide the necessary machinery by which private enterprise can make the goods—and so the thing goes round. I believe that unless we give that sort of prod we shall not get out of this recession as quickly as we ought.
8.40 p.m.
Lord Hampton: My Lords, following that powerful speech by the noble Lord, Lord Underhill, perhaps I might briefly once again draw the attention of the House to the critical unemployment situation in Northern Ireland consequent upon what the noble
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Lord, Lord Blease, said earlier in the debate from his personal experience. The noble Lord, Lord Blease, referred to "horrific figures" of unemployment. Perhaps the figures I give may differ slightly at times, but we are in general agreement. The noble Viscount, Lord Watkinson, referred to the almost desperate position in Northern Ireland, and my noble friend Lord Evans quoted the special problem of Northern Ireland with his caution about playing the numbers game. I shall attempt not to over-play it.
Your Lordships may perhaps have seen an article in the Economist of 10th January this year which had the brilliantly succinct heading, "Guaranteed Depression". It commented that a sense of perspective is returning in the Province, and that people are now more worried about the state of the economy than about the protests in the Maze Prison. Yesterday we heard about fresh troubles at the Maze, but our primary concern today is with unemployment rather than terrorism.
In his vivid television series Robert Kee made the point that Ulster has always been an economically disadvantaged part of the United Kingdom, but that its rulers sought,
"to appease the discontent of its Protestant supporters by indulging them with a sense of privilege, where jobs and housing were concerned, over the Catholic minority".
He looked back, of course, to the devastating depression of the 'thirties and pointed significantly to the unemployment of today. At both times the situation in Ulster was, or is, worse than in the rest of the United Kingdom. Ulster's unemployment rate remains the highest at around 21 per cent., with some of the poorest (largely Catholic) areas up to almost 50 per cent. One in five of the potential working population is therefore unemployed, and this is at least twice the average for the United Kingdom.
On top of this the problem must be seen in its political context. Perhaps the most disturbing of the available statistics is that of the number of young people unemployed; and the noble Earl the Minister showed that he was well aware of the general problem of the young, as did my noble friends Lady Seear and Lord Evans of Claughton, and many others. A trade union report says that 14,865 out of 99,849 unemployed are under 19 years of age, and are particularly vulnerable in Northern Ireland to the influence of paramilitary groups.
It is probably agreed on all sides that the problem is critical, but the Government insist that Northern Ireland gets special treatment in higher public expenditure per head than in any other region. I submit that this is true only in recent years, and that the increase partly redresses the balance of neglect in the past. The largest single item in public expenditure is social security, and this spending does no more than seek to ensure that wages are up to the official poverty line, and spending here is bound to be considerable. A major additional burden—10 per cent. of public funds—is also drained off to the maintenance of law and order, compared with 4 per cent. in the United Kingdom as a whole.
Therefore, I also submit that in spite of the special problem in Northern Ireland the Province has not in fact received special or favourable treatment in the matter of public expenditure. At the time of the Chancellor of the Exchequer's visit to the Province

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the Northern Ireland Office announced the loss of 2,000 more Civil Service jobs, and the threats of further cuts. It is sad, indeed tragic, that at a time when greater co-operation with the Republic of Ireland might be so valuable, the honourable gentleman, Mr. Ian Paisley, the Member in the other place for Antrim North, sees fit to attack any such move out of hand. I humbly submit that he could be better occupied than in organising amateur theatricals in inconvenient places.
To return to the problem of the young unemployed, I quote from a booklet produced by the Fair Employment Agency for Northern Ireland in February 1981. This is called Into Work? (with a question mark)—Young School-leavers and the Structure of Opportunity in Belfast. It emphasises that a number of schemes have been put forward to train school-leavers and provide some basic skills. So far so good, but two cautions are mentioned. Firstly:
"It should be noted however that these schemes rarely provide permanent "—
that is my emphasis, my Lords, on the word "permanent"—
"jobs with secure futures";
and the difficulty of getting permanent jobs has been referred to by the noble Earl, once again, and by the right reverend Prelate the Bishop of Liverpool in his admirable maiden speech.
Secondly, the report (and another on Londonderry) emphasises the sad results of religious/sectarian discrimination whereby Catholic boys and girls throughout the Province find it harder to get jobs than their Protestant counterparts. It is also claimed that a significant portion of the young people who have been born and educated in Northern Ireland are today leaving the country, but without the safety valve of more or less certain jobs in Great Britain, as is more normally the case.
My Lords, I would end by paying tribute to LEDU, the local enterprise development unit. This organisation seeks, as its name suggests, to give modest support to local initiative. In February, for instance, it helped to launch a manufacturing co-operative in the Shankill Road area to produce
"a range of high quality children's clothing and other garments".
A report referred to this as
"a fascinating blend of grass-roots initiative and enthusiasm backed by the finance and expertise of LEDU and a local bank".
That is admirable, but on such a small, small scale—less than two dozen employed, I understand. Can the Government not give encouragement on a larger scale to the hard-pressed Province? I shall listen with great interest to anything further the noble Earl can say when he comes to reply.
8.47 p.m.
Lord Brooks of Tremorfa: My Lords, your Lordships will be pleased to learn that after a very long day I intend to comply with the request of my noble friend the Leader of the official Opposition and to make my comments as brief as I possibly can. It is almost exactly a year since I initiated a debate in this Chamber on the social and economic situation in Wales, and asked the Government what policies they were pursuing to
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alleviate the problems facing the people of Wales. Unfortunately, although the Government listened—and, indeed, today the noble Earl, Lord Gowrie, again said that the Government were listening—they do not seem to hear what is being said. The noble Viscount, Lord Trenchard, replying to my debate of a year ago, said for the Government of that day:
"I hope I have indicated, first, that the constraints on this Government are very real; secondly, that I believe other policies … have failed, and I would ask your Lordships to give our present ones the backing they deserve".—[Official Report; 20/2/80; col. 887.]
My Lords, the plain truth is that the economic position in Wales and other regions is a great deal worse now than it was a year ago. The Government have not shown that they deserve backing for their policies with regard to unemployment in Wales. Indeed, very recently a Government Minister said that even when the present policies have worked through there will be areas of Britain which will have to go by the wayside. Statements like that strike a chill in the hearts of all of us who come from those areas suffering in a way that we have not known for over 40 years.
The Prime Minister said in her now notorious speech in Swansea:
"If the unemployed of Wales cannot find work they should move".
She will never be allowed to forget that heartless and ignorant comment. Indeed, her observation demonstrated quite clearly that the Government do not believe that the policies being pursued can cure our problems. Her attitude offers only despair. The Secretary of State for Industry visited the North of England early last year and was reported as saying to a group of people anxious about employment, "It is up to you". As I said in my speech in February, 1980, this had echoes of the 'thirties, when Walter Runciman said to the people of Jarrow, "Your destiny is in your own hands". No wonder that more and more people are saying that the Conservative Party is the party of unemployment.
At the core of the Government's financial and economic policies is the insistence on reductions in public expenditure. The results of cuts in the public sector are having a devastating effect on Wales, Scotland and many regions in England. The Government's reliance on new private sector investment should be tested against the realisation that in Wales there is hardly any dynamic private sector which is not dependent in some way or other on Government subsidy. We calculate that up to 66 per cent. of all employment is either directly or very strongly underpinned by public expenditure. If one takes Government, local and national, the public utilities and the nationalised industries, there is almost nowhere else in Wales to look for work. We are almost entirely dependent on the public sector and we are being hurt much more than other areas of Britain as a result of the Government's policies. This blunt instrument of public expenditure cuts which the Government are pleased to call an economic policy is having a savagely disproportionate effect on the people of Wales.
As a measure of what is needed in South Wales alone, the Standing Conference on Regional Policy in South Wales (a conference made up of Gwent and the three Glamorgans) has estimated that some £300 million

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of public spending will be needed or £200 million net of regional aid expenditure over a five-year period to provide 20,000 new jobs in manufacturing industry in South Wales alone. This compares with £48 million over two years which has been offered by the Government—£48 million is the response of the Government to assist Wales which, together with the Northern region of England, is suffering the highest unemployment of any area in mainland Britain. We have at the moment over 140,000 unemployed, and about 100,000 on short time or special schemes. Many areas are suffering chronic unemployment; areas in Clwyd with a rate nearing 20 per cent. and up to 35 per cent. in parts of Flint. The Government are presiding over the disappearance of jobs at the rate of 1,000 a week, 200 every working day. If we look at the figures, county by county, for 1979 and 1980, we can see why we reply with a loud "No" to the Government's plea for support for their policies. The figures of jobs lost are: South Glamorgan, 1979, 3,842, 1980, 6,760: Mid-Glamorgan, 1979, 5,841; 1980, 11,231: West Glamorgan, 1979, 2,472; 1980, 15,550: Gwent, 1979, 4,760; 1980, 10,969: Dyfyd, 1979, 2,979; 1980, 6,849: Powys, 1979, 108; 1980, 552: Gwynedd, 1979, 2,574; 1980, 4,790 and, finally, Clwyd, 1979, 8,546; 1980, 7,712. That is the catalogue of misery that we have suffered over the past 12 months in particular.
May I at this point apologise to the noble Earl, Lord Gowrie, that I shall not be able to be present for his winding-up speech. To continue, there is a very serious problem at the moment in the Llanelly area. Your Lordships will know that recently there has been a NEDC report on energy costs in British industry. I see that the Guardian reported yesterday that the Government are likely to give the steel industry more favourable electricity tariffs. While I do not expect the Minister to reply in his winding-up speech, I should be grateful if he could give an indication of whether, even at this late hour, it will be possible to help the Dupont plant in Llanelly. This plant is known as one of the most efficient steel plants in Europe. The proposed closure has been caused partly by high energy costs. The factory uses two electric are furnaces and the energy costs are higher than the wages costs and 30 per cent. higher than Dupont's competitors on the Continent and elsewhere. The closure will increase unemployment in the Llanelly area from 15 per cent. to 20 per cent.
I repeat my plea to the noble Earl and hope that the Government will take a closer look at this so that even now that closure might be averted. The position is worsening almost daily. We call upon the Government to put dogma aside, to recognise that a 19th century knee-jerking response of the Prime Minister to the economic problems of the regions can only widen the gap between the "haves" and the "have nots" and convince yet another generation that the Conservative Party is truly the party of unemployment.
8.57 p.m.
Viscount Rochdale: My Lords, the noble Lord, Lord Brooks, will forgive me if I do not follow him in the details that he gave. This has been a most important, interesting and fascinating debate and one
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feels a degree of responsibility in daring to make a contribution towards it. The noble Lord, Lord Peart, who for many years was the Member for Workington, the constituency in which I live, is always very much respected in this House and I think we owe him a great debt of gratitude for introducing this debate and giving us the opportunity to discuss the many difficult problems which arise out of the vexed subject of unemployment. It is a complex issue which, in my view, can be brought under control and the levels reduced only by very careful and continuing analysis of the causes.
We have heard a great deal about that this afternoon. But it is also an issue with a very great human impact, demanding considerable and compassionate understanding—and that is something which, I have noticed in the past, political parties have not always readily accorded to the motives of their opposite numbers. It has been a matter of great encouragement today to feel that that sense was entirely absent and that we were discussing the matter together on all sides to see how best the problem could be overcome. In my view—and I am encouraged in this by what other noble Lords have said—unemployment in this country, though we may have our special problems, is a world-wide issue and something that should cut right across party political boundaries.
There are, I would suggest, certain reasons for the high level of unemployment from which we are suffering today. It is to no little extent the result of the underlying and very disabling trends that have been developing insidiously, in this country over a great number of years to which Governments of both colours, and indeed all of us as individuals, have probably made our contributions—no doubt often with the very best intentions—but which have weakened our abilities to withstand the pressures of storms such as we are up against today.
May I give two very quick examples of what I first have in mind? I started in the textile industry in the North-West. In the 1920s I have no doubt that the industry felt that it was so secure that it could export those industries to the more backward countries, the Indian sub-continent and so on. It was not so very many years after that when the textile industries of the North-West realised what tremendous competition they were up against from those countries. That was the beginning of the withdrawal of those industries. Again, after the Second World War, we gave great assistance in the building of steel plants and shipyards overseas. Today the effect of that has been tremendous world over-capacity and enormous competition, to our serious disadvantage.
There are many other reasons that one could give that have had this debilitating effect on industry today. There is the effect of changing fashions—and I am not talking merely of textiles but of all sorts of industries—to which we have too often been rather slow to react. There has been, I believe—but I hope no longer persists—a hesitancy on both sides of industry to adjust to the latest available technology, with the result that the way has been left open for our competitors.
Perhaps also the dominant industrial position we held in the past encouraged us in the very natural human way to look for an easier, more comfortable life, providing a less exacting way of working and living,

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over-manning, higher standards of living and more leisure. One could go on suggesting all sorts of issues that have had the effect, whether from the point of view of management, trade unions or individuals, of reducing human endeavour and slowing down to a level at which we could all too easily be hardly secure enough to resist the stormy world in which we live today.
I am not for one moment suggesting that that is true of all industry. There are shining examples today of some very, very good and successful industries: telecommunications, electronics, aerospace and pharmaceuticals. One could quote a very great number of good ones. But it seems to me that the overall effect of these underlying trends has led us to our Achilles' heel of inflation. When we are up against world recession, our present experience is one that can hardly be a surprise to us, and a very difficult one when we also remember that we are today having to deal with the largest male labour force that we have ever had to provide for.
I am therefore quite certain that the present Government are right in making inflation their primary target; but it is all too obvious that, when it becomes necessary to stop the slide of decades in the matter of a few years, it becomes extremely painful. 1 heard the other day—I do not remember whether on radio or television—an analogy which seemed to fit the case absolutely. It was the case of a gentleman who had been to his dentist and had had an extremely painful sitting. The dentist said to him: "You can't possibly complain considering the years that you have eaten so many sweets and chocolates". That to me really describes one of the underlying problems that we are up against today. We have allowed ourselves to drift comfortably down, perhaps unknowingly—
Lord Brooks of Tremorfa: My Lords, I wonder whether the noble Viscount would give way on that point. Would not a better analogy be the story of the man who kept batting his head up against a wall because it was so wonderful when he stopped doing it?
Viscount Rochdale: My Lords, no. I do not agree with the noble Lord. I believe that my analogy is the right one because we have, however unconsciously, allowed ourselves the comfortable way of life. It has been the "We've never had it so good" idea that has resulted in our difficulty and our lack of productivity.
The enormous variations of unemployment in the regions have been mentioned, and noble Lords have referred to particular regions in which they are interested. I recently came across three figures which were published by the Manpower Services Commission in November of last year. I believe they are still reasonably up to date and they indicate this very difficult problem of variation. For every one vacancy there are 41 unemployed in Northern Ireland; in the North-West the figure is 12; in the South-East, it is two. Those figures for the South-East may not, from what the noble Lord, Lord Underhill, said, be quite right today. The figures relate to three months ago. However, those very wide variations show what a difficulty we have there. The North-West (the region I know most about) is third in the list with a figure of 12. One can see that that is largely a result of the region's historical
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concentration on traditional industries such as engineering and its allied industries, and textiles and its allied industries. Today those groups of industries account for the bulk of the job losses. However, it is significant that in this region, with all its tradition of manufacturing industry over the years, employment in services is the dominant source, with 56 per cent. of employment.
So what should we do? Mention has been made of the importance of lowering the MLR. We hope that will come soon, as it may. Also perhaps there might be a further drop in the value of the pound. An easing of the recession will come and that will help; but, for the various historic reasons that I have tried very briefly to hint at, I take the view that we cannot see a full return to the same pattern of employment as we have known in the past. It will be a different pattern, and we must prepare for that. It is a pattern which will need more of the new and more sophisticated industries based on ever-developing technology. Some of these industries may not yet have been dreamed of, but some are there now and more will come.
The problem therefore must be, as I see it; what do we do with the immediate intervening problem? What must be sought is the correct balance between giving aid to the worst stricken areas in the short term without making matters very difficult for the most important new industries—developments of far greater importance to our long-term industry and prosperity in the future. I do not believe that an overall judgment on this is possible. Each case has to be considered on its merits, but my inclination is to feel that in the past we have been all too obsessed with the immediate problems and needs—this is probably true of both political parties—sometimes in aid of political advantage, so that we have lost sight of the future.
I should be personally apprehensive about a more restrictive import policy, except in very special cases. On the other hand, unfair competition—and here I have in mind fuel prices and dumping—must be pursued as hard as we can. I know only too well how difficult it is in the case of dumping actually to bring anything to book. It is a most difficult thing, but whatever can be done I should prefer to see done within the context of the European Community.
More general restrictions on imports could too easily encourage—and I am sorry that my noble friend Lord Balfour referred to the question—retaliation. I do not quite agree with him there. I still think that more general restriction on imports could lead to retaliation in respect of those new industries which we must develop if we are to have future prosperity at all. It is for those industries that we must prepare our younger people—and I use that word in preference to "juvenile"—because they will be the people who can man these new industries. We want to prepare them for it now.
For that reason I applaud the Government for what they are already doing and are planning to do through the Manpower Services Commission. But I want more of that: I want the work they are doing for young people to be extended perhaps for longer periods. Here is a field in which I suggest we should spare nothing, not only from the point of view of compassion for these young people who are out of work, which is very important, but equally as an investment for the

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future by means of education, by training for skills, both manual and otherwise, and by encouragement to acquire the right enthusiastic attitude to work and, if possible—and reference to this has already been made today—with the active help of industries, giving practical experience to many of these young people through one or other of the Government schemes. Here is a field—the helping, training and preparing of young employees—which would give the greatest scope for imagination. It brooks no cuts—that is, no U-turns. Indeed, we want the very reverse. We want more of it. I very much hope, in pressing Her Majesty's Government on this, that, when my noble friend comes to reply, he will be able to assure me that I am pushing at an open door.
9.14 p.m.
Lord Kaldor: My Lords, I very much agree with the noble Viscount, Lord Rochdale, that this has been a most remarkable debate. It is remarkable chiefly in the extent to which there is a recognition now, on all sides of the House, of the magnitude of the disaster that has befallen this country. Even so, it is important to underline the position a little more by putting it in a historical context.
The devastation created by the rapidity with which economic conditions worsened, particularly from the middle of last year, has no parallel at all in British history. There was no period in either the 19th century or the 20th century which was anywhere near as bad. The worst year, during the so-called Great Depression of the 19th century, was between 1878 and 1879, which recorded a fall in manufacturing output of 5½ per cent. The worst that happened during the great world depression after 1929 was between 1930 and 1931, which recorded a fall in manufacturing output of 6·9 per cent. As against that, the reduction from 1979 to 1980, year on year, was 10 per cent.
Just to show how the position rapidly worsened, if your Lordships take the last quarter of 1980, as against the last quarter of 1979, the fall in manufacturing output was 13½ per cent., and in the 12 months December to December it was 15 per cent. We do not yet know the figure for January to January, but I should not be surprised if it was even worse. Nothing like this has happened before and it was not an act of God nor of the King's enemies.
It was not inevitable. Despite the frequent protestations of some groups of Ministers, that this is the necessary price which one has to pay for squeezing inflation out of the economy as part of the counter-inflationary strategy, I do not believe for one minute that they foresaw that this would happen, nor do I believe that they would have gone about it in this way if they had suspected that this would happen. I think that Ministers were taken as much by surprise as industry and everyone else.
The noble Earl, with his consummate skill, gave an admirable speech earlier this afternoon and made the best case he could for the Government's policies. But I am afraid that his best was not good enough, because if one analyses what he said it does not stand up to examination. The first thesis was the 2,000 per cent. increase in oil prices; OPEC and the ensuing world recession was the cause. There is no reason
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why we should suffer from this in the same way as countries which have no oil and have to import it. They have a deterioration in the terms of trade. We are on the gaining end of this change and not on the losing end.
Secondly, it is no good referring to the world depression when no other country has a depression which is anything like it. The EEC published figures just a few days ago, from which it appears that, whereas in the 12 months ending in January 1981 unemployment increased by 3·9 per cent. in Italy, by 13 per cent. in France, and by 26 per cent. in West Germany, it increased by no less than 65 per cent. in the United Kingdom. So that this tremendous acceleration of economic contraction and recession has no parallel anywhere and, as I say, there was no need for us to have it because we were not compelled by a deterioration of the terms of trade. We were not compelled by the need to have to tighten our belts in order to be able to procure oil or anything of that kind.
Moreover, this time there is a smell of the decomposition of the body economic, which was wholly absent in the case of the earlier recessions to which I have referred. The noble Lord, Lord Balfour, referred very aptly to battlefields. He could have added that already there are scavengers around, like those so vividly described by Victor Hugo in Les Misérables who followed after the Battle of Waterloo. Scavengers make money by picking up worthwhile pieces of machinery and equipment and shipping them abroad. Almost every day we hear of factories being dismantled and their contents and machinery being shipped in crates to America. At the same time the scavengers are after living bodies, not just material objects. Our designers, engineers and skilled workers are all being tempted to emigrate abroad where they can get better jobs and better pay.
I want to set this against the picture which the noble Earl tried to present us with: that we are in the middle of a creative transformation, of a great industrial revolution by which we lose our older industries which we are no longer fit to have and instead have new, high technology, high wage, dynamic industries. I do not know where these new, high technology, high wage, dynamic industries are. When I look at countries which have these dynamic industries, countries like Japan which certainly has more of them than anybody else, or America, with Silicon Valley and all that, I see that they do not have to lose their older industries. They do not have to lose their steel industry, their engineering industry, or their shipbuilding industry. It simply is not true that industrial change implies any of these things.
It is the height of irony that our Ministers, who are supposed to be such great advocates of what they call "supply side economics", should do so much to reduce not just demand but also Britain's capacity to produce for the sake of phoney and ill-conceived financial economies. On the one side we hear blood-curdling reports of Russia's aggressive intentions here, there, everywhere; in the Middle East, in Europe and in South America and of our determination to resist her everywhere as though we were still a world imperial power with a great industrial base. Yet at the same time we do everything we can to reduce our capacity to do anything of the kind.

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Unlike any other industrial country in the world, we literally halved our steel producing capacity from 28 million to 14 million tons. At 28 million tons it was considered to be grossly inadequate for our long-term needs—witness the Heath Government's plan which wanted to raise production by 1985 to 36 million tons. Then there is the overhanging threat of the total liquidation of the steel industry if they cannot stop making losses. In one watertight compartment of his mind Sir Keith Joseph is thinking of the advancing Russian hordes and how to resist them, but in another watertight compartment of his mind his only concern is how to get rid of the steel industry which is a luxury which the British taxpayer can no longer afford. The thought that while we may have the most wonderful modern nuclear deterrent we shall no longer be able to make our own bayonets seems to have escaped him.
Unquestionably, the most important single cause of our present plight has been the growing over-valuation of the pound. I want to make it quite clear that I hold the previous Chancellor and the previous Government, not the present Government, responsible for that. It started in October 1977 when the pound was set free for the sake of—what? For the sake of averting a completely imaginary danger that the inflow of foreign money would cause inflation. Unlike with the present Government, where money supply, and M3, is growing at 20 to 25 per cent. a year, the money supply throughout 1977 rose by only 10 per cent. while foreign money came into the country; in other words, it could all easily be sterilised by the borrowings of the exchange equalisation fund.
Nevertheless, the Government thought that they must set the pound free as it conflicted with their monetary target. That started a process as a result of which the pound is now over-valued in relation to what it was in 1977, according to the estimates of the International Monetary Fund and of the OECD, by 55 to 60 per cent. Our relative manufacturing costs in relation to the others have risen by that amount and it would need a reduction in the exchange rate of at least 33 per cent. to bring us back to where we were in 1977, before we set the pound free.
I do not think there is any technical problem in bringing down the exchange rate. Indeed, the process may have begun already in the expectation that the Budget may bring lower interest rates. The danger, as I see it, is the other way round; that once international speculators realise that the pound is on a downward trend (as happened in 1976) there will be a tremendous bear speculation which, once it really gets going is like an avalanche and will be almost impossible to hold; and in the absence of exchange control, there is nothing to limit the sterling outflow. Even if that did not happen, even if we could bring the process to a halt at the right point, so to speak—not over-shoot it—even then it has serious domestic inflationary consequences. A 33 per cent. increase in import prices would imply a 10 per cent. rise in final costs, even before taking into account any consequential increase in wages; that is, consequential on the rising prices.
For these reasons I am convinced that, while we should never have allowed ourselves to get into this position—this was a fatal mistake; even more fatal than the famous return to the gold standard in 1925,
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which only caused a 10 per cent. over-valuation, and not a 50 per cent. over-valuation—now that we are in it, exchange depreciation is not the way to get out of it. It is not a viable solution because it is too dangerous. It is clear that whatever we do we must stimulate demand. In that sense, recovery and reflation are inseparable and the day somebody manages to make the Prime Minister understand that that is so and that it is no good railing against it and saying "I will not have reflation under any circumstances"—if you do not have any reflation you will not have any recovery and if you do not have any recovery you go down the drain. You cannot stand still.
The Earl of Gowrie: My Lords, did the noble Lord try to persuade the previous Prime Minister of the same point?
Lord Kaldor: Well—
Noble Lords: Answer!
Lord Kaldor: The previous Prime Minister would never have said that he was against reflation. I do not think for a moment that he would have said that, but I agree that the previous Chancellor of the Exchequer, who was my chief at one stage, fell a victim to seductive influences coming from Thread-needle Street, and was persuaded to decap the pound. There is no doubt about that and that is the source of a lot of present evil.
So, whatever we might do, we cannot avoid reflation, but it is important that the fiscal stimuli should be administered in ways that will improve our international competitiveness and reduce the rate of inflation, and therefore I am very much in agreement with what the noble Baroness, Lady Seear, said in the course of this debate; we should apply the fiscal stimula so as to reduce our costs and not to increase demand. The best method of doing it is by employment subsidies, as REP used to be. As the person who was responsible for inflicting both SET and REP on this country, I felt some gratification when I heard noble Lords on the other side mention REP with approval; one noble Lord said it was a pity that it was ever withdrawn.
I have no confidence in schemes which relate to additional employment only, because they are not very effective, but I cannot go into that now. But across-the-board subsidies which subsidise all employment are a different matter. They are the same as devaluation. A 10 per cent. subsidy on wages is the same thing as a 10 per cent. devaluation. REP was abolished in 1976 because both the ECC and the IMF wished that we should do so, and we were happy to oblige. By that time, however, its value had become so much eroded through inflation that it did not seem to matter all that much.
I agree that a beginning ought to be made by abolishing employers' social insurance contribution and surcharge, which together take at least 10 per cent. of payrolls, and that would be the equivalent of a 10 per cent. devaluation. If we confined it to the sectors which are exposed to international competition, which are largely manufacturing and tourism, it would cost some £4 billion if given at a flat rate throughout the country. If you do it at a differential rate according

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to the local level of employment it might cost less, but its effectiveness on our international competitiveness would also be less. I would recommend giving it at a flat rate throughout the country, a 10 per cent. basic reduction applying to the whole of manufacturing industry, which you obtain merely by removing that employers' contribution and surcharge, and spending another £4 billion in regionally differentiating supplements.
Even these two measures would only carry us two-thirds of the way towards restoring competitiveness. That is why I feel we cannot rely on saving this country's economy by any one type of measure alone. Noble Lords may know my views. I think it is inevitable that we should have import controls if the question is one of saving vital industries. It would be absolute madness on our part to let the motor-car industry go the same way as the motor-cycle industry has gone simply because we say, "We are not as good as the Japanese. Why should we have motor-cars? The Japanese are better at this." Well, to hell with it; the Japanese may be very much better, but we would be very much worse off as a nation if we did not produce motor-cars, because we would not have the money to import them and we would not be able to give employment. When it comes to saving the motor-car industry, I listened to the speech of Sir Michael Edwardes only a week ago, and he regards it as quite inevitable that imports should be controlled if this industry is to be saved.
I think it is essential—and I was very glad to hear that the noble Lord, Lord Balfour, shares my view—that we should have import controls. The introduction of import duties in 1932 induced the one period of rapid economic growth in the last 100 years. In the five years between 1932 and 1937 our industrial output increased by 50 per cent. One should remember that. I agree entirely with those noble Lords who said that the dangers of retaliation and so on are very much exaggerated. The only countries which could retaliate are those which sell far more to us than we sell to them, so they would not want to cut off their nose to spite their face. Third world countries or the OPEC countries will not retaliate just because we limit the imports of German, French or Japanese goods.
The question which is no doubt on the minds of noble Lords—and 1 am about to finish—is, where would the money come from? I mentioned £8 billion to begin with in order to turn the economy round. The answer which I can give, without hesitation, is that it will be covered out of additional revenue and reduced expenditure due to increased production and lower unemployment. Indeed, £8 billion spent on employment subsidies would increase final demand net of duplication by some £16 billion or, say, 6 to 7 per cent. of the GDP at current market prices. With unemployment at 10 per cent.—indeed more, for reasons that we heard this afternoon—and industrial excess capacity of about 25 to 40 per cent. according to business surveys, a 6 to 7 per cent. increase in output (and output would certainly increase faster than employment) at least £6 billion, or 75 per cent., of total additional expenditure would be covered by increased tax receipts and lower public expenditure. In other words, if we spent £8 billion on additional subsidies, £6 billion would
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be financed by the consequential reduction in the PSBR due to those two factors. That would leave us with only £2 billion—25 per cent.—which could easily be covered by savings due to higher corporate profits and higher personal savings due to higher incomes.
Sooner or later a policy along these lines must be adopted if we are to reverse our cumulative economic decline. I know of no other policy that is capable of reversing it. It is nonsense to think that we can reverse these present trends without a big reflation. There are no obstacles in the way of its adoption—only false dogma and political prejudice.
9.38 p.m.
Lord Mottistone: My Lords, I hope that the noble Lord, Lord Kaldor, will forgive me if I do not follow him precisely. I wish to try to restrict my remarks to one particular subject to which I shall come in a minute. In any case I am sure that my noble friend the Minister of State, if he has not done so already, will be able to answer very satisfactorily the points that have been made by the noble Lord, Lord Kaldor.
I must say that the noble Lord, Lord Kaldor, and the noble Lord, Lord Jacques, reminded me very much of the time five years ago, when we were sitting on those Benches and what fun it was when we were attacking the then Government, who were struggling madly to control unemployment and put the country to rights with their then programme. I must confess that although we on this side are perhaps not as expert as all that, by God! we do not really seem to have done very much worse than noble Lords opposite did when they had the chance.
I must apologise to the noble Lord, Lord Peart, who I thank greatly for initiating this debate, for I have very much enjoyed what I have heard, and I must also apologise to several other opening speakers for not having been present at the beginning of the debate because of other unavoidable commitments. I am particularly sad not to have heard the right reverend Prelate's maiden speech which seems to have been a particularly splendid one. I shall look forward to reading it tomorrow.
I wish to raise one subject. I have narrowed my speech down to one subject partly because other people have said practically everything that has to be said, and partly because I hope that I shall not detain your Lordships for too long. I believe—and this point was raised by both my noble friend Lord Rochdale and the noble Lord, Lord Underhill—that one of the most tragic aspects of unemployment is its effect on youth. I shall not dwell too much on the ethnic minorities, although they are a real problem. I wish to deal with youth as a whole, because it seems to me that they suffer doubly: some of them will not only suffer the debilitating effect of being unemployed, but they may well have never yet worked.
Although it is jolly tough for the man and his wife with two or three children—and they are a different problem—at least they have probably worked on the way. Furthermore, it seems to me that youth are not just a temporary problem: they are a problem that will be with us more rather than less in the future, for two reasons. One is the changing pattern of the workforce's activities altogether, and the other is—and I am not being critical in this respect—the gradual narrowing

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of the gap in wages between the brand new young chap fresh out of school and the experienced man in his twenties. Therefore, it means that companies which would be prepared to take on the young people, now do not see any particular advantage in doing so. They say: "Why not have a young experienced chap if you can get him for roughly the same price?" Therefore, I think that youth will be a problem all the time.
I have an idea which I should like to float towards my noble friend the Minister of State which he may like to consider for the future. Here I take a point made by the noble Earl, Lord Halsbury, when he said "We are in a terrible position, but for god's sake let us plan for the future". If we cannot pay for what I am about to suggest in the immediate future—in any case, it will require a bit of planning—for heaven's sake let us get on with it, so that it can be put into effect as soon as possible.
Three reasons brought me to this particular conclusion. There is a fourth which is contained in some remarks which were made by the Duke of Edinburgh last week at a special conference organised by the industrial training boards. But this idea has been germinating in my mind and I shall explain very quickly just why.
The first point is that your Lordships will know that since, I believe, 1912 the Germans have had compulsory further education for all youth. The noble Baroness, Lady Seear, will correct me ill am wrong. Therefore, there is a precedent. The second background thought is that I shall never forget the young man in his thirties who was a manager of a company for which I then worked, who desperately wanted to do the diploma in management studies. I said, "Why do you want to do it and why do you think this will be a problem?" He said, "Oh, well, when I left school I was mad keen on football and so not only did I go straight into that, but I did not even work at school for the last couple of years because I was just playing football". He then said—although he did not put it in quite these words—"Now I have seen the error of my ways. I am too old to play football and I have become a manager in this company, but I want to improve myself ".
So with the very good assistance of Aston University in Birmingham, which ran a very good DMS course at the time, we made a special effort to allow this chap to have off one day a week to do the DMS course. The prospect was to spread it over five years. It was a terrible programme for him. However, the important point is that he failed. He could not make it; he just did not have what it took. He had not learned enough in the past, and from his point of view he could not attend the course full-time because he had a wife and family to support, and he would not have received any grant for that particular course. Therefore, that is the second point I want to make.
The third one is our own example of Government support for people who have the necessary A-levels to go to university or polytechnic to read for a degree as a mature student, for up to three years, paid for by the state. We do this already. That applies to those
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people who have the necessary qualifications for a degree course. My idea is that this should be extended to everyone, and I would suggest that everyone should be allowed to take a two-year course—for otherwise I think it might be a little out of proportion (I will tell noble Lords why I have selected two years in a minute)—for a mixture of public service, as was mentioned by my noble friend Lord Watkinson in his speech and, indeed, as was also mentioned by the noble Earl, Lord Halsbury, education and training. I am not going to dwell on the mix and content, and all that kind of thing, partly because of the time, and in any case it is a difficult problem. That would need to be carefully studied. Nor am I going to talk about who runs it, but I hope to heaven it would not be the Manpower Services Commission. We need something much more flexible and less narrow than that.
The concept is to have this two year course which is a combination of public service and education. People would take it whenever they wanted to in their lives, just in the same way that you can as a mature student. Some people feel they need it when they are young, and others do not get around to it until they are in their 30s. I estimate that you would need between 750,000 and 1 million places in any one year. This would free the jobs that are needed by the young people or, when times are hard, perhaps we would find the young people taking up this advantage at an earlier age rather than a later one.
It should be possible to manage it on a general principal. If the Government say that they cannot afford it, then perhaps they cannot without getting ready for it. But they did afford that sort of period of two years when we had National Service immediately after the war. That is exactly what they were paying for. The chaps were educated, admittedly to be good sailors, or soldiers, or whatever, and they did their service for the country. I say, let us reintroduce this on a different basis with a different end product. The training and education could be towards equipping them for the tasks which are needed by the country, which companies will not train them for, because companies train them for the tasks for which they need them. To a certain extent this would get over a lot of other problems as well.
All I seek to do is to put the idea in the mind of my noble friend the Minister of State. I do not expect him to answer this, except perhaps to say that he will pay good attention to it. At this stage I do not want to waste the time of your Lordships any more. But I should like to leave it as a thought, as a way through that would solve the problems of the young, and have, in the words of the noble Earl, Lord Halsbury, a dramatic effect on what might, even when the country has been put right—either in a proper way, or in the way that the noble Lord, Lord Kaldor, said that it should be—still be a problem of unemployment at a greater level than there was, say, 30 years ago. Therefore, this would kill a whole lot of birds with one stone, and I commend it to your Lordships as something that needs more than just a passing thought.
9.48 p.m.
Lord Sefton of Garston: My Lords, may I tender my apologies to your Lordships for the fact that my name is not on the list of speakers? I was not certain that I could get here today. I had an appointment in the North-West. In the event, I managed to arrive here and I have heard three-quarters of the speakers. I am very sorry indeed that I did not hear what must have been an excellent maiden speech by the right reverend Prelate the Bishop of Liverpool. Knowing him, I am quite certain that it was an excellent speech.
I am certain that the House will be well aware of the statistics affecting Merseyside in regard to unemployment, because I heard most of the speech made by the noble Lord, Lord Evans of Claughton. In any case, it was never my intention, even had I managed to arrive here in time, to deal with the statistics for Merseyside, because this Motion seeks to draw attention to the unacceptable levels of regional unemployment. Because it does that, it is quite evident that that implies that it is concentrating on regional problems—the difference between one region and another.
I accept completely the sincerity of my noble friend Lord Underhill when he talks about the problems of London, and how very concerned he is about the social problems and all the other problems that now arise in London. Nobody denies those problems, but the figures he quoted have been normal in Merseyside for 30 or 40 years. If they are now unacceptable in London, how much more unacceptable have they been for that long period in Liverpool?
The noble Earl, Lord Halsbury, said that when we fought our way out of the 1931 slump some unexpected things happened. I am not in my middle seventies. At that time I had finished serving my apprenticeship, and for my pains I spent the next 18 months on the dole, just prior to the Second World War. The economy did not pick up in Merseyside. My first experience of national economic problems occurred when I was working as an apprentice in a house belonging to someone whom I considered to be very wealthy. He worked in a big shipping office in Liverpool. He came home and stopped us working because he had just discovered that the White Star Line was being moved to the South of England. That was an indication of something new that was happening and it has been happening ever since.
It took the rearmament programme and the move up to the war to make the nation realise that the people of Merseyside were necessary for the life of the country. We started getting jobs then, when the port was needed and when the Battle of the Atlantic had to be won. We started getting jobs when it was necessary to produce the bombers which flew over Berlin and blew it to pieces. But underlying all that there was no solution to the unemployment problem in Merseyside. That was never found because in 1946 the unemployment figure was more than double the figure for the nation, and Merseyside became an assisted area. Ever since, from 1946 onwards, Merseyside has been an assisted region.
I do not blame this Government for the present economic situation. The last election was open and was fought on a simple premise: "Vote Conservative and we will free the entrepreneurs, reduce income tax at the higher levels, lift the restrictions on private
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enterprise and on the backs of private enterprise enter a new prosperous era". They said, "Let us free the economy", and the trade unions agreed. That is why I do not blame this Government, but it was a tragic mistake for the nation. When the trade unions spurned the idea of a further social contract with the Labour Government, they compounded the felony and those who are sufficiently lily-livered—if I may use that expression in regard to a Member of this venerable House—to leave the Labour Party and give up the battle to make sure there is co-operation between the trade union movement and the party are the people who must share the blame, because they are espousing those ideas of a free society.
It is not the job of a Government to tell British Steel what to do; leave it to British Steel because it is their job, but let me tell your Lordships what is happening in Shotton. I am concerned about the region of Deeside and Merseyside; I am not concerned with regions drawn on a map but regions welded together by the economic and social links that bind people together in one region. It is only a few short months since British Steel told the Government, and the Government told the nation, that the capacity for manufacturing liquid steel to go into our finishing works was too high. We had huge stocks of sheet steel at the finishing plants at Shotton waiting to roll in and be finished into various products.
Within a few months the unemployed steel workers in Shotton have been standing on street corners, and for the last three weeks have seen a fleet of lorries moving sheet steel into the production mills. It has been coining from Runcorn, from the Continent. Is it planning if within a few short weeks of extra capacity being cut down it is necessary to go to the Continent, and so throw our people out of work? I ask that because in Flint we are not talking about 1 in 10 unemployed; in Flint we are talking about 3 in 10 unemployed. In parts of Liverpool we are talking about 4 in 10 unemployed—and they have been there for years.
And let me say this, if I may quote the editorial of a national paper:
"If the smug and complacent South-East think that once again the people in Merseyside and the North-East and Northern Ireland are going to tolerate the situation much longer, then they are very sadly mistaken, because they are not".
I come from Liverpool. I was born in Liverpool, and may I say for the benefit of the noble Lord, Lord Evans of Claughton, I am not a comedian; and there is nothing comic about the situation on Merseyside. There has not been anything comic about it for half a century, and there is not now. No one must tell me that people marching through Liverpool, demanding their rights as citizens of this nation, are to be blamed for anything.
Would it have made any difference if in fact we had never had marches and we had not been forceful in Liverpool? Would it have made any difference to Tate and Lyle? At the very time that the Tate and Lyle Liverpool refinery was first threatened with extinction what were Tate and Lyle doing?—building a glucose refinery on Thamesside, where the unemployment problem was nil. Is that having a regard for the social consequence of your action? Of course it is not. The Government reply to me from the Bench opposite was that it is a matter for the sugar refining

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industry; it is not a matter for Government. That was what I was told last week when I asked what were they intending to do. Of course they had been to see Tate and Lyle in Liverpool. They had looked in the factory and had come to the conclusion that there was no alternative to closure. Of course there was an alternative.
The truth is that no one was prepared to face the alternative, because they have put on a shrine the idea that the most important thing in this nation is the profitability of companies, even the profitability of nationalised undertakings. I do not accept that. It may be heresy to say so, but I say it, and say it firmly. The only important thing about this nation is its economic health measured in the welfare of the people who reside in it. That is the most important thing. If it means a subsidy for steel, if it means increasing the taxes of the higher wage and salary earners, then those things should be done. I say that because it is a cardinal crime to see what is happening—the noble Lord opposite again seems to think that this is something humorous. It may be that he does not like the way that I put it, but here is a typical example of the smug, complacent South-East attitude that looks at a statement like that and then can smile.
London has a problem. London has many problems. One of them arises from the fact that they are shedding labour because the cost of labour is too high. The cost of labour in offices in London is a burden that the private office sector is no longer prepared to tolerate. So it sheds labour, and there is a problem. The cause of the problem is the Civil Service in London. If ever there was a place that is too highly congested, if ever there was a place that is inefficient, if ever there was a place that wasted resources, materials and men in a transport system that is overloaded at peak hours, it is London.
Yet as Sir Keith Joseph was saying that at least 50 per cent. of the regional policy of the Government meant transferring jobs from prosperous areas to less prosperous areas, the Government stopped the transfer of 3,500 Civil Service jobs to Merseyside. They scrapped a completely new office block that was being built. They scrapped the whole concept. And now in this moment of dire peril for the nation we are actually talking about building more massive office blocks on the Thames and denying to the homeless people of London the land where the houses should be built. We are planning London in order to ensure that within the next 10 years the commuters will still pour in—with all the complaints that there are about a most inefficient transport system.
Last night I drew up a list of some of the things that, after my experience of 25 years in local government in Liverpool and many years' experience before that, I felt could begin to be resolved if the drift to the South-East that has taken place in this country could be halted. The whole of the North-West Economic Planning Council, consisting of some of the leaders of the major industries in the North-West, subscribed to the view that the drift to the South-East was the one major danger facing the provinces of the United Kingdom, and that it should be reversed and that somehow or other the old economic activity that used to be in existence in the North-West should be restored. The Government scrapped all the economic planning
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councils. The Government have continuously set their face against the idea of having a regional policy, against the idea of diverting resources from the prosperous areas to the lesser prosperous areas.
But, as I have said before, the drift does not stop as a drift from Scotland, from the North-East and from the North-West, all continuously getting worse economically. After every slump and boom they come out the worst. But it does not stop there, regardless of whether or not we are in the Common Market. I believe that we were right to go in, because economic forces dictated that we were part of Europe, and that is the important thing. Economically, we are part of Europe and should play our part in that place. Economic forces have been saying for the last 20 years that the move is down England and out of the United Kingdom, and that the major centre of activity is moving over to the Continent. One of these days the biggest financial houses in London are going to realise that they can just as well set up their organisations in Calais as they can in London, and when they do it is going to be a very sorry time, not only for the South-East of England but for the whole of our nation.
All we on Merseyside say is this, that there are wasted resources existing in the region. We are asking, and have been asking for 40 or 50 years, for the opportunity to employ those resources on behalf of the nation. We have been continuously denied that opportunity. The time for asking is over. Your Lordships can take it from me that Merseyside and many other places, ultimately, are going to start demanding, and then you are going to have trouble, not only in the East End of London, as you had the other day, but in all the major cities.
10.3 p.m.
Lord Ross of Marnock: My Lords, I am sure my noble friend Lord Peart will be very gratified by the response that has been evoked by his Motion that we should discuss (dare I say it?) regional unemployment, and the fact that we consider it unacceptable. We have won one victory, anyway; everybody agrees it is unacceptable, even the Front Bench opposite. But, of course, there is another reason why I think my noble friend should be gratified. That is because this debate has evoked probably one of the finest maiden speeches that I, certainly, have heard in my experience in either the other place or here. The right reverend Prelate charmed us and cheered us with performances at Lords. He is just as much at home in "the Lords"! He knew his subject, too. His sincerity came through because he was talking about something he lives with; and those of us who have very strong Christian leanings and feel that the Church must be involved in all these things were very grateful indeed to hear what the Church in Liverpool was doing. The people's problems were their problems. It was part of Christianity and Christianity is part of life.
I began to wonder whether it was a regional debate, especially when I heard the noble Earl who speaks for the Government. It may well be a measure of the crisis in employment that the Government were anxious to use this debate over a much wider field to treat the whole question of employment and unemployment to try to justify themselves; because we did not get much

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about the regions. There was a reference to regional aid and to the SDA—and I will come back to these things if I have time and if anyone is prepared to sit to about midnight. The noble Earl tried hard but he did not even convince his own supporters. They were loyal to a point. They said: "There must be no change of policy". Then they said, "But …". I do not know whether the Prime Minister will pay any attention to this debate. Somebody said again that the lady must not be for turning. I got the impression from the importance that the Government put on this and from the reaction of their Back-Benchers, distinguished Back-Benchers, that the lady does not know where to turn. That is the truth.
I did not want to have any competition in respect of the various regions. Let us remember that many of the people who are unemployed in London were Liverpudlians or Scots or Welsh originally. You cannot deny the figures. I see that the noble Lord, Lord Evans, is away. He does not like the numbers game. We must face the fact about the numbers.
On 10th May, 1979, in the South-East area, which includes London, the unemployment figures were 267,000; the figures for last week were 526,000, over half a million. The increase there is higher than it is in Merseyside, Scotland or even Wales. The worst of the increases during the same period occurred in the West Midlands. The figure there was 117,000 when this Government took over and today it is 273,000, an increase of over 150 per cent. These are areas which in other depressions are not hit so quickly or not hit so hard as the traditional areas. Mind you, the traditional areas have suffered, and suffered considerably. We have heard about the Potteries, about Merseyside; and it is not just these figures that matter. These are the figures for the regions as a whole.
One of the most telling points made by the right reverend Prelate the Bishop of Liverpool was the fact that when you take these older industrial inner city areas, unemployment is highest and housing is worst. That is where the deprivation is. He suggested about 40 per cent. in some parts and, generally speaking, 30 per cent. The same is true of Strathclyde in Scotland. We had a bright idea—this is not just one Government—that we start up new towns outside Glasgow. Before we were finished, we were taking all the best people from Glasgow and leaving virtually a handicapped city. As a Government, we started rebuilding Glasgow, reshaping it. This is the kind of thing which the noble Baroness, Lady Seear, was talking about when she said that there are certain investments which should go on—and not just modernisation of the houses; and that is important. There should be more imaginative approaches to the whole question of our inner cities. Capital has to be spent if Britain is going to be worthy of the kind of people that we hear about today. They are not the feckless unemployed. We have heard about the skills that we have and the adaptabilities. Let us do something about it.
The Prime Minister made a speech the other day in which she said it would be terrible if people lose faith in money. It would be even worse if people lose faith in Governments and in democracy. Somebody—I think it was the noble Lord, Lord Evans of Claughton—mocked or did not seem to like marching, whether or
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not it be in Liverpool. I think the noble Viscount, Lord Watkinson, had something to say about troublemakers on marches in Glasgow. I hope that is the only kind of trouble. Remember, in the march in Glasgow we expected about 30,000 people and we had nearly 70,000. There was not one person arrested; it was disciplined and peaceful. Representatives of the Churches, trade unionists and businessmen were there. This is the kind of feeling that is welling up in the country.
If we break faith with those people I can assure you, my Lords, that we shall be letting down democracy itself. It is no good for the Prime Minister to say, as she did in Wales, that if you cannot get a job then why not move. But where to? There was a time when London was Mecca, the South-East, or even East Anglia. Look at the figures. Where are they going? Northern Ireland? Only with the Army! The figures are staggering and denote a crisis that cannot be mocked, as someone suggested, about comparing figures—I think it was the noble Lord, Lord Mottistone. The total unemployed in May 1979 in this country was 1,299,000. In February 1981 it is 2,463,000, an increase of 1,164,000. To take the jobs that used to be despised by noble Lords opposite—because they were not real jobs—those in the Youth Opportunities Programmes, community industry and training for skills, even in that youth section alone we have 174,000 young people. If you take the total of the special employment projects, it is 926,000. That is the real measure of the employment troubles of this country.
It is not good enough for the noble Earl to rise and say, "We are beating inflation. We are taking the medicine". Is the patient going to be alive after the Government have been satisfied about this one particular disease? They are treating one disease but the patient will die of another one. I have been fascinated by the extent to which the noble Lord, Lord Polwarth, almost followed the noble Baroness, Lady Seear, in respect of the criticisms of the Government and what they really could do. The favourite one of course is the national insurance payment—that that should be considerably reduced. There are others.
If the Government do not want to call it a U-turn, I am prepared to say it is not a U-turn. They have to deal with this question of the regions in terms other than of the South-East. In the North there is 13·6 per cent. unemployment; 13·5 in Wales, 12·3 in the North-West, 12·7 in Scotland and 17·3—and we are not finished. I think the noble Lord, Lord Polwarth, was talking about what had been happening in the motor-car industry. What has happened since? It did not end there. We now have Yarrow's engineering at Govan, 350 jobs; Leyland in Bathgate, 920 jobs; Lemax in the Borders, 200 jobs; and just today Hoover have announced 400 jobs lost in Cambuslang; another 300 in Merthyr and 200 in Perivale. Then we have Seagull Seafoods in Lossiemouth, 140. There are nearly another 2,000 jobs since we heard about these, and it is going on day by day and the Government are not too sure as to what they will do.
I was very disappointed in the noble Earl, Lord Gowrie, himself when my noble friend Lord Sefton asked on 17th February about regional policy. I quote from what the noble Earl said (at col. 556):

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"…the great difficulty is to distinguish between regional policy designed to help people through difficult transitions and regional policy designed to equalise the balance of opportunity and employment in the country. Speaking for myself, I must say that I think the latter is never liable to be very successful".
But you have to try. We have been trying for 50 years with some success, and of course the most difficult time is when there is a recession of the gravity of the present one. But if you do not try you will never succeed.
What would the position be like in Scotland, but for what we have done? I heard the noble Lord, Lord Polwarth, talking about what had been happening there. I have heard others talk about what we have done in respect of the newer industries. We have to give that balance of effort and support to the regions, and if we do not then I am afraid the United Kingdom is going to be very much less united. This is the grave danger, and this is why the Prime Minister is so wrong in advising people, implying that you can move and that is all that can be done. We have had enough of this, and today, as far as my own home country of Scotland is concerned, we now have an unemployment figure as staggering as this—more than a quarter of a million. I used to be horrified when I was Secretary of State and I knew what was going to happen to me if we went over the 100,000 mark; but now here we have 240,000—way beyond that, 288,000—within reach of 300,000 unemployed. We have a place where we have got all the new industries in relation to oil. I heard my noble friend speaking about the number of jobs there and he suggested—what was it?—80,000?—more? I would not have put it so high. But despite that advantage, we have what I should have thought were higher unemployment figures than could be borne by the Scottish people. Then someone says "Don't march". What are they to do, if they do not march? It is far better still to have faith in being able to influence a Government to change their ways and their policies. So I hope that the noble Earl will take to heart the importance of what is being suggested.
I could recite the grim catalogue of closures and rundowns—Singer Sewing Machines, Massey-Ferguson, Goodyear Tyres, Prestcold, British Steel at Tollcross, BRS at East Kilbride, Monsanto in Ayrshire, SKF at Kilmarnock and ICI in Ayrshire in the last two years. There were over 83,000 jobs lost, to which you must add the others which I have mentioned. Still they come in daily and we are told just to wear it out.
The fact is that we are achieving new high norms in relation to unemployment. We used to think that 90,000 or 100,000 unemployed in Scotland was wearable. When, if ever, are we to get below the 200,000 mark? I once promised myself that I would retire—this was in the Parliament in which we both served, when I was Secretary of State for four or five years; I eventually did eight years as Secretary of State—if the unemployment figures rose above 100,000. It never did. But then we had a Tory Government and, by heavens! the figure very quickly went way beyond the 100,000.
But we are reaching new high norms, and this is why the Government must look at some of the suggestions that have been made today. This has been a reasonable debate from that point of view. Suggestions have been made in relation to how we should face up
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to this position. There have been suggestions about the 16 to 18 year-olds; about work experience not being something special, but something that is there for everyone as an extension of education. In other words, you enter the labour market later and leave it earlier, at the other end. But for some of these present schemes, the unemployment figures would be absolutely impossible. I look at what has happened, and at what is happening in Govan, Bathgate and Midlothian. Today, Hoover announced a loss of 400 jobs in Scotland, and losses in Wales and England. It just goes on and on and the Government seem complacent about it.
I am very worried about the noble Earl's attitude, because I get the impression that regional policy has just been relegated; that the Government cannot do anything about it. I am telling him, from the point of view of the unity of this United Kingdom, that he had better do something about it. The Government had better get away from their fixed lines in relation to monetary policies. The noble Baroness talked about what can be done, and what should be done, in relation to investment and the difference between current expenditure and investment expenditure by the Government. It used to be done. In fact, if the noble Earl looks back and sees what a Labour Government did, he will find that they met this difficulty. Not only that, but they sheltered, as far as they could, the areas that have been traditionally hard-hit through unpopular, and maybe necessary, measures. We have to come to that again. There is plenty to be done, if you are to prepare for any upsurge—and I hope that I am not too pessimistic—that will come.
There is plenty to be done in the field of housing. But look at the housing figures and the clamp which has been placed upon local authorities. National work needs to be done to improve the quality of life. Can we not do it? I can point to White Papers produced by the Labour Government and supported by the other side about how to use the revenues from North Sea oil. Is it not incredible that with all this wealth flowing into the Government's coffers unemployment in Scotland should be higher than it has ever been since the war? The Government do not differentiate between preparing to improve the quality of life in the country and the employment of staff by local authorities which they say is far too high. The position may become so bad that we shall be unable to get ourselves out of it. The remedy will be such that we shall be unable to survive the so-called cure. I hope the Government will listen to some of the things that have been said today.
Points have been made in relation to young people and in relation to the Special Development Agency by, I think, the noble Lord, Lord Polwarth. What difficulty we had in getting it through the House. Supporters of the Government were going to get rid of the Special Development Agency once they came to office. That is what they used to say. They said the same thing about the Highlands and Islands Development Board. The noble Lord who is tired of my quoting his speech about the Highlands and Islands Development Board is not here. It was Marxism. However, he would not now dare move that it should be abolished. The same thing will come to be said about the Scottish Development Agency and the Welsh Development

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Agency. There should be a little less harping on their failures and a little more publicity about their successes. Whenever there is difficulty in Central Scotland at present—and there is plenty of it—what does the Secretary of State say? He says, "I'll get on to the Scottish Development Agency right away". We created this agency because we felt that the older, traditional means of dealing with unemployment were inadequate. It may well be that we shall need to have way beyond what we have got at present.
I was interested in Lord Halsbury's speech. I did not agree with much that he said, but he quoted Robert Burns. I do not know whether he knew he was doing so. But he spoke about man's inhumanity to man. Does he know that the verse after that is:
"See yonder poor, o'er labour'd Wight,
So abject, mean, and vile,
Who begs a brother of the earth
To give him leave to toil"?
Of course, his petition was spurned.
Should I quote the next verse in the House of Lords?
"If I'm design'd yon lordling's slave—
By Nature's law design'd—
Why was an independent wish
E'er planted in my mind?
If not, why am I subject to
His cruelty or scorn?
Or why has Man the will and pow'r
To make his fellow mourn?"
The line which the noble Earl quoted was about an unemployed man.
The Earl of Halsbury: My Lords, I am greatly obliged to the noble Lord for giving me the origin of that quotation. I took it from the title of a book by Wynwood Reid.
Lord Ross of Marnock: My Lords, there are a number of books with titles which come from Burns. I will give the noble Earl a few of them, if he likes. He should come to my next Burns' Supper in Kilmarnock. "Of Mice and Men" is one of them:
"The best-laid schemes o' mice an' men
Gang aft agley".
And the schemes of the present Government in relation to their monetary policies have gone. They can call it U-turns, or a change of mind, or meeting the circumstances of the hour, as they like, but the Government have got to change their mind and they have got to change their way of doing things.
The noble Lord opposite has not been here very long; if he is a bit tired then he can go. We would not miss him, because we did not miss him when he was not here.
When the present Prime Minister says: "I have heard it said that Conservatives have been associated with unemployment—well that is absolutely wrong. We would be drummed out of office if we had this level of unemployment", that was when the unemployment figure was 1,400,000. It is nearly double that today. Well, I can tell her that if she goes to the Merseyside area, if she goes to Wales, if she goes to Scotland, she will begin to hear the drums being tuned up. We never voted for this Government in
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Wales or in Scotland or in the North, but we got them—
Several noble Lords: Neither did we!
Lord Ross of Marnock: I cannot even say that I was using the royal "we", can I?
Several noble Lords: No!
Lord Ross of Marnock: The people of Scotland did not vote for them. I hope the Government will listen to what the people of Scotland are now saying, that it is time to change their policies. They can disguise it with whatever words they like—U-turns or anything else. The same goes, I am perfectly sure, for the people of the regions of the North, for Wales and the West Midlands and even the South-East and Yorkshire and Humberside. The Government can afford to do it. They have got to do it, because if they destroy the faith of the people of this country in democracy then they will be doing inestimable damage to the future of this country.
So I am very grateful indeed to all those noble Lords who have made this an interesting and fascinating debate. It is clear that practically everyone who has spoken has put forward suggestions in relation to youth unemployment, in relation to the regions, that mean that the Government will have to make changes. Let them have the courage to face that fact and make the changes.
10.33 p.m.
The Earl of Gowrie: My Lords, it is a pleasure to start with the easy bit of the evening, which is to congratulate the right reverend Prelate the Bishop of Liverpool on his maiden speech. I had said that I was looking forward to it and it would be a misstatement to say that any of us were disappointed; we were thrilled by the brevity, the succinctness, the expertise, the compassion and concern which he showed. I was particularly grateful for the tribute paid by the right reverend Prelate to the Government's special programmes, and particularly to the special programmes staff of the MSC. I should like to reciprocate by expressing our warm appreciation of all that the right reverend Prelate has done in his capacity as chairman of the Merseyside Special Programmes Board. He and the chairmen and members of all those boards are doing a splendid job in very difficult circumstances. I can best illustrate that by saying that at the end of January special employment measures as a whole were keeping 331,000 people off the registers, compared with 229,000 the year before.
I shall have to go at a great lick, and I apologise to any noble Lords if they get somewhat short-changed at the end of what I think has been a particularly fascinating debate. My knowledge of economics, which received, I think, a reasonably complimentary gamma from the noble Lord, Lord Kaldor, and something from the end of the Greek alphabet that I hardly know how to describe, from the noble Lord, Lord Ross, really

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has been formed over the last 10 years by assiduous attendance at all economic debates in your Lordships' House. I can honestly say that there has not been one where I have not learned something new. In a more serious personal vein, it is of course true that the Government are attending very carefully to any suggestions being made to them to ease what I described in my opening speech as an acute manpower crisis in this economy.
I have to say, however, that while I listened to noble Lords of the official Opposition, the old guard as it were, I kept thinking, putting myself perhaps vain-gloriously in the role of Hamlet, "Alas, poor Healey, and alas, poor Roy Jenkins". It is the most assiduously cultivated myth, first, that monetarism is principally responsible for unemployment in this country, and, secondly, that it was introduced by this Government, and notably by my right honourable friend the Prime Minister and my right honourable friend the Secretary of State for Industry. In fact the first Government really to apply the quantity theory of money in terms of macro-economic direction were the previous Government, and they also introduced the cash limit system. They did this under the aegis of the IMF, though it started to come in shortly before that. I am grateful to the noble Lord, Lord Kaldor, for pointing out where in his view they originally went astray.
I like to think of monetarism as nothing more revolutionary than the theory that, particularly in periods of low demand in the world, it is difficult for Governments any more, as Mr. Callaghan put it, to spend their way out of recession. But of course they have to spend money during recessions and they try to ease the pain as best they can. I mentioned heresy. Our much respected and erudite Table reminded me that it was Mr. Healey, in the noble Lord, Lord Kaldor's interpretation, who fell victim to the Churchill disease, because Churchill said when he met General de Gaulle,
"Quand je me trouve en face de la vieille dame de Threadneedle Street je me trouve tout à fait impotent".
Maybe the same affliction came over the late Chancellor.
The noble Lord, Lord Kaldor—and I refer to him first because I think it gives some frame to the debate—did say something with which I totally agreed. Indeed, I often in a heretical and perhaps treacherous way tend to side with him by arguing his case with his former pupil my right honourable friend the Secretary of State for Energy. We have quite a lot of fun over that and indeed a lot of enlightenment. The point where I could not agree with him was when he asked how Britain could isolate herself from the OPEC effects simply because she had North Sea oil. That is peanuts, if I may put it vulgarly, in comparison with our other trading activities and our position in world trade. Of course we are affected by the recycling problem, as I am sure he would really agree.
I was glad that he was one of the few speakers who mentioned the 1930s to speak with some affection and indeed pay some compliments to that decade. It is one of the rather damaging myths in our economy that that was an unsuccessful decade in economic terms, because the appalling slump and the social deprivation engendered in the late 'twenties and early 'thirties were followed by a remarkable recovery, and one of the most persuasive parts of the noble Lord's
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thesis has always been that British industry reformed very well under some import protection during that decade.
Lord Davies of Leek: My Lords, of course we are all aware that it was followed by a remarkable recovery, but, as in all economic systems that work on these economic principles, the only way you get full employment is by either preparing for war or rearmament, or by having a war.
The Earl of Gowrie: My Lords, I disagree with the noble Lord because the rearmament of this country did not take place—hence the troubles within the Conservative Party at the time and the isolation of Winston Churchill—until a much later time. I am talking about the period up to 1938 and before the rearmament took place.
I always thought that one of the more cogent aspects of the noble Lord, Lord Kaldor's, arguments was that one could re-group with some protection. The difficulty now is that our position in the world has changed very much and the successful parts of our economy could easily be retaliated against—I am thinking not only of manufactured goods, but of export financial services, overseas investment and the like—if we took those kinds of action. I am not doctrinaire on this subject and I shall, of course, continue to look at it.
The noble Lord, Lord Ross of Marnock, quoted quite a lot of poetry at me. I think that my only poetic contribution is to say that perhaps we could adapt a quotation to say that "the evil that Governments do lives after them; the good is oft interred with their bones". I think that our charge against the previous Government was that they did have a good policy on inflation, they did bring down inflation, they did, as a result, see unemployment rise very heavily, but unemployment was starting to fall when they panicked, reflated hard, and stirred up a lot of problems for themselves—and indeed for us—and that U-turn, as it were, did not even win them the general election. It is that kind of example that we are trying not to follow.
The noble Baroness, Lady Seear, gave me a great deal of pleasure by mentioning something that I had meant to speak of in my original speech, but which I omitted to mention. I am referring to the problem for young people of there being now too narrow a differential between young persons' pay and adult pay and, in fact, that the age at which a young person ceases to become young has been going down steadily and that has been damaging to young people in employment terms. It is fundamentally a matter for collective bargaining, but we are anxious about it, keeping an eye on it and trying to persuade unions and employees wherever we can.
I am glad that the noble Baroness reiterated the need not to price young people out of jobs at the start of their working life. I think that this problem should be much more widely recognised. Between benefit at, say, around £15·50, the Youth Opportunities Programme at £23·50 and the rate for the job, there is quite a gap which a lot of young people could fill. Obviously we and the Manpower Services Commission—as the right reverend Prelate will be aware—have to be very sensitive to the issues of substitution and to union

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feeling, at a time of recession and high unemployment, that young people might be "drafted", as it were into the jobs which they might reasonably hold. I think that the MSC performs a very difficult task in keeping that balance going and, of course, we monitor the situation most carefully ourselves.
One of the rather gloomy things about modern economic management is that so many of our arguments really are about one issue, which is the problem of funding Government debt—not usually an issue to get everybody on their feet and shouting, or even taking to the barricades. It is, I think, the key and central issue of our time. Of course the Government could initiate expenditures and spending programmes—and to some degree they have—which could improve the unemployment situation a great deal. A number of noble Lords—too many perhaps to mention individually, so I hope that they will forgive me—have asked the question: when will the Government grow up and start to try to distinguish between capital expenditure and revenue expenditure? They say: "Let us have some good, solid capital investment for the future which will get some jobs and get some training into this economy and let us, if we must squeeze, squeeze on revenue".
Of course I feel very sympathetic towards that view, but the problem is that all Government expenditure has to be funded and Governments have to go onto the money markets to get their money, regardless of whether they are getting it for sensible long-term purposes or for short-term purposes. It is that tendency of Government expenditure to rise and to drive Governments onto the money markets which, of course, squeezes resources, keeps interest rates high and crowds out money for industry. That is why—and, again, I am talking rather personally here—I am convinced that Governments of both colours will increasingly have to look at different methods of funding their debt, and this may be the key issue before us. I hope that we will return to this; for, this being a slightly less contentious House, it is often a good way to put pressure on Governments to put pressure on their Ministers to raise matters here. So I hope that we might return to that another time.
Mention was made about the fact—in particular by my noble friend Lord Watkinson, and the noble Lord, Lord Ross of Marnock, ended his remarks with it—that we must start thinking of trying to take some people off the labour market at the youth end and also towards the end of the working life. Of course, I agree with that. It is an extremely expensive thing to do. We do it and we should like to do more. Again, it goes back to the question of funding and interest rates. However, I am sure that this is the way to proceed.
I am very glad to be able to say that I do not think that we think in class terms in this country nearly as much as we used to, but I do not think it is contentious to say that middle-class and professional folk are not used to seeing their children go on the labour market at the age of 16. This is really a direction in which perhaps all of us are moving, or should be moving. But, of course, there are transitional problems and expenses, as we know in the large funding that we give to the MSC.
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I take the criticism of the noble Lord, Lord Ross of Marnock, that I have not dwelt as much as I might have done on purely regional aspects; from where I sit in the Department of Employment obviously there are different effects, but, as my opening remarks tried to make clear, this is now really a national and international phenomenon; and although there are obvious differences, in fact, some of the things that we might have expected to happen have not happened. For instance, as my noble friend Lord Polwarth reminded us, Scotland has not fared—due no doubt to off-sea technology and oil-related industries—as badly in this recession as she traditionally fares, and the West Midlands, which normally is relatively immune from recession, as the noble Baroness, Lady Fisher of Rednal, reminded us, has really fared worst of all.
However, the point that I wanted to make in my opening remarks is that now that unemployment is so pervasive, it is not so much a matter of getting the regional policy right as getting the central economic policy right, and that will then allow us to reform somewhat in the regions. We are, of course, particularly worried about Liverpool, which has now such an endemic and chronic record of high unemployment. I shall not weary the House by reading out the enormous amount of money that it receives and has received from public funds, or the very high status in terms of aid which it still, of course, retains. I would rather say that we are open to almost any ideas about Merseyside. We hope for action in the enterprise zone and so forth, but if noble Lords connected with that region care to meet me or my colleagues on any inner-city partnerships, or informally, we should be delighted to try to oblige them.
The noble Lord, Lord Davies of Leek, and my noble friend Lord Thorneycroft added to my schizophrenia by saying that the employment side of me should speak sternly to the energy side of me. I am glad to be able to report that, ever anxious to obey the dictates of the House, I have given myself this lecture and the Government have accepted the NEDO report that some energy prices are higher to industrial users than they are to our competitors, who may not always play the rules. This applies particularly to large users, such as paper and board manufacturers and the steel industry. My right honourable friend will be considering this urgently. I cannot say more than that at the moment.
The noble Baroness, Lady Fisher of Rednal, apologised for not being here, but I want to get this point on the record because it is important. She was one of the few people who, in their anxiety about unemployment levels, also mentioned shortages and vacancies, and she was talking about the shortage of engineers. That certainly exists. One of our problems is that we have an immense demand for maths and physics teachers and an immense surplus of supply of non-maths and non-physics teachers, and we are in negotiation with the unions, and so forth, to try to see how we can correct that balance. She also asked a question about the Employment and Training Bill, which is largely an enabling Bill. My right honourable friend the Secretary of State is much exercised about the state of training in this country and has made a number of speeches about it, and when we have more time I am happy to debate how our training policy might

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develop, because it is a subject of interest to many people in this House.
I have some specific questions to answer from my noble friend Lord Balfour of Inchrye, who expressed general support for the direction that the Government are taking on inflation, but echoed a number of people in wondering whether the price was not very high. I would remind my noble friend that the price is not simply as a consequence of the fight against inflation. The extra oil price rises and the world recession have taken quite a toll as well, but I never doubt that counter-inflation policy is an unpleasant one. It is always a race as to which is more unpopular—inflating your currency or trying to get all the fat off again.
It is true that some firms may not arise again, but in any battle there are liable to be corpses. Nevertheless, I think that the portrait given to us by the noble Lord, Lord Kaldor, and the noble Lord, Lord Ross of Marnock, from somewhat different positions in point of analysis, is not quite so gloomy as they say. We feel that those who are surviving this fearsome squeeze are going to be in much better competitive shape than British industry has been for a long time. I take my noble friend's point that now may be the time to ease the pressure a little, if we are able to do so.
When inflation is overcome interest rates will of course be lower. The noble Lord, Lord Jacques, put to me a question about the relationship of interest rates to inflation. Obviously you store up enormous economic problems for yourself if you lower interest rates so that there is no real rate of return, and then all the money in an economy will rush into areas which are not productive because they will be looking for investments that beat inflation, rather than those which put capital into industry. Again the problem of getting industry new capital, and capital outside the banking system and capital outside these problems of Government funding, will be a central preoccupation of Ministers in the coming months.
I am not going to forecast levels of unemployment. We have usually been wrong about these. So far we have erred on the side of optimism. It was worse than we expected it to be. That of course is a stern corrective and the Government have, without any talk or anxiety about U-turns, changed tack and responded to the rise in unemployment. Certainly we have had to stretch the medium-term financial plan to accommodate it. My noble friend Lord Balfour asked me a somewhat technical question about GATT. I have the answer here, but if he will forgive me I should prefer to write it to him, as the hour is rather late.
As your Lordships know, and as I said at the beginning, I have some sympathies towards protectionism, but we are trying to continue to compete in world markets and I am not convinced that most parts of British industry would enormously benefit from a further period of protection, than having been protected so far by central Government subsidy and funding, and protection of that kind. If they are going to compete in a competitive world, they are going to have to do so on the terms of everyone else.
Another anxiety that I want to register, though he is not here, is Lord Jacques' wishes for us to put every pressure we can to ease sterling. We are taking this anxiety on board and the pound has fallen some-
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what. I must repeat that if the pound comes down the RPI will go up, and it is no good people then trying to compensate themselves for the consequences of a policy which they have asked us to impose.
My noble friend Lord Caldecote mentioned the problems facing Germany. When the noble Lord, Lord Ross of Marnock, was talking about the potential for instability in this country, I thought I must remind him that, as the Minister concerned with overseas affairs in my department, I go to the continent a great deal, and my labour Minister colleagues and opposite numbers on the continental mainland are in a state of complete panic, something one does not see here on either side, yet they are twice as rich as we are. So I think our social and political stability is still a major factor in getting us through what is undeniably a difficult time.
My noble friend Lord Caldecote wondered whether we did not play too much by the Queensberry rules, and I have heard it said that where the French are concerned we play cricket and they play rugger. The difficulty is that we have such institutions as parliamentary ombudsmen and uncorruptible officials, and if my noble friend were an importer, say, of French goods—which he would be perfectly entitled to be—I do not know how he would feel if we instructed Customs to hold up all his goods at Dover.
I was grateful for the remark of the noble Viscount, Lord Rochdale, about the Manpower Services Commission. As he knows, I have had an opportunity to watch them at work in his region in Cumbria. I take the point of my noble friend Lord Mottistone about youth national service. The Youth Opportunities Programme is now a national service open to every young man or woman who is unemployed. We have had calls to make it compulsory and not to allow young people to enter the labour market until they are rather older; but that would, I believe, be an illiberal policy and anyway, as I said, even at the trough of a recession the vast majority of young people actually go into real work.
I will end with a few phrases which came out of the debate and which struck me very much. I agreed with so much of what the noble Lord, Lord Taylor of Gryfe, said that I will not embarrass him by reading it out. The noble Lord, Lord Taylor of Mansfield, said that behind the collective figure lies the individual, and of course we are acutely conscious of that. Even if the macro-economic policies, right or wrong—and we have been subject to criticism are fairly tough, I do not think the policies dealing with the effects of recession and unemployment on individuals could be called that at all. But we cannot do this alone, and for instance the labour unions measure of sincerity, care and concern about unemployment must be measured in the responses they make during the wage round.
My noble friend Lord Boardman said the Government in a short period were attempting to break out of an environment which had brought us lower and lower in this country in each cycle, an environment inimical to our national character. I entirely agree with him on that, and that is why I feel it would be fatal to change overall direction, though I acknowledge the need for courage and compassion, as he put it, to see us all through.
10.58 p.m.
Lord Peart: My Lords, I thank noble Lords for what I think has been one of the best debates we have had in this House—and indeed in another place—for a long time. It has been a good debate, with some great arguments being adduced. I will read carefully the Official Report of what was said, and I believe that it will become a memorable debate in which we shall all be glad we participated. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

  ANIMAL EXPERIMENTS: COUNCIL OF EUROPE CONVENTION
  ANIMAL EXPERIMENTS: COUNCIL OF EUROPE CONVENTION
  THE ADVISORY COMMITTEE ON ANIMAL EXPERIMENTS
  THE ADVISORY COMMITTEE ON ANIMAL EXPERIMENTS
  PRISONERS: NUMBERS HELD IN SECURE CELLS
  PRISONERS: NUMBERS HELD IN SECURE CELLS
  PRISONERS: VISITS BY STRANGERS
  PRISONERS: VISITS BY STRANGERS
  VALE OF BELVOIR: NCB APPLICATION
  VALE OF BELVOIR: NCB APPLICATION
  CHEMICAL WARFARE: OFFENSIVE CAPABILITY
  CHEMICAL WARFARE: OFFENSIVE CAPABILITY