Sitting of 24 March 1981

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

    GREATER MANCHESTER BILL [Lords]
    Order for consideration read.
    To be considered upon Thursday next.

Oral Answers to Questions
  EMPLOYMENT

    Trade Union Education
    Mr. Kenneth Lewisasked the Secretary of State for Employment whether his Department and the Department of Education and Science have completed their consideration of the application by the Trades Union Congress for support for trade unions' education and training in 1981–82.
    The Under-Secretary of State for Employment (Mr. David Waddington): Our consideration has nearly been concluded, and my right hon. Friend hopes to write to the TUC shortly.
    Mr. Lewis: If my hon. and learned Friend cannot give me the figures for next year, will he give me the correct figure for 1980–81, which I understand was over £1 million? The TUC distributes the money downwards to various affiliated unions, including the WEA. Is my hon. and learned Friend satisfied that State support is not going to unions which are acting militantly against the State—for example, the Civil Service unions? Would not it be proper for my hon. and learned Friend to consider this year's distribution in that light?
    Mr. Waddington: A total of £1.67 million was involved in 1980–81. I can assure my hon. Friend that the money is used for the education and training of shop stewards and workplace representatives. Proper training in that area is of great importance in industrial relations. Her Majesty's inspectorate has the opportunity to examine the way in which the money is spent. To the best of our knowledge, it is being spent properly and to the benefit of unions and managements.
    Mr. Arthur Lewis: How much money has been spent in educating the various Soviet knights, such as Sir Anthony Blunt and Sir Roger Hollis, who seem to have received good educations and been given good knighthoods? How much money do they get?
    Mr. Speaker: Order. The hon. Gentleman's supplementary question does not arise from the main question.
    Mr. Arthur Lewis: It does.
    Mr. Speaker: Mr. Morris——
    Mr. Arthur Lewis: On a point of order, Mr. Speaker——
    Mr. Speaker: Order. I will take the hon. Gentleman's point of order at the end of Question Time as I wish to give other hon. Members the opportunity to participate in questions.

    Youth Opportunities Programme
    Mr. Michael Morrisasked the Secretary of State for Employment what is the latest figure for the number of people being helped under the youth opportunities programme.
    The Under-Secretary of State for Employment (Mr. Peter Morrison): At the end of January 1981, there were about 136,000 young people taking part in the youth opportunities programme. The programme has been expanded to help 440,000 young people in 1981–82.
    Mr. Morris: Is my hon. Friend aware how encouraging those figures are? Does he accept that there appears to be a problem of co-ordination in further education between the Department of Education and Science and the Department of Employment? Can he assure me that there is some co-ordination between these two arms of the youth programme?
    Mr. Morrison: I am delighted that my hon. Friend thinks that the figures are encouraging. I can assure him that the co-ordination between the Departments of Education and Science and of Employment is as close as it can be. If there is any problem that he would like me to consider, I shall be delighted to do so.
    Mr. John Evans: When does the Minister expect to be able to provide real jobs, including skilled apprenticeships, for the many hundreds of thousands of young people who cannot find real jobs?
    Mr. Morrison: The hon. Gentleman will be aware that many real jobs are being created thanks to the economic climate of realism that now exists. He will know that the provision of apprenticeships is a matter of great concern both to my right hon. Friend the Secretary of State and to the Prime Minister.
    Mr. Bulmer: Will my hon. Friend confirm that he expects significant numbers of skill shortages next year? Is he satisfied that everything possible is being done to ensure that training for young people relates as closely as possible to real job opportunities?
    Mr. Morrison: I assure my hon. Friend that where skill shortages appear to exist in future the Department and my right hon. Friend will take notice and will do what they can to help.
    Mr. John Grant: Does the Minister accept that the youth unemployment problem is crucial, but that the Opposition remain fully committed to the youth opportunities programme? Having said that, however, may I express our deep concern at the increasing strain on the programme as a result of the huge numbers of young people who have to resort to it? In particular, will he comment on the difficulties being experienced in job substitution and the abuse of the scheme by some

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    employers through the Government's failure to raise the allowance to the level that the Manpower Services Commission wanted and the increasing difficulty of maintaining the scheme's credibility when young people passing through it can no longer be placed in employment? Will he further tell the House when the Secretary of State will implement his pledge of vocational training of quality for all young people. If that was only a pious hope, it was a cruel deception at the expense of young people?
    Mr. Speaker: Order. The Minister need feel obliged to answer one supplementary question only.
    Mr. Morrison: Thank you, Mr. Speaker. I shall attempt to answer two. As the hon. Gentleman is aware, there is still a substantial difference between the YOP allowance and what a school leaver would receive if he were unemployed. I assure the hon. Gentleman that, if and when substitution occurs, the Manpower Services Commission immediately withdraws the scheme. Finally, I am delighted that the Opposition support the youth opportunities programme.
    Mr. Marlow: Will my hon. Friend consider the differential between the YOP allowance and the amount that young people receive in supplementary benefit? Within the total amount paid, will he investigate the possibility of increasing the allowance, with perhaps a slight reduction in supplementary benefit?
    Mr. Morrison: I believe that the difference is about £8·25. This is being looked at. One has to see exactly how the market forces, as it were, work in this context. But I am sure that my hon. Friend will agree that the difference is substantial.

    Trade Union Immunities
    Mr. Rentonasked the Secretary of State for Employment how many representations he has received on the Green Paper on trade union immunities.
    Mr. Waddington: So far, I have received representations from about 30 organisations and individuals. However, consultations are due to last until 30 June. In view of the importance and complexity of the issues raised in the Green Paper, I do not expect to receive comments from the major organisations in industry until later in the consultative period.
    Mr. Renton: Bearing in mind the strong wish of many trade unionists for further action to limit the closed shop and for compulsory secret ballots before some strikes, do my hon. and learned Friend and his Front Bench colleagues intend to introduce further legislation on trade union immunities in the life of this Parliament?
    Mr. Waddington: I know how concerned people are about the closed shop, which may have come into prominence particularly as a result of what has happened at Sandwell, and about secret ballots. We are not committed to legislate during the course of this Parliament, but neither are we committed not to legislate. This is genuine consultation. We shall consider arguments and representations during this period and then decide in the light of all the evidence what it is correct to do.
    Mr. Cryer: Does the Minister agree that the legal position of trade unions barely allows them to function and that their allegedly powerful position has apparently not
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    stopped unemployment rising to 2 ½ million? Does he further agree that this is eroding the position of the trade unions, and that that is part of the Tory Government's policy? Is it not true that the Tory Government wish to see free trade unions operating only in Poland, and not here in the United Kingdom?
    Mr. Waddington: It is bizarre to assert that the present law barely allows trade unions to operate. Trade unions in this country have privileges which are not granted to trade unions in almost any other country in the world. We are glad that they can operate effectively to look after the interests of their members, but we do not consider that they should have carte blanche to inconvenience and damage the community as a whole.
    Mr. Madel: Is my hon. and learned Friend aware that many industrial managers are very satisfied with the Employment Act 1980 as it affects trade union immunities, and that, in view of the employment difficulties and the need for co-operation with the trade unions, such managers are very cautious about whether the Government need to take any further action for the time being?
    Mr. Waddington: My hon. Friend is entirely right if he is saying that we must carefully assess the practical effect of further measures before introducing them. It is no use putting new laws on to the statute book if they do not advance industrial relations or the liberty of the individual trade unionist. But that does not mean that we should just sit and do nothing. We must listen to the representations, hear all the arguments and then decide what is right.
    Mr. Skinner: Does the Minister recall that, before the introduction of the recent picketing laws, Tory spokesmen were saying that those laws would enable them to curb any actions in industrial disputes? Does he now accept that, arising out of the unofficial miners' strike, particularly in Wales, the picketing laws then on the statute book were swept away in respect of both secondary and tertiary picketing? Would it not be sensible to drop any proposals to introduce further laws and to get rid of those already on the statute book?
    Mr. Waddington: My right hon. Friends said nothing of the sort. They said that there were abuses which had to be dealt with, that it was outrageous that masses of people should be picketing outside workplaces other than their own. We came to power, and we have dealt with that abuse, as with other abuses. That is what we set out to do, and that is what we have achieved.

    Unemployed (Concessionary Fares)
    Mr. Freesonasked the Secretary of State for Employment if he will make a statement on the progress in his Department's consideration of the granting of concessionary fares to the unemployed.
    Mr. Peter Morrison: As the right hon. Member may know, the hon. Member for Swansea, East (Mr. Anderson) and myself have been involved in this question. I am pleased to say that, following discussions with my department and the National Bus Company, a trial scheme is currently operating in South Wales. I hope that it will be a success.
    Mr. Freeson: Does the Minister consider a trial scheme to be satisfactory when millions of people are in

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    continuing unemployment? Should not action be taken to increase mobility to assist the unemployed and to reduce their tremendous burden of expenditure in seeking alternative employment, in travelling not only long distances around the country but even within striking distance of their own homes?
    Mr. Morrison: I am somewhat surprised at the right hon. Gentleman's reaction. I should have thought that he would welcome the trial scheme. If he were to propose a scheme for his own area, we should be prepared to consider it, provided that no additional staff costs were involved. I do not recall his having done so.
    Mr. Farr: As this is the International Year of Disabled People, will my hon. Friend consider approaching our right hon. Friend the Secretary of State for Social Services to see whether disabled persons may be allowed concessionary travel on public transport?
    Mr. Morrison: As my hon. Friend knows, my right hon. Friends the Secretaries of State for Employment and for Social Services are always talking about such matters. Now that my hon. Friend has raised this point, I am sure that they will talk about it in future.
    Mr. Anderson: Is the Minister aware that, since he personally authorised the trial scheme less than a month ago, more than 600 "job seeker" tickets have been issued in the South Wales transport area and I am assured by the company that no administrative problems have arisen? In the light of that monitoring process, will he consider extending the scheme to other appropriate areas?
    Mr. Morrison: Perhaps I may first say how grateful I am to the hon. Member for bringing the matter to my attention originally. As he knows, he and I worked on this and we hope that we have reached a satisfactory conclusion in his area. I have already said that if other hon. Members, from whatever part of the House, wish to approach me on the matter, provided that no additional staff costs are involved, we are prepared to look at other schemes.

    Unemployment Statistics
    Mr. Winnickasked the Secretary of State for Employment what is the latest number of registered unemployed in the United Kingdom.
    Mr. Jim Marshallasked the Secretary of State for Employment if he will make a statement on the current level of unemployment.
    The Secretary of State for Employment (Mr. James Prior): At 12 March, the provisional number of people registered as unemployed in the United Kingdom was 2,484,712. The seasonally adjusted rise of 77,000, announced today, confirms that the rate of increase in recent months is slower than it was at the end of the last year. Despite this better trend, we remain deeply concerned at the rapid increase and high level.
    Mr. Winnick: Is the right hon. Gentleman aware that those figures are an appalling indictment of the bankrupt Government of which he remains a member? Is it true that the Treasury has forecast that unemployment will rise to more than 3½ million in 1983? How long does the right hon. Gentleman intend to go along with such disastrous policies?
    Mr. Prior: It is not true that the Treasury has forecast 3 ½ million unemployed by 1982 or 1983. The figures are still serious, but whether or not we get out of our problems quickly depends very much on the state of the world recession.
    Mr. Jim Marshall: How many further jobs will be destroyed as a consequence of the Budget?
    Mr. Prior: It is not necessary for any further jobs to be destroyed as a result of the Budget. In fact, the reductions in interest rates which have already taken place, together with further reductions which may take place in line with our policy, could result in more jobs being available than would otherwise be the case.
    Mr. Ancram: Many of us welcome today's news that the overall unemployment figure in Scotland has fallen this month. While not wishing to read too much into one month's figures, does my right hon. Friend not agree that yet again that emphasises the underlying resilience of the Scottish economy and that it bodes well for the future?
    Mr. Prior: One is pleased that the increase in unemployment in Scotland over recent months has not been as severe as in other parts of the United Kingdom. Of course, Scotland has the advantage of extra jobs created by North Sea oil. It is a good sign that at last Scotland is beginning to see some benefit from past investment.
    Mr. Ashley: As many women workers in industries such as the pottery industry do not register when they become unemployed, does the Secretary of State agree that the real level of unemployment is now more than 3 million? If so, should not any responsible Minister either fight in Cabinet to reverse the Government's economic policies or resign?
    Mr. Prior: I do not accept that the right hon. Gentleman has got the figures right. It is always the case that a number of people do not register when they lose their jobs. Similarly, a number of people who register are not available for work. The Government are now supporting about 1,214,000 people in jobs through various schemes, such as temporary short-time working and so on. That clearly shows that the Government care about the level of unemployment.
    Mr. Whitney: Does my right hon. Friend agree that trade union practices have contributed massively to the present level of unemployment? Should the review of the Green Paper on trade union immunities show that further legislation is necessary to improve those practices, will he confirm that it will be possible to introduce such legislation in the next Queen's Speech?
    Mr. Prior: Unemployment is caused not only by trade union practices but by many other practices as well, for which Government and management over 20 years or more must take their share of responsibility.
    There is no doubt that if we continue to pay ourselves more money for very little extra work, we shall run ourselves into an even greater problem of uncompetitive-ness. In the last 10 years, output has increased by 1 per cent. a year—10 per cent. in 10 years—but during that period we have paid ourselves 320 per cent. more money. That is the way to ruin and high unemployment.
    Mr. Cyril Smith: Is the right hon. Gentleman aware that an additional contributry factor to the scandalous level of unemployment to which he has just referred is the

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    buying policy of Government Departments and huge industries such as British Leyland which are being financed by taxpayers' capital? For example, the Ministry of Defence establishment at Bath is purchasing goods from abroad which have previously been purchased from a British textile company. Even in the last seven days, British Leyland has placed an order in France, whereas up to this year that order was placed with a British textile company. What are the Government doing about their buying policy?
    Mr. Prior: Government Departments are instructed to buy British goods wherever possible. If any hon. Member believes that goods are being bought abroad by a Government concern which could buy those goods at home, I hope that he will let me know and I shall see that the necessary action is taken.
    Mr. Forman: Is my right hon. Friend convinced that during this deep and tragic recession the Manpower Services Commission in particular can do enough to train and retrain many of the unemployed? Is he aware that at present, according to my figures, the total number of people trained and retrained by the MSC is 92,000, which represents one-third of 1 per cent. of the working population? Can we not do more in that regard?
    Mr. Prior: Most training needs to be done by employers on their own premises. Where employers cannot carry out that training, it must be subsidised and aided by training by the MSC. I am not satisfied that we are doing enough training, but I am well satisfied that, rather than the Government providing money, employers should recognise that unless they maintain their training we shall suffer from a further shortage of skills when we come out of the recession.
    Mr. Varley: When does the right hon. Gentleman expect unemployment to fall in the remainder of this Parliament to the level which he inherited when he was appointed to his present job?
    Mr. Prior: I cannot give such an answer, any more than the Labour Government could say when they thought unemployment would fall to the level which they inherited.
    Mr. Varley: Is it not more accurate to say that the Government's economic policy is now in ruins and that it is more likely that the Secretary of State will preside over unemployment of 3 million or more before this Parliament finishes?
    Mr. Prior: It is totally incorrect to say that Government policy is not succeeding. Labour Members should recognise and understand that the present level of unemployment is due just as much to a failure to pursue the right policies over a number of years when they were in office as it is to anything which has happened in the last two years.

    Industry (Noise Levels)
    Mr. Chapmanasked the Secretary of State for Employment when he plans to meet the chairman of the Health and Safety Commission to discuss noise levels in industry.
    Mr. Waddington: I meet the chairman frequently, but have no plans at present to discuss this particular matter.
    Mr. Chapman: Will my hon. and learned friend bear in mind the fact that keeping within reasonable noise levels in factories is important not only to the health of employees but also to residents who live nearby, especially at night if factories work a shift system? Will he consult other appropriate Ministers as well as the chairman of the Health and Safety Commission? does he accept that a wider environmental dimension is increasingly important?
    Mr. Waddington: The Health and Safety Commission will shortly publish a consultative document on the protection of the hearing of people at work. Clearly, in certain circumstances, noise reductions at work for the protection of employees may also benefit the general public. The prime responsibility for combating nuisance to the public as a result of noise rests not with my Department but with my right hon. Friend the Secretary of State for the Environment, as well as with local authorities, which were given new powers in the Control of Pollution Act 1974. I shall certainly pass on my hon. Friend's remarks to the Secretary of State for the Environment. I can assure him that we all treat seriously the pollution of the environment by noise.
    Mr. Pavitt: In the International Year of Disabled People. is the Minister aware that, unless the noise threshold is reduced to 80 decibels within a short time, thousands of people will become deaf? Will he hold an urgent meeting with the chairman of the Health and Safety Commission and the CBI about taking preventive measures, such as those operated by Heinz in my constituency?
    Mr. Waddington: The hon. Gentleman will be pleased to know that the consultative document will be published before long. I understand that it will contain draft regulations dealing with noise levels at work and a draft code of practice. He will be able to state his views, as the matter will no doubt be thoroughly discussed and debated.

    Youth Service Scheme
    Mr. Dykesasked the Secretary of State for Employment whether he has received any representations with a view to the foundation of a European Community youth service scheme; and what is the Government's policy towards the project.
    Mr. Peter Morrison: My noble Friend the Minister of State, Department of Employment, has been in correspondence with the Young European Democrats' Organisation about a proposed European youth service scheme. The Government recognise the value of youth exchanges of this kind but are primarily concerned to develop schemes that already exist to encourage voluntary work by young people, including the unemployed, in this country.
    Mr. Dykes: I thank my hon. Friend for that reply. As the Department has been progressive and forward-looking about the extension of schemes for the young unemployed, does not my hon. Friend accept that this is a logical extension? Does he not agree that the EEC budget funds could do a great deal to help, if only member States held a common view?
    Mr. Morrison: There is a lot in what my hon. Friend has said. However, I hope that he agrees that some difficulties would be raised by increasing the number of foreign volunteers coming into this country.

    Industrial Relations
    Mr. Knoxasked the Secretary of State for Employment when he plans to meet the director-general of the Confederation of British Industry to discuss the long-term improvement of industrial relations.
    Mr. Prior: I have had a number of discussions with representatives of the Confederation of British Industry about the long-term improvement of industrial relations. I shall be addressing a CBI conference on the Green Paper on trade union immunities tomorrow.
    Mr. Knox: When my right hon. Friend next meets the director-general, will he impress on him the importance of greater employee participation in the long-term improvement of industrial relations? Will he also impress upon him the danger of doing nothing?
    Mr. Prior: Yes, Sir. The CBI and the director-general are well aware of the importance of bigger and better schemes for communication, information and involvement in matters that concern work forces in their places of work. I hope that the code of practice that the CBI has issued in conjunction with the Industrial Society and other organisations will be followed.
    Mr. Maclennan: Although I recognise the importance of a long-term policy, may I ask whether the right hon. Gentleman accepts that the immediate need is to help industry? When he says that unemployment can best be solved by tackling the problem of over-payments, is he saying that he favours an incomes policy rather than the massive deflation that the Budget offers?
    Mr. Prior: I do not think that that question has any relevance to the original question.
    Mr. Haselhurst: Would it be helpful to have a system of monitoring voluntary progress towards the creation of satisfactory schemes for employee participation? Might not that encourage those companies that move rather slowly?
    Mr. Prior: The CBI has a monitoring scheme. My Department is carrying out a survey, which I hope will be available later in the spring. I cannot stress too strongly that the maximum amount of importance should be attached to further schemes for involvement. When we come out of the recession, we shall need, above all, to communicate better with employees than we have done in recent years.
    Mr. John Evans: Is it not time that the Secretary of State accepted that industrial relations involve both sides of industry and that they cannot be improved by repressive anti-trade union legislation?
    Mr. Prior: No one is suggesting that industrial relations can be improved by repressive anti-trade union legislation. Nor is anyone suggesting that the law does not have an important part to play in the conduct of industrial relations. Those hon. Members who seem to think that the law should be concerned entirely with giving trade unions advantages that are not available to ordinary people need only consider what has happened in recent years to realise that the working people have done badly.

    Engineering Industry (Training)
    Mr. Scottasked the Secretary of State for Employment when last he met the chairman of the Engineering Industry Training Board to discuss training in the engineering industry.
    Mr. Peter Morrison: My right hon. Friend last met Lord Scanlon, chairman of the Engineering Industry Training Board, on 19 March. My right hon. Friend's last full discussion with him on training in the engineering industry took place on 22 October 1980.
    Mr. Scott: Will my hon. Friend confirm that Ministers were impressed by the account that Lord Scanlon gave them of the work done by the Engineering Industry Training Board in supporting training schemes—particularly apprenticeship schemes—at a time of recession when employers are cutting such schemes? When he makes up his mind about a more efficient and streamlined training system, will he bear that in mind?
    Mr. Morrison: The Department applauds the Engineering Industry Training Board's attitude towards apprenticeships, which is one of moving towards the setting of standards rather than time serving. As my hon. Friend probably knows, the MSC has already offered the Engineering Industry Training Board funds this year for 2,000 additional craft and technican trainees.
    Mr. Flannery: Is it not a fact that even in the depths of the recession in the 1930s we did not have enough engineering apprentices? Is it not disgraceful that all engineering training centres feel that they are in danger? The centre in Sheffield has had to be helped by South Yorkshire county council to maintain its training facilities. Does not the Minister accept that we need more cash if we are to train apprentices? Is he aware that if we do not get that cash we shall not be able to produce goods for the world market when the upswing comes?
    Mr. Morrison: The hon. Gentleman may know that my right hon. Friend has not made any decision about the future of any of the training boards, and least of all about the future of the Engineering Industry Training Board. He will not make any decision until the MSC has made its recommendations. As I have said, an extra 2,000 trainees have been helped through the MSC. Therefore, we are aware of the problem.
    Mr. Needham: Does my hon. Friend accept that some employers use the Government-backed schemes run through the MSC or industrial training boards to provide substitute labour? Will he give an assurance that the worries and concerns of many people on this matter are being properly looked after?
    Mr. Morrison: I have already spoken about substitution. The MSC and the Government are keeping that under close scrutiny. I cannot say more than that.
    Mr. Harold Walker: Will the hon. Gentleman confirm that by 1984 the Government will have imposed a further cut of £77·5 million in public support for industrial training? Does the Minister recall that on Second Reading of the Employment and Training Bill on 9 February he promised to consider carefully the extension of the period for Government withdrawal of financial support for the operating costs of training boards after 1983? Why is it now proposed that financial support should come to an end by 31 December 1981?
    Mr. Morrison: As the hon. Gentleman knows, on Second Reading my right hon. Friend and I said that we were aware of the difficulties facing industry as a result of the transfer of operating costs to the remaining statutory boards. That remains our position.

    Young Persons (Training Opportunities)
    Mr. Frank Allaunasked the Secretary of State for Employment, further to his reply of 24 February, Official Report, col.315–6, what proposals have now been discussed between the Manpower Services Commission and the Ministry of Defence involving unemployed young people.
    Mr. Prior: The Manpower Services Commission is currently considering proposals for a pilot scheme under which 1,000 unemployed young people would receive training in the Army for periods of up to six months. I expect to receive the views of the commission shortly.
    Mr. Allaun: Do not school leavers need industrial rather than military training? Do they not need training for life rather than training for killing? What type of Government or system is it that offers 17-year-olds a choice of unemployment or entrance into the Army?
    Mr. Prior: The hon. Gentleman should not allow his prejudices to run away with him. Such a scheme would be entirely voluntary. Many young people would like to have the opportunity of spending a bit of time with Her Majesty's Forces. It would be entirely voluntary. I am by no means certain that the Manpower Services Commission will recommend it. Speaking from my own experience, I know that many young people would like to take part.
    Mr. Stokes: Is my right hon. Friend aware that there is no better experience for young people than a period of time spent serving the Queen, when they will learn loyalty, self-discipline, self-respect and esprit de corps?
    Mr. Prior: Apart from all those estimable qualities, which my hon. Friend has to the full, and about which I fully agree, the fact is that young people could have training for a whole range of skills which they are more likely to get through this scheme than through many other schemes.
    Mr. Douglas: Will the Secretary of State treat the matter more seriously? Does he recognise that there would be a great objection if the aura of the scheme is surrounded by what we might loosely call square bashing? Does he agree that we should consider the facilities available in the Royal dockyards, such as Rosyth, for apprentice training? Is he aware that the facilities are already there, so that no new facilities would be created? They could be much more intensively used and the essential ingredient of giving young people a skill would be foremost in mind and not secondary.
    Mr. Prior: I hope that no one in the House will think that I am not taking the matter seriously. I believe emphatically that this is the type of scheme that we should consider carefully. There are some difficulties about the recruitment of apprentices into Royal Naval Dockyards and other defence establishments, but generally we need to encourage as many apprenticeships as we can afford.
    Mr. Varley: Does the Secretary of State realise that what he has said has many serious implications? We shall
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    want to know a lot more about the proposed scheme before the Opposition give it their approval. Will he give the undertaking that if the Manpower Services Commission goes ahead and approves the scheme he will make a statement so that we can discuss the matter thoroughly before committing our young people to it? Is he aware that a record number of young people want not necessarily military experience but proper long-term jobs?
    Mr. Prior: As I said in my original answer, I expect to receive the views of the Manpower Services Commission before long. I do not know what those views will be but if the commission suggests that we can go ahead with a scheme of that nature I shall report to the House.
    Mr. Frank Allaun: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise this matter on the Adjournment. This is the thin end of the wedge.

    European Community (Employment)
    Mr. Teddy Taylorasked the Secretary of State for Employment if he will initiate an inquiry into the impact on employment in the United Kingdom of membership of the EEC.
    Mr. Waddington: No, Sir. Such a study would hold value only if it were possible to quantify with certainty the separate effects of the many different factors influencing employment levels. We can, however, be certain that withdrawal from the Community, into which at present we sell over 40 per cent. of our exports, would generally have a most adverse effect on employment.
    Mr. Taylor: As Britain's performance on employment and growth under Governments of both parties since 1973 has, on the Minister's own figures, been a lot worse than that of our EEC partners, and considerably worse than those European countries which did not join the EEC, would it not be wise to have such a study to enable us to identify the changes we need to make to promote employment and growth?
    Mr. Waddington: If my hon. Friend considers the matter, I am sure that he will recognise the changing patterns of trade that have taken place, not just since we joined the Community but for many years before that. Not so many years ago, 40 per cent. or more of our trade was with the Commonwealth and America. Today, only 20 per cent. of our trade is there and 40 per cent. is with Europe. How can we contemplate cutting ourselves off from that market?
    Mr. Roy Hughes: Does the Minister appreciate that the loss of cheap food to the British housewife has had the effect of driving up wages in this country, which in turn has made our products less competitive in the markets of the world? In addition, we have had to get rid of our small tariff barriers which were effective. Is he aware that their loss has driven many industries to the wall? As regards trade with the Common Market, will he bear in mind that many of our imports are being paid for by North Sea oil?
    Mr. Waddington: I do not accept for one moment that the abolition of tariff barriers against imports from European countries has led to the present unemployment. The truth is that we have free access to the most rapidly expanding consumer market in the world, into which at present we sell well over 40 per cent. of our exports.

  PRIME MINISTER

    Engagement
    Mr. Canavanasked the Prime Minister what are her official engagements for 24 March.
    The Secretary of State for the Home Department (Mr. William Whitelaw): I have been asked to reply.
    My right hon. Friend is taking part in the meeting of the European Council at Maastricht in the Netherlands.
    Mr. Canavan: Is it sheer coincidence that when, for the first time in the lifetime of this Parliament, I have landed question No. 1 to the Prime Minister, she has hopped off to Holland for a Common Market meeting? As the Prime Minister is primarily responsible for today's announcement of yet another appalling record unemployment total, will the Home Secretary send an urgent message to the Prime Minister telling her not to bother to come back because we shall all be better off without her?
    Mr. Whitelaw: I will do my best.—[Interruption.] I will do my best to hear the hon. Gentleman. If he wishes to refer to the unemployment figures, my right hon. Friend the Secretary of State for Employment has made the position clear. If the policies that his party proposes were to be followed, the situation would be a great deal worse and he and his party know that.
    Mr. John Townend: Will my right hon. Friend take time today to remind the public sector unions that, if their policy of obstructing the collection of revenue is successful, it could well lead to increasing pressure on the Government to suspend the inflation-proofing of public sector pensions?
    Mr. Whitelaw: I hope that all those taking part in this unfortunate dispute will realise their great responsibilities to the public.
    Mr. Beith: Has the Home Secretary seen the reports of what the Prime Minister has said today in Holland about the fisheries dispute? While he may welcome, as most of us will, an attempt to resolve that dispute, will he assure the Prime Minister that there will be great anger in the fishing community if she gives way on access in order to secure a settlement?
    Mr. Whitelaw: It is clear from the reports from Maastricht that my right hon. Friend has made the position of this country's fishing industry very clear. She will make a statement when she returns.
    Mr. Peter Bottomley: Will my right hon. Friend take time today to spell out to those who want to share equally in the country's wealth that they have another 10 days in which to apply to buy their homes at the prices set in August last year?
    Mr. Whitelaw: I agree with my hon. Friend. No doubt some of those Labour councils which have been trying to obstruct the development will realise how stupid they have been.
    Mr. Winnick: Bearing in mind the remarks of the hon. Member for Reigate (Mr. Gardiner) to the effect that a number of his Conservative colleagues are trying to replace the Prime Minister as leader, will the right hon. Gentleman say whether such plotting has minority or, by now, majority support in the Cabinet?
    Mr. Whitelaw: If any people are taking that view, they are very stupid indeed.
    Mr. Marlowasked the Prime Minister if she will list her official engagements for 24 March.
    Mr. Whitelaw: I have been asked to reply.
    I refer my hon. Friend to the reply which I gave earlier.
    Mr. Marlow: Is my right hon. Friend aware that BSC at Stanton and Staveley is setting up a Companies Act company with a separate board of directors? Will my right hon. Friend confirm that that is the beginning of a massive programme of denationalisation and that, as that takes place, workers and employees in the nationalised industries will be able to buy a stake in their companies and participate? Does he agree that they will then have a stake in their workplace and that the nationalised industries will have a rather lower stake in the taxpayers' pocket?
    Mr. Whitelaw: As my hon. Friend the Minister of State, Department of Industry, said on 19 March, the proposals made in that case will pave the way For privatisation.
    Mrs. Renée Short: Is the right hon. Gentleman aware of the serious situation facing many of London's postgraduate medical institutions? Is he aware that the Royal postgraduate school at Hammersmith lost £941,000 this year and that the London School of Hygiene and Tropical Medicine lost about £750,000 because of the decline in the number of overseas doctors coming here as a result of the increase in students' fees?
    Will the right hon. Gentleman ask the Prime Minister to take that on board urgently and ensure that the Secretary of State for Education and Science, who is due to meet Lord Annan shortly, gives a reprieve to the postgraduate schools?
    Mr. Whitelaw: This matter has been argued exhaustively. The Government position has been made clear. I shall draw my right hon. Friend's attention to what the hon. Lady has said.
    Mr. John MacKay: Would it not have been better if the hon. Member for West Stirlingshire (Mr. Canavan) had acknowledged that the unemployment figures for Scotland this month show a slight but nonetheless welcome decline?
    Mr. Whitelaw: It would indeed have been better, but it would not have been reasonable to expect him to do so.
    Mr. Pavitt: Will the right hon. Gentleman exercise his well-known chivalry on behalf of the fair sex following the insensitivity of the Prime Minister in reply to questions about private medicine and the National Health Service? Is he aware that the Prime Minister's answer last week indicated her lack of understanding that women at the change of life are penalised unless they have the power of the purse to relieve them of their pain and misery? Will the right hon. Gentleman persuade the Prime Minister to take a different attitude?
    Mr. Whitelaw: I shall speak to my right hon. Friend and tell her what the hon. Gentleman has said.
    Mr. Best: With reference to his earlier reply, will my right hon. Friend welcome the fact that in the 18 months since the Government took office 120,000 council and new town houses have been sold to their tenants? Is he aware that since 3 October, when the right to buy arose,

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    and 31 December, another 100,000 tenants have applied to buy their own homes? Does he agree that that represents a complete endorsement of the Government's policy to sell council houses and is in line with the desire of the people? Does he agree that the measure will be heralded by future generations as being one of the major social advances of this century?
    Mr. Whitelaw: I entirely agree with my hon. Friend. I find it extraordinary that some Labour councils are apparently against something which so many people in their areas want. Why are they against it? Nobody can explain except them.
    O3. Mr. Fosterasked the Prime Minister if she will list her official engagements for Tuesday 24 March.
    Mr. Whitelaw: I have been asked to reply.
    I refer the hon. Gentleman to the reply which I gave earlier.
    Mr. Foster: It is assumed that unemployment will rise to 3 million and stay there for two years. Is the right hon. Gentleman aware that that implies that there will be 700,000 long-term unemployed? What is the Government's policy for the long-term unemployed, apart from reducing their benefits and hounding them with the DHSS fraud squad? What message of hope can we give to the long-term unemployed in the Northern region?
    Mr. Whitelaw: I shall not indulge in forecasting nor will I accept some of the forecasts that have been made. I represent a constituency in the North and I take the Northern region's position very seriously indeed. The most important factor that will help the long-term unemployed in the Northern region and elsewhere is a reduction in inflation, which the Government are determined to achieve.
    Mr. Moate: Will my right hon. Friend try to explain the practical purpose of the proposed new Common Market format burgundy passport?
    Mr. Whitelaw: The proposed passport has been under discussion for a considerable time. The discussions were initiated by the right hon. Member for Huyton (Sir H. Wilson) when he was Prime Minister. Discussions are still continuing. We shall have to see how we get on and how eventually we plan the passport.
    Mr. Greville Jannerasked the Prime Minister whether she will list her official engagements for Tuesday 24 March.
    Mr. Whitelaw: I have been asked to reply.
    I refer the hon. and learned Gentleman to the reply which I gave earlier.
    Mr. Janner: Will the right hon. Gentleman draw the Prime Minister's attention to the very high unemployment level in areas such as Leicester, which were until recently prosperous, but where over 10 per cent. are now unemployed and where over 15 per cent. of the workers are on short time? Is he aware that in one school in Leicester parental unemployment is over 40 per cent.? What will he do to help areas which were prosperous but which are now sinking fast under his Administration?
    Mr. Whitelaw: I certainly accept the serious position of Leicester, which I visited recently. I say to the hon. and learned Gentleman what my right hon. Friends and I have said consistently—that the policy of bringing down inflation is the best means of finding jobs for such people.
    Mr. Brotherton: What is the purpose of the burgundy-coloured Common Market passport?
    Mr. Whitelaw: The purpose, as originally proposed when discussions were first undertaken, was to have a common passport throughout the European Community.
    Mr. David Steel: Is the right hon. Gentleman aware that on the radio at lunchtime the Secretary of State for Employmnent said that he was constantly raising the unemployment situation within the Cabinet. In the absence of the Prime Minister, will the Home Secretary arrange for the Secretary of State for Employment to have a more sympathetic hearing?
    Mr. Whitelaw: My right hon. Friend the Secretary of State for Employment has always had a sympathetic hearing. What people do or do not raise in the Cabinet is a matter for members of the Cabinet and nobody else.
    Sir Derek Walker-Smith: Can my right hon. Friend say whether it is a fact that the burgundy-coloured passport was the brainchild of that noted "vinophile" Mr. Roy Jenkins?
    Mr. Whitelaw: I do not wish to comment on its parentage. Let us see how the child gets on.
    Mr. Foot: Since the right hon. Gentleman has been so reticent about what takes place in the Cabinet, can he give us his view, or that of the Prime Minister, on the speeches at the weekend by the Minister of Agriculture, Fisheries and Food? Without revealing any Cabinet secrets, can he say whether he belongs to that half of the Cabinet that agrees with the Minister of Agriculture, Fisheries and Food?
    Mr. Whitelaw: I note that my right hon. Friend said in his speech at Worcester that the Conservative Party will be the governing party of Britain for the next half century. I entirely agree. I only wish that I could be there to see it.
    Mr. Foot: I invite the right hon. Gentleman to stick around for a little longer. Did he also read those sections of the speech attributed to the Minister of Agriculture, Fisheries and Food in which he said that if it had not been for public expenditure over a whole range of Government policies unemployment would be very much higher than it is? Does the right hon. Gentleman agree with all that public expenditure? Does he wholeheartedly approve the whole of that speech?
    Mr. Whitelaw: Certainly I agree with my right hon. Friend's remarks about expenditure on different industries. If it had not been for our support for British Leyland, not only would many jobs have been lost at British Leyland but many more jobs would have been lost in component industries throughout the West Midlands. If it had not been for public expenditure on the youth unemployment and training programmes the situation would have been very much worse. Everybody in the House will agree with those two examples.
    Mr. Nicholas Winterton: Will my right hon. Friend get a message to the Prime Minister while she is in Holland indicating that harmonisation of Excise duties on beer and wine are putting many brewery workers in this country out of work? We are merely soaking up the wine lake of Europe. Will the Government slow down the harmonisation so that we do not drink so much wine but drink more beer?
    Mr. Whitelaw: I do not think that I would seek to comment on the relative merits of drinking more wine as opposed to drinking more beer. I shall refer the remarks of my hon. Friend to my right hon. Friend the Prime Minister when she returns.
    Miss Joan Lestor: If the right hon. Gentleman gets time today to read my local paper he will see a report of the death of a youth who committed suicide because he was unable to find a job. In view of the seriousness of
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    unemployment among young people, may I ask the right hon. Gentleman to say to what level inflation has to fall before a decrease in unemployment can be expected?
    Mr. Whitelaw: The hon. Lady has referred to a most tragic case reported in her local paper. I recognise the seriousness of that matter. I can only repeat what I believe to be the absolutely fundamental truth, that if we get inflation down we shall provide real and sensible jobs for our people in the future. There is no other way. The policies of the Opposition would make the situation a great deal worse.

Canvey Island (Planning Inquiry)
The Secretary of State for the Environment (Mr. Michael Heseltine): With permission, I shall make a statement about Canvey Island.
An exploratory local inquiry was held in 1975 to consider whether to revoke outline planning permission that had been granted to United Refineries Limited for an oil refinery. At the inquiry an assessor recommended study of the inter-related risks of the Canvey area. This study was then carried out by the Health and Safety Executive, which concluded that the risks did not justify closure of any of the existing installations at Canvey provided that certain improvements were carried out. The local inquiry was reopened in 1980 to take account of its findings and the inspector was asked to consider the safety aspects of the proposed refinery, having regard to existing uses in the vicinity.
I am publishing the inspector's report today. Copies have been placed in the Library.
On the matters under consideration before the inquiry, the inspector found no real disagreement with the Health and Safety Executive's findings on the order of risks involved, and he concluded that the additional risk from the proposed refinery would in itself be comparatively small.
However, notwithstanding improvements initiated following the HSE study, the inspector was concerned about the possible consequences of any incident at the nearby British Gas methane terminal, and judged that it would be wrong for that terminal to remain sited so close to the resident population unless a foolproof device for the protection of the public could be installed.
I must stress that the methane terminal was not itself the subject of the inquiry. The inspector did not consider, and was not asked to consider, all the issues involved in the safety of this plant, but in the light of his very serious remarks I consider that it is essential for these issues to be properly and urgently subjected to a full inquiry, at which all the facts and opinions can be evaluated and considered.
I am therefore today contacting the Castle Point district council with a view to arranging a full inquiry under planning powers, to be arranged as soon as possible. The inspector, with specialist assessors, will be asked whether it would be right to begin discontinuance procedures or whether, in the light of the evidence given to the inquiry, such a step would be inappropriate.
As the terminal is operational land of a statutory undertaker the report will be made to my right hon. Friend the Secretary of State for Energy as well as to me. Meanwhile, I propose to defer further a decision on whether the United Refineries Limited permission should be revoked. I shall also defer deciding a planning appeal by London and Coastal Oil Wharves Limited for development at its site near the methane terminal.
I am sure that the House will agree that we must reach properly informed decisions on these issues, which concern both the safety of people living in the area and the public interest in maintaining the gas supply.
Mr. Gerald Kaufman: I thank the Secretary of State for making the statement. I thank him, in particular, for deciding to publish the report. That is a most helpful action. I am sure that he will agree that there will be a great deal of concern in the Canvey, Thurrock area, which is in any case a high-risk area, as a
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result of his announcement, not because anyone would quarrel with it or challenge it but because the very fact that the right hon. Gentleman has called for an inquiry will, of itself, heighten anxiety about the situation in this area.
Will the right hon. Gentleman give the House an assurance that the inquiry will be as speedy as possible and that the outcome and the findings will be published as quickly as possible? Will he also assure the House that whatever the findings and recommendations of the inquiry, and whatever interest they may damage, if they are helpful to the environment of the people living in the area he will not flinch from carrying them out?
Mr. Heseltine: I am grateful for the right hon. Gentleman's comments. I think that I can help. I would want to proceed as quickly as possible, compatible with the thorough nature of the job to be done and the preparation of the necessary work and evidence. The inspector's report that follows from the inquiry would have to be published. I take the point put to me by the right hon. Gentleman that there is bound to be public concern and public interest in the matter. It has been a characteristic of this situation for a considerable time. In one sense, I believe that the holding of a major public inquiry of this sort will reassure people of the Government's determination to see that all the issues are properly ventilated as quickly and as effectively as possible.
Sir Bernard Braine: Is my right hon. Friend aware that having fought for years for a full investigation of the huge concentration of risk from gas, chemical and oil storage to which my constituents have been exposed, I am delighted, as they will be, to hear that this is now conceded and that, in the meantime, the development of other hazardous activities is to be frozen? That is a victory for common sense.
My right hon. Friend will appreciate that when I have studied the inspector's report there will no doubt be many questions that I shall wish to ask. There are, however, three that occur to me now. First, will my right hon. Friend be good enough to explain why it is necessary to have an exploratory inquiry—that is, an inquiry into an inquiry—into the feasibility of removing the British Gas terminal, which accounts for one-third of the total potential risk to my constituents? Surely, if he is to allay public anxiety about a major hazard that has already had three enforcement notices served on it by the Health and Safety Executive for neglect of elementary safety precautions, he should set up his main inquiry forthwith.
Secondly, my right hon. Friend will know that British Gas is already decommissioning its below-ground storage of liquefied natural gas. Can he tell the House how long this welcome process will take?
Finally, can my right hon. Friend give me an assurance that in the meantime the British Gas Corporation will not be permitted to reactivate its liquefied petroleum gas pipeline, as it is seeking to do, which would give it an excuse for permanent above-ground LPG storage on the island?
Mr. Heseltine: I believe that the whole House is aware of the assiduous manner in which my hon. Friend has sought to represent the interests of his constituents as he saw them. I am grateful for his remarks. I shall try to deal with the questions that he has put.
The inspector's report arose not from an inquiry into the methane terminal but from an inquiry into another

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planning matter. In that sense, it would be wrong for me to make a final judgment about whether I have the evidence upon which to move for discontinuance and, therefore, to that extent, to put the Government's opinion behind such a step.
I fully understand the validity of my hon. Friend's question, but in the circumstances it is right to establish the facts in respect of the British Gas terminal before we decide whether it is right to discontinue it.
My hon. Friend's second question concerned the time taken to decommission the underground storage. I understand that the time is expected to be about two years, but of course it will depend on the availability of alternative storage, principally in the Isle of Grain.
The third question concerned the reactivation of the liquid gas pipeline. The Health and Safety Executive would need to approve any such proposals, but I understand that at present it is not proposed to increase overground storage in connection with the reactivation of any underground pipeline. If that were to happen it would again be within the purview of the Health and Safety Executive.
Mr. Speaker: I propose to call the three hon. Members who have been rising.
Dr. Oonagh McDonald: Does the hon. Gentleman accept that his statement will be very welcome to the people of Thurrock? Will he assure the House that, in the additional inquiry that is about to commence, Thurrock borough council will be consulted, since a major incident in the Canvey Island area would affect Stanford-le-Hope and Corringham in my consituency? Will the right hon. Gentleman further accept that, to ensure public safety, further public spending may be involved or that assistance may need to be given to the companies that are already present in the area? Will he ensure that public expenditure of that nature will be forthcoming if the results of the inquiry show that it is necessary.
Mr. Heseltine: We shall, of course, keep the Thurrock borough council fully involved. It will be fully aware of
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the procedures and will have an opportunity to make its views known to the inquiry, should it wish to do so. At the moment, it is premature to try to judge what may emerge from the inquiry and to make commitments about public expenditure. The cost of accommodation would fall to Castle Point district council and the cost of the inquiry itself would fall to my Department. However, we shall have to judge the recommendations and findings of any report and then decide on the expenditure that may be necessary. If the Government decided that it was in the interests of the safety of the people to take certain steps, I cannot believe that public expenditure constraints would prove an overriding barrier
Sir Albert Costain: Is my right hon. Friend aware that Trinity House pilots are extremely concerned about the Merchant Shipping Act which could result in a relaxation of pilotage in this part of the River Thames? Will my right hon. Friend arrange for them to give evidence in any inquiry?
Mr. Heseltine: I am sure that they would have a right to give evidence to the inquiry. Clearly, they would regard that as important.
Mr. Sydney Chapman: I congratulate my right hon. Friend on the care and consideration that he has given to what is, by any standards, a vital safety and planning matter, and which, if he takes a certain decision, may be without precedent. Will he confirm that the planning permission was given by the Secretary of State and not by a local planning authority? Will he say what compensation is likely in the event of a revocation taking place?
Mr. Heseltine: I thank my hon. Friend for what he says, but I think that the procedures should be allowed to take their course before the House makes judgments about how the bills are to be apportioned between public bodies. Clearly, issues of public safety would have to prevail, and the allocation of costs would need to be discussed in those circumstances.

Lloyd's Bill (Members' Interests)
Mr. Jack Straw: On a point of order, Mr. Speaker. I raise a point of order relating to voting on the Lloyd's Bill, of which I gave notice to you and to the right hon. Member for Crosby (Sir G. Page), who is steering the Bill through the House. I seek your guidance whether Members of the House who are members of Lloyd's have a direct pecuniary interest that is immediate and personal such as to require them not to vote on the Bill, whether for or against it.
On 9 December last year, the Chairman of Ways and Means said that as he was a member of Lloyd's, a fact that is recorded in the Register of Members' Interests,
"it would be undesirable for me to discharge, in relation to the Lloyd's Bill, the various duties which the House imposed upon the Chairman of Ways and Means".
Although I accept that his position is somewhat different from that of ordinary Members, I believe that the principle is the same, and that other Members of the House who are members of Lloyd's should act in a similar way and not vote. However, I read in today's Financial Times that the right hon. Member for Crosby has issued a statement saying that he does not think that a member of Lloyd's need refrain from voting for fear of a challenge that his vote would be disqualified.
At page 407 of "Erskine May" we are told:
"it is a rule that no Member who has a direct pecuniary interest in a question shall be allowed to vote upon it: but, in order to operate as a disqualification, this interest must be immediate and personal, and not merely of a general or remote character".
There are 53 Members of the House who are members of Lloyd's, including 13 Government Members. Some of them are brokers or underwriting members, but most of them are names who put their total personal wealth at risk and have to show that they have £100,000 at least in unencumbered assets, and the whole of that amount is put at risk by their membership of Lloyd's. It is self-evident that their interest in Lloyd's is direct, pecuniary and, above all, immediate and personal. Indeed, nothing could be more immediate and personal than having the whole of one's personal wealth at risk.
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The Lloyd's Bill goes to the heart of the operations of the Society of Lloyd's. It not only provides for the disciplining of members by which they may lose their livelihood, but, in clause 8, it defines the liability of members of Lloyd's.
The noble Lord Salmon in the Royal Commission on Standards of Conduct in Public Life said at page 37:
"the prime purpose of rules and laws requiring the declaration of interests is to enable him to separate his legitimate private interests from his official duties. The existence of such rules and laws is also a reassurance of the public that those engaged in the work of public bodies do indeed separate their private interests and public duties in the way that is expected of them".
Whatever the strict legal position, there are the strongest ethical reasons for members of Lloyd's not to vote in the debate today. It would be inconsistent with the standards of public life that one expects. However, it is a case that falls fairly and squarely within the rules, and members of Lloyd's should be advised that they are likely to be disqualified if they vote for or against the Bill.
Sir Graham Page: Further to that point of order, Mr. Speaker. Having studied "Erskine May", and having seen cases where the shareholders in a company have promoted a Bill and had their votes allowed—and not disallowed—in such cases, I took it upon myself, having been asked by the presenter of the Bill to move the Second Reading, to tell Members that I did not believe that their vote could be challenged.
If there is any doubt about the matter, I am happy to advise those Members who are members of Lloyd's to refrain from voting, because I am quite satisfied that the Bill will achieve its objects and will be accepted by the House on its merits.
Mr. Speaker: I am deeply grateful to the right hon. Gentleman for his remarks. On the question of a pecuniary interest, I am of the opinion that if any right hon. or hon. Member has the slightest doubt about the matter he should not vote. If he votes, he takes the risk that the House itself could disallow the vote afterwards. However, I am much obliged to the right hon. Gentleman for his statement, which has saved me adding anything to what he has said.

House of Commons Disqualification Act 1975 (Amendment)
3.50 pm
Mr. Dennis Canavan: I beg to move,
That leave be given to bring in a Bill to amend the House of Commons Disqualification Act 1975 by inserting among the persons disqualified for membership of the House of Commons any person who, having been described on the ballot paper at the time of his election to the House of Commons as a candidate for any political party, thereafter resigns his membership of that party.
You are unique in many respects, but especially because you are the only Member of the House who was not elected to Parliament on a party political description—at least, not at the latest general election. All other hon. Members stood as party political candidates and were elected because the majority of voters voted for their political allegiances. The majority of people voting in a general election are voting not simply on the merits or demerits of candidates as individuals; they are voting Labour, Tory or Liberal, as the case may be. It is sheer arrogance on the part of any hon. Member to pretend otherwise.
Since the 1970 general election a space has been reserved on the ballot paper for a description of the candidate. Most candidates have used that space to describe their party political affiliations. I do not know of any hon. Member who, at the 1979 general election, described himself as a Social Democrat, yet there are 13 Social Democrats sitting in the House who, in 1979, stood as Labour candidates, and one who stood as a Tory candidate. They have the brass neck to sit here having resigned from their parties. They call themselves Social Democrats.
There is nothing new in all this. The history of the Parliamentary Labour Party is littered with the political corpses of people who thought that they could break away and go it alone—for example, Oswald Mosley, Desmond Donnelly, Dick Taverne, Jim Sillars, and the right hon. Member for Daventry (Mr. Prentice), who was elected to the House as the Labour Member for Newham, North-East and who crossed the Floor of the House to join the most reactionary Right-wing Government ever.
I accept that anybody is entitled to change his mind, especially a politician. Even St. Paul had his road to Damascus, but he had the slight advantage that he finished facing in the correct direction. If elected representatives of the people—elected because thousands voted for the general philosophy and policies of the party for which they stood—resign membership of their parties it is incumbent upon them to resubmit themselves to the electorate who put them in the House. Otherwise, they can rightly be accused by their electorate of hanging on to their seats and parliamentary salaries under false pretences.
Even Dick Taverne, for whose policies I had no great respect, at least had the decency and guts to resubmit himself to the people of Lincoln. The members of this latest bunch of so-called Social Democrats seem to be following the bad example of the right hon. Member for Daventry by refusing to test their new colours before their constituents. These people are phoney democrats. They are anti-social and anti-democratic. They are taking a massive swipe at representative democracy as we know it. They pose as the guardians of parliamentary democracy,
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but the truth is that at the 1979 general election 255,558 Labour voters in 13 constituencies who successfully voted for the return of a Labour Member of Parliament now find themselves deprived of their Labour representatives and are instead being represented by so-called Social Democrats.
To prove that I have no party political bias, I can tell the House that 33,796 Tory voters in one Tory constituency who successfully voted for the return of a Tory Member to Parliament now find themselves represented by a so-called Social Democrat.
The whole business is bringing Parliament into disrepute and is being exacerbated by the influence of certain extra-parliamentary non-elected unrepresentative forces which are trying to engineer it all. I refer, for example, to Shirley Williams. At the last general election she achieved the remarkable feat of turning a safe Labour majority of almost 10,000 into a Tory majority of more than 1,000. Roy Jenkins is another enemy of parliamentary democracy. That is clearly demonstrated by his fanatical devotion to the bureaucracy of the Common Market. I understand his fanaticism, because he made £250,000 during the past four years as head of the Commission. He returned home and found that his £30,000 a year severance pay was not enough pocket money. He has become a merchant banker. He bought a half-page advertisement in The Guardian to recruit more subversive elements.
The only honourable and decent course for the Jenkinsites is to resign. If they wish, they can stand in the subsequent by-election under their new colours. If any of them have the decency and guts to stand in a by-election they will get their come-uppance. The majority of voters, especially in Labour constituencies, do not have much time for defectors, turncoats and traitors. Those enemies of democracy will be exposed in any by-election and thrown out on their necks.
My Bill will do a public service. I appeal to all moderate Members such as myself who are interested in the preservation of parliamentary democracy to support it.
Several Hon. Members rose——
Mr. Speaker: Order I have received notice that the hon. Member for Thornaby (Mr. Wrigglesworth) seeks to oppose the motion.
3.59 pm
Mr. Ian Wrigglesworth: I pay tribute to the hon. Member for West Stirlingshire (Mr. Canavan) for his wit—both intended and unintended—but not for his interpretation of parliamentary democracy. As he said, there is nothing new in all this. It is the sort of action that has been taken in the representative system of parliamentary democracy in Britain for many centuries. The hon. Gentleman is proposing a matter of the utmost importance to Parliament—not only to the Social Democrats, but to the whole House. He raised the question of who should have the right to disqualify or remove an hon. Member from the House.
I ask the House to oppose the introduction of the Bill because it is a fundamental attack on the principles of representative parliamentary democracy. The House should uphold the established view that only constituents have the right to remove Members. It is a further move—and the source of the Bill is significant—in the

815
direction of extending the authority of the party label over Members of the House, because it would undermine the principle of representative parliamentary democracy.
The House has a duty to uphold the view that constituents are the only people who should have the right to remove a representative. The relationship with constituents is the most important relationship that hon. Members have. It is wrong to seek to make an hon. Member responsible to anyone other than the electorate. That is what the Bill proposes to do. It seeks to extend the authority of the party over the Member of Parliament. It seeks to remove people who have reneged not on a party manifesto but simply on a party label, irrespective of what that party decides to do and whether that party changes its constitution, personality and policies. The Bill seeks to tie the Member of Parliament to the party label.
In those circumstances, inevitably the question is raised as to who controls the party label. Parties change their policies, personalities and constitution from time to time. By implication, the Bill is saying that an hon. Member must accept that it is his party, right or wrong, irrespective of the conscience and attitude of the individual hon. Member.
The Bill is only one step removed from the time when the withdrawal of the party whip would mean expulsion from the House of the hon. Member concerned. The Bill does not do that, but it is only one short step from it.
The most fundamental aspect of the matter is that the Bill undermines the principle of representative parliamentary democracy. In his speech in Bristol, which has been quoted many times in debates in the Labour Party in recent years, Burke laid out the principles upon which hon. Members sit in this place. There is nothing inevitable about the way in which the parties have begun to encroach more and more upon hon. Members and upon the House in recent years. My colleagues and I would like to see that process reversed. There has been pressure, particularly in the Labour Party in recent times, to turn hon. Members into delegates. Other hon. Members and I resisted that pressure strongly, and the House should resist it strongly today.
Many hon. Members will be watched by their constituents today to see whether they vote for the extension of the sort of campaign that has been run by the Campaign for Labour Party Democracy to seek to shackle hon. Members to their party and its policies and constitution, irrespective of their own views.
I hope that the House will bear in mind the implications of the Bill and will not be swayed by short-term political advantage. I hope that it will consider the profound constitutional implications of writing into a statute a means of disqualifying hon. Members from the House.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and nomination of Select Committees at commencement of public business):
The House divided: Ayes 142, Noes 166.

Division No. 120]

[4.00 pm

AYES

Abse, Leo

Bennett, Andrew (St'kp'tN)

Adams, Allen

Bidwell, Sydney

Allaun, Frank

Booth, Rt Hon Albert

Archer, Rt Hon Peter

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

Ashton, Joe

Brown, Michael (Brigg&Sc'n)

Atkinson, N. (H'gey,)

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

Barnett, Guy (Greenwich)

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

816

Campbell-Savours, Dale

Lyon, Alexander (York)

Canavan, Dennis

McCartney, Hugh

Carmichael, Neil

McKay, Allen(Penistone)

Carter-Jones, Lewis

McKelvey, William

Clark, Dr David (S Shields)

McNamara, Kevin

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

McTaggart, Robert

Coleman, Donald

McWilliam, John

Concannon, Rt Hon J. D.

Marlow, Tony

Cook, Robin F.

Marshall, D (G'gowS'ton)

Cowans, Harry

Marshall, DrEdmund (Goole)

Crowther, J. S.

Marshall, Jim (Leicester S)

Cryer, Bob

Martin, M (G'gow S'burn)

Dalyell, Tam

Maxton,John

Davidson, Arthur

Maynard, Miss Joan

Davies, Rt Hon Denzil (L'lli)

Meacher, Michael

Davis, Clinton (Hackney C)

Mikardo, Ian

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

Millan, Rt Hon Bruce

Deakins, Eric

Morris, Rt Hon A. (W'shawe)

Dean, Joseph (Leeds West)

Morris, Rt Hon J. (Aberavon)

Dixon, Donald

Morton, George

Dobson, Frank

Newens, Stanley

Dormand, Jack

O'Neill, Martin

Dubs, Alfred

Orme, Rt Hon Stanley

Duffy, A. E. P.

Pavitt, Laurie

Dunwoody, Hon Mrs G.

Powell, Raymond (Ogmore)

Eadie, Alex

Prescott, John

Eastham, Ken

Price, C. (Lewisham W)

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

Richardson, Jo

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

Robert s, Albert (Normanton)

English, Michael

Robert s, Allan (Bootle)

Ennals, Rt Hon David

Robert s, Ernest (Hackney N)

Evans, Ioan (Aberdare)

Rooker, J. W.

Evans, John (Newton)

Ross, Ernest (Dundee West)

Fletcher, Ted (Darlington)

Rowlands, Ted

Foot, Rt Hon Michael

Ryman, John

Foster, Derek

Sever, John

Foulkes, George

Sheerman, Barry

Freeson, Rt Hon Reginald

Sheldon, Rt Hon R.

Garrett, John (Norwich S)

Short, Mrs Renée

Garrett, W, E. (Wallsend)

Silkin, Rt Hon J. (Deptford)

Golding, John

Silverman, Julius

Graham, Ted

Skinner, Dennis

Grant, George(Morpeth)

Smith, Cyril(Rochdale)

Hamilton, James (Bothwell)

Smith, Rt Hon J. (N Lanark)

Harrison, Rt Hon Walter

Soley, Clive

Hattersley, Rt Hon Roy

Stallard, A. W.

Haynes, Frank

Stott, Roger

Heffer, Eric S.

Strang, Gavin

Hogg, N. (E Dunb't'nshire)

Straw, Jack

Homewood, William

Taylor, Mrs Ann (Bolton W)

Hughes, Mark (Durham)

Thorne, Stan (Preston South)

Hughes, Robert (Aberdeen N)

Tilley, John

Jay, Rt Hon Douglas

Tinn, James

Johnson, James (Hull West)

Torney, Tom

Jones, Barry (East Flint)

Urwin, Rt Hon Tom

Jones, Dan (Burnley)

Watkins, David

Kilroy-Silk, Robert

Welsh, Michael

Lambie, David

White, Frank R.

Lamond, James

Williams, Rt Hon K(S'sea W)

Leadbitter, Ted

Winnick, David

Leighton, Ronald

Woolmer, Kenneth

Lestor, Miss Joan

Young, David (Bolton E.)

Lewis, Arthur (N'ham N W)

Lewis, Ron (Carlisle)

Tellers for the Ayes:

Litherland, Robert

Mr. Mart in Flannery and Mr. Russell Kerr.

Lofthouse, Geoffrey

NOES

Adley, Robert

Bonsor, Sir Nicholas

Alexander, Richard

Boscawen, Hon Robert

Ancram, Michael

Bottomley, Peter (W'wich W)

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

Bowden, Andrew

Baker, Nicholas (N Dorset)

Braine, Sir Bernard

Beaumont-Dark, Anthony

Bright, Graham

Beith, A, J.

Brinton, Tim

Bell, Sir Ronald

Brooke, Hon Peter

Bendall, Vivian

Browne, John (Winchester)

Berry, Hon Anthony

Bruce-Gardyne, John

Biggs-Davison, John

Buchanan-Smith, Alick

Blackburn, John

Buck, Antony

817

Chalker, Mrs. Lynda

Howells, Geraint

Chapman, Sydney

Hunt, John (Ravensbourne)

Churchill, W, S.

JohnsonSmith, Geoffrey

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

Johnston, Russell(Inverness)

Clark, Sir W. (Croydon S)

Jopling, Rt Hon Michael

Clarke, Kenneth (Rushcliffe)

Kaberry, Sir Donald

Cope, John

Kimball, Marcus

Corrie, John

Knight, MrsJill

Cranborne, Viscount

Knox, David

Cunningham, G. (Islington S)

Latham, Michael

Dean, Paul (North Somerset)

Lawrence, Ivan

Dorrell, Stephen

LeMarchant, Spencer

Douglas-Hamilton, LordJ.

Lester Jim (Beeston)

Dunn, Robert (Dartford)

Lewis, Kenneth (Rutland)

Durant, Tony

Lloyd, Ian (Havant & W'loo)

Dykes, Hugh

Mabon, Rt Hon Dr J. Dickson

Eggar, Tim

McCrindle, Robert

Elliott, Sir William

MacKay, John (Argyll)

Emery, Peter

McQuarrie, Albert

Fairgrieve, Russell

Major, John

Farr, John

Marland, Paul

Fell, Anthony

Marten, Neil (Banbury)

Fisher, Sir Nigel

Mather, Carol

Fitch, Alan

Mawby, Ray

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

Mawhinney, Dr Brian

Fletcher-Cooke, Sir Charles

Maxwell-Hyslop, Robin

Forman, Nigel

Meyer, Sir Anthony

Forrester, John

Miller, Hal (B'grove)

Fowler, Rt Hon Norman

Mills, Peter (West Devon)

Freud, Clement

Montgomery, Fergus

Garel-Jones, Tristan

Morgan, Geraint

Gilmour, Rt Hon Sir Ian

Murphy, Christopher

Glyn, Dr Alan

Needham, Richard

Goodlad, Alastair

Newton, Tony

Gow, Ian

Page, Rt Hon Sir G. (Crosby)

Greenway, Harry

Parkinson, Cecil

Grimond, Rt Hon J.

Parris, Matthew

Gummer,JohnSelwyn

Patten, Christopher (Bath)

Hamilton, Michael (Salisbury)

Pawsey, James

Hampson, Dr Keith

Pollock, Alexander

Haselhurst, Alan

Porter, Barry

Hawkins, Paul

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

Hayhoe, Barney

Price, Sir David (Eastleigh)

Heddle, John

Prior, Rt Hon James

Higgins, Rt Hon Terence L

Proctor, K. Harvey

Holland, Philip (Carlton)

Pym, Rt Hon Francis

Howell, Ralph (N Norfolk)

Rathbone, Tim

818

Rees-Davies, W. R.

Thompson, Donald

Rhodes James, Robert

Thornton, Malcolm

Ridley, Hon Nicholas

Townend, John(Bridlington)

Rifkind, Malcolm

Trippier, David

Rost, Peter

Trotter, Neville

Sainsbury, Hon Timothy

Vaughan, Dr Gerard

St. John-Stevas, Rt Hon N.

Viggers, Peter

Scott, Nicholas

Wainwright, R (Colne V)

Shaw, Michael (Scarborough)

Wakeham, John

Shelton, William (Streatham)

Walker, B. (Perth)

Shepherd, Colin(Hereford)

Walker-Smith, Rt Hon Sir D.

Shepherd, Richard

Ward, John

Silvester, Fred

Wells, Bowen

Sims, Roger

Wheeler, John

Skeet, T. H. H.

Whitehead, Phillip

Smith, Dudley

Whitney, Raymond

Speller, Tony

Wiggin, Jerry

Squire, Robin

Wigley, Dafydd

Steel, Rt Hon David

Wilkinson, John

Stevens, Martin

Williams, D (Montgomery)

Stewart, Ian (Hitchin)

Winterton, Nicholas

Stewart, A. (E Renfrewshire)

Younger, Rt Hon George

Stokes, John

Stradling Thomas, J.

Tellers for the Noes:

Temple-Morris, Peter

Mr. Patrick Cormack and Mr. Michael Brotherton.

Thomas, Rt Hon Peter

Question accordingly negatived.
Mr. Tristan Garel-Jones: On a point of order, Mr. Speaker. The hon. Member for Thornaby (Mr. Wrigglesworth) spoke against the Bill on which the House has just voted and, as a result, the House was forced into a Division. Many of my hon. Friends voted for the survival of the new group, whereas the members of that group, on the first occasion on which it has divided the House on its own initiative, decided to abstain. Will you give the House guidance, Mr. Speaker, on how we are to deal with this question in the future?
Dr. David Owen: On a point of order, Mr. Speaker. My right hon. and hon. Friends and I did not vote in the Division Lobbies because we felt that if we did it might be construed that we had an interest.

Orders of the Day
  SUPPLY
  [13th ALLOTTED DAY]—considered

  Overseas Aid
  Mr. Speaker: I have selected the amendment in the name of the Prime Minister.
  4.16 pm
  Mr. Guy Barnett: I beg to move.
  That this House deplores the damaging cuts in the United Kingdom's official aid programme which contributed to the fall in 1980 in official development assistance as a percentage of gross national product to about half the United Nations target figure; deplores the hostility to official overseas aid which some Government statements have revealed, including the Prime Minister's description of overseas aid as a 'hand out'; and calls on the Government to reverse its policy of cutting aid, and especially to restore the disproportionate cuts in official aid to the poorest countries, recognising, as does the Brandt Commission Report, the critical needs of these countries.
  The House has given a great deal of attention to overseas development during the past year, and there can be no doubt of the importance of the subject in the eyes of many hon. Members on both sides of the Chamber. The publication of the Brandt report has been partly responsible for that. The challenge that the report presents was recognised by most hon. Members who spoke in the three debates we have had on the report over the past year.
  That attention in the House has been a reflection of the widespread interest and pressure which will is evident in most constituencies. I am certain that it will also be reflected in the size and the sense of seriousness which characterise the lobby on aid that will take place on 5 May.
  Another reason why a growing number of people recognise the seriousness of the subject is that they have understood that we are no longer talking about charity to unfortunate people living far away. It is no longer relevant, if it ever was, to the massive problems the world is facing to talk about "handouts", as the Prime Minister did. The experience of the 1970s as it affected this country under Conservative and Labour Governments is that we can no longer hope to prosper in isolation from mankind as a whole.
  World population is growing at an alarming rate; there is a crisis in energy, in food and in raw materials. At the same time there is much under-used productive capacity in the world. Some of it exists in the poorest countries of all and will not be developed without assistance from the rich.
  In this short debate, I shall not attempt to rehearse at length the frightening facts which affect huge regions of the world. Much of that information is set out in the report, and I will quote three points from it. First, 800 million people live in conditions of poverty described by the president of the World Bank as below any rational definition of human decency. Secondly, between 20 million and 25 million children below the age of 5 die every year in developing countries, and one-third of those deaths are from diarrhoea caused by polluted water. Thirdly, while the world's military spending is approaching $450 billion a year, annual spending on official development aid is only $20 billion.
  820
  Merely to recite those facts is to state an obscenity. It is a moral outrage, which borders on political and economic lunacy. At crowded meetings that I have addressed throughout the country, people have asked "What can we do?" I reply "Put pressure on the Government and on Parliament; put pressure on the Government to increase their aid and development programme". One reason why I say that is that I believe that anything we say in the EEC, in the Commonwealth, at the United Nations or at the Mexico summit will lack authority and credibility unless our contribution to overseas development is something of which we can be proud. That is one reason why we have called for this debate today.
  I want to analyse the Government's record to date, but, before I do so, I place on record my admiration for the quality of British aid and pay a tribute to the dedication and effectiveness of the many hundreds of people from this country who work in technical assistance in the developing world and to recognise the care with which projects are evaluated and also the high quality of the contribution by our universities and other educational institutions.
  However, one aspect of the quality of our aid gives grounds for concern. Since the Minister for Overseas Development made his statement on the review of overseas development policy in February 1980, there has been a significant shift of emphasis away from more help for the poorest—the title of the 1975 White Paper. I know that the hon. Gentleman protests that he still observes developmental criteria and the Government amendment refers again to this, but there is not more money but less, so increasing emphasis on commercial, industrial or strategic factors is bound to mean that projects are chosen because they fit those criteria rather than the developmental criteria. The figure of £15 million for Turkey, for instance, must mean less for countries which are poorer than Turkey, as I shall try to show later.
  I said that there was less money and there is a sorry tale to tell of the quantity of British aid. What look like leaks suggest that the Government are deeply embarrassed, and so they should be. The global figures—published by ODA on 5 March—show a cut of 18 per cent. in 1980 compared with 1979. The figure for 1979 was £787 million—a figure which I think the hon. Gentleman has taken pride in from time to time-while that for 1980 was £643 million, and those are both figures at 1979 prices.
  The public expenditure White Paper has more bad news. The percentage change between 1980–81 and 1982–83 is, according to my calculations, minus 15·3 per cent. I notice that in the Government's amendment reference is made to £1,000 million as the aid figure for 1981–82 and I want to ask the hon. Gentleman if I am correct in believing that that figure is in fact the gross figure for aid—that is, before account is taken of repayments on loans. If I am correct, the net figure for aid in 1981–82 is £972 million. That surely is the realistic figure; it is the figure which this House is asked to vote on and to approve as the total of overseas aid for development.
  The Government are apt to plead whenever these criticisms are made that all programmes must take their share of the cuts, but two things, in my view, deserve comment.
  The first is that the cut in total Government expenditure works out at 1·7 per cent., whereas, as I have said, the overseas development figure is 15·3 per cent.—that is,

  821
  nine times as much. The only other public expenditure programme that has come off worse, according to my calculations, than the overseas development programme is that on housing, about which the Opposition have already made the strongest protests.
  The motion is also and especially concerned with the level of aid to what the Overseas Development Administration itself calls the poorest countries. Whereas the drop in aid from 1979 to 1980 was 18 per cent. for the programme as a whole, for the poorest countries it was 26 per cent.
  The House, I think, will expect a full statement from the Minister about what precisely has happened to the bilateral aid programme to India, which fell between 1979 and 1980 by a massive 57 per cent. Quarterly figures for India show that during the last three quarters of 1980 the net figures are, respectively, £1 million for the second quarter, £8 million for the third quarter and nothing at all for the fourth quarter. The reason for the final figure being nothing is that gross expenditure was £9·6 million, while repayments made by India on loans amounted to £9·9 million.
  The Prime Minister is going to India in May and will clearly have some explaining to do to Mrs Gandhi. Indeed, the Minister has some explaining to do to the House this afternoon. This will be a matter of deep concern to many hon. Members and we shall expect a full statement as to what has gone wrong and why it has gone wrong.
  Lastly, on the general picture, will the Minister confirm, as his hon. Friend the Minister of State, Foreign and Commonwealth Office was not prepared to do on 4 March, that aid as a percentage of the gross national product for 1980 has fallen from 0·51 to 0·34?
  The Minister protests from time to time that the Government's objective is to achieve the 0·7 per cent. United Nations target figure, but the Government's policies move in precisely the opposite direction. An objective assessment of that is given in a press release, dated 5 February, from the OECD development assistance committee on its examination and review of the British aid programme:
  " … the Committee expressed serious concern about the considerable cuts in ODA volume in future years. The Government had announced in 1980 that budgetary allocations for aid were to be cut by some 16 per cent. in real terms between 1979/80 and 1983/84 as part of a general retrenchment of public expenditure. While appreciating the economic difficulties faced by the United Kingdom, the Committee regretted that aid had been reduced and that, by comparison with other public expenditure categories, it had borne a disproportionately large part of the overall cuts. In view of the urgent needs of the developing countries which are receiving British aid, it urged the United Kingdom Government at least to keep the volume of its ODA stable in real terms and to resume progress as soon as possible. The Committee expressed concern that cuts in the aid programme of this proportion would have wider implications for the North-South dialogue."
  Speeches and statements by Government spokesmen often reveal a disturbing lack of concern about the deterioration in our aid programme. I except the Minister from that. He has a long-term commitment to the Commonwealth and a knowledge of development problems. But, alas, what he has to spend comes from on high and, although he understands, it is clear from the Prime Minister's Freudian slip about handouts that she does not. Over 150 hon. Members have signed the early-day motion protesting at her use of that insulting term.
  822
  Indeed, the dominance of the right hon. Lady over the policies of this Government has resulted in an aid policy characterised by ignorance, meanness and selfishness. There have been too many tales of visits to No. 10 Downing Street and elsewhere at which the response to statesmen and high commissioners from the developing world has been, "You have your problems and we have ours."
  An article in The Guardian on 21 January illustrated poignantly the sheer ignorance of anyone who could respond like that. Mr. Andrew Porter, a consultant paediatrician, said:
  "When I know that perinatal mortality in rural India approaches 200 per thousand live births, can I feel deeply about whether that in my district is 12 or 15?"
  One illustration of meanness is the recent decision by the Department of Health and Social Security to make overseas students pay for medical treatment in this country. The United Kingdom Council for Overseas Student Affairs described that cut as petty and vindictive. I hope that considerable exceptions will be made for students studying in this country, because I cannot overstate the damage that this will do, for so small a saving, to our reputation overseas.
  I have mentioned downright selfishness. The trouble with selfishness is that it is the Scrooge who often suffers most in the end. John Madeley, who writes regularly on aid, has estimated that the cut of £100 million in our aid programme will cost the country 15,000 jobs. I do not know whether his calculations are right. I am not qualified to judge. The irony is that despite the Government's desire to use aid in support of Britain's commercial interests, it is bilateral aid that is being cut, and bilateral aid is tied to products produced by British firms and made by British workers. Small firms in Britain often do particularly well out of British bilateral aid.
  To quote an example, two researchers, May and Dobson, state that a London firm told them that if there had been no aid orders employment would have declined from 120 to 70. If the Chancellor of the Exchequer wants to help small firms, he should remember that.
  A fundamental change in our aid programme is urgently needed. Without it, the Prime Minister's presence in Mexico in October will not carry much conviction. The postponement of the summit meeting gives us six months for the preparations which I know are taking place at official level in the Department.
  It also gives the Government three political opportunities to make a vital contribution to the success of the conference. First, there will be a chance to bring pressure to bear on other EEC members, beginning perhaps at the Development Council next month. Secondly, there is the Ottawa conference in July, where the heads of the rich nations will meet. Their contribution at Mexico will be vital. Thirdly, the Commonwealth Heads of Government are meeting in Melbourne at the end of September. From that meeting the Heads of Governments of Nigeria, Britain, India, Canada and Tanzania will go to the Mexico summit. If they go united, they could prove a powerful force.
  Those opportunities will be lost or will be worth little if the Government persist in cutting aid and demonstrate by their public stance and statements that their aid policies do not measure up to the grave situation facing the world.
  4.32 pm
  The Minister for Overseas Development (Mr. Neil Marten): I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  'this House notes that the aid programme for 1981–82 will be in excess of £1,000 million and welcomes the Government's intention to continue to give priority to the poorest countries in allocating bilateral aid'.
  The timing of the debate is most appropriate, following as it does the Government's Budget proposals and the publication of the 1981 public expenditure White Paper. It enables me first to underline the importance for this country of doing all that we can to bring inflation under control. A reduction in public spending to the level that the country can afford is the most effective contribution that the Government can make.
  At the expense of boring the House, let me state that since I was made Minister in May 1979 I have visited Barbados, St. Vincent, the Virgin Islands, Dominica, Antigua, Kenya, Uganda, Tanzania, Malawi, Mozambique, Ghana, Zambia, Zimbabwe, India, Pakistan, Nepal, Sri Lanka, Fiji and the Solomon Islands. I talked to the Governments of each country and explained why we are in some cases cutting our aid programme, although not by very much—we have to bring down the rate of inflation. Each country accepts that that is a thoroughly good aim. They do not want us to export inflation to them. They understand the problem when it is explained to them properly. I hope that when Opposition Members go abroad, even if they do not agree with the proposition and say so, they will at least explain why there have been cuts in the aid programme.
  I need hardly say that, especially in these circum-stances, the determination of priorities in public spending is no easy job and that no single public expenditure programme can be looked at in isolation. However, contrary to what a number of observers have assumed, the hon. Member for Greenwich (Mr. Barnett) included, aid was not the hardest hit among public expenditure programmes. Other programmes—agriculture, energy, industry and housing, for example—have suffered more.
  Let us not forget that, when faced with economic difficulties, the Labour Government did not hesitate to cut overseas aid. In December 1976, reductions of £50 million in each of the years 1977 and 1978 were announced by the then Chancellor of the Exchequer. These cuts, I may add, were greater proportionately than those that we have made this year and last year. That is a fact that the Opposition should remember when putting down such motions.
  The second reason why I welcome the debate is that it gives me the opportunity of demonstrating the importance that we continue to attach to the aid programme. As hon. Members will have seen from the recently published White Paper, the gross programme in cash terms—that is, the amount available for spending in the 1981–82 financal year—will be £1,037 million, compared with about £960 million in the financial year that is just ending. The hon. Gentleman is right in saying that the net figure is £972 million.
  Over £1 billion spending money—almost $2·4 billion-is hardly an unsympathetic response to the problems of the Third world. It is a highly creditable performance and one of which we as a nation should be proud. As the hon. Gentleman said, the quality of our aid
  824
  is very good, a fact that is recognised everywhere one goes. If I may say so without causing offence, it is much better than some aid from other countries.
  We are thus maintaining a substantial aid programme, and this will be of great benefit to the developing countries. We hope that by helping the development process and ultimately improving living standards in the countries which we aid, stability and progress will be promoted—political objectives that everyone will acknowledge as sound.
  The aid programme will also bring orders to British industry and thus help to sustain employment in a number of key sectors of our economy. Commercial and employment advantages arise in particular from the operation of the aid and trade provision, which, by combining aid with commercial credit, brings benefits several times greater than those deriving from the aid element alone.
  On the geographical distribution of the bilateral aid programme, we have consistently acknowledged that the greatest need is in the poorest countries, and, therefore, we aim to concentrate a substantial proportion of our aid on them. They are the countries which find it most difficult to generate an adequate volume of domestic savings for investment or to attract private finance and investment from overseas, and, of course, were severely afflicted by the rise in oil prices.
  We have stated on many occasions that the poorest countries will remain major beneficiaries of our aid.
  Mr. Brocklebank-Fowler: If that is so, why is the cut in aid to the poorest countries so much larger in percentage terms than the overall cut in aid?
  Mr. Marten: I do not believe that that is true. If it is, the explanation is that our commitments to the multilateral organisations are such that we cannot reduce them, so a large proportion of cuts must fall on bilateral aid. However, I believe that the hon. Gentleman has got it wrong.
  The poorest countries received some 62 per cent. of our bilateral aid in 1980. Our record in this respect is well above the average for OECD countries as a whole.
  I should like to emphasise, since the charge has been specifically levelled in today's motion, that there has been no policy decision to cut aid to the poorest countries disproportionately. Opposition Members should not draw erroneous conclusions on the basis of a limited series of statistics, great though the temptation is. As I told the House on 16 March, the United Kingdom plans its aid programme on a financial year basis. Drawings by some of our major recipients, notably India, were lower than anticipated in the first three-quarters of the present financial year in relation to the resources available. As our aid is planned on a financial year basis, the pattern of drawings can fluctuate sharply between quarters, and we are working to ensure that the resources available in the financial year as a whole are fully drawn down.
  Factors such as the slow drawings naturally have an impact on our aid performance in a particular time period measured, in accordance with international convention, as a proportion of GNP. The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Mid-Oxon (Mr. Hurd), explained to the House on 4 March—I regret that I was in the Solomon Islands at the time and could not do it myself—a more significant factor

  825
  affecting our aid performance in 1980, namely, the fact that no promissory note in respect of IDA V1 was made before the end of the calendar year.
  The poorest countries are, of course, major beneficiaries of the substantial funds that we provide to the multilateral agencies, in particular the International Development Association. Of course, the Commonwealth and our remaining dependencies have a high priority in the allocation of our funds—and almost three-quarters of our expenditure goes there—and this is consistent with our emphasis on the poorest, for there are many of the latter within the Commonwealth.
  Dr. Jeremy Bray: The hon. Gentleman said earlier that the cuts made by the Labour Government in 1975–76 were larger than those proposed by this Government. In fact, the actual cut was 3·8 per cent. between 1975 and 1976; they recovered in the following year above the 1975 level. So that is a 3·8 per cent. cut in one year which was more than made good the following year, compared with the proposed cuts of 7·7 per cent. this year and 8·2 per cent. next year. Will the hon. Gentleman withdraw his figures?
  Mr. Marten: I shall not withdraw the statement. If the hon. Gentleman reads Hansard tomorrow, he will recognise that I said "proportionately". Also, I said that the cuts were proposed in the Budget, but I did not say that the cuts in the second year amounted to that.
  Dr. Bray rose——
  Mr. Marten: I must get on. Perhaps the hon. Member will make his own speech on this point. This is a very short debate and many hon. Members want to speak.
  I was about to refer to Zimbabwe, which is referred to frequently in this House at Question Time. I should like to take this opportunity to deal with two specific aspects of our bilateral programme that are of current interest. The Zimbabwe conference is now in progress. We wish it every success in attracting the greatest possible international support, and we have been active in lobbying all friendly Governments and international organisations to this end. My right hon. and noble Friend the Lord President of the Council is leading the British delegation.
  The British aid programme to Zimbabwe is generous in spite of what some critics may write. At the time of independence in 1980 we pledged £75 million of new aid to be committed over three years. In addition, we are spending £14 million on training awards approved before independence and £7 million on railway electrification under the aid-trade provision. So our total aid is already £96 million. In addition, we have written off £22 million of debt and rescheduled £33 million more on favourable terms.
  Outside the aid programme we are providing assistance for the amalgamation of military forces in Zimbabwe. This vital assistance is costing us £6 million over this financial year and next. But, of course, this is not coming out of the ODA budget. Our aid is concentrated on the areas of greatest priority to the Zimbabwe Government, particularly reconstruction and resettlement. The biggest single allocation is £20 million for resettlement. We recognise the great need for land resettlement but, as my right hon. and noble Friend the Secretary of State for Foreign and Commonwealth Affairs made absolutely clear at Lancaster House, the overall needs are beyond the
  826
  capacity of Britain alone or any other single donor. That is something which we must remember when we are looking at the Zimbabwe question. We hope that other donors will join in this essential programme. I understand that America has made a very generous offer.
  Nevertheless, in recognition of the special needs which have been put before the donors' conference, we have decided that some further assistance is justified. I am happy to say that, as my right hon. and noble Friend is telling the conference today, if he has not already done so, we have been able to ollocate a further £10 million for resettlement and a further £5 million for higher-level awards for the training of Zimbabwean students who will be finishing this summer intermediate level courses supported under our pre-independence training programme. That is something which the Zimbabwe Government needed very much.
  With these additions, our basic aid pledge to Zimbabwe will be £111 million. In addition, we shall be providing £10 million for regional transportation projects in Southern Africa which, even if not actually in Zimbabwe, will be of direct benefit to Zimbabwe.
  Finally, I have just heard that the European Community has committed some £54 million of which the United Kingdom's share will be about £10 million. On the whole, that is not a bad effort for Zimbabwe.
  Mr. John Farr: The whole House will be pleased to learn of the new aid which the Lord President of the Council is announcing in Salisbury today. Is my hon. Friend aware that a number of would-be students in further education in Zimbabwe who want to come to Britain to pursue their education are having to go to study behind the Iron Curtain because financial facilities are not available in this country? Is not that something which we as a Government should do our utmost to prevent?
  Mr. Marten: That may be so. All over the world that argument is put and it may be perfectly true. Those students have the option of going there or of coming here if they are within the education programme. I take the point. It is something which naturally I do not like particularly, but we cannot educate everybody in this country.
  Mr. Nigel Spearing: In relation to the £10 million for resettlement that the hon. Gentleman mentioned, can he tell the House whether it is all going for land purchase? Is it half and half, and are the Zimbabwe Government still expected to double that amount from their own resources? As he will know and, I think, acknowledge, aid for the purchase of land is likely to come only from the United Kingdom and not from elsewhere.
  Mr. Marten: The use of the £10 million will be one of the subjects that the Lord President of the Council will be discussing. I must leave it to him to come back with the answer to that question.
  The second topic concerns overseas students. The overall policy concerning the withdrawal of the indiscriminate subsidy on overseas students' fees is a matter for my right hon. and learned Friend the Secretary of State for Education and Science, and the Government are monitoring the effect of the withdrawal of that subsidy. But, as for the aid programme, we recently announced our intention to restore the number of new awards in 1981–82

  827
  under our Government-to-Government programme to approximately the levels of 1978 and 1979. We have taken a similar step in respect of the Commonwealth scholarship and fellowship plan, bearing in mind the strong support for the scheme at the Commonwealth Education Ministers' conference in Colombo.
  Finally, we have extended for 1981–82 our fee support scheme for selected private postgraduate students from developing countries who have had difficulty in meeting the cost of fees. All these schemes are based on a careful selection of award holders for the study of subjects of direct relevance to their countries' development.
  During the debate on Belize last week the hon. Member for Crewe (Mrs. Dunwoody) asked about National Health Service charges for overseas students. We intend to meet the cost of health treatment for those students and trainees brought to Britain under our Government-to-Government programmes and the Commonwealth scholarships and fellowships plan.
  Viscount Cranborne rose——
  Mr. Kevin McNamara (Kingston-upon-Hull, Central): The hon. Gentleman has only just entered the Chamber.
  Mr. Marten: I am trying to finish my speech to allow as many other speeches to be made as possible in this short debate.
  In these debates we tend to concentrate on the bilateral aid programme. That is understandable, for it is the part of the programme over which we have the greatest control. It remains our aim to shift the balance from multilateral aid towards the bilateral programme in the long term. However, it is worth recording again the degree of our present support for the activities of the major multilateral institutions.
  We have confirmed our support in principle for the $40 billion general capital increase of the World Bank and for the sixth replenishment of the International Development Association. Our share of the IDA VI total of $12 billion will be £555 million, which is 10·1 per cent. of the total. Subject to the United States Administration obtaining the endorsements and appropriations from Congress necessary to trigger off IDA V1, our promissory notes will be deposited over three years.
  As the House already knows from the debate on 4 March, we have obtained parliamentary approval to participate in the IDA VI bridging arrangement. This will enable us to provide up to £184 million as part of the bridging operation—that is, one-third of the total—to help fill the gap until replenishment can become fully effective through appropriate action by other participating Governments.
  Under the second Lomé convention, which came into force on 1 January 1981, we shall make a contribution of about £460 million to the European development fund, which is 18 per cent. of the total contribution.
  There is a danger in concentrating too heavily on what donor Governments can do through the provision of official assistance. Official assistance is important, as the Government recognise, and especially for the poorest of countries. However, we should remember that responsibility for their development rests on the developing countries themselves and on the use that they make of their own resources,
  Mr. Bruce Douglas-Mann rose——
  Mr. Marten: Moreover, trade access is of critical importance. Britain will continue to work for an open trade system. Our record in this respect is a good one.
  Mr. Douglas-Mann rose——
  Mr. Marten: I want to get on.
  We take a greater share of manufactured imports from the developing countries than does any other European country. There have recently been some important improvements in the second Lomé convention and the new generalised scheme of preferences. Incidentally, some hon. Members who call vociferously for more aid are precisely those who are simultaneously pressing for tighter import controls. This would severely hit developing countries that are trying to build up their own industries.
  Mr. McNamara rose——
  Mr Douglas-Mann rose——
  Mr. Nick Budgen rose——
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. The Minister is not giving way. I remind the House that 12 right hon. and hon. Members wish to take part in the debate. Interruptions will only reduce the time that is available for them.
  Miss Betty Boothroyd: What about hon. Ladies?
  Mr. Marten: Touché.
  I emphasise that private direct investment, bank lending and export credits are of much greater importance in total for the developing world and especially for the middle and upper income countries.
  One of the unsung statistics that should have more publicity is that in 1979—the last year for which we have firm figures—we were second only to the United States of America in terms both of the volume of private flows at market terms to developing countries and of total resource flows to developing countries. In that year net private flows in sterling from the United Kingdom amounted to £1·3 billion and there was a further £3 billion in foreign currency that was recycled through financial institutions here which carry the risk, a total of £4·3 billion or 2·37 per cent. of gross national product.
  The Government's decision to remove exchange controls shortly after coming into office helped significantly to facilitate the flows of private finance to the developing world.
  I hope that what I have said will reassure hon. Members that our aid programme is directed at the right target area, that it is substantial and that it will have the support of this House in the Division Lobbies tonight.
  4.57 pm
  Mr. David Ennals: I am certain that both sides of the House will welcome the Minister's statement on Zimbabwe. We shall want to examine it carefully. I hope that the hon. Gentleman will consider the intervention of the hon. Member for Harborough (Mr. Farr) on the position of students. I have received similar representations in my constituency.
  We problably all sympathise with the Minister, because he has had the unenviable task of visiting so many

  829
  countries to break the bad news to them. I do not accept that they all readily accepted his explanation. As he knows, I followed him to one or two countries, and I can assure him that they did not accept his explanation.
  The fact of the reduction in British aid is not in dispute. My hon. Friend the Member for Greenwich (Mr. Barnett) referred to a cut of 15·3 per cent. As he said, that cut is disproportionate to other public expenditure cuts and disproportionate to the aid effort of other countries. The World Bank has a 0·7 per cent. of gross national product target scale for aid. It may be that the Prime Minister's attacks on the International Monetary Fund now extend to the World Bank, but I hope that that is not so. Against its target scale, a dozen countries are moving upwards. These are Austria, Belgium, Denmark, Finland, France, Holland, Italy, Japan, Norway, Switzerland, West Germany and the United States, although threats from Washington suggest that the rise of the United States on the target scale may not continue.
  Unfortunately, Britain is slipping down the scale after several years of rising on it. For that reason Britain has come in for sharp criticism from the World Bank, from the Finance Ministers of the Commonwealth and from voluntary aid organisations in Britain, such as Oxfam, Christian Aid, Catholic Aid and Overseas Development. The amount by which we are cutting aid next year is seven times the total amount that can be expected to be raised by all the voluntary aid programmes put together in Britain. The voluntary sector cannot possibly fill the gap that will be left by the reduction in Government aid.
  Criticism is not limited to an alliance of what I suppose the Prime Minister would consider to be the aid wets. It comes from sources such as the British Atlantic Committee's defence and overseas policy working party, which is chaired by Marshal of the Royal Air Force Sir Neil Cameron, who called on the Government for a more constructive aid programme to stem Soviet advances in the Third world. It is not only a wet approach that is being made to the Government.
  There is sadness in and condemnation by countries such as Bangladesh, Pakistan, Malawi and Kenya. Those are countries that I have visited in the past few months. In other Third world countries, such as India, the feeling is extremely strong. These countries link the cuts and the effect that they will have upon their economies—
  Mr. John Townend: If the right hon. Gentleman is so critical, will he compare our present aid programme after the Government's cuts with that of the Japanese, Japan being a much wealthier country?
  Mr. Ennis: The hon. Gentleman should put his question to the Minister so that he can make his own comparison with Japan. I shall not be drawn into that argument. I am concerned with our performance. I said that Japan was proportionately increasing its performance and that Britain was proportionately worsening its performance.
  People in developing countries that have suffered from the Government's action link the cuts in what the Prime Minister calls a handout and what we call development aid with other Government actions. For example, I believe that the cuts in the overseas student intake as a result of the massive increase in fees will be very serious indeed. There is a reduction already, and it looks as though by next year it will be between 40 and 50 per cent. Cuts have been
  830
  made in the work of the British Council and in the overseas service of the BBC. There is the question of National Health Service costs for overseas students. I was concerned that when the Minister thought that he was giving an assurance about this he was referring to only a very limited number of students who will not now he expected to pay National Health Service costs while they are here.
  The Government's policies show no sense of the moral obligation of the more developed world to help the less developed world, which was so strongly and rightly emphasised in the Brandt report and on which the right hon. Member for Sidcup (Mr. Heath) has virtually stomped the country arguing a case that the Government have denied. The Government's attitude reflects the Prime Minister's cynical disinterest—one can only call it that—in the Third world. It shows a lack of concern for the special needs of very poor countries that are deeply affected by the rising prices of oil and the capital goods that they need to import.
  Those countries have few resources of their own. They cannot raise money through the international banking system or attract inward investment. The Prime Minister's crisp comment that we have our problems and they have theirs sums up her approach to these matters.
  My main contention is that the Government's overseas aid policy is doing great damage to Britain's long-term and short-term interests. Most of the cut of about £125 million will be borne by Britain's bilateral aid programme. As the Minister knows, about three-quarters of that programme is tied to the purchase of British goods and services. As my hon. Friend the Member for Greenwich pointed out, it has recently been reliably estimated that a cut of £125 million is likely to lead to a loss of exports of about £100 million and a loss of about 15,000 jobs in Britain. If the Minister thinks that that estimate is incorrect, I hope that he will tell us so. It would have been useful had he told us the effect on the British economy of the cuts that he has had to justify in this Parliament and overseas. According to the survey, half of the British companies winning orders as a result of the British aid programme employ fewer than 200 workers. They are small firms, about which the Government profess to be deeply concerned.
  The whole package of Tory policies on aid, overseas students, National Health Service costs, the BBC overseas service, and so on, will serve to break invaluable links of history, language and technology which have made a small country—and Britain is, after all, a small country—into a great country. With this Government, Great Britain will be great no more. "Stop the world, we want to get off' seems to be the Government's attitude to the rest of the world, an attitude which denies the whole concept and principle of the interdependence of nations. Moreover, those who in the past took pride in Britain's overseas achievements—and the Minister rightly paid tribute to those involved in our aid programme and in giving technical advice to other countries—now find it deeply humiliating to recognise the position that the Government are taking.
  5.5 pm
  Mr. John Townend: I support the Government's rather small reductions in overseas aid. I see no need for Ministers to be embarrassed about them, as they have the overwhelming support of the people of this country. Labour Members seem to be out of touch

  831
  with the grass roots. I certainly find that the average working class Labour voter wishes that the Government would reduce overseas aid more rather than less. The Government's policy is naturally opposed by the intellectual do-gooders of the soft centre, but they are very much the minority.
  I turn for a moment to the philosophy behind overseas aid. The arguments advanced are often misconceived and muddled. I often hear it said that as an ex-colonial Power we have a responsibility for starvation and poverty in our ex-colonies. In my view, that is nonsense. Many of the people in those ex-colonies were better fed and more prosperous and had sounder economies when they were colonies.
  I cite a few examples. Ghana had a large balance of foreign currency when it became independent. Within five years, President Nkrumah had squandered it. As a colony, Uganda never suffered the starvation, terror or other problems that it faced under General Amin. Even now that he has been replaced, the Ugandans are far worse off than they were under colonial rule. Burma was a large exporter of rice under British rule, but that ceased within a few years of independence.
  The same is now happening in Zimbabwe. I do not oppose the Government giving aid to that country, but as Southern Rhodesia it never needed international aid. Now, progressively, it is holding out the begging bowl. Indeed, the Head of State is asking for no less than £800 million.
  The second problem facing the Third world is the lack of private investment. Again this is often the result of actions by the Third world itself. In too many instances, Western investors have seen, at worst, their investments expropriated or nationalised, or at best, restrictions placed upon the remission of dividends and profits by Left-wing governments.
  There is a lack of management skills. But how often have the newly-independent countries driven out white ex-patriates? Much of the lack of management skill in East Africa is due to the racialist way in which the East African Asians were persecuted and then excluded.
  Mr. Douglas-Mann: I hesitate to interrupt the hon. Gentleman's racialist speech. Does he not recall that in 1945 it was necessary for Europe to hand round a begging bowl in the United States to rehabilitate the damage caused by our own internecine war? The example of Zimbabwe is as irrelevant to the situation in the developing world as would be the suggestion that Europe is incapable of managing its own affairs.
  Mr. Townend: That is not a fair comparison at all. There are plenty of examples of countries in Africa where there was no war of independence but which through their own actions have reduced their economies to ruin. Many of them seem to lack the ability to grow sufficient food for their own population. There are instances in which this is due to the political stance of the Government of. the country. Collectivisation in Tanzania severely reduced food production. In other areas, food production is affected by religious beliefs. In India, millions of cattle have to be fed but cannot be slaughtered for meat due to religious principles. Overpopulation is a problem. Again, it is not only a question of education. In many cases, it arises because of traditions and religion. None of those problems will be solved by overseas aid.
  832
  The second argument used by Labour Members is a moral argument, which is valid. It is said that the rich have a duty to help the poor. I believe that among civilised people charity has a role to play, especially to help the world's poor following natural disasters and famines. The Victorians gave us a good example. They argued that much of this help should derive from the work of private charities and religious bodies.
  However, even in extreme places such as Cambodia, where the problem was self-inflicted by political disputes, we are now receiving reports that the size of the problem was exaggerated and that the massive volume of Western aid was in the first instance used to shore up the Vietnamese-backed Communist Government by providing for their functionaries and supporters before the population at large.
  However, the moral argument can also be questioned. Western aid is paid for by Western taxpayers, both rich and poor. Such aid is not given to the poor of the Third World. In most instances, it is given to Third World Governments who are often partly responsible for the poverty of their subjects.
  In some cases they use this money for prestige projects such as building capital cities, running airlines—which they should not in any case—building universities and even buying arms, which many Labour Members oppose. In other cases, although the aid is spent on worthwhile projects, it releases other finance for the prestige projects that I have mentioned.
  The hon. Member for Greenwich (Mr. Barnett) referred to India. I could not understand him. According to the Supply Estimates for 1981–82, our aid to India still amounts to £80 million, even though there has been a small reduction. I am appalled that British taxpayers are providing £80 million worth of aid to India when that country is spending millions of pounds on nuclear development which could well give it the capability of producing atomic weapons.
  The third argument in support of overseas aid is that it creates jobs and helps exports. That applies only to bilateral aid. I am delighted to know that the Government will move progressively from multilateral aid to bilateral aid.
  Mr. Ennals: That is what they are cutting.
  Mr. Townend: With respect, the Minister said that in the long term the Government aim to move from multilateral aid to bilateral aid.
  Professor Bauer dealt with that point extremely well when he compared it with the shopkeeper who had been burgled and, who might justly think himself none the worse off if the burgler spent some of his swag in his shop. If we are worried about jobs, I am sure that our economy would benefit far more by spending £200 million on railway electrification or help to the textile industry, where literally thousands of jobs have been shed, than by spending it on overseas aid.
  I support the Government's policy progressively to reduce the PSBR. I look forward to the time when we eventually produce a balanced budget. In a year when the PSBR will be more than £10½ billion, I do not see how we can justify spending £1 billion on overseas aid. In simple man's language, we are borrowing money to give away. That does not make sound common sense.
  I come from a rural constituency. My constituents, like many others, are suffering from the 20p increase in petrol

  833
  tax. I voted for that because I support the Government's financial strategy. If we spend money, we should be prepared to raise it in taxation. However, the Government would have been much more popular and better understood had they reduced overseas aid by £250 million this year and increased the petrol tax by 15p rather than 20p.
  I accept that there is a case for overseas aid. A total of £700 million could be well spent. I support the helping of overseas students, but that should be done through the overseas aid budget and not through the education budget. I agree with the use of overseas aid if it is to the financial and political benefit of this country. Britain has used aid in this manner for several hundred years. However, in recent years we have not received an adequate return on our investment.
  An example is India, our largest recipient. It is clear from India's voting record in the United Nations that it is far from one of our best allies.
  The poverty of the Third world will not be changed by aid. If the massive movement of resources recommended by the Brandt report were put into operation, it would mean transferring resources from the relatively efficient and skilled to the relatively inefficient and unskilled; from the honest to the corrupt; from the experienced to the inexperienced; and from the productive sector of the Western economies to the parasitic public sectors of many Third world economies.
  One has only to look at those Third world countries which have succeeded—South Korea, Taiwan, Hong Kong and Singapore—to see the importance of the free market economy. One must be honest and say that racial and religious differences must play a part, because the peoples that I have just mentioned are mainly of Chinese origin, compared with the Africans, whose success rate has been far worse.
  Aid will not stop the slide in Africa which has progressively accelerated since the end of Western colonisation. Under such circumstances, perhaps the only answer to the terrible things that we have seen on that continent—black inhumanity to black, the exploitation of the population by black power elites, corruption, maladministration and civil war—is some form of recolonisation in the long term.
  I accept that that is completely impractical, and I do not put it forward as a valid argument. However, as I believe that such problems will not be solved by overseas aid, I strongly urge the Government to re-examine their overseas aid policy.
  The Government have been singularly unsuccessful in reducing public spending. In a few months, they will be examining public expenditure plans for the coming year. I strongly urge them to wield the axe and cut £200 million or £250 million from the overseas aid budget. In our present economic difficulties, with unemployment at more than 2 million, that money could be used for productive investment to create more jobs.
  The Opposition criticise the Government for the cuts that have been made, but they have not come clean and said exactly by how much they would like to see the overseas aid budget increased. Nor have they said where the money would come from. Would they cut other programmes such as the youth employment programmes; would they increase taxation; or would they borrow? If
  834
  they wish to increase spending on overseas aid, which is not popular with the ordinary man in the street, they have a duty to tell the House where the money will come from.
  5.18 pm
  Mr. Kevin McNamara: As I listened with interest to the speech of the hon. Member for Bridlington (Mr. Townend), I thought of his predecessor, now Lord Holderness, and of his distinguished record under Mr. Macmillan's Administration when he became Secretary for Technical Co-operation.
  Unlike the hon. Gentleman, Lord Holderness understood the importance of aid to man's dignity and the need for common decency. More importantly, he realised that aid and development were vital for at least one basic human reason—that, if people's bellies are full and if they feel that there is hope and security for them and for their children, there is less chance of war. If there is less chance of war, there is far less chance of this country being dragged into a world conflict. God knows we hope and pray that there will not be another war.
  A future world war will not be the result of an eyeball to eyeball confrontation between the Prime Minister and Mr. Brezhnev. In one way or another we shall be dragged into a war by the surrogate Powers of America and Russia's colonies or neo-colonies. One of those countries may drag its patron into a conflict. We can avoid that situation by giving security and stability to the developing world. We can afford to give more in terms of aid and development. The hon. Member for Bridlington seemed to believe that aid was unpopular with the ordinary working man. He should consider the great response of the British people to tragedies such as those in Cambodia and Somalia. He should bear in mind what a "Blue Peter" appeal can do.
  As legislators, our task is to gear that voluntary, spontaneous and generous spirit of the British people into a continuous programme, so that we become alarmed not only when we see people starving as a result of a natural famine but also when we see people starving and debilitated as a result of polluted water and malnutrition. I am not speaking so much about disasters such as the Sahel drought—which has caused the deaths of many people—as about the ever-present problems. People should realise that many of these disasters are not sent by God or created by nature. They can be overcome by human ingenuity and effort. If we are prepared to spend more money and to pay more attention to this subject the problems can be solved.
  It may be asked where the money will come from. It must come from our pockets and from the money that is to be spent on tanks and Trident. The sending of tractors and simple agricultural instruments will be of far greater help in the maintenance of Western security, and will provide a more lasting investment in peace, than the provision of tanks, Armalite rifles and other weapons of destruction. We should say that defence of the West and of its institutions is based on world stability and security. Such stability comes when individuals throughout the world feel that they have a place under the sun that is not exposed to its intolerable heat. That involves human decency and understanding. We are talking about giving the children of the hon. Member for Bridlington and my children an opportunity to live in peace. Indeed. I hope

  835
  that our grandchildren will also have that opportunity. I am not talking about the type of attitude that the hon. Gentleman adopted.
  I regret that as time is short I shall not expand my argument. However, I should like to ask the Minister a few questions about Zimbabwe. Is the money additional money within the aid programme, or will it come from other parts of the programme? Where will the money come from, and who will get it? Zimbabwean students have been allocated £5 million. I think that all my hon. Friends who sat on the Sub-Committee on Zimbabwe appreciate the stand that the Government are taking. We look forward to knowing the details. We had hoped for more, but at least the Government have come some way towards meeting the situation. Will that education be in the United Kingdom or Zimbabwe? No mention has been made about the nonsense over the rates due for Rhodesia House, which is now Zimbabwe House. The time has come for that debt to be written of. It is nonsense, and it should not cause us problems. The country has changed.
  I understand the Government's attitude to aid. They say that they are being treated unfairly and that they are spending money. They say that no one understands what they are trying to do. However, since the Conservative party came to office there has been a catalogue of events. For example, development education was the victim of the Government's first cut. That was a mean cut. Then came the cut in official aid. Measures to deal with overseas students were then introduced. Many students were dealt with in a nasty way. Indeed, the problems of many private students have not yet been dealt with.
  I welcome the Minister's remarks about improving the conditions and increasing the numbers of overseas students. That takes us back to the previous position. Many private students who have been sponsored by a Village fund, a charity or an international agency will not be helped. It was the grudging reaction to the Brandt report that filled rooms throughout the kingdom. People from all walks of life attended meetings. They came to listen to speeches about the Brandt report and about what it means for world peace. The Brandt report caught people's imaginations in a way that is hard to describe. Hon. Members from all parties spoke about Brandt. They received far greater audiences than many of them had known previously in their political careers. People attended meetings in remote villages. Village halls were crowded. In the bigger cities hundreds of people crowded in to buildings to discuss the Brandt programme and the way in which it should be implemented.
  The Minister should tell the Prime Minister and the Foreign Secretary that, as they have belatedly accepted the idea of a Brandt summit and of going to Mexico, they must gear their ideas towards something positive and imaginative. Our attitude to overseas development has cost us our prestige, and our loss is almost immeasurable in terms of money and status. It is impossible to calculate what we have lost. Our actions have affected the attitudes of all countries, whether in the Commonwealth or in the United Nations.
  When for the first time, the nations of almost the whole world—and particularly the developing countries—are united with the West in condemnation of the Russian invasion of Afghanistan, because they realise that it represents a threat to them, we must not squander that
  836
  advantage. The good will that exists will be dissipated unless the Prime Minister and President Reagan—I welcome the fact that he is going to Mexico—and the other leaders of the West can say to the developing world "Look, our way of life is better. We are concerned not only with human rights and the old liberal values but with the basic human rights of food, warmth and a roof over one's head."
  If we can translate our belief in that to positive programmes and actions, those two leaders and the Western World will have done an enormous service to the cause of democracy and liberty in which we all believe. None of those virtues can flourish unless a man feels that he is free to make real decisions. To do that he must have a full belly.
  5.31 pm
  Mr. Bowen Wells: I am disappointed at the terms in which the debate has been conducted. It is possibly the tradition of the House that we exaggerate in order to make our points, but some hon. Members have contributed to the debate in a way that is counter-productive to the imaginative feeling and concerned approach that the hon. Member for Kingston upon Hull, Central (Mr. McNamara) exhibited. It is the imagination that we have to spark world-wide and in this country. Indeed, to my hon. Friends who disagree with that approach I say that unless we seek for the sky to aid the poor and to develop where underdevelopment has caused misery, poverty and death, we as a nation do not and should not aspire to world leadership, let alone influence in the world.
  I deprecate some of the opening remarks of the hon. Member for Greenwich (Mr. Barnett), because he said that the Government's development programme was characterised by ignorance, meanness and downright selfishness. I know that he is a compassionate man, but such language, when one is considering an aid programme of £1 billion and the tremendous efforts to which he paid tribute—I believe that he exempted my hon. Friend the Member for Banbury (Mr. Marten), the Minister for Overseas Development, from those strictures—is a strong indictment and cannot possibly be sustained.
  To be even-handed, I say to my hon. Friend the Member for Bridlington (Mr. Townend) that to talk about transferring resources from the honest to the corrupt is an exaggeration that will not stand up to examination. Indeed, it is a slur not only on those whom one accuses of corruption but on the honest who give to the corrupt. That kind of exaggeration reveals the extent of the task to which we all have to bend our minds and hearts—that of educating everyone to the problems that face the world.
  Basically, there are three mistakes in the Opposition's approach. After the speech of the hon. Member for Greenwich, I can add a fourth mistake. The first is that it is assumed that Government aid produces development. That is not necessarily true. Just under 50 per cent. of the aid programme goes into what is characterised as project aid. The House should remember that project aid is funnelled through the Government machine. It is Government-to-Government aid. If an overseas Government wish to build a canning factory, the British Government may agree to contribute and pay for the purchase and building. That may create development, and it may enable horticultural development to take place and over-production to be preserved, but if the horticultural processes and the harvesting of the goods to be canned are

  837
  not properly carried out, financed and controlled, the canning factory will be a white elephant and the money will be wasted.
  That is a serious problem for all engaged in the development process. The same thing occurs in this country. One can invest and not do one's sums properly. Consequently, the investment becomes a white elephant. Thus, the assumption that by increasing the amount of aid poured in will necessarily produce development is erroneous. That is the second mistake that underlies the Opposition's motion—that more money equals more development. It does not necessarily do so. In fact, it can be counter-productive, because the countries concerned cannot absorb it.
  That leads me to the third mistake—that the poorest countries can use more money. Our aid programme has failed to be drawn down by the poorest countries, which is the basis of the accusation that the Government have not aided the poorest countries. That is again an error. It is not that we have not committed the funds to the poorest countries but that the countries have not been able to draw the money down because they do not have the know-how. Some of them have had it, but have not retained it.
  My hon. Friend the Member for Bridlington made a good point. Unfortunately, he said that it was only the white managerial classes that had deserted the ex-colonial countries. One of the major problems that one finds when development is not taking place as the result of the actions of underdeveloped countries is that the middle classes, the managerial staff—often highly trained in this country—are leaving the country. The examples are Jamaica, Guyana and Tanzania.
  Mr. John Townend: My hon. Friend has misunderstood me. I did not make the point about only white managerial staff. I particularly mentioned Asians in East Africa who had a fundamental effect on the economies of the East African countries when they were expelled.
  Mr. Wells: I am glad that my hon. Friend referred to that. I wanted to try to modify what I did not think was the remark that you intended, because that sparked off an accusation against your admirable speech, that you were talking in racial terms.
  Mr. Deputy Speaker: Order. I remind the hon. Gentleman that he should not bring me into the controversy.
  Mr. Wells: I apologise, Mr. Deputy Speaker. The motion carried me away.
  Mr. James Johnson: I hope that the hon. Gentleman will excuse me, but I have been here long enough to hear the tenor of his speech. I am told that the economies of countries in Africa and elsewhere cannot absorb more than a certain level of investment. Does he accept that they could absorb more social services and education where teachers are needed so badly? Our language needs to be pushed as hard as the French are pushing theirs.
  Mr. Wells: I do not have the time to make the point that the poorer countries cannot absorb a given amount of assistance or resources. It is much more difficult for them to use large quantities of money effectively in the development process. The fact that one can spend more money on factors such as education is undoubted, but one must ensure that the teachers will be properly used in the
  838
  teaching process and will not sit in Government offices as advisers. We must think further than just chucking money at problems. We must put some managerial know-how, administration and imagination into what we are doing, in order to ensure development.
  The hon. Member for Greenwich said that the development purposes are not served by pursuing commercial criteria, as opposed to, I assume, social criteria, for aid and development. The criteria are not alternatives. The development of industry and commerce, which provides profits, jobs, taxes and therefore social services, is the nub of the development process. They are not alternatives. They must be brought together.
  Mr. Guy Barnett: I did not say that they were alternatives. I said that they were not the same—which is quite different.
  Mr. Wells: I know that, but I understood the hon. Gentleman to mean that in some way the quality of the aid programme and the pursuit of commercial profit were inferior to the type of programme that would have been pursued if the Opposition had been in office or that they did pursue during their period in office. The aid budget has been cut by 15 per cent. However, it was increasing by unprecedentedly high amounts when this Government came to office. We should regard the 15 per cent. cut in that light.
  The main burden of my speech is that there is no conflict between aid and trade, and that there is no conflict between the pursuit of commercial objectives and public assistance in the underdeveloped countries. We need a combination of public assistance through the aid programme and the private flow.
  One of the major acts by the Government in relation to overseas aid was the abolition of exchange controls, which has led to major investments by Britain overseas. That in turn has created jobs and profits in the recipient countries and has helped Britain, through interdependence with our trading partners, in terms of interest earned, dividends paid and capital repaid.
  To all those who believe that capital outflows from this country damage Britain's investment I quote an American article:
  In conclusion, the report states: 'Again the job-export theory is shown to have no basis in fact; the U.S. job performance of the group investing more heavily abroad is better than that of the group placing less capital overseas. If there were any truth to the job-export theory, the more intensive foreign-Investing companies would have a much worse job performance in the U.S. than the companies investing less abroad. Since this correlation of better job performance in the U.S. with the more foreign-investment-intensive companies has been consistent throughout all the BI studies so far, it would indicate that the reverse of the job-export theory has more evidence behind it than does the job-export theory. In other words, foreign investment by U.S. companies, at least in relatively large amounts. imports jobs into the U.S. "'
  That illustrates the interdependence of the trading nations and of the rich and the poor. The poor can become richer if we encourage trade. Private outflows are four times the outflows of official public aid.
  The Overseas Development Administration has a fine record. It is unrivalled in the Commonwealth Development Corporation by any other organisation or aid programme in the world. We have made vast strides in the quality of our aid. I want that to go further. I want the public aid programme, allied with private investment programmes overseas, to provide in the underdeveloped

  839
  countries the infrastructure that cannot be achieved by private investment alone. That will bring a real focus to the work that can be done by the private and public sectors.
  We have spoken about Zimbabwe. Millions of pounds have been spent on purchasing farms. That money will fail Zimbabwe and poison the country unless it is utilised by the white and black farmers to form nucleus estates and to teach people how to farm in the most economical way. Many techniques are not yet understood by the people who have been toting arms in the last six years. We must ensure that the money is used properly, in combination with private resources and technology, so that farmers are established on land that they can use properly for the benefit of Zimbabwe. That is what I mean by development. That is what I believe that the Government are pursuing, and that is what I commend to the House.
  5.45 pm
  Miss Betty Boothroyd: I am sure that the hon. Member for Hertford and Stevenage (Mr. Wells) will forgive me if I do not take up his argument. First, I wish to make one narrow but important point. Recently I returned from a parliamentary visit to Nepal, where the Gurkha connection with the United Kingdom plays an important part in the economy, largely as a result of the remittances, the Gurkha pensions, and so on, which are financed by the bilateral aid programme.
  The remittances are restricted. During many years of high inflation they have not been increased, because of an agreement that the United Kingdom Government reached with the Indian Government at the time of India's independence. Therefore, the people involved are adversely affected. More importantly, the remittances from Britain and the support facilities, after earnings from tourism, are Nepal's most valuable source of foreign exchange. Nepal is one of the poorest countries in the world and its people have certainly earned the remittances.
  I am remiss in not giving the Minister warning of the subject that I wish to raise. It would be helpful if he could reply. If he cannot reply today, I am sure that he will find some parliamentary occasion in order to spell out the assistance that we might give to one of the poorest countries in the world.
  I shall cut many of my comments short in order to give colleagues an opportunity to speak, and devote my remarks to the element in the budget involving population activities. I shall do that because of the continuing high rate of population growth, which has an adverse effect and influence on all that we are trying to do and on what recipient countries are trying to achieve.
  We would be foolish if we were too encouraged by the signs that fertility is beginning to decline in some countries. Minute graphs show such a trend in some areas, but there are no grounds for complacency. On the contrary, the fragile gains that have been achieved will be swept away if our efforts are not sustained and increased.
  Aid planners cannot ignore the population factor. Our efforts will be seriously weakened if we allow the recessional period—which might continue for 15 or 20 years, in varying degrees—to deflect us from the long-term objectives of overall development with which population policies are so inextricably bound up.
  The Minister knows my views. No technical aid programme can be considered in isolation from plans to
  840
  improve the social fabric of a recipient country, in terms of its health and better housing. I think, too, of the emancipation of women and their right of access to clean water, their right to family planning, and their right to welfare programmes of all types.
  I hope that the Minister will have something to say about the priority that he gives, in the development programmes, to improving the status and education of women. Women tend to be a forgotten factor. We women are often a forgotten factor, although not an invisible element, in the House. Often, women are an invisible element in development programmes. The failure to consider women in projects and the failure to consider their role in population programmes can lead to the failure of the projects themselves.
  The Minister has to some extent recognised the great need for population programmes and their importance. Although some hon. Members on the Conservative Benches do not feel that the Minister is doing sufficient in this respect, it is only right that I should pay tribute to him. In his booklet "Report of Population Activities", issued by his Department only in the summer of last year, over his signature, the Minister says:
  "I have instructed that a population component should wherever possible be incorporated in new development projects financed by ODA."
  I say on behalf of the parliamentary group for population and development that we are grateful to the Minister for going so far. The hon. Gentleman leaves us in no doubt about his commitment and understanding on the matter, but the Government collectively do not seem to echo his initiative. After the Government had been in office for some months I asked how much of the Labour Government's planned spending on population programmes had been cancelled as a result of cuts in development expenditure. A Foreign Office Minister replied to the questions that I put late in 1979. He said that projects in six countries had been abandoned. I happen to believe that there are more, but I do not challenge the reply at this juncture. He said that there were six countries in which population projects had been abandoned. These were areas of the world where population increase cannot be ignored. I hope that the House will bear with me if I mention them.
  Ghana currently has a population of about 12 million. At the present rate of growth, by the turn of the century—it is only 20 years away—that population will have nearly doubled. In the Caribbean—another area mentioned by the Minister in reply to my question—the population is at present about 30 million. In 20 years' time it will have increased by 13 million. Bangladesh now has a population of 85 million. At the present rate of growth, its population will have nearly doubled, to 154 million, in the same period. Turkey, not one of the poorest countries of the world, with a population of 45 million at present, will be moving towards 70 million by the turn of the century. Nepal, with a population of about 14½ million at present, will then have a population of about 23 million at the present rate of growth. Life expectancy in that country, which is now only 45 years, will have moved only to 50 years in another 20 years' time.
  I must enter a caveat about Nepal. On an up-country visit about two weeks ago I talked to a young nurse who was responsible for the health of 300,000 people. It was a most daunting conversation.

  841
  To revert to the Minister's reply, the Philippines are the last of the six countries where population projects have been abandoned. At present, the Philippines have a population of 51 million. In another 20 years' time, the population will have increased by 33 million to 84 million. This situation is in complete contrast to the Cabinet paper published in 1976 from which I would like to quote. Under the heading "Conclusions and implications for the United Kingdom", the document said that
  "the most urgent and important problem is limitation of population growth."
  The document added that
  "delays in achieving stabilisation and a delay of one generation could increase the world's population by 70 per cent. A large reduction in growth rate must be achieved in developing countries."
  The document went on to say that
  "fertility regulation programmes become effective only when the expectation of life has risen significantly and living standards have started to rise. Thus, aid is needed first to relieve poverty and raise living standards and to help create a social framework that is conducive to the practice of fertility regulation."
  I do not believe that the Government are fully orchestrated in their commitment to welfare and population programmes when they have only an element of 1 per cent. in that budget.
  I turn to requests for bilateral aid funds made since the Government took office. I understand that no new research projects have been undertaken, although seven requests for funds have been received by the Department. I wonder whether the Minister will say why the majority of these requests have been turned down. To which areas of the world did the projects relate? What was the level of assistance required in each case? Most important, what criteria are used in examining such requests? I have put numerous questions on this matter, but I have never really received a satisfactory reply. The House would like an answer. Do the Government accept the conclusions of that Cabinet paper, that population is the most important problem that will be faced over the next 20 years?
  I wish to turn to the Population Bureau itself—that specialist advisory body within the ODA—first established by a Labour Government in 1968. It was established to increase Britain's capacity to provide aid in terms of population. in 1974, which, as the House will recall, was World Population Year, the specialist staff was increased. it was further increased in 1977. Although only a small body, it contained a great deal of expertise. Since the present Government came to office the expert staff has been reduced and posts abolished.
  I must voice my concern about the current situation that exists in the bureau. I understand that the post of director has been vacant for nearly seven months. I am unhappy about the long delay in filling what is an important post. I hope that the Minister will give an assurance that he will move more speedily to see that such important posts are filled.
  I understand that the professional staff in the bureau is half the capacity it was when the Labour Government left office. This cannot be right, in view of the growing and demanding needs related to the Third world, and the population programme and its associated activities. I recognise that the Minister is sincere and understands the problem but I do not believe that the Government share that commitment in their approach to population matters and in relation to aid and development matters in general.
  842
  They give the impression of sounding brass, as we say in the North, but when one examines their activities one finds that they amount to little more than a tinkling cymbal.
  In a world that has been shrunk by the development of the jet engine, we cannot go on ignoring the needs of others who are so traumatically disadvantaged. I ask for a further move of resources into multilateral and bilateral population programmes. We ask for a larger percentage of the aid programme to be used in creating the social framework that is conducive to the practice of fertility regulation. More resources used in family planning, welfare activities and all the matters that I have mentioned would go some way to meet what is a very explosive situation.
  5.58 pm
  Mr. John Farr: I support what my hon. Friend said in presenting this programme of overseas aid. I disagree personally with what has been stated, particularly from the Opposition Benches, in criticism of the programme. I feel that £1,000 million or £972 million in a year—whatever the figure is—is not a matter to be ashamed of. When that is coupled with increased private transactions and funds, it becomes the vast figure of £5·3 billion in a year. That is equivalent to about 2·8 per cent. of gross national product—second only to the United States. As my hon. Friend the Member for Peterborough (Mr. Mawhinney) said, one of the advantages of the Government's freeing capital and fund transactions to and from Britain has been that private industry and capital has been able to leave London in larger quantities and at a greater pace to boost the official Government money. There is nothing to be ashamed of in 2·8 per cent. of GDP.
  I want to refer briefly to Zimbabwe. I have an interest to declare, in that I still have a farm there. It has been abandoned by the guerrillas as unsuitable, and I hope shortly to resume a more personal relationship with it.
  It was brought home to me by a number of Members of Parliament and the Speaker of Zimbabwe, when they were over here, that while the money that our Government are spending there is much needed, there is much concern about the temptation that students from Zimbabwe who want to travel overseas feel from countries behind the Iron Curtain.
  I welcome what was said earlier about the conference that has begun in Salisbury to raise £800 million. I assure my hon.. Friend the Member for Bridlington (Mr.Townend) that Zimbabwe is launching an international campaign and is not seeking to get more than 10 per cent. from Britain. Surely, no hon. Member would criticise an attempt by Zimbabwe to get £800 million of international aid to help developments there, including teaching the new African farmers who need instruction, helping to make land available, providing darns and irrigation, and making it possible for former guerillas to settle down as peaceful farmers.
  We are presented with a wonderful opportunity, and it is a wonderful programme for any Government to be associated with. I am sure that most hon. Members are proud that the British Government are playing a leading role and are channelling into Zimbabwe a sum in the region of another £100 million towards the £800 that is needed. I do not know whether my hon. Friend the Member for Bridlington who criticised the provision of that aid, visited Zimbabwe recently, but it should be pointed out that on the fate of Zimbabwe rests more than

  843
  the fate of one small African nation. On the fate of Zimbabwe and Mr. Mugabe's democratically elected Government rests the whole of Southern Africa and civilisation there. No one in the House can do other than wish Mr. Mugabe well, and help him to the limit of our ability.
  Mr. John Townend: My hon. Friend has misunderstood me. I thought that I had made it clear that I was not criticising aid to Zimbabwe. I merely used it as one of a number of examples of countries that had sound economies under colonial rule and that did not need international aid—I cited Ghana, Burma and Uganda—but required it after the end of colonial rule. I was not opposed to aid to Zimbabwe.
  Mr. Farr: I thank my hon. Friend for that explanation. However, time is short, so I shall not dwell on the matter, except to say that much of the money provided by Her Majesty's Government is for the resettlement of guerrillas and of the two armies, and, as I said, to provide irrigation, roads and a communications network to enable former soldiers to sette down in a peaceful agricultural life. That is money well spent.
  In mentioning Zimbabwe I shall refer to the role of the Commonwealth Development Corporation. My hon. Friend did not mention its role in Zimbabwe. Before UDI, the CDC was involved in building houses, housing estates, agriculture and land development in that country. I hope that in his winding-up speech my hon. Friend will say a word on the subject.
  I want to mention one further matter, which may tend to refute what was said by the Opposition Front Bench about India and how unpopular we were there. One or two Opposition Members, and I together with my hon. Friend the Member for Loughborough (Mr. Dorrell), were in India and met many of its leaders. In India there is nothing but gratitude for what Her Majesty's Government are doing to help solve the massive problems that exist in that country.
  I entirely support what was said by the hon. Member for West Bromwich, West (Miss Boothroyd). The leaders in India and Bangladesh recognise that family planning and population control are absolutely essential if the country is to be helped in any way. I endorse all that the hon. Lady said.
  I also wish to thank my hon. Friend for having seen us after we returned from our visit to India and Bangladesh, and for the assurance that he gave on that occasion that he recognised that proper spending on development aid, particularly in India and Bangladesh, must be tied to the effective and efficient family planning associations that exist, particularly in India, which have been established there since as long ago as 1937.
  I am sure that no one in the House begrudges spending all that we possibly can on overseas aid. However difficult it may be to explain it to our constituents, I, for one, am always prepared to have a try, because a civilised country such as ours, with a fairly high standard of living, has a duty to spare what we can for those who are less fortunate in the world. I fully endorse the programme that has been presented by my hon. Friend this evening.
  6.9 pm
  Mr. Russell Johnston: I welcome the closing words of the hon. Member for Harborough (Mr. Fan), though I do not agree that the Government can be exonerated from the criticisms that have been advanced from the Opposition Benches.
  In the memo to the Secretary of State for Foreign Affairs which various overseas agencies, including Oxfam, Christian Aid and the Catholic Fund for Overseas Development, presented on 14 November, they quoted Rosemary Righter writing in The Sunday Times on 7 September about the United Nations' special session. I am sure that the Minister will remember this. She said:
  "With the exception of Britain's Development Minister, Neil Marten, whose speech has been greeted by friend and foe with bewildered scorn, everybody talks about the urgency of tackling a package to avert crisis and they cite the Brandt report warning that the world's economy is breaking down … Britain is widely identified 'as the top villain—it is the only major industrialised country actually cutting aid'."
  I am not happy about that. I know that the Minister is a good man. I know also that he probably wants to do much more than he is able to do. But I am afraid that the Government are doing much less well than they should. The hon. Member for Kingston upon Hull, Central (Mr. McNamara) made a compassionate and understanding speech, but he did not persuade me that we should exonerate the Government. It is true that more aid does not necessarily produce more development, but it is equally true that less aid certainly produces less development. There is no way around that.
  The hon. Member for Greenwich (Mr. Barnett), who spoke from the Opposition Front Bench, quoted certain figures. I wish to remind the House of the current position. In 1978–79 we gave £805 million, this year we have given £741 million, and it will be £680 million hereafter. By 1982–83 our aid will be only three-quarters of what was originally planned. It will represent only 0·3 per cent. of gross national product. The United Nations' target is 0·7 per cent. Britain is now at half the 1960 level of aid—when we were only half as well off as we are now. That is profoundly unsatisfactory.
  It is not a simple matter of issuing clarion calls for more aid and more trade. It is the quality of aid that counts. Increases in trade must be concentrated on Third world processed manufactured goods, and there must be a stable and guaranteed price for its raw commodities. What progress has there been on the 1976 UNCTAD decision to set up a common fund to provide finance for commodity agreements? We have been talking, talking and talking about that, but nothing has happened.
  Population control was rightly stressed by the hon. Member for West Bromwich, West (Miss Boothroyd). I agree that Britain should not be cutting its contribution in that area. Aid and trade are important, but a further major contribution could be made by Britain and its partners if they cut their consumption of certain materials, notably oil. The West's demand for oil has catastrophic consequences for poor countries. It forces up the world price and makes it harder for non-oil developing countries to buy the oil that they require. That affects their food production.
  Brandt pointed to the unquestionable need to consider more radical changes in the pattern of the international order if we are to cope with the food and material shortages predicted for the 1990s and if we are to deal with the 30

  845
  poorest nations such as Togo and Mali, which are collapsing. When the Prime Minister goes to Mexico, I hope that she will direct her attention to those matters.
  For me the fundamental justification for action is a moral one. I find it unacceptable that a Minister of my country, which is one of the 12 richest countries in the world, should not only defend a 0·3 per cent. expenditure but should assert that we should be proud of it. I am not proud of it—I am ashamed of it. The Good Samaritan did not say "You've got your troubles and I've got mine". Nor did he say, as the hon. Member for Bridlington (Mr. Townend) said in his astonishing speech, that charity has a place among civilised people. That deserves to be the quote of the week.
  There is another aspect of aid to which I wish to make a brief reference. I am aware that a number of hon. Members are anxious to speak. If the descriptions of the horrors of poverty in the poorer countries do not have an effect on the Government in the way that they should, perhaps it will have some impact if we contemplate the damage to Britain that our niggardly behaviour is causing. The Minister referred to overseas students. My right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) said in his speech to the annual congress of the Free Church Federal Council on 19 March:
  "The State visit of Nigerian President Shagari served to remind me of how much damage the Government's policy on overseas student fees is doing. I was told how nearly all of the visiting Nigerian party had been educated in Britain, but how in future none would probably be in that position. In other words we are, in keeping out overseas students, apart from the very rich, steadily undermining our future friendship and relations with the leaders of the developing world. We are turning our backs on the means of promoting future economic links with those countries. Upon those links our future trade depends. Overseas students, apart from what they add to the quality of those educational institutions they attend, are a major part of our contribution to aid for world development. A cheseparing approach, with such comparatively small savings will have far-reaching effects."
  That is a practical argument. It is not the sort of argument that was described in a disparaging fashion by the hon. Member for Bridlington as the wet centre of politics. It is a hard, practical matter. I make no apology for believing that morality is important. If that is called the wet centre, I am part of it. Perhaps we should have a wider, wetter centre.
  As a member of the Commonwealth and the EEC, acting through Lomé—I hope that the Minister will take an opportunity to pay tribute to the work of the EEC in this area—Britain has an exceptional responsibility and an exceptional opportunity. The Government are failing to face either.
  6.17 pm
  Mr. Stephen Dorrell: The problem with much of the Opposition case is that it is based on a largely false premise—that aid is the most important aspect of our economic relations with the developing world. I do not believe that that is so, either in terms of what should happen or in purely factual terms of what has happened.
  The last years for which figures are available show that flows from Britain were £4 billion for the private sector against less than £1 billion for official aid. Factually, the more important element was private investment rather than official aid. The Opposition case, based on the Brandt report, is that we should he increasing our overseas aid programme. The Brandt report has been cited almost as
  846
  though it supported the case of the aid lobby. Of course it does, but aid is only one short chapter in a long report. If we quote Brandt in support of the foreign aid case we must also quote him in support of the case for private investment and for freeing the trading relationships between Britain and the remainder of the world.
  When the Opposition advance a case based purely on the aid programme they are ignoring at least three-quarters of the issue. Let us consider private investment. We heard from my hon. Friends the Members for Harborough (Mr. Farr) and for Hertford and Stevenage (Mr. Wells) and from the Minister that Britain, in recent years, has undertaken a substantial programme of direct investment in the developing world. That has been substantially improved by the Government's right and courageous decision to lift exchange controls. Brandt supported and reinforced that. If Opposition Members want to use the Brandt report in support of their argument, they must be prepared to recognise the force of the argument for lifting exchange controls and encouraging British companies to play a major part in the development process.
  One point in the Brandt report was the need for a new code of practice on the operation of private sector companies in the developing world.
  I shall take up the call made by the hon. Member for Kingston upon Hull, Central (Mr. McNamara) for a positive and imaginative initiative to be launched by the Government of Mexico. They might take up that part of the Brandt report and undertake to obtain agreement among the countries of the developed and developing world on a code of practice under which multinational companies can operate in the developing world to the advantage of the developing and developed countries of the West. Private companies, operating in proper circumstances, have a major role to play, such as in transferring production technology to the developing world—that example is often cited. More important, they play a major role in getting access to the rich countries' markets for the products which are made in the developing world. Many developing countries can make the products, but more often they are short of the marketing expertise to design and sell those products in the developed countries of the West.
  If we are considering the position of the rich countries vis-a-vis the developing countries, I hope that we can take a more positive look at the achievements of the Government in launching a major British initiative to encourage foreign investment in the developing world.
  The second aspect of our relations with that part of the world, about which the Government have nothing to apologise but where the Labour Party has a record which is much less defensible, is in the business of import controls on products from the developing world. I do not see how one can claim to argue the case for the developing world if one prevents our companies from investing in those countries, and prevents our consumers from buying the products which those countries can make. The trading argument is the other side of the investment coin. There can be no better illustration of the case for mutuality of interest made by Brandt than the issue of international trade.
  There is a clear example of that in my constituency. My hon. Friend the Member for Harborough and I have had altercations on that subject in the past.
  Mr. Farr: Friendly altercations.
  Mr. Dorrell: As my hon. Friend rightly says, they were friendly altercations.
  There is a substantial textile industry in my constituency and a company which makes railway engines, which recently has won a £25 million order to export railway engines to Sri Lanka. I do not see how we can expect that trade to continue and grow—as I sincerely hope it does—if we do not accept that we must also buy the products which countries such as Sri Lanka, India and others in the Far East can make. Textiles are a major element of their trade.
  If we are considering the Government's record for the developing world, we are entitled to point to our record on private investment and trading policy. I am proud of that record. It contrasts favourably with the policies advocated by the Labour Party. However, that does not mean that I think that aid is unimportant. If there is a danger of the Labour Party underestimating the importance of the private sector in promoting the development process, there is sometimes a danger of some of my hon. Friends underestimating the role of official aid in the development process.
  Just as there is a case for our promoting investment in the productive sectors of the economy in the developing world, there is an important case for promoting the building of the infrastructure in those countries, to make possible the sort of commercial investment which I have mentioned. That is the argument for concentrating aid in the poorest countries. We should seek to concentrate our aid budget in the least developed countries, to build their infrastructure, which makes it possible for our private sector companies to invest and extend the development process.
  It does not make sense to tell a British company that the burden of development rests on it and that it should invest in the developing world, if we do not provide for it the infrastructure to make investment possible. One cannot invest in an economy if the people one is seeking to employ do not have the education to understand the instructions that they are given, if the communications do not exist to export their products from the country where the companies operate, and if most of them are in a survival, rural economy without the housing and infrastructure of the urban State.
  Therefore, private investment by private companies has an important part to play. Official aid has an equally important part to play in creating the infrastructure which makes that possible. I suggest to the Minister that we should concentrate our aid on health and communication infrastructural projects and on the sort of population projects mentioned by the hon. Member for West Bromwich, West (Miss Boothroyd). I share with her the honour of being joint secretary of the population group of the British Parliament. There is no better example of the way in which official aid can be used effectively to promote the development process than in the population area.
  My hon. Friend the Member for Bridlington (Mr. Townend) illustrated that example with uncanny perception by his figures. Among the many problems in the developing world to which he believed that aid would not help provide a solution, he listed population. He said that our total aid to India was £80 million last year. By a lucky coincidence, £80 million is the total cost of the Indian population control programme. Although our assistance to India was not directed to that programme, it
  848
  paid for the entire Indian population control programme. There could not be a better illustration both of the cheapness of population policy as an element in the development process and of its importance to this country.
  Why should we be interested in what happens in the developing world? There have been several arguments about that question. My hon. Friend the Member for Bridlington said that there was a place for charity. I do not see the primary argument for overseas aid and investment—certainly not for investment—in terms of charity. The much more important argument is not the charity argument but the self-interest argument. There is much latent demand in the developing world. The people there do not have the capacity to buy the goods, although they need them. In the developed countries of the West, there is much idle capacity for producing the goods that the developing countries want. It should be our policy to seek to release that demand to make the wheels of Western industry turn again. The precedent of the Marshall aid programme is much overworked, but it is none the worse for that. Europe pulled the United States into super-growth after the war. There is no reason why the less developed countries should not play a part in the achievement of the same end for our country now.
  6.28 pm
  Mr. Christopher Brocklebank-Fowler: If I had any residual doubts about having crossed the Floor a week ago tonight, they were entirely erased by the speech of the hon. Member for Bridlington (Mr. Townend), which showed such ignorance and such a lack of compassion that it was clear that he did not begin to understand the problems facing developing countries. The hon. Member for Greenwich (Mr. Barnett) reminded us of what the debate is all about. Although I have much sympathy with the hon. Member for Loughborough (Mr. Dorrell), and with the hon. Member for Hertford and Stevenage (Mr. Wells), who talked about the interaction of aid and trade and the importance of both to the prosperity of our economy and that of the developing world, the debate is not about that but about the Government's record in giving aid. Aid to what purpose?
  The hon. Member for Greenwich reminded us at the outset of the debate that in 1981 there live in the world 800 million people whose standard of living is below the poverty line and between 20 million and 25 million children are dying each year from disease which can be overcome by modern medical and health practices. He reminded us that the world spends on the manufacture of weapons and armaments designed to destroy people 20 times the amount it spends on aid.
  I regret that the Government have embarked on a course of increased defence spending and decreased expenditure on overseas aid. It has been argued that in some countries a good aid programme can be a much more effective counter to communism than having an extra half dozen tanks.
  Mr. Alan Clark: On a point of order, Mr. Speaker. As you know, Mr. Speaker, it is customary not to intervene in maiden speeches. May I have your ruling on whether the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler) is making a maiden speech?
  Mr. Speaker: That is clever, but it is not the best that the hon. Gentleman has done.
  Mr. Brocklebank-Fowler: I am concerned that defence expenditure is going up and aid expenditure is going down. It is clear that aid, as part of a relation between this country and a developing country, can be a much more cost-effective and useful way of maintaining our friends in the developing world.
  In my speech last week I made clear that I thought that the reason why Britain should play a leading part in the world's aid programme to developing countries, quite apart from our moral responsibility, was that we benefit more than anyone else from our trade with the developing world. I can think of no other country which enjoys such a balance of payments surplus with developing countries. The surplus of £2·1 billion last year is almost the total balance of payments surplus that this country earns. It is right for the country that is head of the Commonwealth and benefits massively from trade with developing countries to play a leading part in the aid programme.
  I regret to say that there are grounds for disappointment in the aid figures. Our country is pledged, with others, to reach a target of 0·7 per cent. of GNP in aid. The Government have achieved 0·51 per cent. and this year 0·34 per cent. Although there may be arithmetical arguments about net and gross sums, as a proportion of GNP the amount Britain spends on the aid programme is falling.
  In my first speech from this position in the House and with the time constraint, I would hate to allow the occasion to pass without paying a small tribute to the Minister.
  Mr. Alan Clark: Will the hon. Gentleman give way?
  Mr. Brocklebank-Fowler: I will not; I do not have the time.
  I join hon. Members on both sides of the House in thanking the Minister for the part he played in bringing about the Government's agreement to increase Britain's aid to Zimbabwe. He announced in the House this afternoon an additional £10 million aid over one year for settlement purposes, £5 million for education and £10 million through the EDF for the SADC programme in Southern Africa. May I ask him whether that £10 million for settlement will be devoted to the purchase of land? There is no doubt—I think the Sub-Committee of the Select Committee on Foreign Affairs will agree—that unless the land settlement issue in Zambabwe is settled, the possibility of peace and stability in that country will be adversely affected. It is the central issue.
  Although I do not press the Government tonight to tell us precisely how that £10 million is to be spent, I hope the Minister will reassure us that the £20 million devoted to land purchase so far and the £10 million which he announced today will not be a once-for-all payment but that, as and when these initial schemes are carried through and people are settled on the land, the Government will be open to further requests from the Government of Zimbabwe to consider further support for this crucial purpose.
  I welcome the £5 million for education and hope that the Minister will find time to tell us that it is intended to assist the 800 Zimbabwean children who are coming up to university qualifying examinations this year. Will he make clear on what that is to be spent?
  Finally, I refer more in sorrow than in anger to the rates on Rhodesia House. It is ridiculous after all this time that the small amount of £300,000 should cause us so much
  850
  political difficulty in Zimbabwe. I hope that the Minister will undertake to discuss with the Treasury means of writing off this debt which was not incurred by the current Government but should be charged against the old Government of Southern Rhodesia.
  6.37 pm
  Mr. Guy BarnettWith the permission of the House I should like to make a brief intervention, largely to enable the Minister to reply to the many matters that have been raised during the debate.
  I thank the Minister for his announcement about Zimbabwe and what his noble Friend will say at the Zimcord conference today. As my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) said, we shall want to judge the Minister's statement, not least in the light of the way in which the Zimcord conference goes and whether the money that comes from other donor countries is likely to meet the immediate and pressing needs of Mr. Mugabe and his Government.
  My hon. Friend the Member for Kingston upon Hull, Central also asked whether this was new money. We should like an answer to that question. I hope that it is new money. If it is not, presumably there could be cuts in other programmes.
  I want to raise an issue that has not so far been raised, namely, the serious problem of the developing food shortage in East Africa. No doubt the Minister will have seen the article in The Times today referring to the proposal put forward by the Secretary-General of the Commonwealth that one possible solution to the problem of famine developing in other parts of East Africa, principally around the area of Muanza, might be to take advantage of a good harvest in Zimbabwe, using funds from donor countries to enable that food to be transferred to areas where famine is likely to develop.
  I note that the President of Tanzania is now saying that, because of the economic situation in Tanzania, caused by the rise in energy costs and the military costs in connection with Uganda, he is hardly able to purchase food from abroad.
  The hon. Members for Hertford and Stevenage (Mr. Wells) and for Loughborough (Mr. Dorrell) may have misunderstood me. At no stage have I or any other Opposition Member criticised the use and importance of private capital in developing countries, but we must make it absolutely clear that it is not a form of aid. If it were a form of aid we should have to say, presumably, that Japanese companies investing in Britain were aiding Britain, or that German companies investing in Britain were doing so. The thing is patent nonsense. Obviously, the transfer of private capital to the developing countries is more often than not extremely useful to the development of those countries—not necessarily or always so, but very often.
  The hon. Member for Loughborough suggested, too, because the debate this evening is limited to the subject of the British aid programme, that the opposition had forgotten that there are large and important elements other than aid that can assist in the development of the Third world. Of course we would not make that mistake, but this is a debate about aid, and one of the points that I want to underline again is that our credibility in terms of the Mexico summit is dependent not least upon our record as

  851
  a country that is giving aid. I take all the points that have been made about trade. I do not have time, obviously, to answer them at the moment.
  There is one other question that I want to put to the Minister. We are now reaching the end of the financial year, and I ask him to say quite clearly whether the aid budget for the current financial year has been fully spent or is is underspent. He should be in a position to tell the House that this evening, and I very much hope that he will do so.
  6.42 pm
  Mr. Marten: I should like to answer what I can of the various points raised in this debate. I am afraid that I cannot give the answer to the point about underspending until the end of the financial year. Then, of course, once the bills have come in—and it takes some time to collect them all—we shall be able to give the answer.
  I am very conscious of the question of food surpluses in Zimbabwe, and the Minister of Agriculture of Zimbabwe came to see me the other day and we discussed their use and sale in Africa. We also discussed the question of the storage of these surpluses until they were needed.
  Many points have been raised in the debate, and, if I cannot reply to all of them because of lack of time, I shall do so by letter.
  The hon. Member for Greenwich (Mr. Barnett) raised the question of India. The fall in aid to the poorest countries is closely linked to the question of aid to India. The hon. Gentleman asked for a detailed explanation of the figures. Drawings in respect of the Indian programme have been lower than expected in the first three-quarters of the present financial year, and we are working with the Indian authorities to try to ensure that the resources available for the year as a whole will be fully and effectively used. The financial year is a relevant period for the Indians and for ourselves and we hope to provide roughly the same amount in 1980–81 as we did in 1979–80—that is, about £123 million gross.
  We give more aid to India than any other bilateral donor. According to World Bank figures, British aid amounted to 34 per cent. of net bilateral aid by members of the Aid India Consortium in 1979–80. That is a very substantial percentage. Several other OECD, OPEC and Communist bloc countries were net negative donors after Indian payment of loan amortisation was taken into account. India also benefits from the multilateral flows, to which Britain contributes heavily—for example, expenditure by the International Development Association.
  The hon. Member for Greenwich also asked about development projects. It is not the case that projects being financed under aid programmes do not continue to be approved on the basis of development criteria. This remains of basic importance for the regular programme and for projects being financed under the aid and trade provision, all of which come to me, and I have to be satisfied that there is a developmental aspect.
  The hon. Member also asked whether I would confirm that the 1980 ODA-GNP ratio would be 0·34 per cent. I am afraid that a firm figure is not yet available. Both components—official development assistance and the GNP estimates—are subject to revision. I do not think it would serve any useful purpose to give a provisional estimate at this stage, but, as I have made clear today, slow
  852
  bilateral spending and the fact that we did not deposit a promissory note with IDA before the end of 1980 because of the American Congress hiccup will mean that the 1980 ODA-GNP figure will be below the level recorded in 1979.
  When speeches such as that of the hon. Member for Inverness (Mr. Johnston) are made about the reduction in aid in 1980, any reasonable person must bear in mind those two factors of the under-drawing by the recipient countries and the IDA replenishment being virtually blocked because Congress failed to play its part during the American elections.
  The hon. Member for Greenwich—I am devoting a lot of time to answering his questions—criticised the Government for assisting Turkey, a crucial member of NATO, to overcome its serious balance of payments difficulties. This, frankly, is slightly surprising considering that the Labour Government found it right to give emergency assistance of this kind to countries facing such difficulties. Any allocation of aid is arguably at the expense of some other recipient. We attempt to keep a reasonable balance at all times between the competing claims on the resources available.
  The hon. Member for Newham, South (Mr. Spearing), in his intervention, raised a question—which was followed up by the hon. Member for Norfolk, North-West (Mr. Brocklebank-Fowler)—about Zimbabwe and the £10 million for land resettlement. I am afraid that details of its use are still to be discussed with the Zimbabwe Government. The first £20 million was for both purchase and subsequent development of land and we would expect the use of the next £10 million to follow a similar pattern, but this is for discussion. I make one point, however, on what I felt lay behind the remark of the hon. Member for Norfolk, North-West. The question of future aid on land resettlement is at any time open for discussion. What we cannot give as a Government—and I am sure that this is a responsible attitude—is an open-ended commitment to it, which I believe some people would like us to do.
  The right hon. Member for Norwich, North (Mr. Ennals) found a different story told to him when he followed me round some of the places I visited. That, of course, may be so; it depends upon who one speaks to. I speak to my opposite numbers. As a visiting Minister, I speak to the Prime Minister, the President, or whoever it might be, about aid, and they do not say that to me. My hon. Friend the Member for Harborough (Mr. Fan) told us what he found when he went to India, and that rather bears out what is told to me when I travel round. Perhaps the right hon. Gentleman does not. I can understand why, of course: he cannot explain the matter in the terms in which the Government see it. Perhaps we can have a lesson about that so that the next time he goes there he gets the same reaction as I do.
  The right hon. Gentleman then referred to a "stop the world, we want to get off" attitude. It is not that at all, although it was quite a nice way of expressing what I think was in his mind. After all, although I hate rubbing this in, we inherited considerable economic problems which we are now trying to overcome.
  I turn to the speech of my hon. Friend the Member for Bridlington (Mr. Townend). I think it is true to say that a number of people in this House and outside it do not agree with his views, but what he has said reflects a part of public opinion, and therefore he is right to say it. That is what Parliament is all about—putting the different

  853
  views. So to that extent I thank him for what he said, but I should like to pick up briefly one or two points about aid to Zimbabwe. It did not have aid before, but it has been through a tragic period of war and the aid is all about reconstruction after the war.
  My hon. Friend said that some say that aid is given not to poor people but to Governments. That is a Professor Bauerism. A lot of our aid, being infrastructure, is given to Governments. For example, in Sri Lanka we are giving £100 million to build the Victoria dam. That is Government aid, but the dam will enable 20,000 farming families to be resettled on their land to produce food for themselves and their country for export. The dam will also provide electricity for industry. That is an example of how aid given to Governments flows to the people.
  My hon. Friend also told us that it is said that our enonomy would benefit if aid money was spent here. I take the point. I left out of my geographical tour my visit to Egypt. I went there a few weeks ago, and announced £50 million aid to improve Egyptian sewers. The sewers in Cairo were bad enough during the war, but the population has risen from 1 million to 9 million. I stood deep in sewage in the Cairo streets, yet I have letters asking what we are doing giving £50 million to Egypt when the sewers in Little or Big Sodbury need attention. Nothing will change people's views.
  My hon. Friend's final point was that the Opposition should say where the money for increased expenditure should come from. One hon. Gentleman tried to respond but the answer should come from a Front Bench spokesman who may have future responsibility. I do not ask for the suggestion now. Perhaps the hon. Member for Greenwich could write to me.
  I agree with the hon. Member for Kingston upon Hull, Central (Mr. McNamara) that aid is about living in peace. That is why in my original remarks I said that aid helped to achieve stability in the developing world. The hon. Gentleman said that we had belatedly accepted the Mexico summit invitation. We accepted it when we received it. A lot of people thought that we were ducking it, but the invitation perhaps came later than the hon. Gentleman expected.
  My hon. Friend the Member for Hertford and Stevenage (Mr. Wells) said that we must bend our minds and hearts to aid. I agree, provided that we also keep a level head. He made an excellent speech, and brought the debate down to earth in a constructive and helpful way. He normally speaks about the Commonwealth Development Corporation. When I was in the Solomon Islands three weeks ago, I visited the CDC palm oil plantation, and was impressed with the style of its work—its employment of labour and its ability to create overseas earnings for the country involved.
  Mr. Peter Hordern: Is there a prospect that the activities of the CDC will no longer be counted under the public sector borrowing requirement?
  Mr. Marten: I gave way to my hon. Friend because I wanted a sip of water. That is a hint that I do not wish to give way again. We are discussing the matter. My hon. Friend knows that the Treasury is not easy to persuade on such matters.
  I have taken note of the point about Nepal made by the hon. Member for West Bromwich, West (Miss Boothroyd). I shall write to her. If she then wishes to put
  854
  down a question to get the answer officially open, I shall provide her with a written answer. I am grateful to her for her kind remarks on population control. The pressure on me by the parliamentary group, of which the hon. Lady and my hon. Friend the Member for Loughborough (Mr. Dorrell) are such outstanding members, has been great. It has educated me, and I have taken an interest in it. Someone was talking behind me, and I did not quite catch what she said about women. I thought that she said that women are invisible. That is not the case so far as I am concerned.
  My hon. Friend the Member for Harborough mentioned the alternative for students of going behind the Iron Curtain for education. As I said earlier, I recognise that fact, and we give it constant attention, but we cannot expect to educate everyone who wants to come here.
  The hon. Member for Inverness quoted the Oxfam paper which was produced before the organisation met the Foreign Secretary and myself. It was riddled with mistakes, which was surprising. After Oxfam had seen us and had corrected the paper, it reissued a better and more accurate version. The incident illustrates how wrong well-meaning people can be if they do not get the statistics absolutely right. Such a huge area of percentages is not easy to deal with. My Department's information service is available to anyone who wants to write a thesis on our aid programme in percentages or in real terms.
  The hon. Gentleman questioned the famous quotation about myself at the United Nations. Miss Rosemary Righter reported on the supposed United Nations' reaction in the auditorium to my speech. As I have said before., she was not in the auditorium, she was not in New York—indeed, she was not even in America at the time. How could she, therefore, judge the reaction? Oxfam picked up the remark in a rather cheap way, without investigation. My speeches are usually pretty bad, but, as I walked from the rostrum to my seat, I was shaken by the hand by three different African delegations. Miss Righter should report what she knows directly.
  The agenda of the Mexico summit has not yet been agreed. Several hon. Members have suggested points for discussion, which will be fed into our national machine and into the preparatory committee that will draw up an agenda. I am grateful to hon. Members for the suggestions.
  We shall take up the points suggested by my hon. Friend the Member for Loughborough for the Mexico summit. I agree with what he says about trade and the difficulties of hon. Members who have factories in their constituencies affected by imports but who also want a generous approach to aid. It is not consistent to argue for both.
  The hon. Member for Norfolk, North-West regrets increased spending on arms. He is aware that I do not agree with him. Defence is the first priority for any Government.
  I thank all hon. Members for their contributions to the debate, which we will take seriously. I shall answer in writing those that I have not dealt with. A debate like this stimulates the subject of aid and gives it an airing.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 245,Noes 302.

  Division No. 121]

  [7.00 pm

  AYES

  Abse, Leo

  Allaun, Frank

  Adams, Allen

  Anderson, Donald

  855

  Archer, Rt Hon Peter

  Ginsburg, David

  Ashley, Rt Hon Jack

  Golding, John

  Ashton, Joe

  Gourlay, Harry

  Atkinson, N.(H'gey,)

  Graham, Ted

  Bagier, Gordon A, T.

  Grant, George(Morpeth)

  Barnett, Guy (Greenwich)

  Grant, John (Islington C)

  Beith, A, J.

  Hamilton, James(Bothwell)

  Bennett, Andrew(St'kp'tN)

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

  Booth, Rt Hon Albert

  Harrison, Rt Hon Walter

  Boothroyd, Miss Betty

  Hart, Rt Hon Dame Judith

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

  Haynes, Frank

  Bradley, Tom

  Healey, Rt Hon Denis

  Bray, Dr Jeremy

  Hogg, N. (E Dunb't'nshire)

  Brocklebank-Fowler, C.

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

  Brown, Hugh D. (Provan)

  Home Robertson, John

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

  Homewood, William

  Brown, Ron (E'burgh, Leith)

  Hooley, Frank

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

  Horam, John

  Campbell, Ian

  Howell, Rt Hon D.

  Campbell-Savours, Dale

  Howells, Geraint

  Canavan, Dennis

  Hudson Davies, Gwilym E.

  Cant, R. B.

  Hughes, Mark (Durham)

  Carmichael, Neil

  Hughes, Robert (Aberdeen N)

  Carter-Jones, Lewis

  Hughes, Roy (Newport)

  Clark, Dr David (S Shields)

  Janner, Hon Greville

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

  Jay, Rt Hon Douglas

  Cohen, Stanley

  John, Brynmor

  Coleman, Donald

  Johnson, James (Hull West)

  Concannon, Rt Hon J. D.

  Johnson, Walter (Derby S)

  Cook, Robin F.

  Johnston, Russell(Inverness,)

  Cowans, Harry

  Jones, Barry (East Flint)

  Craigen, J. M.

  Jones, Dan (Burnley)

  Crawshaw, Richard

  Kaufman, Rt Hon Gerald

  Crowther, J, S.

  Kerr, Russell

  Cryer, Bob

  Kilroy-Silk, Robert

  Cunliffe, Lawrence

  Lambie, David

  Cunningham, G.(Islington S)

  Lamond, James

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

  Leadbitter, Ted

  Dalyell, Tam

  Leighton, Ronald

  Davidson, Arthur

  Lestor, Miss Joan

  Davies, Rt Hon Denzil (L'lli)

  Lewis, Arthur (N'ham NW)

  Davies, Ifor (Gower)

  Lewis, Ron (Carlisle)

  Davis, Clinton (Hackney C)

  Litherland, Robert

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

  Lyon, Alexander(York)

  Deakins, Eric

  Lyons, Edward (Bradf'd W)

  Dempsey, James

  Mabon, Rt Hon Dr J. Dickson

  Dewar, Donald

  McDonald, Dr Oonagh

  Dixon, Donald

  McGuire, Michael(Ince)

  Dobson, Frank

  McKay, Allen(Penistone)

  Dormand, Jack

  McKelvey, William

  Douglas, Dick

  MacKenzie, Rt Hon Gregor

  Douglas-Mann, Bruce

  Maclennan, Robert

  Dubs, Alfred

  McMahon, Andrew

  Duffy, A. E. P.

  McNamara, Kevin

  Dunn, James A.

  McTaggart, Robert

  Dunnett, Jack

  McWilliam, John

  Dunwoody, Hon Mrs G.

  Magee, Bryan

  Eadie, Alex

  Marshall, D(G'gowS'ton)

  Eastham, Ken

  Marshall, DrEdmund(Goole)

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

  Marshall, Jim (LeicesterS)

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

  Martin, M(G'gowS'burn)

  Ellis, Tom (Wrexham)

  Mason, Rt Hon Roy

  English, Michael

  Maxton, John

  Ennals, Rt Hon David

  Maynard, Miss Joan

  Evans, Ioan (Aberdare)

  Meacher, Michael

  Evans, John (Newton)

  Mellish, Rt Hon Robert

  Field, Frank

  Mikardo, Ian

  Fitch, Alan

  Millan, Rt Hon Bruce

  Flannery, Martin

  Mitchell, Austin(Grimsby)

  Fletcher, Ted (Darlington)

  Mitchell, R. C. (Soton Itchen)

  Foot, Rt Hon Michael

  Morris, Rt Hon A. (W'shawe)

  Ford, Ben

  Morris, Rt Hon C. (O'shaw)

  Forrester, John

  Morris, Rt Hon J. (Aberavon)

  Foster, Derek

  Morton, George

  Foulkes, George

  Moyle, Rt Hon Roland

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

  Newens, Stanley

  Freeson, Rt Hon Reginald

  Oakes, Rt Hon Gordon

  Freud, Clement

  O'Halloran, Michael

  Garrett, John (Norwich S)

  O'Neill, Martin

  Garrett, W. E. (Wallsend)

  Orme, Rt Hon Stanley

  856

  Owen, Rt Hon Dr David

  Stott, Roger

  Palmer, Arthur

  Strang, Gavin

  Parker, John

  Straw, Jack

  Pavitt, Laurie

  Summerskill, Hon Dr Shirley

  Pendry, Tom

  Thomas, Dafydd (Merioneth)

  Powell, Raymond (Ogmore)

  Thomas, Jeffrey (Abertillery)

  Prescott, John

  Thomas, Mike(Newcastle E)

  Price, C. (Lewisham W)

  Thomas, DrR.(Carmarthen)

  Race, Reg

  Thorne, Stan (Preston South)

  Radice, Giles

  Tilley, John

  Rees, Rt Hon M (Leeds S)

  Tinn, James

  Richardson, Jo

  Torney, Tom

  Roberts, Albert(Normanton)

  Urwin, Rt Hon Tom

  Roberts, Allan (Bootle)

  Varley, Rt Hon Eric G.

  Roberts, Ernest (Hackney N)

  Wainwright, E. (Dearne V)

  Roberts, Gwilym(Cannock)

  Wainwright, R.(Colne V)

  Robertson, George

  Walker, Rt Hon H.(D'caster)

  Robinson, G. (Coventry NW)

  Watkins, David

  Rodgers, Rt Hon William

  Weetch, Ken

  Rooker, J. W.

  Wellbeloved, James

  Roper, John

  Welsh, Michael

  Ross, Ernest (Dundee West)

  White, Frank R.

  Rowlands, Ted

  White, J.(G'gow pollock)

  Ryman, John

  Whitehead, Phillip

  Sandelson, Neville

  Whitlock, William

  Sever, John

  Wigley, Dafydd

  Sheerman, Barry

  Willey, Rt Hon Frederick

  Sheldon, Rt Hon R.

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

  Shore, Rt Hon Peter

  Williams, SirT.(W'ton)

  Short, Mrs Renée

  Wilson, Gordon (Dundee E)

  Silkin, Rt Hon J. (Deptford)

  Wilson, Rt Hon Sir H.(H'ton)

  Silverman, Julius

  Wilson, William (C'try SE)

  Skinner, Dennis

  Winnick, David

  Smith, Cyril(Rouchdale)

  Woodall, Alec

  Smith, Rt Hon J. (N Lanark)

  Woolmer, Kenneth

  Snape, Peter

  Wrigglesworth, Ian

  Soley, Clive

  Wright, Sheila

  Spearing, Nigel

  Young, David (Bolton E)

  Spriggs, Leslie

  Stallard, A. W.

  Tellers for the Ayes:

  Steel, Rt Hon David

  Mr. Hugh McCartney and Mr. Joseph Dean

  Stewart, Rt Hon D. (W Isles)

  Stoddart, David

  NOES

  Adley, Robert

  Brotherton, Michael

  Aitken, Jonathan

  Brown, Michael(Brigg&Sc'n)

  Alexander, Richard

  Browne, John(Winchester)

  Alison, Michael

  Bruce-Gardyne, John

  Amery, Rt Hon Julian

  Buchanan-Smith, Alick

  Ancram, Michael

  Buck, Antony

  Arnold, Tom

  Budgen, Nick

  Aspinwall, Jack

  Bulmer, Esmond

  Atkins, RtHonH.(S'thorne)

  Burden, SirFrederick

  Atkins, Robert(Preston N)

  Butcher, John

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

  Cadbury, Jocelyn

  Baker, Kenneth(St, M'bone)

  Carlisle, Kenneth(Lincoln)

  Baker, Nicholas (N Dorset)

  Chalker, Mrs. Lynda

  Banks, Robert

  Channon, Rt. Hon. Paul

  Beaumont-Dark, Anthony

  Chapman, Sydney

  Bell, Sir Ronald

  Churchill, W, S.

  Bendall, Vivian

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

  Benyon, Thomas(A'don)

  Clark, Sir W. (Croydon S)

  Benyon, W. (Buckingham)

  Clarke, Kenneth(Rushcliffe)

  Best, Keith

  Clegg, SirWalter

  Bevan, David Gilroy

  Cockeram, Eric

  Biggs-Davison, John

  Colvin, Michael

  Blackburn, John

  Cope, John

  Blaker, Peter

  Cormack, Patrick

  Body, Richard

  Corrie, John

  Bonsor, Sir Nicholas

  Costain, Sir Albert

  Boscawen, Hon Robert

  Cranborne, Viscount

  Bottomley, Peter (W'wich W)

  Critchley, Julian

  Bowden, Andrew

  Crouch, David

  Boyson,Dr Rhodes

  Dean, Paul (North Somerset)

  Braine, Sir Bernard

  Dickens, Geoffrey

  Bright, Graham

  Dorrell, Stephen

  Brinton, Tim

  Douglas-Hamilton, Lord J.

  Brittan, Leon

  Dover, Denshore

  Brooke, Hon Peter

  du Cann, Rt Hon Edward

  857

  Dunn, Robert (Dartford)

  Hunt, John (Ravensbourne)

  Durant,Tony

  Hurd,HonDouglas

  Dykes, Hugh

  Irving, Charles(Cheltenham)

  Eden, Rt Hon Sir John

  Jenkin,Rt Hon Patrick

  Eggar,Tim

  Johnson Smith, Geoffrey

  Elliott,Sir William

  Jopling,Rt Hon Michael

  Emery, Peter

  Joseph, Rt Hon Sir Keith

  Eyre, Reginald

  Kaberry,Sir Donald

  Fairbairn,Nicholas

  Kershaw,Anthony

  Fairgrieve,Russell

  Kimball,Marcus

  Farr,John

  King, Rt Hon Tom

  Fell,Anthony

  Knight, Mrs Jill

  Fenner, Mrs Peggy

  Knox, David

  Finsberg, Geoffrey

  Lamont,Norman

  Fisher, Sir Nigel

  Lang, Ian

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

  Latham,Michael

  Fletcher-Cooke,Sir Charles

  Lawrence, Ivan

  Fookes, Miss Janet

  Lawson, Rt Hon Nigel

  Forman,Nigel

  Lee, John

  Fowler, Rt Hon Norman

  Lennox-Boyd,HonMark

  Fox, Marcus

  Lester, Jim (Beeston)

  Fraser, Rt Hon Sir Hugh

  Lewis,Kenneth(Rutland)

  Fraser, Peter (South Angus)

  Lloyd, Ian (Havant & W'loo)

  Fry, Peter

  Lloyd, Peter (Fareham)

  Galbraith, Hon T. G. D.

  Loveridge,John

  Gardiner,George(Reigate)

  Luce,Richard

  Gardner, Edward (S Fylde)

  Lyell,Nicholas

  Garel-Jones,Tristan

  McCrindle,Robert

  Gilmour, Rt Hon Sir Ian

  Macfarlane,Neil

  Glyn, Dr Alan

  MacKay, John (Argyll)

  Goodhart,Philip

  Macmillan, Rt Hon M.

  Goodlad.Alastair

  McNair-Wilson.M. (N'bury)

  Gorst,John

  McNair-Wilson, P. (New F'st)

  Gow, Ian

  McQuarrie,Albert

  Gower,Sir Raymond

  Madel, David

  Gray, Hamish

  Major,John

  Greenway, Harry

  Marland,Paul

  Grieve, Percy

  Marlow,Tony

  Griffiths, Peter Portsm 'th N)

  Marshall, Michael (Arundel)

  Grist, Ian

  Marten, Neil (Banbury)

  Grylls, Michael

  Mather,Carol

  Gummer,John Selwyn

  Mawby, Ray

  Hamilton, Hon A.

  Mawhinney,Dr Brian

  Hamilton,Michael(Salisbury)

  Maxwell-Hyslop,Robin

  Hampson,Dr Keith

  Mayhew, Patrick

  Hannam,John

  Miller,Hal(B'grove)

  Haselhurst,Alan

  Mills,Iain(Meriden)

  Hastings,Stephen

  Mills, Peter (West Devon)

  Havers, Rt Hon Sir Michael

  Miscampbell,Norman

  Hawkins,Paul

  Moate, Roger

  Hawksley,Warren

  Monro,Hector

  Hayhoe, Barney

  Montgomery, Fergus

  Heddle,John

  Moore,John

  Henderson, Barry

  Morgan,Geraint

  Heseltine,Rt Hon Michael

  Morris, M. (N'hampton S)

  Hicks, Robert

  Morrison, Hon C. (Devizes)

  Higgins, Rt Hon Terence L.

  Morrison, Hon P. (Chester)

  Hill,James

  Mudd, David

  Hogg,Hon Douglas(Gr'th''m)

  Murphy,Christopher

  Holland,Philip(Carlton)

  Myles, David

  Hooson,Tom

  Neale,Gerrard

  Hordern, Peter

  Needham,Richard

  Howe, Rt Hon Sir Geoffrey

  Nelson,Anthony

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

  Neubert, Michael

  Howell, Ralph (N Norfolk)

  Newton,Tony

  Hunt, David (Wirral)

  Normanton,Tom

  858

  Oppenheim, Rt Hon Mrs S.

  Squire,Robin

  Page, John (Harrow, West)

  Stainton,Keith

  Page, Rt Hon Sir G. (Crosby)

  Stanbrook,Ivor

  Page, Richard (SW Herts)

  Stanley,John

  Parkinson,Cecil

  Steen,Anthony

  Parris, Matthew

  Stevens,Martin

  Patten,Christopher(Bath)

  Stewart, Ian (Hitchin)

  Pattie,Geoffrey

  Stewart,A.(E Renfrewshire)

  Pavitt, Laurie

  Stokes,John

  Pawsey, James

  Stradling Thomas,J.

  Percival,Sir Ian

  Tapsell, Peter

  Peyton, Rt Hon John

  Taylor, Robert (Croydon NW)

  Pink, R.Bonner

  Taylor, Teddy (S'end E)

  Pollock,Alexander

  Tebbit,Norman

  Porter, Barry

  Temple-Morris,Peter

  Prentice, Rt Hon Reg

  Thomas, Rt Hon Peter

  Price, Sir David (Eastleigh)

  Thompson,Donald

  Prior, Rt Hon James

  Thorne, Neil(IlfordSouth)

  Proctor, K. Harvey

  Thornton,Malcolm

  Pym, Rt Hon Francis

  Townend, John (Bridlington)

  Raison,Timothy

  Townsend, Cyril D,(B'heath)

  Rathbone,Tim

  Trippier,David

  Rees, Peter (Dover and Deal)

  Trotter,Neville

  Rees-Davies, W. R.

  van Straubenzee, W. R.

  Renton,Tim

  Vaughan,Dr Gerard

  Rhodes James, Robert

  Viggers, Peter

  Rhys Williams,Sir Brandon

  Waddington,David

  Ridley,Hon Nicholas

  Wakeham,John

  Ridsdale,Sir Julian

  Waldegrave,Hon William

  Rifkind,Malcolm

  Walker, B. (Perth)

  Rippon,Rt Hon Geoffrey

  Walker-Smith, Rt Hon Sir D

  Roberts, M. (Cardiff N W)

  Waller, Gary

  Roberts, Wyn (Conway)

  Walters,Dennis

  Rossi, Hugh

  Ward,John

  Rost, Peter

  Warren,Kenneth

  Royle,Sir Anthony

  Watson,John

  Sainsbury, Hon Timothy

  Wells,John(Maidstone)

  St. John-Stevas, Rt Hon N.

  Wells,Bowen

  Scott,Nicholas

  Wheeler,John

  Shaw, Michael (Scarborough)

  Whitelaw,Rt Hon William

  Shelton,William(Streatham)

  Whitney,Raymond

  Shepherd,Colin(Hereford)

  Wickenden,Keith

  Shepherd,Richard

  Wiggin,Jerry

  Silvester, Fred

  Williams, D. (Montgomery)

  Sims, Roger

  Winterton,Nicholas

  Skeet, T. H. H.

  Wolfson,Mark

  Smith,Dudley

  Young, SirGeorge(Acton)

  Speller,Tony

  Younger, Rt Hon George

  Spence,John

  Spicer, Jim (West Dorset)

  Tellers for the Noes:

  Spicer, Michael (S Worcs)

  Mr. Spencer Le Marchant and Mr. Anthony Berry.

  Sproat,Iain

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments), and agreed to.
  Mr. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House notes that the aid programme for 1981–82 will be in excess of £1,000 million and welcomes the Government's intention to continue to give priority to the poorest countries in allocating bilateral aid.

  Lloyd's Bill (By Order)
  Order for Second Reading read
  Mr. John Wells: On a point of order, Mr. Speaker. You ruled earlier today that members of Lloyd's could not vote on the Bill's Second Reading. Will members of Lloyd's be able to vote on a closure motion if there is one?
  Mr. Speaker: I advised hon. Members who are Members of Lloyd's. I did not give a ruling. I cannot stop any hon. Member from going into the Lobby to support the Bill. I can only warn hon. Members who are members of Lloyd's that there are consequences from so doing. However, it is the right of every hon. Member, whether or not he is a member of Lloyd's, to cast his vote if a closure motion is proposed and is accepted by the Chair. No financial interest can be involved in that procedure. That would be a matter of public business.
  7.12 pm
  Sir Graham Page: I beg to move, That the Bill be now read a Second time.
  First, Mr. Speaker, may I say to you, how grateful I am for your ruling on voting because it is an issue that has caused some anxiety? Earlier today I altered the advice that I had given to my colleagues. I had told them that it was all right to vote if they were members of Lloyd's. I am happy that they should be told not to vote because of the various doubts that exist.
  This is a private Bill promoted by the Society of Lloyd's, which was incorporated by statute as long ago as 1871. The members of the society individually underwrite contracts of insurance, and when they do the liability of each is a several liability that is limited to its own parts but is otherwise an unlimited personal liability. The society is the core of the community of Lloyd's, and in that phrase I include not only the members of the society, the underwriters, but the underwriting agents, Lloyd's associates, annual subscribers, substitutes and Lloyd's brokers. It is a community which, incidentally, earns in overseas earnings the substantial sum of £515 million a year. The society provides employment for no fewer than 72,000 persons, yet it has to look back to the 1871 statute for its constitution.
  In three important respects, and in many other fairly substantial respects, that constitution has proved in modern times to be an obstruction to the effective control and advancement of the society's proper functions in the insurance market. The Act of 110 years ago, the Lloyd's Act 1871, set out in section 24 a long list of subjects upon which rules and regulations of the society can be laid down by byelaws. The byelaws have to be made by a resolution of two general meetings. They cover the most minor matters of government of the society. For example, it needs two general meetings to make a byelaw or to regulate the appointment, employment and remuneration of a secretary and other officers and servants. That is an indication of the present cumbersome procedure.
  It is true that under another section of the 1871 Act the committee, which consists of 16 members, has the management and superintendence of the society's affairs. However, when the committee cannot make rules and regulations, and cannot introduce byelaws, its powers of management are necessarily ineffective.
  The system may have worked 110 years ago in 1871 when the membership of the society was less than 1,000.
  860
  It may have worked 20 years ago when the membership did not exceed 6,000. However, we now have a membership of 19,109 and it is impracticable to try to run an important organisation such as Lloyd's on the present basis.
  Under clause 3, a new council of Lloyd's will be constituted to take over the functions of the existing committee. Clause 6 gives the council not only the management and superintendence of the society's affairs but the power to regulate and direct the business of insurance at Lloyd's, to exercise all the powers of the society and to make byelaws upon the wide area of government that is set out in schedule 2. That is the way in which the Bill overcomes the first obstacle of the present statute.
  The second stumbling block of the 1871 Act is the disciplinary procedure. One wonders how any discipline has ever been kept in Lloyd's up to the present. The procedure provides that to discipline a member of Lloyd's one must have two arbitrators, and possibly an umpire, who finds the accused person guilty of violating a fundamental rule of the society or of any act or default discreditable to him as an underwriter, and so on. When he has been found guilty by this strange form of arbitration, the matter then goes before a general meeting.
  The person cannot be suspended unless two general meetings, one after the other, confirm the arbitrators' ruling. It is an extremely cumbersome procedure. Under a later Act of 1911, the committee was given power temporarily to suspend a person, but that procedure was almost as cumbersome. If the committee suspended a member, he could appeal to a general meeting. If the committee's decision to suspend was to be confirmed, 100 members had to be present and a three-quarters majority had to vote for the suspension. Otherwise, the committee's decision just fell by the wayside.
  The cumbersome and indeed rather ludicrous position of disciplinary actions under the Acts of 1871 and 1911 is shown by a case at present proceeding. I shall refer only to the procedure, not to the merits of the case. In May 1979, Lloyd's set up a working committee to investigate certain accounting discrepancies by a firm of Lloyd's brokers, the Christopher Moran Group of Companies, from which syndicate 566 might have suffered loss.
  The committee reported in June 1979, and disciplinary arbitration proceedings of the kind that I have described were started in October 1979. Since then, preliminaries to the arbitration, applications to the court and even an action for injunction have kept the parties occupied for 18 months, and the arbitration seems to be no closer to a hearing. That is a typical example of how cumbersome the procedure is. Incidentally, in the meantime—in August 1980—Mr. Moran was charged by the police with conspiring to defraud two other syndicates. The procedure is therefore very cumbersome indeed.
  The promoters of the Bill are asking Parliament for power to set up proper disciplinary bodies. Clause 7 provides for an efficient disciplinary procedure by means of a disciplinary committee and an appeal tribunal with proper procedures to deal promptly with potentially dangerous situations arising out of suspected malpractices, while giving the accused all the proper protection.
  As important as those disciplinary proceedings is the power to make byelaws for committees of inquiry. The power to do that is included in schedule 2, which provides for these inquiries to be set up, for persons to be examined

  861
  and for documents to be produced. Had good byelaws of that kind been in existence five or six years ago, the "Savonita" case, which I think is familiar to some hon. Members, would have been tackled far more satisfactorily.
  In the "Savonita" case, several hundred Fiat cars caught fire on board the vessel of that name. They were returned to port and disposed of very much under value. They had been re-insured at Lloyd's, but the brokers resisted the claim. Other brokers were then appointed and settled the claim. The first brokers alleged that Lloyd's had failed to protect them properly. That may be so, under the present procedure that Lloyd's has had to adopt. At that rather late stage, Lloyd's set up a board of inquiry which sat for six months, took a mass of evidence and decided that the allegations were unfounded. I am convinced that if the byelaws contemplated in the Bill had existed then, that inquiry would have started more promptly and would have obtained better evidence more quickly.
  The third stumbling block of the present constitution under the 1871 Act is that the statutes deal only with the Society of Lloyd's, that is to say, the underwriting members of Lloyd's. A good example is the fact that, having looked all through the statutes to see whether Lloyd's brokers were mentioned anywhere, I have found that the phrase is never used. Yet they are very important people in the community of Lloyd's.
  Under its present statute, Lloyd's cannot control the insurance market unless it has regulatory powers over the community of Lloyd's. It has that partially by agreements, but it is now asking Parliament—very reasonably, I think—to allow it to govern all those who operate within the market. In addition to the 19,109 members of the society, there are 1,023 annual subscribers, 142 associates, 5,508 subsititutes and about 175 brokers groups.
  For the good name, reputation and status of Lloyd's, it is essential that its regulatory powers should comprehend the whole community and should be such that suspected malpractices can be dealt with competently and promptly.
  Again, I take an example. Had powers of the kind for which Lloyd's is now asking Parliament existed over the community of Lloyd's in 1977—the byelaw-making powers, suspension of underwriting agents, which is not possible now, the disciplinary and inquiry powers and so on—the Sasse case might not have dragged on through protracted litigation as it has.
  Again, I imagine that a number of hon. Members know of the Sasse case, but I shall briefly put it on record. Syndicate 762 suffered heavy losses because it had been allowed to rely upon overseas agents to whom it had given a binder, that is, an authority to commit it to underwriting contracts. Because there was a loss on those, Lloyd's intervened, settled the losses of some members, but left others dissatisfied. The point is worth making that only at a late stage in the trouble were disciplinary proceedings commenced against some of those involved.
  If such procedures, and those for starting and conducting a proper inquiry, had been more clear-cut and streamlined, as we wish to make them through byelaws under the Bill, might not matters have been disclosed that would have avoided the litigious issues that followed? I think that those blameless in the Sasse affair should welcome the Bill wholeheartedly. Things go wrong because Lloyd's has
  "an antiquated constitution and restricted powers of regulation over its community".
  862
  Those are not my words. They are the words of the Fisher committee which, under Sir Henry Fisher, began its work in February 1979 and made a comprehensive report 15 months later, in May 1980. It was appointed to inquire into self-regulation at Lloyd's, to review Lloyd's constitution, and to review the powers of Lloyd's committee and relevant matters.
  I can sum up the recommendations of the Fisher report—a 200 page document—by saying that it considered a properly conducted system of self-regulation essential, that Lloyd's committee did not provide an efficient system of regulation, that substantial changes in the constitution were necessary, and that the changes could not be made without amending the statutes.
  Between June and October last year Lloyd's held extensive consultation upon the contents of that report, and the Bill is the result. It was put in draft before a general meeting of Lloyd's at the Albert Hall in November 1980, and was approved by an overwhelming majority of 13,219 to 57.
  I apologise for that long introduction. I now turn to the Bill itself. I have already dealt with clause 3, which sets up the new council. However, I should like to mention the constitution of that council. The existing committee of 16 has never been representative of the categories of members of the Society of Lloyd's. The council will now consist of 16 working members, who are defined on page 4 as
  "a member of the Society who occupies himself principally with the conduct of business at Lloyd's by a Lloyd's broker or underwriting agent."
  Those 16 working members will be elected by a working member electoral roll, which is provided for later in the Bill. The council will also consist of six external members, who are any members of the society who are not full working members. Since the Bill was printed, a reasonable argument has been put forward that the representation of external members is too low. Out of the 19,109 members that I have mentioned, the number of working members is 3,794, whereas the number of external members is 15,315. Of course, the working members are geographically capable of doing work and are the experts in council or committee work.
  On behalf of the promoters I undertake that we shall seek to increase the number of external members to at least eight, which will give a better representation. It is intended that those external members should be elected by postal ballot and that they should have a chance to have an election manifesto delivered with the voting papers. That can be inserted into schedule 4, which is the temporary provisions schedule, and it will be a precedent for a permanent byelaw. I also undertake on behalf of the promoters to seek to include the election manifesto provision as an amendment to schedule 4.
  In addition to the 16 working members and the eight external members, there are to be
  "three nominated members of the Council appointed by the Council,…and…confirmed by the Governor for the time. being of the Bank of England".
  They are intended to be independent members of the council outside the community of Lloyd's. It is the intention that the nomination of those members should be by special resolution. Here again, I undertake to ensure that an amendment is moved to insert that provision in the Bill.
  The council is to have power to make byelaws by special resolution. I call attention to what is meant by a special resolution of the council. Such a resolution must

  863
  have the "separate majorities" of the 16 working members and a majority of the external members plus the nominated members. That is a vital piece of the constitution, which will make the council truly representative of the categories of membership.
  I turn to clause 6, which sets out the powers of the council. I have already explained those when talking about the special resolution to make byelaws. That clause contains a long-stop provision for those who object to a byelaw that the council seeks to make. Under an old byelaw, which will be kept alive by the Bill, anyone can call a general meeting if he can get another 15 members of the society to join him in requisitioning such a meeting. However, if he wishes to attack a byelaw made by the council, that meeting will have to be requisitioned by 500 members.
  The council will have power to delegate part of its directions to the committee. Under clause 5 the committee comprises the 16 working members. The council can also delegate to the chairman and other officials, but there is always a veto on that delegation. Anyone who objects can carry out a procedure under clause 6(8) and (9). I shall not go into great detail. It ensures that the council will be representative of the categories of members of the society. Therefore, the general meeting, as is the case under the present constitution, will cease to be the byelaw-making body, and in future the byelaw-making body will be the council.
  I have already mentioned the disciplinary procedure contained in clause 7. Clause 8 is declaratory of the practice of Lloyd's business.
  I now turn to clause 10 and 11. If the new representative council is to be given stronger and prompt powers to prevent malpractices and to control the insurance business at Lloyd's, it should not hesitate to take those powers. Indeed, self-regulation is the fundamental purpose of the Bill. Therefore, there is some argument for saying that it should have some immunity from actions for damages.
  Mr. Nick Budgen: Will my right hon. Friend expand on that argument? It will not help some of us if he just leaves it like that.
  Sir Graham Page: My hon. Friend interrupted me in the middle of my remarks. I was about to explain that the Bill seeks to give the normal immunity—given under section 448 of the Companies Act 1948—to the servants, employees and directors of a company. If the servants of a company act genuinely and honestly, and if the court thinks that they should be excused for the damaging results of any of their acts, it can so excuse them. That is a normal provision. The ordinary company servant is given pretty wide immunity.
  Lloyd's seeks to go further, because it wishes to protect not only its servants and "directors"—members of the council—but the society. Under clause 11, immunity goes further than the normal immunity found under the Companies Act. Careful consideration must be given to this. There must be consultation with those who do not have the opportunity on a Private Members's Bill to make their voices heard during all the Bill's stages. Therefore, I wish to delay any decision so that consultation can take place.
  On behalf of the promoters of the Bill I give an undertaking that they will seek to insert an amendment in
  864
  Committee whereby schedule 2 will provide power for byelaws to be made about immunity. In other words, clause 11 and similar provisions in schedule 2 will be removed from the text of the Bill. If any byelaw of that type is made, it will not be operative until it has been embodied in an Order of Council, which will require the affirmative approval of both Houses of Parliament.
  Mr. Clinton Davis: I am sure that the right hon. Gentleman will agree that this represents a substantial departure from what was originally envisaged. Rightly or wrongly, it was contemplated that this issue would be dealt with in primary legislation. Is it not extremely unsatisfactory that so basic a matter should be dealt with in subordinate legislation that cannot be amended? Would it not be far more courageous if Lloyd's—which has had plenty of time to think about this—were to involve itself in further amendment of clause 11 instead of dealing with this issue in an unsatisfactory way?
  Sir Graham Page: I am obliged to the hon. Gentleman for that intervention. If he can assist in producing an amendment, his efforts will be carefully considered.
  On behalf of the promoters of the Bill I wish to give time for consultation on the proposition. Lloyd's feels that it is basic to the Bill, to the self-regulation of Lloyd's and to the powers of the new council. Apart from the point about consultations, I do not think that it makes much difference whether the issue is dealt with in primary legislation, or subordinate legislation, which has to receive the affirmative approval of the House. I present the Bill to the House with that amendment to clause 11 and with an undertaking that Lloyd's will table an amendment to that effect in Committee. If any right hon. or hon. Member has a satisfactory solution that leaves the society with some form of immunity, it will receive the greatest consideration.
  Clause 12 and schedule 3 repeal some of the dead wood of the old statutes. Schedule 4 set out the transitional provisions. The important schedule is schedule 2, which sets out the byelaws or the subjects on which byelaws can be made. The present committee of Lloyd's is determined that there should be a separation of broking and underwriting and that they should be independent of each other. We can assume that if the committee is determined the new council will be of the same mind and will carry the society's members with it. It is a difficult issue to work out on the Floor of the House or in Committee. Lloyd's wants the new council to consider carefully how independence of operation can be brought about by divestment or some other effective process.
  Mr. Clinton Davis: When we dealt with the Insurance Brokers (Registration) Bill, time limits were applied to a number of important matters relating to the introduction of proposals by brokers. Should not time limits be applied in this respect, and in one or two other respects, if we are to deal with the matter along the lines suggested by the right hon. Gentleman? Otherwise, the matter may never be dealt with.
  Sir Graham Page: I wish to express my personal feelings, without giving any undertaking on behalf of the promoters. I see no reason why a time limit of five years should not be imposed. However, that is a personal

  865
  opinion. If the hon. Gentleman has another formula, that will be considered. Lloyd's is determined to establish the independence of broking and underwriting.
  Mr. Clinton Davis: I am grateful to the right hon. Gentleman for giving way again. He is always courteous about such matters. I am not considering a time limit for the introduction of divestment. I seek an acceptance of the principle of divestment. There could then be a further extension of time—perhaps five years, as Fisher envisaged—for implementation. There are two different phases.
  Sir Graham Page: The promoters of the Bill and I will certainly give that point consideration. One must bear in mind that a new council is about to come into being. I do not wish to cut the ground from under its feet by deciding what form of divestment or separation process is right.
  Mr. Roger Moate: Does my right hon. Friend accept that there is a fundamental difference of principle between independence of operation and total divestment? Is it not unsatisfactory to leave such a vague power in legislative form? Will my right hon. Friend give some indication of the path that the present council wishes to pursue? Does it wish to pursue total divestment and complete legal separation, or the lesser form of divestment that the minority report recommended?
  Sir Graham Page: I cannot go further than my previous remarks. The present committee is determined that there should be independence of operation. It wishes to leave the method to the new council. One must bear in mind that it is not only members of the society who are concerned. We are dealing with brokers. I have been informed that the brokers are in favour of the separation of broking and underwriting. However, the form of separation is a matter for consultation between them and the new council.
  The second important aspect of schedule 2 relates to ensuring that malpractices and fraudulent activities are reported to the council at the earliest possible stage. Paragraphs 21 and 22 give the council considerable powers if the byelaws are made in that form.
  I am obliged to some of my hon. Friends for their suggestions. We did not think that it went far enough, and I give an undertaking that further paragraphs will be added on the following lines: for empowering further byelaws for investigating frauds and crimes, for prosecuting persons responsible and for handing information and documents to the police. There will be another paragraph for regulating the giving of information and the production of documents, and a third paragraph for the preservation of due confidentiality of information documents thus given to Lloyd's.
  These are formidable weapons that Lloyd's will be able to use to attack the malpractices and fraud in the insurance market. Indeed, I feel that the whole Bill gives Lloyd's the right weapons and tools to run the insurance market properly in future. I hope that I shall have support for the Bill.
  7.50 pm
  Mr. K. J. Woolmer: I congratulate the House on ensuring a substantial attendance for what is clearly a most important industry. On many occasions when we have been debating the problems of industries we have hoped for such a good
  866
  turnout. Perhaps that reflects the fact that the City is where money is made and that industries such as textiles in my area are the industries with problems. I am delighted to see the full ranks on the Conservative Benches and hope that hon. Members show the same interest and concern for other industries.
  As the right hon. Member for Crosby (Sir G. Page) said, this is the first major piece of legislation of this type for a considerable time. He will agree that it is important to get it right. I was struck by the number of occasions on which the right hon. Gentleman felt it necessary to make what I regard as potentially major concessions. It is unfortunate that the Bill has had to come before the House on Second Reading with potential concessions which may not be as significant as the right hon. Gentleman suggested. I am not happy with the proposals for dealing with it in view of the right hon. Member's own recognition that they are major matters.
  First, I do not wish to get involved with the problems of the committee, the council and the members. That is a private matter. Nevertheless, it is interesting to see that the risk takers are struggling to get on a par with the workers. Perhaps some of the lessons in the rest of industry are interesting.
  My first reservation relates to clause 11. We cannot shirk the fact that this is a major matter of principle. With my hon. Friend the Member Hackney, Central (Mr. Davis), I am not happy that it is proposed that this matter should be relegated to byelaws and secondary legislation. That is not a satisfactory method of dealing with it. I am looking for a commitment that the principle will be abandoned and that any further discussions will start from the presumption that no blanket immunity can be granted. If we seek to start from there and find such immunities that are desirable in the circumstances to grant, we should start from a fundamentally different position.
  The Bill does not appear to deal with a fundamental matter of principle on the problems of brokers and underwriters. There is a difference between the proposal to break the link by having, in effect, separate companies under the same ownership, and divestment. I hope, together with Conservative Members, that we shall have a clear commitment that the path of divestment will be followed. It is not satisfactory to be given an assurance that in Committee different ways of doing that will be considered. It is not satisfactory for the House to send the Bill to Committee without a clear view about which of those is favoured.
  Mr. Moate: I agree that one needs clarity of intention. I hope that the hon. Gentleman did not draw the conclusion from my earlier intervention that I was in favour of divestment. I favour the reverse.
  Mr. Woolmer: I do not draw conclusions of that nature. Many hon. Members would not be happy with a simple assurance that one of two ways will be found to overcome an agreed problem. The outcome would be fundamentally different, according to the view that one took on the principle. I do not believe that the people outside the House would expect us to allow the Bill to go to Committee without that principle being properly aired. That is what I seek.
  I did not feel that this matter, together with that of indemnity, was properly and adequately aired in the right hon. Gentleman's introductory remarks. They were

  867
  recognised as problems without strong arguments being made about why what appeared to be basic principles of objection should not be fully answered.
  Those are two substantial reasons for the Bill not to go forward this evening. Lloyd's should be asked to reconsider its proposals. This is the first time in 100 years that a major piece of legislation has been proposed for Lloyd's. We should ensure that in modern circumstances it is based firmly on principles which will endure for a substantial time. I hope that the House will vote against giving the Bill a Second Reading, not because we do not wish most of the Bill to go forward but because at least two major matters of principle must be put right.
  7.58 pm
  The Under-Secretary of State for Trade (Mr. Reginald Eyre): It may be for the convenience of the House if I say at this relatively early stage how the Government regard the Bill. I first congratulate my right hon. Friend the Member for Crosby (Sir G. Page) on the excellent way in which he presented his case and on the patient and skilful way in which he has conducted negotiations with the interested parties. As he said, Lloyd's makes an important contribution to the economy of the country.
  I begin by paying tribute to all who contribute to the success of this unique institution. I am sure that the tribute will give pleasure to my hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) who, by a happy coincidence, is on duty on the Government Front Bench.
  In 1979, Lloyd's premium income was £2,247 million, or over £8 million per working day, of which about three-quarters comes from overseas. In the 10-year period from 1970 to 1979 Lloyd's accounted for an average of 42 per cent. of the total income from overseas of the insurance industry. In 1979, out of the £957 million contribution made by the insurance industry to the invisible trade balance, Lloyd's accounted for £383 million. Lloyd's has pioneered many new forms of insurance, such as jumbo jets, super tankers, oil rigs and communications satellites. Lloyd's influences the terms and conditions, including rates of premium, on which business is written throughout the world.
  The very success of Lloyd's has pointed to the problems that the Bill seeks to solve. Its long history means that procedures that have worked perfectly well in the past may be in danger of losing some of their effectiveness in a changing society. Many of Lloyd's procedures are founded firmly in custom and practice. They are none the worse for that. The Government have no enthusiasm for excessively detailed legislation and regulation. However, some updating of the law is timely.
  Lloyd's owes its character as an institution to the fact that it is self-regulating. Providing a framework for the operation of individual underwriters is probably inseparable from regulating their activities. Government regulation could not be substituted for self-regulation without destroying the character of the institution. Not only do we not want to do that, we do not want to add to the functions of government either.
  Lloyd's has proved the value of its commercial services over nearly 300 years, during which it has never defaulted on a legitimate claim. It has demonstrated the institution's
  868
  own capacity to regulate over the same period. The fact that the Bill is before the House now shows that Lloyd's is alive to the changing needs of our time. There may be a case for changing individual provisions of the Bill. That is a matter for debate. There is clearly no case for destroying the institutional framework.
  Much of the internal machinery of Lloyd's stems from an Act of 1871. Lloyd's has troubled the House but little since then. Of the five private Bills that it has promoted since 1871, excluding the one currently under consideration, one was in connection with signal stations and had nothing to do with insurance, and all but one of the remainder involved relatively minor amendments. This Bill continues the pattern of amendments to the 1871 Act. Practices and conventions which were suitable for a society of 675 members in 1871 are no longer adequate for a society of about 19,000 members, most of whom have no regular contact with the underwriting room in Lime Street. It is for Lloyd's to determine, with regard to the needs of its internal organisation, a suitable formula for representing the interests of the external names which will commend itself to Parliament.
  The report of Sir Henry Fisher and his working party has clearly outlined where the major changes are needed, and the report set out specific proposals for this purpose. Here I should say that it is not only the members of Lloyd's who have benefited from this excellent report but everyone who has an interest in this institution has gained an insight into its workings as a result of the painstaking study made by Sir Henry and his working party. Although the Bill does not follow Sir Henry's draft, it is based closely on the working party's recommendations. I must congratulate Lloyd's on the speed with which it has brought forward the proposals for legislation to implement the recommendations.
  Some misgivings have been felt about certain provisions of the Bill. Parliament is rightly concerned at any question of legal immunity. The proposed amendment will allow the matter to be fully and properly considered.
  Mr. Budgen: If we approve the Bill tonight and the provisions of clause 11 are put in a schedule, when the byelaws come before the House there will be no opportunity for amendment. We shall either have to agree to them or reject them as they stand.
  Mr. Eyre: The byelaws will be in the form of secondary legislation. However, I emphasise that my right hon. Friend the Member for Crosby was forthright in saying that he would consider proposals by hon. Members in preparation of the byelaws in question. In addition, the usual affirmative resolution procedure will be required. The order will be laid in draft and its adoption will require consideration by Parliament. That is a reasonable provision for dealing with this matter.
  If a byelaw on immunities is adopted by special resolution, my right hon. Friend the Secretary of State will be prepared to consider it and, if satisfied, to bring it before the Privy Council and Parliament for approval. That is the quickest way for the new regulatory machinery to be established. It enables consultation with all interests to start soon and it retains for Parliament itself the right to decide, in the light of these consultations, what degree of immunity is right. We support the view expressed in the Fisher report that a regulatory authority must be sure of its power to carry out its essential regulatory functions and not be inhibited by fear of harassing litigation.
  Mr. Richard Needham: Is my hon. Friend saying that if the Government are satisfied with the immunities they will come back with the Government's imprimatur? If that is so, is it not a slightly dangerous precedent, considering the immunities that are now granted to trade unions?
  Mr. Eyre: I emphasise my right hon. Friend's offer to consider in detail the proposals for immunity. The proposals will be considered by the Secretary of State. He is conscious of the need to take account of views and to gain support in the House. If my right hon. Friend is satisfied, he will seek to obtain the Privy Council's approval and eventually bring the matter before Parliament for approval. Extra responsibility is put upon my right hon. Friend on the form of the byelaw. He will seek to discharge that responsibility. We will want to commend to Parliament only a form of byelaw that he believes merits support. My right hon. Friend will be most sensitive in that process to take account of all the proper arguments. I have emphasised that, in the light of these consultations, it will be for Parliament itself to decide what degree of immunity is right. We support the view, as I have said, that was expressed in the Fisher report, that a regulatory authority must be sure of its power to carry out these essential regulatory functions.
  I should like to refer to the question of the divestment of underwriting agents from brokers, which is one of great complexity. An attempt to incorporate such requirements in the Bill could cause delay while the principles outlined by Sir Henry Fisher's working party are examined and converted into effective working rules. The problem needs careful examination. In my view, it cannot be dealt with by way of a short addition to the Bill. It is also essential that Lloyd's should be able to deal with fraud. It is right for the House to satisfy itself that proper powers exist for that purpose. I am advised that the arrangements that are to be proposed will have that effect.
  In their examination of the Bill the Government have been concerned to ensure that the provisions are not in conflict with the requirements of the statutes in force or with Government policy. We are satisfied on this score. The details of its provisions are matters for the promoters of the Bill and for the House.
  We are convinced that if Lloyd's is to continue to make its contribution to the economy as a whole it must regulate its own affairs and that it can and will do so effectively with the powers that it now seeks. The community of Lloyd's, on the basis of a wide-ranging inquiry, has decided that changes are necessary. Members of Lloyd's have voted overwhelmingly for the promotion of the Bill. It is clear that some strengthening of Lloyd's regulatory powers is necessary, and that is what the Bill seeks to do. We wish it well.
  8.11 pm
  Mr. Clinton Davis: Like the Minister, I wish to congratulate the right hon. Member for Crosby (Sir G. Page) on the manner in which he introduced the Bill. I also pay tribute to the chairman of Lloyd's and his committee for the painstaking efforts that they have made to consult hon. Members on both sides of the House about this important measure. That is not to say that we are ad idem with them on all the matters embodied in the Bill. I pay tribute to them in that regard. They have
  870
  diligently and in good faith sought to arrive at conclusions that are in the best interests of Lloyd's. It is a matter of judgment whether those conclusions are right.
  I join my hon. Friend the Member for Batley and Morley (Mr. Woolmer) in his keen observation about the presence of so many hon. Members on the Government Benches. It is a remarkable attendance. In this day of new parties that are emerging, I thought, for a moment, that we might get a party of Lloyd's brokers established. Like my hon. Friend, I look forward to attendance and participation on a similar basis in debates dealing with industry, urban deprivation, overseas aid, unemployment and housing and, if I may say so, other equally important matters.
  There has been a remarkable debate about those issues outside Parliament. Over the months that the Bill has been in the course of preparation I have seen some extraordinary headlines. I have seen
  "The affair of the Lloyd's Bill"
  in The Times,
  "Tory dissenters look set to accept Lloyd's Bill"
  and also
  "Top broker criticises 'rapacious' colleagues"
  which might be the sort of language one would expect to be used by some hon. Members about others in this House. Another headline read "Split rivets the sleepers". That was very intriguing. I thought that the best of all which appeared in The Economist some time ago, was "The lady gets shirty". This was not a reference to the Prime Minister's view of the Secretary of State for Employment. It was a reference to the "luckless" Lady Middleton, who has been involved in carrying out opposition to the Bill for some considerable time. "Luckless" is the word attributed by The Economist rather than by myself.
  I believe it was vitally important for Lloyd's to introduce a Bill to revise its procedures. The reputation of Lloyd's for integrity, trustworthiness and fair dealing is a prime ingredient for its survival and expansion. It follows that, while these qualities cannot be imposed by rules, rules which enable Lloyd's to act more promptly to deal with abuse, to deter aberrant behaviour and to provide effective redress can most certainly inspire increasing confidence in Lloyd's.
  There is no doubt that Lloyd's has gone through a dramatic transformation not simply over the last half century but over the last decade. This is spelt out in the Fisher report. For example, it has a vastly increased membership. In 1970 there were 6,001 members. Today there are more than 18,500 members. This variety and diffusion of interests and this change in the character of Lloyd's membership have to some extent led to an erosion of traditions. Perhaps this wide variety of interests is less amenable to some of the traditional, gentlemanly sanctions which were applied some time ago and, indeed, up to the present time. The inadequacy of these methods and sanctions is highlighted in the Fisher report.
  For these reasons and others, it has been concluded that there are substantial grounds for Lloyd's interfering in the free working of the market and such grounds are positively identified in chapter 1, paragraph 19, of the report. It has also been concluded that the changes envisaged by the Fisher report and, to some extent, mirrored in the Bill will represent important steps in safeguarding and enhancing the reputation of Lloyd's, in mitigating the problems that have arisen in recent cases, and in doing justice to policyholders and to others who are concerned in the insurance market.

  871
  In general terms, I welcome the Fisher report. I believe it to be a work of considerable scholarship. It has put forward quite radical proposals in some respects, while preserving, as it has decided is best for Lloyd's, the self-regulatory processes that Lloyd's also want to see retained.
  One of the questions that is properly posed is whether the Bill should preserve the self-regulatory process regarding Lloyd's, or whether the Government, through the Department of Trade, which is responsible for the insurance business, should be assuming a supervisory role in relation to Lloyd's, akin to other parts of the insurance business.
  It is an important matter, but I am bound to say that I regard entry on that route with much caution. Lloyd's is still a highly prestigious organisation securing, as we heard from the Minister, considerable benefits for the United Kingdom, particularly in overseas earnings. If proposals were introduced at this stage to abandon self-regulation without giving the new procedures a chance to work, it could be construed as a vote of no confidence in Lloyd's, and that could result in an erosion of confidence and of its continued ability to match the stiff international competition and to trade profitably abroad.
  It is premature for us to condemn the changes that are envisaged without giving them an opportunity to work, and I hope to say something about those changes in a moment.
  What I have said is entirely without prejudice to the possibility of a more interventionist role for the Department of Trade by a Labour Government to bring Lloyd's more into line with other insurance interests in the way in which they are supervised, should those procedures be found wanting. There is, therefore, a heavy burden on Lloyd's to satisfy the community as a whole that what it is about to do will be effected properly and will meet the public interest.
  Recently there have been enormous pressures on Lloyd's. It has been criticised on numerous occasions for the way it has carried out its duties. It is well within its knowledge that it has to demonstrate more forcefully than ever that the way it does its business ensures that the public interest is satisfactorily maintained.
  Our debate has centred on a number of important issues that have been highlighted by the Fisher report, and I want to deal with them at this stage. I turn, first, to clause 3, dealing with the establishment of the council. I welcome the amendments to the original proposals which were mentioned by the right hon. Member for Crosby. I believe that they provide a better balance between the working members who are capable of dealing with the technical work at present handled by the committee of Lloyd's. I believe that that formula will avoid the domination of working members by a single section of the market—a possibility that has caused some anxiety. There are also the external members and the independent persons, whose role I hope will be impartial, and whose appointments will be confirmed by the Governor of the Bank of England.
  The numerical balance proposed by the right hon. Gentleman is an improvement, and I congratulate him on having reached those conclusions with the Lloyd's team. It is right also that there should be flexibility about the size of the council and the methods of election, which, of course, can be determined by byelaws.
  872
  I turn to clause 6, relating to the making of byelaws. It is right that there should be a division of responsibility between the committee and the council, the latter dealing with important questions of principles and planning. The safeguards contained in subsection (4) lean over backwards to appease the opposition that has been expressed to these proposals. I do not believe that the right hon. Gentleman could have gone further.
  Clause 7 deals with the question of the establishment of the disciplinary committee and appeal tribunal. The right hon. Gentleman was right to assert, as did the Fisher Report, that the present procedures are cumbersome, grossly outdated and wholly inadequate to meet the challenges. The complicated process of arbitration is ludicrous in this day and age. There is no other comparable organisation that has to go through such a procedure to establish its disciplinary processes. It is right, too, that the committee should have a reserve power to compel people to disclose information and give evidence, and that it should be a disciplinary offence to disobey such a request. If that were not provided, the teeth of the disciplinary committees would simply not exist. I welcome, too, the appeal tribunal, which will ensure that a person who is aggrieved should be able to obtain justice.
  I turn next to the issue which, with perhaps one other, has dominated the controversy attaching to the Bill, namely, the immunity provisions. I wish, as does my hon. Friend the Member for Batley and Morley, that the matter had been canvassed more fully by the right hon. Gentleman. He should have dealt with the principles that are involved. In fact, he skated over them. That is almost the only criticism that I make of his contribution to our debate tonight. I do not believe that the Fisher report dealt adequately with those issues. There is unquestionably a difficult problem, namely, how do we reconcile the need to take speedy and effective action to detect and stop abuses so as to avoid, or at least to limit, losses to assureds with the undesirability of providing extensive and unprecedented immunity in law to a self-regulatory body? That is the question.
  Fisher argued that it would be disastrous if the consequences of decisions such as Hedley Byrne v. Heller and other cases that were cited had the effect of discouraging the council from introducing regulatory measures required for the general good because it feared that there would be civil liability to individuals. There is a real problem here. However, I am not encouraged to believe that, by deferring it and relegating it to a future debate, the answers will emerge.
  The right hon Gentleman and Lloyd's appear to have conceded, by removing clause 11, that its terms were too extensive. They feared that those terms would be unacceptable to the House. They have had ample opportunity to put forward proposals to amend that provision. To play for time is no good. The right hon. Gentleman invited me to suggest alternative proposals. I should like to do that. I shall do my best to help, but it is not really my job. Lloyd's has an adequate number of skilled lawyers. It must decide what it wants. It is no good introducing proposals unless the principles can be agreed. Lloyd's has run away from that issue, which I regret.
  The right hon. Gentleman said that Lloyd's would go away and think about it. He was supported—not surprisingly—by the Minister in his view that Lloyd's should produce a draft byelaw that would require the positive affirmation of Parliament. That is not acceptable.

  873
  It was reinforced in that belief by what the right hon. Gentleman said, namely, that the matter was basic to the Bill and to the operation of Lloyd's. If it is so basic, surely it is a matter for primary legislation. It is wholly wrong to introduce it by subordinate legislation, which is not intended to deal with such fundamental principles. I hope that the right hon. Gentleman and Lloyd's will seriously think about the matter.
  The road of subordinate legislation is wrong. Lloyd's believes that. If it had believed that it was a matter for subordinate legislation clause 11 would never have appeared. Lloyd's accepted the principle that it was right to deal with the matter in the Bill. That judgment was correct. A different view is now taken for reasons of expediency. Lloyd's realised that, with justification, many hon. Members did not like clause 11 as it stood. It has run away from the issue. I beg the right hon. Gentleman to counsel Lloyd's not to proceed down the route that he has suggested tonight.
  Perhaps Lloyd's should be thinking in terms of splitting the immunity. I have discussed that purpose with Lloyd's, although I do not commit myself to it. Perhaps it would not be unreasonable to limit the immunity, for the general benefit of market and members, to a position where the council, in exercising its powers to approve membership or in taking other steps vis-a-vis the membership that are contemplated in the Bill, is acting in good faith, but, nevertheless, loss may ensue through the aberrant behaviour of the member concerned. It might be arguable that failure to exercise its power of supervision, which led to the loss—perhaps because of the way in which it operates the fit and proper person procedure—should not be a ground for civil action.
  Perhaps that is one of the ways which could be explored by the right hon. Gentleman. However, if Lloyd's believes that the powers of investigation would be fatally flawed by not having extensive immunity, and if it believes that there is no other way in which that objective can be secured, let it argue that as a matter of principle in primary legislation on the Floor of the House rather than deal with it in the unsatisfactory manner proposed by the right hon. Gentleman.
  If the House approves the suggestion made by the right hon. Gentleman, it will be incumbent on the council to produce byelaws within a reasonable period, as I believe was envisaged by Fisher. Just as the registered brokers had the pistol of time levelled at their heads in producing their byelaws, it is right that Lloyd's should operate in the same way. There is no reason why Lloyd's should be dealt with differently.
  I was glad to hear about the strengthening of the proposals on fraud, mentioned by the right hon. Member for Crosby. The inadequacy of the capacity of Lloyd's to act swiftly has been a matter of grave anxiety in recent cases. It was not its fault, because it was encumbered by the ludicrous procedures, which are totally outdated. The question of the duty of people to divulge information relating to suspicions is difficult. That is argued in chapter 13, paragraph 33. I commend that chapter, because it poses that question to the House.
  Fisher argues that there must be an immediate power to restrain action which, if permitted, could cause grave harm to Lloyd's or to its policyholders. He concludes that there must be apower to give directions in particular cases which are immediately binding and which carry a sanction for disobedience. That is right. The fit and proper person
  874
  procedure concerning admission and continued membership, which are analogous to those vested in the Department of Trade in its supervision of insurance companies, are important in exercising proper control, and control over underwriting agency companies or firms, or over directors or senior employees of such companies. That is also envisaged.
  I now turn to divestment. Fisher strongly recommended by a majority that, over a period of five years, shareholding links between Lloyd's brokers and managing agencies and between non-Lloyd's insurance interests and managing agencies should be severed and prohibited for the future. The links between Lloyd's brokers and member agents would not be so prohibited. Fisher recommended that the decision should be left to the council, which would have the power to make bye laws in that area, It was contemplated that the council would engage in profound consultation with all the relevant interests and would work out how the problems would be resolved.
  It is not satisfactory for that issue to be left in that way. The majority of Fisher described that as a basic principle. The principle is essentially that an agent should not expose himself to a conflict of interests. The right thing to have done—not as Fisher recommended—would have been to embrace the issue in the Bill. Unfortunately, that has not been so. I am sorry that that is so, because again, it will be a prescription for doing nothing. The contemplation will take so long that there will be no action. That at least is the risk. It was summed up in the Financial Times on Monday:
  "What will decide the outcome of the debate is how far the individual commercial interests of the brokers are likely to weigh against the long-term interests of protecting Lloyd's identity as a separate institutional entity rather than allowing it to become a broker managed underwriting pool. With broking in recession the pressures against full divestment are considerable "
  Therefore, this is a prescription for further delay, and I believe that to be wrong.
  The representations made by hon. Members to Lloyd's and to the right hon. member for Crosby, who has been characteristically courteous in receiving those representations, have been helpful. They have led to important amendments being proposed to the Bill.
  I am not happy about some of the results, as I have said. I shall not advise my right hon. and hon. Friends to vote for the closure or for the Bill. Having regard to the unsatisfactory features I have highlighted, I shall he unable to vote for the Bill. I shall not vote against it; I shall abstain.
  8.35 pm
  Sir Anthony Royle: I think that we all heard the thoughtful and powerful speech of the hon. Member for Hackney, Central (Mr. Davis), realising the interest that he took in the insurance industry when he held ministerial office in a previous Government.
  I want to say a few words as probably the senior working member of Lloyd's who is also a Member of Parliament. I was elected as a member of Lloyd's in 1950, so I have spent 31 years as a working member of Lloyd's, and 33 years as an insurance broker at Lloyd's, starting there in 1948. So I am the first speaker tonight who has personal knowledge of Lloyd's and the workings of that institution, which provides a community of interest for so many people.

  875
  I should also declare a further interest, in that I am also director of a large insurance broking firm at Lloyd's. For those reasons I wish to speak for a few minutes to underline the wholehearted support that the community of Lloyd's gives to the Bill.
  As was said by my hon. Friend the Under-Secretary of State and by my right hon. Friend the Member for Crosby (Sir G. Page), Lloyd's, as one of our oldest national institutions, makes a major contribution to the country's balance of payments. More important, during the past 20 or 30 years Lloyd's has seen dramatic changes in Lime Street as an insurance market.
  When I joined Lloyd's in 1948 it was a small market. There were many small broking firms and small syndicates, and everyone knew everyone else. The behaviour of individuals in that market was soon known. For that reason, the arrangements for the disciplining and running of Lloyd's functioned well.
  I remember in 1957, as a marine broker, placing a risk in the market at Lloyd's on the Kariba dam in Central Africa, which had a value of £21 million. The premium paid on that risk was £150,000. At the end of last year my firm placed a risk in Lloyd's on the Thomson dam in Victoria, Australia—a similar dam. The value was £500 million and the premium £1·5 million. In the marine market of Lloyd's, in 1956 a tanker of 250,000 tons was valued and placed at £10 million. In 1981 a liquefied natural gas carrier would be valued and placed at £100 million.
  A drilling platform 10 years ago, in 1971, would have been valued at $75 million, and only last week in Lloyd's a risk was placed on a big Norwegian drilling platform the value of which was $1·5 billion. I think that that underlines the need that has arisen to provide a much larger market in Lloyd's if it is to maintain its role as a world insurance centre.
  My right hon. Friend the Member for Crosby, the sponsor of the Bill, mentioned the dramatic increase in the numbers of members of Lloyd's over the past 20 or 30 years. The fact that there were 3,000 members in 1949–50 and there are nearly 20,000 today has been mentioned by several speakers. The point that I do not think has been made is why that increase has become necessary, because it is that increase that has caused many of the problems that have confronted the committee of Lloyd's over the past five or six years. If, over that period, the committee of Lloyd's had not arranged to increase the total membership it would have meant that business would have drifted overseas and we would not have had the capital base to insure these huge new values.
  I emphasise at this stage that those values that I mentioned earlier on were the values that were insured on the entire world market—in the United Kingdom, in Europe, in America, world-wide. The element of Lloyd's participation was still very high. On average, 40 per cent. of all those risks were insured in the Lloyd's market. I think that it is important to realise that and to understand why the need arose to expand the membership of Lloyd's.
  The market now has large broking firms involved as a result of this expansion. Very large syndicates are involved. There are syndicates in Lloyd's today of 800 or 900 names, which would have been unthinkable 20 years ago. Inevitably, with the expansion of the market, people work in that market who are not known as well as they
  876
  would have been in the small community that was operating many years ago. As a result, the need arose, through a series of issues that I shall mention in a minute, to tackle the problem by, first, setting up the Fisher inquiry, the report of which produced answers that are incorporated in the Bill, and, secondly, providing the committee with the clout that it needs to deal with the minority which in any community tries to bend or evade the rules.
  My hon. Friend the Member for Thanet, East (Mr. Aitken) raised in a debate in March 1978 the "Savonita" claim, and I think that he deserves credit for giving publicity for the first time to an issue that had not before been discussed. I admit that I was one of many involved in the Lloyd's community—and I apologise to him now—who at that time were somewhat doubtful about the fact that he had raised this issue on the Floor of the House. I retract now, because I think that the fact that he raised it drew public attention to the changes in the Lloyd's market and the change that was taking place in the insurance market in the City.
  That was followed by the Sasse syndicate disaster, although of course there had been major losses before Sasse. Some of us will remember the Roylance mishap, which took place in the 1950s, but the Sasse syndicate case hit the headlines. Then, of course, we had the Moran case and others which have not received quite the same publicity. All this is indicative and typical of the problems that arise when dealing with many thousands of people, instead of hundreds, in a market that is crucial and full of people with necessarily an entrepreneurial streak, because that is basically Lloyd's.
  Mr. Clinton Davis: With reference to the "Savonita" case—and perhaps there are others like it—does the hon. Gentleman not think that it would be better, if an hon. Member has a situation of that kind in mind, to give the Minister an opportunity to deal with it before raising it on the Floor of the House?
  Sir Anthony Royle: The hon. Gentleman raises an aspect of the event in the detail of which it would not be very sensible to get involved this evening. I do not know whether my hon. Friend discussed the matter with the hon. Gentleman, but he had a perfect right to raise it on the Floor of the House.
  Mr. Jonathan Aitken: I appreciate my hon. Friend's gracious and generous reference to me, but as a point of factual record I make it clear that, far from raising the matter as a surprise manoeuvre, I saw the Minister and the officials concerned before raising it and gave the Minister the full text of the speech that I intended to make, for which he thanked me when he spoke. I could not have done much more to play fair.
  Sir Anthony Royle: I cannot set myself up this evening as an arbitrator between the hon. Member for Hackney, Central and my hon. Friend. If they wish to debate the matter outside the Chamber, I wish them luck.
  The incidents that I have mentioned are major and have a fall-out effect on the reputation of Lloyd's. They had a great deal of influence on the work of the Fisher committee, which started meeting before the "Savonita" case came up, although it added importance to the deliberations. These cases and the smaller ones, which may not have had the same publicity, have underlined the

  877
  fundamental point that the House has a duty to sustain a national institution like Lloyd's and give it the opportunity to put its house in order, as it is requesting us to do this evening.
  Concern has been expressed outside about four major issues that have been mentioned by all the speakers so far. My right hon. Friend the promoter of the Bill has satisfied both sides of the House about representation on the council. However, the hon. Member for Hackney, Central still has reservations about clause 11. It is a matter that the committee of Lloyd's through the promoter of the Bill, is prepared to discuss in greater detail at later stages in the passage of the legislation. At an earlier stage the hon. Gentleman underlined the fact that the committee of Lloyd's had taken a great deal of trouble to consult those concerned, including himself, in order to find a solution. If members of the committee of Lloyd's read Hansard tomorrow, they will learn what hon. Members feel and what action they would like to take. My right hon. Friend the promoter of the Bill has made it clear that that is also his intention. The suggestions put forward for alterations to the Bill should meet the point on fraud in full. I welcome the assurances given by my right hon. Friend.
  I wish to spend a second or two on the fourth point—divestment. As we all know, brokers own agencies at Lloyd's. I am glad that the sponsors of the Bill have proposed that the council should deal with this as a matter of urgency immediately it is set up. As a director of a major broking firm at Lloyd's, I am in no way opposed to divestment. I do not share the views of the hon. Member for Hackney, Central that the council's suggestions to deal with the poblem is a means of doing nothing at all. Such is the public interest in divestment, and such is the need for the committee of Lloyd's to satisfy it, that the new council will not be allowed to sit on the matter. It will have to deal with it.
  Hon. Members should appreciate the real problems involved in divestment which make it important that the new council should decide and that we should not try to do its job for it. What happens if a broker is no longer allowed to own an agency in Lloyd's and decides to own an insurance company instead, and if the broking community then moves out into the wider insurance market by owning insurance companies and starts to place its business in those companies instead of at Lloyd's? That is one question that has to be answered. I shall not answer it tonight.
  Secondly, London brokers may decide that if they are not allowed to be involved in owning underwriting agencies in Lime Street they will own overseas underwriting agencies instead. Might not that have a disastrous effect on Lloyd's, with a moving of business out of the London market into overseas markets? So far as I am aware, there is no evidence that the names are actually prejudiced by brokers' agents. Indeed, the Wilson, the Roylance and the Sasse syndicates were all run by non-broker-owned agencies.
  There is another point. Who would replace the present brokers as owners of those agencies? Perhaps a big industrial company would buy—Tiny Rowlands, Tesco, some conglomerate—I do not know. The outside pressures would clearly build up. I am not saying that that is necessarily a bad thing, but it is something that one has to consider. Outside pressures would build up if, for instance, overseas interests moved in and bought the agencies.
  878
  Let us look next at the possibility of the ownership being taken over by names themselves. Could the names afford it? To purchase some of the major and profitable agencies in Lloyd's today would cost a great deal of money. One wonders whether the names, who obviously would be the ideal people to own them, would be able to raise the necessary cash to do so.
  Mr. Needham: It is a question, is it not. of the divestment of managing agencies? It has not been suggested that membership agencies should be transferred or divested. Surely the brokers would still have their interest, and therefore their entitlement, to continue in the market.
  Sir Anthony Royle: Yes, they would. If the names could not buy the agencies themselves, the temptation for brokers, rather than to get involved in the complications and difficulties of operating in the market, might be to move overseas.
  I think that answers can be found to all these problems. I am not opposed to divestment, but I feel that the committee and the council of Lloyd's should find the answers and that we should not try to find them here in this House.
  Independent underwriting teams owning themselves is the ideal solution, and it is one that many people would like to see. I hope that the new council will encourage that. There is a feeling in the market and among the general public that the major brokers have become too powerful. If Lloyd's is to flourish, it needs to encourage the entrepreneurial energy of underwriters, which exists today. They need to build up their agency and to sell it in a market where they can sell for a profit the expertise that has been built up over the years. If that cannot be done Lloyd's will be damaged.
  It is right that the new council should tackle and decide this complicated, but important, issue that has been mentioned by all hon. Members who have spoken. I apologise for keeping the House for so long but, as shown by the Warncliffe meeting at the Albert Hall, which I attended, there is an overwhelming majority of both working and external names for the Bill. The community of Lloyd's wants the Bill. It is vital to our future and crucial to the City that Lloyd's is able to function well and is seen to be doing so. It is right that, where possible, our major institutions should police themselves and not involve the Government. The Bill provides for just that, and I hope that it will be accorded its Second Reading this evening.
  8.55 pm
  Viscount Cranborne: Although I am not a member of Lloyd's I cannot disagree with my right hon. Friend the Member for Crosby (Mr. Page) in drawing attention to the extraordinarily important place that Lloyd's occupies not only in the City of London but in earning a colossal amount of foreign exchange and making an extraordinarily large contribution to Britain's invisible exports. It seems entirely appropriate that this issue should attract enormous interest. The rather snide comments from Labour Members do them no credit. The same comment may be made of the fact that Labour Members are here in such small numbers to consider a vital part of our economy.
  Mr. Michael English: The Chair did not call my hon. Friend the Member for Keighley (Mr. Cryer).
  Viscount Cranborne: It is plain that the Bill is needed urgently. Equally, there can be no doubt that an institution with the reputation of Lloyd's for innovation, flexibility and all the remarkable virtues that have given it its preeminence in insurance should adhere to the principle of self-regulation. Many of the disadvantages from which other insurance markets suffer in other parts of the world stem from the fact that they are unquestionably governed by rigid regulations and Government rules that inhibit the powers of innovation and flexibility that Lloyd's enjoys.
  My right hon. Friend the Member for Crosby referred to the great changes that have occurred over the past decade in the market at Lloyd's. Bearing in mind the shortage of time, it would be churlish to rehearse those arguments, which I accept entirely. A Bill is needed because of those changes, and it was with considerable relief that those who are interested in Lloyd's heard that a Bill was forthcoming and that the committee and council of Lloyd's regarded the Bill as urgent.
  It was with considerable interest that I addressed myself to the document when it was published. My sense of anticipation and relief turned to some extent to disappointment when I read what the Bill contained. We knew that the changes in the market of Lloyd's in the past decade or so have led to an astonishing number of rather doubtful stories, many of which have been referred to by right hon. and hon. Members this evening. I do not wish to rehearse them, but if we are to accept the importance of the principle of self-regulation, surely it is vital that the self-regulating body should not only be above reproach but be seen as such by the country at large. In other words, it must be more Catholic than the Pope.
  Bearing in mind the number of stories that have emerged over the past few years about Lloyd's and those who work at Lloyd's, the Bill should have presented Lloyd's with an opportunity to show, if I may continue the religious mataphor, a firm purpose of amendment, as I believe the Catholics call it. That firm purpose of amendment is signally lacking in the expressions in the Bill.
  What about fraud? There has been an enormous amount of publicity about fraud in the past few years in matters concerning Lloyd's. It was surely only natural to think that the Bill would contain at least some passing reference to this undesirable activity. The House will be able to imagine my surprise when I found no such references when I read the Bill. I believe that I did so with proper care and attention. I looked as hard as I could, but not once did I find that five-letter word in the entire Bill.
  That remarkable fact reminded me of nothing so much as of an impoverished noble family sitting in a large and stately home trying to ignore the nasty smells from the drains that they could not afford to have repaired. That parallel surely cannot apply to Lloyd's, however. Although it is undoubtedly a noble institution, no one in his right mind could describe it as impoverished. The simile that I prefer, therefore, is that it is acting as though it inhabits an ivory tower. That is something that an innovative, flexible market, which Lloyd's has a reputation for being, cannot afford to do. I am delighted that my right hon. Friend was able to assure us about fraud; he did much to allay the questions in my mind.
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  There are other matters, however, such as divestment. My hon. Friend the Member for Richmond, Surrey (Sir A. Royle) has already referred to the undesirable growth of broker power over the past few years. Surely we must all accept that this phenomenon must be attacked by those in authority in Lloyd's. I was delighted to hear from my right hon. Friend that they intend to do so.
  As the hon. Member for Hackney, Central (Mr. Davis) said, the question of divestment has been hanging around for a considerable time; I believe that the Cromer report raised the matter over a decade ago. The committee of Lloyd's has been discussing it for over 10 years. We hear that it has reached some conclusions, but we have no clear evidence that it intends to take any action on the matter. Conclusions are a small advance, perhaps, but, for such a flexible and innovative institution, Lloyd's hardly shows any great sense of empressement in taking 11 years to come to a conclusion. Will it take 30 years for us to see some action? One is reminded of a reluctant bather by the Serpentine on Christmas day, trying to make up his mind to take the plunge. To the interested passer by, the longer the hesitation on the brink, the less attractive the body becomes.
  My right hon. Friend has done signal service today by trying to ensure that the sponsors at least do something in Committee to improve the original Bill. I sincerely hope that he will be able to prevail upon them and those who consider the Bill in Committee to give a binding and public undertaking that some kind of divestment—even a separation of powers would be an advance—will take place within a set period. My hon. Friend the Member for Richmond was right to say that this raises great difficulties. Nevertheless, the principle is so important that Lloyd's, with its reputation for intelligence and flexibility, must do something to solve the problem.
  I shall not continue too long, as many other hon. Members wish to speak, but I cannot close without mentioning immunity, in which Labour Members have expressed great interest. The history of the Labour Party shows clearly that its members are experts on the subject. They have done their best to defend immunities when it seemed in their best interests to do so. It all seems curiously one-sided.
  Mr. English: The hon. Gentleman will recollect that it was a Liberal Government who created those immunities.
  Viscount Cranborne: I recollect perhaps rather less well than the hon. Gentleman what happened in 1906, because I was not alive at the time. However, I recollect rather more clearly that further immunities were granted by Labour Governments in 1974 and 1976, which perhaps reinforced the fell work of the Liberal Government of 1906.
  We must be careful before we grant anyone new immunities. We Conservatives are reasonable men. We recognise that there may be occasions when some immunity is necessary, but the Bill provides a scale of immunity which I am advised is enjoyed by no one apart from the Privy Council and the Crown. That seems excessive, and I suggest that the promoters address their minds carefully to the question. We should seriously consider the granting of such extraordinarily excessive powers to a body which, in spite of the large number of Conservative Members present, does not have the political clout of the trade unions.

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  I question whether the same object could not be achieved by the council of Lloyd's by other means. We know that clause 10 confers on the council and its members the privileges conferred by section 448 of the Companies Act 1948. If Lloyd's wants more immunities, perhaps the redress lies within its own power. Surely that flexible institution could devise an insurance policy which would protect it as the immunities seek to do.
  I shall vote for the Bill as a disinterested outsider, in the clear expectation that the remarkable remedial work of my right hon. Friend the Member for Crosby (Sir G. Page) will continue in Committee. I hope that he will be able to give us the assurances we need. If I vote for the Bill and find that my expectations have been dashed, I shall have learnt a lesson from which I can only profit in future.
  9.7 pm
  Mr. Bob Cryer: Conservative Members are here in strength tonight.
  Mr. John Prescott: It must be about money.
  Mr. Cryer: Indeed. It is said that Lloyd's is representative of innovation and flexibility. Many years ago, when I wanted to insure a steam-operated railway, Lloyd's proved to be neither innovative nor flexible. In fact, an ordinary commercial insurance company undertook what was a fairly new venture with aplomb and courtesy.
  It is said that the community of Lloyd's wants the Bill, but there is more to it than that. There is a public interest in the Bill as well as a public interest in the operation of Lloyd's. Lloyd's does an enormous amount of business. If it is to maintain a reputation of service and credibility among its clients, the degree of scrutiny which will ensure that credibility must be maintained.
  It is claimed that the Bill is required in order to update the self-scrutiny of Lloyd's. The Bill, irrespective of clause 11, gives enormous powers to an outside body. Parliament should be careful about handing over such powers to a body, no matter how old, traditional or well-established.
  Under clause 7, the council is able to establish a disciplinary committee and an appeal committee. In the normal course of events, a professional body has to ask the Minister to introduce a regulation to obtain such powers. Therefore, the House would give Lloyd's an enormous advantage.
  My hon. Friend the Member for Hackney, Central (Mr. Davis) said that the appeal system would ensure that justice was carried out within the internal workings of Lloyd's. Under clause 7(2) the council can, by byelaw, specify the classes of
  "decisions, findings, orders, acts or omissions"
  against which appeals can be made to the appeal tribunal. It has the right to decide whether something should be the subject of an appeal. In other words, we are handing over the application of some sort of justice to an outside body. We should examine that right carefully.
  I turn to the contentious subject of clause 11. The hon. Member for Dorset, South (Viscount Cranborne) mentioned trade unions. If trade unions saw clause 11, they would would have their breath taken away by the scope and magnitude of the immunities granted. [Hon. Members: "Hear, hear".] Conservative Members may say that members of Lloyd's do not have immunity and are at
  882
  an unfair advantage. However, from their note of approval for my comment about the reactions of trade unions, I gather that they are critical of clause 11. Such approval for my comments does not often spring from Conservative Members.
  Trade unions are in a different position. First, they do not have such breathtaking immunity. Secondly, they are subject to a registrar, established by legislation, who produces an annual report on how trade unions are functioning. The applications of trade union funds for political purposes is the subject of legislation and of close scrutiny. Therefore, the position is different. The House should be careful before handing over such a power to an outside body, regardless of its prestige.
  I hope that the right hon. Member for Crosby (Sir. G. Page) will not think unkindly of me if I say that I have great regard for the work that he does in the House. However, he said that byelaws would be introduced under the powers contained in the Bill to remove clause 11 and to introduce some modified form of immunity. That is not a good process. Regardless of whether this is a public or private Bill, we should strive to avoid that. To hand over the creation of primary legislation is to usurp the legislative functions of this House. Therefore, it is to usurp Parliament's very power.
  The right hon. Gentleman said that such an alteration would take the form of an affirmative statutory instrument. However, such an instrument is not subject to modification. One must take it or leave it. If anyone has reservations he must vote against it. There is no grey area of debate. Indeed, debate is limited to one and a half hours. In the nature of our operations that hour and a half of debate will take place not in the early part of the evening, but at 11 pm, midnight or at 1 am. Our cerebral processes may not be at their best at that time. That is a relatively trivial reason, but the most important principle is that even on public legislation I am concerned about the powers that Ministers have to produce regulations to alter and shape essentially primary legislation. That is not a satisfactory substitute for getting primary legislation right the first time for debate and vote on the Floor of the House.
  I turn to schedule 2. The essence of the Bill is self-regulation. I have great reservations about it. An annual report should be available describing how the self-regulatory body is proceeding. If it is proceeding satisfactorily, it should harm no one. It should be a proud boast that it is proceeding satisfactorily. If it is less than satisfactory, it is a cause for anxiety, but it will ensure that outside pressures put the regulatory procedures in train if, by any chance, those inside the prestigious, long-established body are too comatose or complacent to carry them out with due speed. Long-established prestigious organisations often develop an inertia to remedy faults which need outside pressure to produce a correction.
  There is a useful point of comparison with trade unions, and there should be a form of annual report. The right hon. Member for Crosby said that he would propose additions to paragraphs 21 and 22 of schedule 2. They would be the mechanisms for informing the police about malpractice and byelaws for prosecuting offenders. I want to be sure that any self-regulatory body does not have double standards—that is, one standard for internal organisation where malpractices and criminal activities occur and another for the rest of the public.
  I should like to see the clauses so framed that an internal investigation under the schedule should be accompanied

  883
  by external investigations. There would be no possibility of that being brushed to one side because those inside the prestigious institution felt that calling in outside public officers such as the police might be harmful. That is always a possibility within an institution that believes that outside scrutiny and prosecution by the police might harm its reputation. We want to see similar institutions placed on a par, whether it is Lloyd's or an ordinary insurance company. Everybody should be open to prosecution for criminal activities. The Bill is concerned only with internal self-regulatory mechanisms. We all welcome proper and adequate scrutiny and wish to ensure that external public examination is undertaken as well.
  I shall vote against the Bill because I do not think that it should proceed without being opposed, because that strengthens its position in the later stages. That may dull people's critical faculties. In view of the breathtaking immunities contained in clause 11, something must be done to the clause now so that hon. Members who complain about the immunities of trade unions can claim that they did not have double standards and voted against immunities for trade unions but voted for breathtaking powers for a tiny, very profitable organisation in which a fair chunk of them have financial interests. A stronger element of public accountability is needed by means of an annual published report made available to hon. Members and the public which can be debated in the House. In the final analysis, public scrutiny is the best form of accountability.
  9.20 pm
  Mr. Nick Budgen: I hope that I shall not dissipate any support that I might have for my views by saying that I thought that the hon. Member for Keighley (Mr. Cryer) made a splendid speech. Because I agree with him so warmly I am deeply concerned about clause 11, to which I shall direct all my observations.
  Many of my hon. Friends believe that the immunities at present enjoyed by trade unions are bad not only for the country but for the trade unions. We are sometimes described as union bashers, but we believe that when we attack their immunities we speak on behalf of ordinary working people and of trade unionists who are locked into a structure from which they have no lawful appeal.
  When an institution with which we have many links of friendship and interest asks for special and wide privileges, we must examine them carefully. I am in favour of self-regulation. As a member of the Bar I am subject to self-regulation from the Bar Council. After many years of playing with horses, I know something about the activities of the Jockey Club which is also a self-regulatory body and has functions which are partly quasi-judicial and partly administrative.
  As the hon. Member for Keighley said, the Jockey Club used to be a sleepy, complacent organisation which often did much injustice to the broad sections of the community that came before it. However, it was not subject to any immunity. A number of useful actions were brought before the courts and the club changed its procedures for the better.
  The arguments for clause 11 are remarkably defective. I apologise to my right hon. Friend the Member for Crosby (Sir G. Page) for jumping into his argument rather quickly.
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  I had hoped that he would deal with the issue of principle at some length and with some weight of argument. My right hon. Friend has had many discussions with many of his hon. Friends who are worried about the matter. We looked for some compelling arguments of principle so that we could distinguish the position of Lloyd's from that of trade unions, for instance.
  All that my right hon. Friend did was to repeat the passage on page 2 of his briefing document which states:
  "Lloyd's needs powers which can tackle abuses which in recent times have received publicity. There is, therefore, an argument for providing some immunity for the Council."
  I see no logical connection between the first and second sentences. I interrupted my right hon. Friend in the hope that he would provide that connection. I thought that he might say that if there were disciplinary proceedings there might be some publicity of the allegations against the accused person, that perhaps the disciplinary body would be frightened of actions for libel and that then we would have to examine whether the system of qualified privilege is an adequate defence. However, my right hon. Friend did not say that.
  It is important to examine the arguments advanced by Fisher. I found the most desultory discussion of the issue in paragraph 6.05 of chapter 6. The committee simply says that it would be disastrous if no immunity were granted, bearing in mind the extension of the law of negligence following the Hedly Burn case. Hon. Members should be clear that the Fisher committee was saying that if some form of protection is required, there are three available courses. The first course, according to the committee, is to try to cover by insurance any liability towards members. We have heard nothing about that course from my right hon. Friend. The second course, the committee says, is the possibility of requiring members and others—I shall not read out the whole sub-section—
  "to agree not to sue the Corporation of Lloyd's, and/or to agree to indemnify the Corporation of Lloyd's' against civil liability."
  The report goes on to explain that some consequential change in the law would be necessary to allow that. It points out that the third course is to ask for the indemnity that has been asked for. If my right hon. and hon. Friends are serious in our assertion that we make so often to our constituents and sometimes to my right hon. Friend the Secretary of State for Employment that the immunities granted to the trade unions are vast—although, I concede, much more regulated than what is proposed in clause 11—and should be diminished, we would surely agree to anything approaching clause 11 only if we were satisfied absolutely that the case for immunities was overwhelming and that no other course was open in the circumstances. It is no good saying, as my right hon. Friend has said to me on occasion, that it is difficult to insure against this. It is difficult to insure against claims for negligence, but banisters are now thought, in certain circumstances, to be liable to claims for negligence. We insure. I should have thought that the council of Lloyd's could also insure. Of course, it reduces profitability.
  A high issue of principle is involved here. It is no good saying "Send it off and with a bit of fudging and mudging, a few cups of coffee, and a drink for someone else, we will fiddle our way through." This is a great issue of principle that touches the whole of the body politic. There is nothing new about this situation. Every rich, strong and powerful

  885
  group in our society, at various times, has sought special privileges. This House has, above all, existed to try to diminish and criticise that claim for special privileges.
  As I listened to my right hon. Friend, I remembered how I was taught that, after the Norman conquest, the great feudal barons had their manorial courts and how zealously and jealously they guarded their privileges against the encroachment of the King's justice. I feel that my right hon. Friend was like a very wise, very eloquent abbot of, if I may say, advancing years, whom the feudal barons had put up to support their case for special privileges.
  I am afraid that, as my right hon. Friend put the case forward, like the careful lawyer he is, he was saying that there is an argument. In my experience, there is an argument in life for almost everything. I am not sure that there is a proper or an honourable argument for those Conservative Members who believe that, in the interests of all the people, and most of all in the interests of ordinary trade unionists, our duty in the future is to seek to diminish areas of special privilege in our society.
  9.30 pm
  Mr. Michael English: I must follow the speech of the hon. Member for Wolverhampton, South-West (Mr. Budgen) with one short sentence. I have in my constituency a piece of land which was once the prior of Lenton, and the prior of Lenton—in some books he is called the abbot—was the only person who was hanged at the gates of his own priory on behalf of Henry VIII, because he was the only person who did not take a pension when Henry VIII and this House and the other place changed the religion of this country in 1536. He preferred to be hanged. In that case, I think that the constituent of my predecessor in title, as it were, could claim that he was an honest man. There are not many such men. Most take pensions, and they did in 1536.
  I wish to make only one comment on the Bill. It behoves anyone who takes money to inquire where it comes from, and it behoves anyone in business to inquire where his money comes from and where it goes to. I am sure that in the case of Lloyd's, the money comes entirely from legitimate quarters—at least, I hope so. It is not always true that everyone in Lloyd's knows where it goes to.
  Lloyd's has a tendency to regard itself as a collection of individual firms, individual people, of whom, as we have heard, there are a large number, some working members and some external members. But it is a matter of concern whether they always know the results of their own actions. The Sasse case is a clear example, and I do not think I need go into the details of that.
  I am concerned about another sort of insurance—insurance against kidnapping. Such insurance is not generally known about, because there is a clause in every policy which says that no person insured may declare that he has such a policy. Thus, the matter is kept secret, and there is good reason for that in this context. The matter is also kept outside the area of discussion. There are people in Italy, for example, who say that we in this country are more concerned about making money out of insurance than about where the money goes to. There may be people in Italy who are the recipients of the products of such insurance policies.
  886
  It must be a matter of some concern to Lloyd's—not a collection of firms, but a singular corporation—that., to quote the preamble to the Bill,
  "By Lloyd's Act 1871 certain persons were united into a society or corporation".
  In fact, Lloyd's is a singular corporation. Whether it acts as such is not necessarily something that we know about. When it is a question of deciding what their colleagues should insure against, members have a tendency to assume that all their colleagues are gentlemen. Perhaps that was once true. It cannot necessarily be said to be true that it is good for the image of this country in the rest of the world that we are almost the only people who insure against kidnapping.
  If somebody is kidnapped the ransom is provided out of his insurance—if he is lucky enough to have such an insurance. We all know how unljucky some people can be. It is deeply unfortunate if your name happens to be Rolf Schild instead of Rothschild. It can be said that every corporation and public company in this land that is a member of the British Insurance Association does not insure people against kidnapping. Such insurance is not provided even by the majority of the members of Lloyd's, but a minority, uncontrolled by the society to which they belong, do offer it.
  I am not suggesting that they intend to do evil. Evil is sometimes done by people who do not intend to do it. They are simply concerned for themselves. But it is of importance that anyone should determine—[Interruption.] Is someone suggesting that such insurance is not being offered? A couple of firms, no more, in Lloyd's offer insurance against kidnapping. As a result, in effect and in actuality, they are paying money to those who have kidnapped their clients. It is a great advantage for the kidnappers to have an insured income. I suggest that that practice should cease.
  9.36 pm
  Mr. Richard Needham: I wish to declare an interst, in that I am a mini-member of Lloyd's. I emphasise the word "mini" because the hon. Member for Blackburn (Mr. Straw), on a point of order this afternoon, said that £100,000 was required by a person wishing to become a member of Lloyd's. He was not correct. When I joined Lloyd's I needed £37,500, and I had £37,632—admittedly that excluded my house, or that part of it that my wife does not own. The reason why I am making this important point is that the days when Lloyd's was a great institution, entirely dominated by the very rich, are at an end. Large numbers of people of middle means have joined Lloyd's. Inevitably, that has changed its character. I shall not give away any secrets if I say that the chairman of Lloyd's, on the occasions that he has visited the House, has not painted a happy financial picture for its immediate future.
  The problems faced by Lloyd's are great. High interest rates around the world mean that many new people wish to get into the insurance business. Inevitably, that means lower premiums, which makes competition more difficult—as, of course, does the general effect of the world recession. That has led to a serious dimunition of under-writing profits and, in many cases, to underwriting losses. Many agencies have been kept above their financial bankruptcy level only by large amounts of premium income which they have been able to offset against losses on their underwriting. The loss of earnings in the outflow

  887
  of premiums has meant that many emerging countries wish to start their own home insurance business. The outlook for insurance is gloomy all over the world.
  On top of that, Lloyd's has another problem. As my hon. Friend the Member for Richmond, Surrey (Sir. A. Royle) said, it needed to expand in the latter half of the 1970s from about 5,000 to 20,000 names. That led to more syndicates, which led to more competition and lower rates in Lloyd's.
  I accept, as I am sure most of my hon. Friends do, that self-regulation is the right direction in which Lloyd's should go. Fisher made that clear on page 3 of the report. Referring to self-regulation, it said in paragraph 1.12:
  "The freedom thus granted by the law carries with it great responsibility. The areas of activity controlled by self-regulating bodies are of considerable national importance and affect the lives of many people. Self-regulating institutions must use their freedom wisely and fairly in the public interest and must be able to demonstrate by their actions that they are doing so."
  I understand that the argument behind self-regulation, as opposed to governmental regulations, is, perhaps "set a thief to catch a thief'. I should like to consider the major issues on self-regulation, why they are important to Lloyd's and whether in its current legislation Lloyd's lives up to what Fisher said in paragraph 1.12 it must do.
  All right hon. and hon. Members will accept that one cannot have effective self-regulation if there is a conflict of interest. The problem now in Lloyd's is that since the war the power of the brokers over the whole Lloyd's market has become dominant. Of the present council of Lloyd's, 11 members are attached to brokers in one way or another. One has only to look at the enormous power of brokers in the business that they give and at the control that they have over managing and membership agencies to realise their dominance.
  If Lloyd's wishes to come to Parliament to ask for self-regulation, it can do so only if there is no conflict of interest. If the gloomy picture painted by the chairman of Lloyd's is correct, increasing pressure will be brought on Lloyd's by its external names, and by the vast number of people who have invested in Lloyd's, without fully understanding what they were doing. Therefore, in seeking assurances about alterations to the Bill from my right hon. Friend the Member for Crosby (Sir G. Page), who has been extraordinarily helpful, the question of divestment cannot and must not go away. I am sure that if Lloyd's tries to make it go away, untold damage will be done.
  There is a great need for the representation at Lloyd's to be seen to be fair. My right hon. Friend has gone a long way towards achieving that. However, six members of external names is not enough. It is crucial that when the election to the new council takes place the external names know who they are voting for. My right hon. Friend has also gone some way towards meeting that need. However, if the new council were to end up by being dominated by the same group of people as in the past and if the same whiff of scandal continues as the economic problems of Lloyd's mount up, the danger to Lloyd's of a different kind of legislation and control will become much greater.
  The right of members to have recourse to the court was mentioned in connection with immunities. I hope that my right hon. Friend's shrewd change will mean that the Bill need never come back to this place. I openly admit that. Clause 10 should be sufficient.
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  If Lloyd's wonders why we doubted it in looking at the Bill, it is because when an institution comes to us for self-regulation it is asking too much if there is nothing in the body of the Bill about divestment, nothing about fraud, an unsatisfactory attempt to set up an electoral system and a demand for enormous immunities.
  I am delighted that my right hon. Friend the Member for Crosby is dealing with fraud. It is crucial to Lloyd's that everyone within the market is clear beyond doubt that fraud is a criminal issue and comes above the law of agency. Through my right hon. Friend, Lloyd's has given these assurances.
  There are doubts in my mind that until Lloyd's has established these byelaws further pressure will be needed to bring them into effect. It will be a great tragedy to the insurance business if there is any more fudging or mudging. Lloyd's and the council will have to live with the pressure that they will get from 20,000 new external names. It is in the interests of Lloyd's and of the market that Lloyd's should act on the byelaws as soon as the Bill goes through Parliament.
  9.46 pm
  Mr. Archie Hamilton: I would first declare that I have no financial interests in Lloyd's; nor has any near member of my family. I am concerned about the Bill because I regard Lloyd's as a major financial institution that must work in a way that is beyond reproach, must at all times avoid scandal and must be seen to be whiter than white.
  I therefore welcome he Bill, with the undertakings that my right hon. Friend the Member for Crosby has inserted in it. It is essential that Lloyd's has greater powers of self-regulation. Here we must look to the experience of the Stock Exchange, which shows that policing is best done by those who understand the business.
  I hope the new committee with greater powers will realise that there are certain new realities of Lloyd's. The first is that it is no longer a coffee shop where deals are struck between people who know each other extremely well. It is no longer an exclusive gentlemen's club, if it ever was. It has today about 19,000 members many of whom are foreigners living abroad. It can hardly therefore be described as exclusive. It is also a major financial institution and, with its massive export earnings, it needs the skills of players rather than those of gentlemen. It is a business of professionals rather than of amateurs.
  The problem is that non-working members who risk their capital are by definition amateurs. These people look to the committee ultimately to safeguard their interests. Recently they have had reason to feel that they do not have the protection to which they imagine they are entitled, so I am delighted that Lloyd's committee should have these greater powers, but only on the strict understanding that it carries much greater responsibilities as well.
  One responsibility must be to ensure that non-working members, particularly new members, understand how Lloyd's works. There is still far too much mystique at Lloyd's. This seems to be maintained for the benefit of working members, the people on the inside track, while it works against the interests of new members and people who may not understand how well it works.
  For instance, how many potential new members know that commissions can now be paid for introduction to syndicates of up to £1,000, which is not inconsiderable in anybody's language? How many potential new members

  889
  know that a members agency cannot offer the full choice of syndicates at Lloyd's because the best syndicates may be over-subscribed? Anyway, a members agency is liable to be greatly influenced by the commission that is paid to it by a managing agency. How many potential new members know that there is a complete list of underwriting syndicate results but this is held by the committee and is not available to anybody who is thinking of investing in Lloyd's. Those who do understand the way that Lloyd's works know that, of the 400 syndicates, 50 are extremely profitable, 300 make a decent return and 50 lose money.
  We have to ask ourselves why the members should not have this information. In the opinion of Lloyd's members who were on the Fisher committee, that information could be misleading. I am afraid I fail to understand how knowledge that certain syndicates lose money year after year could he misleading. The only thing that I consider could be misleading is to put somebody on to such a syndicate and risk his money.
  I look to the new committee to take the responsibility of opening up the amount of information on syndicates that is available so that market forces can work properly. In those circumstances, bad syndicates will go to the wall and good ones will flourish, but that is the way that markets should be seen to operate.
  A further protection for non-working members must come from uniform agency agreements; all members should be offered the same deal by their members agencies and there should be no exclusion of liability by these members agencies, as there has been in some instances in the past. Members must be aware that commissions paid to underwriting agencies can vary considerably between 20 per cent. and 33 per cent. of the profits that they get from those underwriting agencies. Those commissions vary dramatically. That is the sort of information that should be available to people who intend to invest in Lloyd' s.
  Finally, we must turn to divestment. Eight brokers, all publicly quoted companies, control nearly 60 per cent. of the underwriting syndicates, yet, as we know, brokers are supposed to act for the client and underwriters are supposed to work for the members who have their money at risk. So there is clearly a commercial conflict of interest here. Also, the invitation is permanently there to push through fraudulent claims, as the big brokers want to keep their large customers satisfied and they cannot risk losing business; they might well take the view that they can get the money back on the next premium anyway.
  In the opinion of one of the witnesses to the Fisher committee, brokers are prone to load their expenses on to the syndicates. The Fisher report recommended that there should be complete divestment within five years, and surely the evidence is overwhelming that this should be in the Bill. I hope that the Bill's later stages will include some definite commitment to divestment, as Fisher recommended.
  Then there is immunity, in clause 11. I accept that there is a radical amendment now in the schedule by my right hon. Friend the Member for Crosby (Sir G. Page), but it is outrageous that this provision should ever have been in the Bill. In the whole of its existence Lloyd's has only been sued once, and that was by the Sasse syndicate. The committee paid up because, in my opinion, it realised that it had been negligent since the information received by it in 1976 from its lawyers in the United States was not passed on to the agent or the syndicate. Why, in these circumstances, should we then give Lloyd's immunity
  890
  from future prosecution? It seems absurd that, if Lloyd's committee does not carry out its obligations to members, it should not be liable to be sued.
  I welcome the increased powers and responsibility to pursue fraud. It must be possible for working members, particularly brokers, now to report fraud to the committee when they know about it, and there is no doubt that the brokers are the people most likely to detect fraud. If Lloyd's became known as an insurance market that was easy on fraud, its days would be numbered. As it is, its reputation can only be enhanced by taking a firm stand on fraud.
  I wish this Bill luck and I wish Lloyd's and the chairman, Mr. Peter Green, every good fortune. If he strives to protect the interests of non-working members with the same courage and determination with which he has resisted amendments to this Bill, the members of Lloyd's will be able to face their future with confidence.
  9.56 pm
  Mrs. Peggy Fenner: I sat through the debate in the hope that I would have a few minutes to introduce a different note. I cannot agree with my hon. Friend the Member for Epsom and Ewell (Mr. Hamilton) that the chairman of Lloyd's has been reluctant to amend the legislation. Almost everything said by my right hon. Friend the Member for Crosby (Sir G. Page) demonstrated the co-operation of the society in getting the Bill on to the statute book.
  The Minister paid tribute to the way in which Lloyd's contributes to our economy. I am not a member of Lloyd's, nor am I one of the rich and influential people referred to by Opposition Members. I wish in the time-honoured tradition of the House to pay tribute to Lloyd's for its important contribution to my constituency. I have a constituency interest in the continuing success of this great international institution. It has fine, award-winning buildings fronting the Medway, where a large number of my constituents work in magnificent conditions. From the introduction of the Bill I learnt nothing about the prestigious nature of Lloyd's. Some of my hon. Friends have done less than justice to the institution. It is a wonderfully participating business constituent and a fine contributor to Medway's community life.
  There can be no dispute about the necessity for the Bill. No one could expect such an important institution to continue with regulations determined in 1871 without changes. Lloyd's requires an effective system of self-regulation. My right hon. Friend the Member for Richmond, Surrey (Sir A. Royle) told us that the scale of business at Lloyd's and the expansion in the number of members demands that it has additional powers in order to be self-regulating. I was impressed by the degree of concentration, and disappointed that some of my hon. Friends found it less than satisfactory.
  I am also impressed by the fact that the overwhelming majority of Lloyd's members are wholeheartedly behind the sponsors in deciding the contents of the Bill. There has been full consultation with the market associations, which all support the Bill. In discussions with hon. Members and in the subsequent compromises arrived at there has been great awareness of the concern inside and outside the House over the controversial clauses. In the innovation of external members on the committee there was bound to be a divergence of view about the right number. I am

  891
  delighted that my right hon. Friend the Member for Crosby has balanced the number by announcing that it will not be six but eight.
  I accept the concern about immunities. I do not agree with the comparison made by some of my hon. Friends. I share the view of the Secretary of State for Employment
  892
  in the Green Paper about trade unions. We should be thinking about a positive Bill of Rights and not about immunities. I am delighted that it is sought to move clause 11 from the main substance of the Bill and to introduce it in the second schedule so that Lloyd's can be truly self-regulatory and form an effective byelaw.
  Sir Graham Page rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to
  Question put accordingly, That the Bill be now read a Second time:—
  The House divided: Ayes 206, Noes 42.

  Division No. 122]

  [at 10.00

  AYES

  Adley, Robert

  Gardner, Edward (S Fylde)

  Alexander, Richard

  Garel-Jones, Tristan

  Arnold, Tom

  Gilmour, Rt Hon Sir Ian

  Aspinwall, Jack

  Glyn, Dr Alan

  Atkins, Robert (PrestonN)

  Goodhart, Philip

  Baker, Kenneth(St. M'bone)

  Gorst, John

  Baker, Nicholas (N Dorset)

  Gower, Sir Raymond

  Beaumont-Dark, Anthony

  Grant, Anthony (Harrow C)

  Beith, A, J.

  Greenway, Harry

  Bell, Sir Ronald

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

  Benyon, Thomas(A 'don)

  Griffiths, Peter Portsm'thN)

  Benyon, W. (Buckingham)

  Grylls, Michael

  Bevan, David Gilroy

  Gummer, John Selwyn

  Biggs-Davison, John

  Hamilton, Hon A.

  Blackburn, John

  Hamilton, Michael(Salisbury)

  Bottomley, Peter (W'wich W)

  Haselhurst, Alan

  Bowden, Andrew

  Hastings, Stephen

  Braine, Sir Bernard

  Havers, Rt Hon Sir Michael

  Bright, Graham

  Hawkins, Paul

  Brinton, Tim

  Hawksley, Warren

  Brittan, Leon

  Hicks, Robert

  Brotherton, Michael

  Hill, James

  Brown, Michael (Brigg&Sc'n)

  Hogg, Hon Douglas (Gr'th'm)

  Browne, John(Winchester)

  Hooson, Tom

  Bruce-Gardyne, John

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

  Buchanan-Smith, Alick

  Howells, Geraint

  Buck, Antony

  Hunt, David (Wirral)

  Bulmer, Esmond

  Hunt, John (Ravensbourne)

  Butcher, John

  Hurd, Hon Douglas

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

  Jenkin, Rt Hon Patrick

  Channon, Rt. Hon. Paul

  JohnsonSmith, Geoffrey

  Chapman, Sydney

  Johnston, Russell (Inverness)

  Clark, Sir W. (Croydon S)

  Kaberry, Sir Donald

  Clarke, Kenneth (Rushcliffe)

  Kershaw, Anthon y

  Clegg, Sir Walter

  Kilfedder, James A.

  Colvin, Michael

  King, Rt Hon Tom

  Cope, John

  Knight, Mrs Jill

  Cormack, Patrick

  Latham, Michael

  Corrie, John

  LeMarchant, Spencer

  Cranborne, Viscount

  Lennox-Boyd, Hon Mark

  Crawshaw, Richard

  Loveridge, John

  Critchley, Julian

  Luce, Richard

  Crouch, David

  McCrindle, Robert

  Dean, Paul (North Somerset)

  Macfarlane, Neil

  Dorrell, Stephen

  MacKay, John (Argyll)

  Dover, Denshore

  Macmillan, Rt Hon M.

  Dunn, Robert (Dartford)

  McNair-Wilson, M. (N'bury)

  Dunnett, Jack

  McNair-Wilson, P. (New F'st)

  Durant, Tony

  McQuarrie, Albert

  Eden, Rt Hon Sir John

  Marten, Neil (Banbury)

  Elliott, Sir William

  Mawby, Ray

  Emery, Peter

  Maxwell-Hyslop, Robin

  Eyre, Reginald

  Mayhew, Patrick

  Fairbairn, Nicholas

  Miller, Hal(B'grove)

  Fairgrieve, Russell

  Mills, Iain(Meriden)

  Fenner, Mrs Peggy

  Mills, Peter (West Devon)

  Fisher, Sir Nigel

  Miscampbell, Norman

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

  Molyneaux, James

  Fletcher-Cooke, Sir Charles

  Monro, Hector

  Fookes, Miss Janet

  Montgomery, Fergus

  Fowler, Rt Hon Norman

  Morgan, Geraint

  Fox, Marcus

  Morris, M. (N'hampton S)

  Fraser, Peter (South Angus)

  Morrison, Hon P. (Chester)

  Freud, Clement

  Mudd, David

  Gardiner, George(Reigate)

  Murphy, Christopher

  894

  Myles, David

  Speller, Tony

  Nelson, Anthony

  Spence, John

  Neubert, Michael

  Spicer, Jim (West Dorset)

  Newton, Tony

  Spicer, Michael (S Worcs)

  Normanton, Tom

  Squire, Robin

  Page, John (Harrow, West)

  Stanbrook, Ivor

  Page, Rt Hon Sir G. (Crosby)

  Stanley, John

  Page, Richard (SW Herts)

  Steel, Rt Hon David

  Patten, Christopher(Bath)

  Stevens, Martin

  Pattie, Geoffrey

  Stewart, Ian (Hitchin)

  Pawsey, James

  Stewart, A. (E Renfrewshire)

  Penhaligon, David

  Stradling Thomas, J.

  Percival, Sir Ian

  Tapsell, Peter

  Pollock, Alexander

  Taylor, Teddy (S'end E)

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

  Tebbit, Norman

  Prentice, Rt Hon Reg

  Temple-Morris, Peter

  Prior, Rt Hon James

  Thomas, Rt Hon Peter

  Proctor, K. Harvey

  Thompson, Donald

  Rathbone, Tim

  Townsend, Cyril D, (B'heath)

  Rees-Davies, W. R.

  Trippier, David

  Rhodes James, Robert

  Trotter, Neville

  RhysWilliams, Sir Brandon

  van Straubenzee, W. B.

  Ridley, Hon Nicholas

  Wainwright, R, (Colne V)

  Ridsdale, Sir Julian

  Walker, B. (Perth)

  Rifkind, Malcolm

  Walker-Smith, Rt Hon Sir D.

  Rippon, Rt Hon Geoffrey

  Waller, Gary

  Roberts, M. (Cardiff NW)

  Walters, Dennis

  Roberts, Wyn (Conway)

  Weetch, Ken

  Ross, Stephen (Isle of Wight)

  Wells, Bowen

  Rossi, Hugh

  Wheeler, John

  Sainsbury, Hon Timothy

  Whitelaw, Rt Hon William

  Sandelson, Neville

  Whitney, Raymond

  Scott, Nicholas

  Wilkinson, John

  Shaw, Michael(Scaroorough)

  Williams, D.(Montgomery)

  Shepherd, Coline(Hereford)

  Wolfson, Mark

  Silvester, Fred

  Sims, Roger

  Tellers for the Ayes:

  Skeet, T. H. H.

  Mr. John Major and Mr. John Meddle.

  Smith, Cyril(Rochdale)

  Smith, Dudley

  NOES

  Ashton, Joe

  McKelvey, William

  Bagier, Gordon A. T.

  Marshall, Dr Edmund (Goole)

  Bennett, Andrew(St'kp'tN)

  O'Neill, Martin

  Booth, Rt Hon Albert

  Palmer, Arthur

  Campbell-Savours, Dale

  Powell, Raymond (Ogmore)

  Clark, Dr David (S Shields)

  Prescott, John

  Cryer, Bob

  Price, C. (Lewisham W)

  Davidson, Arthur

  Roberts, Gwilym(Cannock)

  Dixon, Donald

  Robinson, G. (Coventry NW)

  Dobson, Frank

  Ross, Ernest (Dundee West)

  Duffy, A. E. P.

  Sheerman, Barry

  Ellis, R(NE D'bysh're)

  Skinner, Dennis

  Evans, John (Newton)

  Spriggs, Leslie

  Field, Frank

  Stott, Roger

  Fletcher, Ted (Darlington)

  Strang, Gavin

  Freeson, Rt Hon Reginald

  Straw, Jack

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

  Taylor, Mrs Ann (Bolton W)

  Haynes, Frank

  Wigley, Dafydd

  Lewis, Arthur (N'ham NW)

  Young, David (Bolton E)

  Lyon, Alexander(York)

  McDonald, Dr Oonagh

  Tellers for the Noes:

  McGuire, Michael(Ince)

  Mr. K. J. Woolmer and Mr. Nick Budgen

  McKay, Allen(Penistone)

  Question accordingly agreed to
  Bill accordingly read a Second time and referred to the Examiners of Petitions for Private Bills

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting the Merchant Shipping Bill [Lords] and the International Organisations Bill [Lords] may be proceeded with, though opposed, until any hour.——[Mr. Boscawen]

  Merchant Shipping Bill [Lords]
  As amended (in the Standing Committee), considered
  10.12 pm
  The Under-Secretary of State for Trade (Mr. Reginald Eyre): I beg to move, That the Bill be now read the Third time.
  As explained at earlier stages, the Bill is concerned with changing mechanisms rather than with introducing new policies. It deals with the way in which financial limits to legal liability are expressed in two United Kingdom Acts in the maritime field and has the object of replacing the now obsolete gold francs as the unit of account by the more modern special drawing right of the International Monetary Fund. It will enable the United Kingdom to ratify two protocols to international conventions, the wider international adoption of which will bring considerable benefit to interests in this country through greater international harmonisation and removal of commercial distortions.
  Although focused on one issue only, the importance of the Bill should not be underestimated. There is very deep concern internationally on the question of the interpretation of gold-based monetary units. The practice as regards conversion into national currency unfortunately varies from country to country. Based on the free market value of gold, a British shipowner or insurer abroad may be faced with liability amounts in some cases up to 12 or even 15 times higher than his foreign counterpart would be subject to in this country. Differences of that order of magnitude represent a very significant commercial disadvantage to our national interests. That is why it is important that the internationally agreed procedures, which we already follow, should be implemented as widely as possible and as quickly as possible. It is for this reason that the United Kingdom wishes to set a lead and thereby encourage others to follow suit. There is growing international awareness of the problem, and it is right that we should help to maintain the momentum.
  It is clear that the Bill is widely accepted as a modest but necessary measure of some importance, and I am grateful for the continued support that it has received.
  10.14 pm
  Mr. Clinton Davis: As the Bill simply follows the Labour Government's policy, I fully support it. It is to be commended on that basis. I recommend it as a precedent which the Minister should follow in the future.
  Question put and agreed to
  Bill accordingly read the Third time and passed, with amendments

  International Organisations Bill [Lords]
  As amended (in the Standing Committee), considered
  10.15 pm
  The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): I beg to move, That the Bill be now read the Third time.
  The Bill's two main objectives are to do away with provisions in the 1968 Act, which discriminate against organisations composed of Commonwealth States, and to afford certain privileges and immunities to international commodity organisations of which the United Kingdom is not a Member.
  10.16 pm
  Mr. Giles Radice: This is a highly uncontroversial occasion. There was no discussion on Second Reading, almost no discussion in Committee and no discussion on Report. In essence, this is a technical Bill, which corrects certain anomalies.
  As the Minister said, our international organisation legislation has in the past discriminated against the Commonwealth. Secondly, our representatives at Western European Union and the Council of Europe have not had the same immunities as we accord to all Members of Parliament during Sessions of Parliament.
  As I understand it, the only exception is clause 2, which enables a limited range of privileges and immunities to be granted to an international commodity organisation of which the United Kingdom is not a member which has an office in this country. What advantages are to be gained in the United Kingdom through such commodity organisations having an office in this country, and what organisations do the Government hope to attract in the future?
  I hope that the Minister will confirm that this is enabling legislation, which will be operative by affirmative order. That means that the House will be able to consider individual Orders in Council and check whether immunities and privileges are being abused.
  10.17 pm
  Mr. Ivan Lawrence: When a Bill is presented which purports to extend immunities to organisations and conferences sponsored by those organisations, and to sub-organisations of those organisations of which Britain is not a member, it is important for a Back Bencher on one side of the House or the other to question what is being done.
  I noticed the speedy way in which my hon. Friend the Minister presented the Bill and the immediate acceptance given to it by the hon. Member for Chester-le-Street (Mr. Radice).
  At a time of international terrorism, when diplomatic immunity has been blatantly seen to have been abused by terrorist organisations from other countries, when attacks on foreign nationals have taken place in London's streets and when British citizens have been threatened indirectly by warfare on our streets, we should consider more closely the diplomatic immunities which exist rather than gaily extend them in a minute and a half to organisations to which they do not apply.
  I have no objection to the broad features of the Bill—
  Mr. Cyril Smith: It is a bit late.
  Mr. Lawrence: It is not my choosing that the Bill is being discussed at this hour, nor is it my choosing that it was introduced in the House of Lords. It is never too late to question what we are doing.
  On the whole, no one can object to reasonable extensions of tax relief or concessions to Commonwealth organisations and commodity markets. Indeed, I do not object to that. Under the Bill representatives of organisations of which Britain is not a member, representatives to conferences convened by such organisations, and members of subordinate bodies of those organisations may be exempted from searches of personal baggage.
  I expect that my hon. Friend the Minister will reassure me that the possibility of inspecting baggage is not precluded. The authorities were not precluded from inspecting the

  897
  baggage of the Libyans who probably brought guns and ammunition into the country by means of a diplomatic bag. On arrival they caused murder and mayhem. On several occasions the House has debated how, without breach of our international obligations, it can more easily search diplomatic bags and ensure that weapons are not brought into the country in personal baggage.
  In the space of a minute and a half we may extend immunity to organisations with which we are not directly connected, and there will be no general power of search. The extension of immunity is limited, because action must be taken through an Order in Council and an affirmative resolution. Such proceedings usually take place at a late hour. Indeed, I have never seen so many Liberal Members in the Chamber at such a late hour. Nevertheless, I should like an assurance that terrorist organisations or any organisations that have the faintest hint of terrorism about them will be subject to more searching scrutiny than appears likely under the provisions of the Bill.
  We should avoid extending immunity to countries which have relations with terrorist organisations. They may abuse the system and bring more terror to our streets. I hope that my hon. Friend will give the assurance for which I have asked. If he does, I shall not attempt to divide the House.
  10.23 pm
  Mr. Hurd: I shall briefly reply to the hon. Member for Chester-le-Street (Mr. Radice) and to my hon. Friend the Member for Burton (Mr. Lawrence). The hon. Member for Chester-le-Street concentrated on clause 2. He asked why the Government wanted commodity organisations to which we do not belong to be able to set up their headquarters in Britain. Traditionally, London has been the centre of the world commodity trade. Seven commodity organisations already serve the interests of producers and consumers in Britain. It is to London's advantage that, as they take shape, similar organisations should be encouraged to settle in London.
  However, competition is involved. In competitions between cities that offer themselves as the sites for headquarters, one element is the ability to grant a certain amount of privilege and immunity. The hon. Gentleman asked for an example. The International Tea Promotion Association comes to mind. It has not yet made a decision. It is a producer organisation and therefore we would not be a member of it. Obviously, there is an advantage to us if it settles and has its headquarters in London.
  Secondly, I confirm that this is an enabling Bill. It does not commit the House or grant privileges or immunities to anyone. It is primary legislation enabling the House, should the House so decide, to grant privileges and immunities to different organisations covered in the Bill. I hope that that answers my hon. Friend the Member for Burton.
  If a proposal were made which contained some form of taint, to which my hon. Friend referred, the House would be quick to find that taint and to express its views. An affirmative order would be required on each occasion. The
  898
  Government have no intention of extending the privileges and immunities except where, in our view, we would be bound to do so by negotiation and agreement to attract an organisation to settle here under clause 2.
  We are as concerned as anybody about any abuse that may occur of the privileges and immunities which have already been granted or which may be granted. As my hon. Friend said, we have discussed this several times in the House. It is correct that we should do so. My hon. Friend referred to the the searching of baggage. The exemption which might—I underline "might"—be granted under clause 2 to any organisation would not preclude authorities from inspecting baggage if there were grounds for presuming that it contained prohibited articles. After recent experiences to which my hon. Friend alluded, that is an area about which we are careful. We are trying to ensure that everyone who possesses privileges and immunities is aware of the strong views that we take. In the light of that assurance, I hope that my hon. Friend will be content that the Bill should receive a Third Reading.
  Question put and agreed to
  Bill accordingly read the Third time and passed, with amendments

Petition

  Unemployment
  10.28 pm
  Mr. Cyril Smith: With your permission, Mr. Speaker, and that of the House, I beg leave to present a petition from the Liberal Party, supported by 271,957 people. It relates to the disastrous level of unemployment and the need to change the Government's policy, which has led to that high unemployment. It demonstrates the anxiety that my party feels and, more importantly, that the public feel for this matter. The petition is signed by people throughout the United Kingdom who are deeply concerned at the way the country is being led.
  With your leave, Mr. Speaker, I shall read the petition.
  It states:
  To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled. The humble petition of the citizens of the United Kingdom sheweth:
  That the policies of Her Majesty's Government, including public spending cuts and higher taxation upon employment, are causing the closure of well-run businesses, and real misery and mass unemployment throughout the United Kingdom;
  That the industrial base and international competitiveness of the country are being destroyed, and young people are being offered no hope for the future.
  Wherefore your Petitioners humbly pray that your Honourable House will reject these policies and as a matter of the greatest urgency cause the Government to reduce interest rates, halt destructive public expenditure cuts, finance investment in new industry, increase training and retraining programmes and improve our international trading position to bring more jobs to the people
  And your Petitioners, as in duty bound, will ever pray, etc.
  To lie upon the Table

  Young Persons (Military Service)
  Motion made and Question proposed, That this House do now adjourn—[Mr. Boscawen.]
  10.30 pm
  Mr. Alexander W. Lyon: It is appropriate that I should be raising the issue of the young unemployed being offered the chance of military training under a proposal by the Secretary of State for Employment immediately after the Liberals have presented their petition on unemployment. Young people are being driven out of work by the Government's policies, and the Government are driving them into military service as the only available alternative.
  The matter arises out of the youth opportunities programme, begun two or three years ago by the Labour Government as a temporary way of providing alternative training and work experience for young people who were thrown out of work in what was thought to be a temporary recession. It is now clear that something more than temporary work experience and training are required.
  In a perceptive analysis of the youth opportunities programme, the organisation Youth Aid says that there must be a new system of youth opportunities programme. It states:
  "The aim of the new YOP must be to provide a range of training and educational opportunities to 16–18 year olds designed to enhance their personal development and increase their future employability. We do not believe that there is any real conflict between these two sets of objectives."
  In a statement, the Secretary of State supported that approach. He said that the Government were to introduce a new system of vocational training for all young persons between the ages of 16 and 18. He said that it was an extremely ambitious programme, and continued:
  "It is nothing less than a new deal for the young unemployed and its success depends on full co-operation from all those concerned, particularly from employers, whose assistance in sponsoring projects is vital."—[Official Report, 21 November 1980; Vol. 994, c. 205.]
  He might well say that that is necessary, because in the league table of training for young people Britain is the bottom in Europe.
  In 1977 in Great Britain, 56 per cent. of young people in the appropriate age group left school and took up full-time general education, full-time vocational education, or apprenticeship. The rest went into either work or unemployment. In Germany the figure was 91 per cent. and in France 81 per cent. In such circumstances, one must ask what we are doing to help our young people to get work experience or training that is appropriate for their future development and to bring us up to the levels of the Germans and the French.
  The proposal to adapt the YOP to a sensible system of providing work experience for all young people is a desirable development. However, the Government have a problem. They propose a YOP system that will give assurance to all children leaving school in July that they will obtain a place on the programme by Christmas if they are still unemployed. For that purpose, the Government are allotting between 400,000 and 440,000 places on the YOP. By July next year, about 600,000 of the 750,000 school leavers are likely to find themselves registering for employment because they will be unable to find a job when they leave school. It is conceivable that by Christmas they will have obtained some employment, but in the present climate and in the prospective climate for next year that is very unlikely. The shortfall might be between 100,000
  900
  and 150,000 places on the projected programme. In those circumstances, the Government have turned to the only device that Tories can ever anticipate—"Give them a chance to do military training."
  When I first aired this proposal in the newspapers in February I was told by the Secretary of State for Employment:
  "No proposal on these lines"——
  namely, that young people on the youth opportunities programme should receive some military training in uniform——
  "has been submitted to the Manpower Services Commission, which administers the youth opportunities programme. However, the Ministry of Defence, which has been a sponsor under YOP since 1978, is considering what further help it might offer unemployed young people and we are in discussion with it about this."—[Official Report, 4 February 1981; Vol. 998, col. 138.]
  The Prime Minister, on 5 February, in response to a supplementary question, said:
  "With regard to his point about opportunities being made available by the Ministry of Defence, such opportunities would, of course, have to comply fully with the youth opportunities programme. If they are able to do so, it would seem reasonable to offer young people that extra chance to work there."—[Official Report, 5 February 1981; Vol. 998, col. 401.]
  There are already some projects on military establishments where young people can get work experience and training in civilian occupations as civilians. It is quite a different matter to say that they should be recruited into the Armed Forces and that they should then be asked to be subject to the normal military discipline. Even as late as 17 March 1981, the Under-Secretary of State for Defence for the Army wrote to Youth Aid saying:
  "Should we decide to offer places to unemployed young people on training courses given to Service men it would be necessary to require the extra trainees to wear uniform to ensure that they were treated no differently from the majority of people on the course. This would allow us to offer access to a greater range of training opportunities, and would simplify the basis on which the Ministry of Defence could offer help. Of course, all places offered under the YOP scheme have to be confirmed as suitable by the MSC and we are discussing with them the type of training we might offer."
  All those answers are untrue. The proposal that has been put to the Manpower Services Commission is that there should be about 1,000 places for young men aged between 17 and 19 who would serve for about six months. The volunteer trainees would spend a period of about six months with the colours, subject to normal military discipline, and would be selected to meet Service standards of physical fitness, character and other attributes. In itself, that requirement is against the proposals in the YOP. It restricts the kind of people who could take part in this kind of training.
  Two types of training with the Army are envisaged. The first is skill-oriented training directly relevant to future possible civilian employment, which would be provided by the technical arms and logistics corps. It would be available to only 300 of the 1,000. In some senses, it may be argued that the 300 would be receiving training that would be relevant to some civilian occupation when they left the military course. It could not be said for the remaining 700 entrants. For them, the second form of training would be general military training. Spare recruit training capacity would be used, and the volunteer trainees would join Regular recruit intakes on GMT courses scheduled for 1981–82.

  901
  The training would last for a maximum of about 20 weeks and the volunteer trainees would then be posted to Service units at home and in the BAOR for a further short period of between six and 12 weeks to complete their six months' opportunity. During that period they would be employed in the same way as their Regular counterparts. That seven-tenths of the 1,000 intake would be square-bashing. After that, they would be put on normal military duties.
  That is not what the YOP was ever intended for, nor is it consistent with the philosophy of the existing YOP. Still less is it consistent with the philosophy of the new YOP that the Seretary of State outlined in his November statement. It is intolerable that such a proposal was put forward. The outcome of the proposal is that £2 million will be used to provide those 1,000 places. The £2 million could have provided 2,000 civilian places on the YOP, because the cost of a place on this scheme will be twice as much as the cost of a place on a YOP scheme.
  Mr. Frank Allaun: Am I right in saying that the people serving in the 1,000 force will receive £23·50 a week, plus food, whereas Regulars will receive £72 a week? In many cases, they will be asked to do the same work, thus undercutting their pay—in fact, scabbing.
  Mr. Lyon: That is absolutely true, the emphasis being on the fact that they will be doing the same work.
  The YOP was never intended for that kind of training. It could be argued that to take £2 million out of the Ministry of Defence budget and use it for this purpose was at any rate within the ethos of the Ministry of Defence allocation. But to take it out of the YOP means that 2,000 young people are being denied the chance of getting relevant civilian training and work experience. It is quite unacceptable on that basis alone.
  It is unacceptable because the links with the local labour markets will be weakened, especially during service overseas. Moreover, it will be impractical to undertake a serious job search or for advice and counselling to be provided by the careers service. Kids who come back from BAOR will be dropped into the unemployment pool with no job training or experience to equip them to find a job. At the moment, kids who come off YOP have that advantage, and a substantial proportion of them manage to find jobs.
  It is also relevant that most of the training provided will be specific to Army needs. My hon. Friend the Member for Salford, East (Mr. Allaun) says that those who serve would get only £23·50 compared with the higher sum for Regular recruits. There is a further element; they would be getting £23·50, but if they were not on the YOP and not in military service they would be getting supplementary benefit, which is about £8 less than the YOP figure. That is a substantial proportion.
  If a young man is faced with the alternative of either going into military service because there are no places on the YOP or staying on supplementary benefit, which will he choose? To say that he is then a volunteer for military service is a misnomer. It is not voluntary military service; it is forcing kids into the Army because they are being forced out of jobs, because there is not the economic atmosphere in which there are jobs for all our young
  902
  people and, moreover, because the system of work-saving and experience promised by the Secretary of State is not available.
  In my judgment, the scheme is nonsense and should be dropped. I hope that the Minister will say that he intends to go no further with it. The Secretary of State said today that he was waiting for the response of the MSC. The MSC is wholly opposed to it—and not only the MSC, but all the participating members of the special programmes board, including the CBI. Youth organisations are opposed to the proposal. I have had letters from different youth organisations all over the country that are opposed to it. If the proposal is forced through, it will be forced through in the teeth of opposition not only from the official Opposition but from all interested bodies throughout Britain. I hope that the Minister will tell us tonight that he will drop the proposal.
  10.46 pm
  The Under-Secretary of State for Employment (Mr. Peter Morrison): I am grateful to the hon. Member for York (Mr. Lyon) for raising this important matter. Although the House is rather sparsely attended, the matter is of great concern throughout the country. As the hon. Gentleman rightly pointed out, it is a question of what jobs and opportunities will be provided for school leavers during the next year.
  I am glad that the hon. Member for Salford, East (Mr. Allaun) is in the Chamber I listened attentively to the question that he put to my right hon. Friend the Secretary of State during Question Time this afternoon. The hon. Member is a prominent member of his party. He is a member of the Labour Party national executive committee, and when he speaks he does so with great authority on behalf of the Labour Party.
  The hon. Member for York knows that the youth opportunities programme is voluntary. It is not compulsory in any way, shape or form. For the hon. Member and his hon. Friends to suggest that we are forcing young men into the Army is wrong. Any man or woman who has joined the youth opportunities programme has done so because he or she decided so to do. To suggest that we are forcing people into the Armed Forces could not be further from the truth. The hon. Gentleman pointed out that the pay for someone on the youth opportunities programme was £23·50. That is correct. But these people will join the Armed Forces only if they are prepared to take that pay. It is similar to the pay offered in other programmes in industry generally.
  My right hon. Friend the Secretary of State and I do not want the youth opportunities programme—regardless of what opportunity is available—to be anything other than voluntary. We shall adhere to that. We do not want any element of compulsion. As the hon. Gentleman said, it is an expanding programme. This year, 320,000 youngsters will take advantage of what the Government are offering on a voluntary basis. By the end of the year, 440,000 youngsters will be involved in the programme. The hon. Gentleman said that there would be a shortfall of 150,000 places on the target of 440,000. I do not know how he arrived at that figure. I accept that the target is ambitious, but the MSC is doing everything in its power to achieve it—in the way that it has done everything in its power to achieve this year's target—which it will do, give or take a few thousand.

  903
  I hope that both the hon. Member for York and the hon. Member for Salford, East agree that the important point about any programme under the youth opportunities scheme is that it should be of lasting good to the participants. As a result of taking advantage of the youth opportunities programme, school leavers and 17 and 18-year-olds should be more likely to obtain a lasting job. I trust that that is common ground, although I doubt it, judging from the recent words of the hon. Member.
  I assure the hon. Member that no decision has yet been taken. As he rightly said, the MSC has still to give its views on the proposal put forward by my right hon. Friend the Secretary of State. However, I am sure that the MSC, because it is a highly responsible body which wants to do the best for the young school leaver, will want to take into account the views of employers—that is to say, the potential employers of young men who have come out of schemes. It will want to think carefully about what those employers will be looking for in 17 and 18-year-olds. That is the best way in which it can help them. It will also want to take carefully into account, as I am sure it is doing, the views of the young people.
  Mr. Alexander W. Lyon: As the CBI representatives are opposed to the scheme, will the Government also listen to the views of those employers and drop the scheme?
  Mr. Morrison: The hon. Gentleman appears to know more than I do. I do not know whether the CBI representatives are opposed. The hon Member is apparently all-knowledgeable about things about which I am not all-knowledgeable. The CBI is not the eventual employer, but the eventual employers are small business men throughout the country and big companies such as Marks and Spencer and General Electric. Those people will pay and employ the young people who come out of the youth opportunites programme. I am more concerned about those people, for the sake of the young people.
  Not only those people are important; so are the young people themselves. The hon. Member said that every youth organisation he had talked to was opposed to the proposal. That may or may not be so. However, I take more interest in what the young people want. If the school leavers want to join such a scheme, they should have the opportunity so to do.
  We have a highly professional Army, Navy and Air Force, which, for understandable reasons, do not want to be too bothered with amateurs. It is admirable that they are prepared to play their part because of the results of the recession. They are prepared to say that there are school leavers in difficulies, who cannot find jobs, and that they are prepared to do something about it.
  The hon. Member referred to the proposals put to the MSC. I am not sure where he obtained that information. I do not know whether the proposals were published, but such things happen.
  I shall reply to the points made by the hon. Member. Because recruitment in the Armed Services has been restricted, there are under-used training facilities which will be of great interest and use in the long term, were the young people to go on such a scheme. Were such a scheme to be approved by the MSC, it would be only a pilot
  904
  scheme and it would—I concur with the hon. Gentleman—include only 1,000 young men between the ages of 17 and 19. That would be for the year 1981–82.
  The third thing—entirely endorsing what the hon. Gentleman was saying—is that two types of training would be envisaged. First, there would be the skill-oriented training, which, I hope the hon. Gentleman will agree, regardless of the military side, would be of great value to these young people in terms of their civilian future, and then there would be the general military training.
  I agree entirely with the hon. Gentleman—he did not actually say this, but he implied it—that every applicant who was involved in what I have described as the general military training should be told before he decided to go on such a programme exactly what it involved. It would be quite wrong if he were not told, in terms of not anticipating what could happen. I also agree that it would be wrong if a volunteer—and he would be a volunteer in these circumstances—were not able to terminate his service with the Army, Navy, Air Force, or whatever it was. Certainly, it is right that participants in a voluntary scheme should be able to terminate.
  Mr. Frank Allaun: The new scheme will clearly involve a lot of trouble, new ideas and arrangements. Does the Minister feel that all this trouble will be worth while if the scheme is limited to what he himself says is the very small number of 1,000 men? In other words, I am asking the hon. Gentleman whether this is not really a trial which, if it comes off, will be extended to thousands and thousands of young men who will be under pressure to do this. I can tell him that in the Manchester area no military recruitment officers are allowed in the schools.
  Mr. Morrison: I think that it would be totally worth while. If 1,000 young men aged 16,17 or 18 are to be given an opportunity to do something as a result of which they will gain a proper job because they have learned certain skills, of course it is worth while, even if it is only a pilot scheme; and perhaps it will grow, on a voluntary basis. It certainly is worth while to help young men to find their feet in the world, and I have no doubt whatever that the vast majority of the people in the country feel exactly the same as I do.
  I return to the point about employers, because employers are the key if the young men are to find their feet and find a job. I know that it may sound old-fashioned or out of date, but I believe that what I am about to say is new-fashioned. What employers look for is self-reliance, the ability to work in a team, alertness and punctuality. The hon. Member for York smiles, but it is true. If only more people who are involved in education and training understood that they would be able to do a far greater service to the school leavers and, indeed, to schoolchildren. It is unfair not to tell them what life is all about. It is old-fashioned, perhaps, but in my book it is quite new-fashioned.
  I am grateful to the hon. Member for York for raising this matter. It is a matter of political divide which I quite understand. The hon. Member and his hon. Friend the Member for Salford, East and I do not agree on it, but that is why, unusually in an Adjournment debate, we can have an interesting discussion. The country will decide, no doubt, who is right and who is wrong.

  905
  I fully agree with the Opposition, in that I would be the first person to say that it should never be compulsory but should be on a voluntary basis—and it is on a voluntary basis. Surely it is right to give the opportunity to young men to help themselves. One of the Opposition Front Bench spokesmen earlier today said that he believed that the youth opportunities scheme was a good scheme and was right.
  906
  Opposition Members want to help young men as much as I do. I believe that this proposal could help young men in a quite significant way.
  Question put and agreed to
  Adjourned accordingly at one minute to Eleven o'clock

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Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—read by the Lord Bishop of Southwell
The LORD FOLEY—Took the Oath.

Namibia: Independence Arrangements
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a statement on the progress of arrangements for the independence of Namibia (South West Africa).
The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne): My Lords, all concerned in the negotiations, including the new administration in the United States, are reviewing their approach in the light of the setback to hopes of an early settlement at the Geneva meeting in January. We hope that negotiations will resume soon but it is too early to predict when or how it may be possible to make progress.
Lord Brockway: Yes, my Lords, but is it not the case that there has been no progress since the abortive Geneva Conference owing to the intransigence of South Africa in relying on a new attitude by President Reagan? Is it not the case that South Africa is now using its military strength to increase its occupation, even going deep into Angola? Will the Minister answer this: Are the United Kingdom and the other Western powers who were parties to the settlement balancing the pro-South African visitors toWashington by urging unitedly that President Reagan should end the illegal South African occupation of Namibia?
Lord Trefgarne: My Lords, while the United States will have an important role to play in this matter in due course—that is, when they have determined their policy—the fact is that the principal organisation involved in reaching a settlement will be the United Nations.
Lord Barnby: My Lords, would the Minister not agree that impartiality is the essence of the exercise and that, while the United Nations are now funding SWAPO and have resolved that SWAPO alone is the authentic voice of the people of South-West Africa, progress must necessarily be slow and difficult for all those participating, and particularly for the Republic of South Africa? Secondly, can he comment on the reports in the press that arms for SWAPO are of Russian origin? Are they paid for by the United Nations, or are they given freely to SWAPO by Russia?
Lord Trefgarne: My Lords, I am afraid I cannot comment on the press reports relating to the sources
1052
of arms which are available to SWAPO, but, on the question of the United Nations' partiality, it is true that some of the resolutions and other statements that have come from the General Assembly have been less than helpful in this matter. On the other hand, the policy with regard to Namibia is the one determined by the Security Council and administered impartially by the Secretary-General.
Lord Goronwy-Roberts: My Lords, would the Minister agree that the successful outcome of the negotiations which resulted in the settlement in Rhodesia provides a very hopeful precedent for the way in which the United Nations and we in the West, and everybody else concerned, can deal with the Namibian situation? Will he in particular remind his right honourable and noble friend the Foreign Secretary that one of the major features of the Lancaster House negotiations was that everybody concerned in the future of Rhodesia within Rhodesia and in countries contiguous to Rhodesia were consulted and took part in fashioning the very effective settlement?—in which case it would seem very helpful for Her Majesty's Government to speak firmly in Pretoria and with clarity in Washington.
Lord Trefgarne: My Lords, it is right to say that the settlement in Rhodesia is a source of hope that a settlement can also be achieved in Namibia. But I would warn against drawing too close a parallel between the two situations, for I doubt very much whether the approach which was successful in the case of the Rhodesian situation would be equally fruitful with regard to Namibia.
Lord Gladwyn: My Lords, is it the fact that the United States Government have recognised the revolutionary movement known as Unita in Angola? If so, is that not likely to have a certain effect on Ovamboland and on events in North-West Namibia?
Lord Trefgarne: My Lords, I do not think it is true to say that the United States have recognised Unita as such. There was the repeal of the Clark amendment which may, it seems, pave the way for certain assistance to be granted to Unita if the American Government so decide; but this is a matter for the American Government and the American Congress. We have full diplomatic relations with the Angolan Government and do not recognise or support any opposition movement in Angola.
The Lord Bishop of Southwell: My Lords, will the Government, as we are one of the five United Nations contact countries, give an assurance that they will not agree to any further delays in a cease-fire and in the implementation of the United Nations plans for Namibian independence? Will they further give an undertaking that they will not agree to any electoral reforms which do not recognise the rights of SWAPO to seek the support of the Namibian people?
Lord Trefgarne: My Lords, on the first point put by the right reverend Prelate, the question of the way forward in the Namibian context, it is not for the United Kingdom alone to decide whether delay occurs

1053
or does not occur. It is quite properly the case that the Five—the contact group as they are called—move forward with a degree of consensus, and we are seeking to achieve that. On the second point, that of electoral arrangements which will in due course come to pass in Namibia, I do not wish to go further than to say that our policy is to allow all the people of Namibia to express their views at the due time.
Lord Paget of Northampton: My Lords, since the real issue in Namibia seems to be whether there is going to be Cuban control or South African control, have Her Majesty's Government applied their mind at all to which of those two real alternatives they prefer?
Lord Trefgarne: My Lords, not for the first time the noble Lord has over-simplified the matter.
Lord Hatch of Lusby: My Lords, is the noble Lord the Minister aware that there is a very widespread feeling in Southern Africa that the South African Government are deliberately postponing any decision about the cease-fire until they are able to destroy the forces of SWAPO, and that if this were so it would ignite an inferno which would sweep right across Southern Africa? Do Her Majesty's Government condemn the aggression which the South African forces are daily carrying out within the boundaries of Angola?
Lord Trefgarne: My Lords, we condemn all violence from wherever it may come, particularly in this context. However, the South Africans are not alone in this matter.
Lord Pargiter: My Lords, may I ask whether, whatever political settlement is arrived at, it is likely that none will be agreed by South Africa unless her commercial interests are well looked after, and that these commercial interests of South Africa fit in very well with British commercial interests?
Lord Trefgarne: My Lords, many supplementary questions seek to ascribe to the South Africans one motive or another. I can only answer for the motives of the British Government in this matter. Our motive is to seek a settlement in this area as soon as may be.
Lord Brockway: My Lords, does the Minister not agree that when there is fear of SWAPO's ideology we should bear in mind the case of Zimbabwe where there was similar fear of Mugabe's ideology? Is it not the case that failure of the West to act will increase the influence of the Soviet Union and help to determine the character of the independent Namibia?
Lord Trefgarne: My Lords, the question of the ideology of one party or another in Namibia will in due course be a matter for the Namibian people to decide, and that is the purpose of our policy.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, I think it may be for the convenience of your Lordships if we move on to the next Question.

Electoral Law: British Citizens Abroad
2.47 p.m.
Baroness Faithfull: 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 review of the electoral laws of this country has been completed, and whether British citizens living abroad are to be granted voting rights.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): My Lords, my right honourable friend the Home Secretary has now completed his review of electoral law and procedures and hopes to make a Statement about his conclusions before long. This will deal with, among other things, the proposal that United Kingdom citizens resident abroad should be able to vote at elections in this country.
Baroness Faithfull: My Lords, may I thank the noble Lord for that reply. I am sure that the citizens living abroad will be grateful for it. May I ask the Minister whether, during his review, it was found that the number of United Kingdom citizens living abroad for a short or long spell has greatly increased and therefore this matter is of double the importance it was before?
Lord Belstead: My Lords, I must make it clear to my noble friend that the Government are sympathetic to the case for permitting United Kingdom citizens resident abroad to vote at elections in this country, particularly elections to the European Parliament. But there are issues of principle as well as a large number of practical problems which must be resolved before such arrangements can be introduced. So far as the numbers question is concerned, we must await the Statement which my right honourable friend hopes to make.
Lord Wigoder: My Lords, did the review deal with the question of whether we might change to a sensible electoral system?
Lord Belstead: My Lords, the review did not deal with the question in the way that the noble Lord has put it.
Lord Wells-Pestell: My Lords, may I ask the Minister whether he is suggesting that voting rights will be extended to those British subjects who have made it perfectly clear that they have no intention of returning to this country?
Lord Belstead: This, my Lords, is of course one of the matters of principle which would have to be considered seriously.
Lord Ferrier: My Lords, would my noble friend agree that this point raised by my noble friend is one of particular significance to Scottish people? Would he agree that it is probable that there are more guidgaun Scottish men and women living and working abroad than there are resident in Scotland?
Lord Belstead: My Lords, I am sure that this is a point which will be well taken by my right honourable friend the Home Secretary.
Lord Elwyn-Jones: My Lords, will the question whether British citizens living abroad are paying taxes to this country be a relevant consideration?
Lord Belstead: My Lords, that again would be among the many considerations to be taken into account.
Viscount St. Davids: My Lords, may I ask the noble Lord a genuine question as a matter of information? What other nations, particularly European nations, go in for this practice?
Lord Belstead: My Lords, may I give the noble Viscount a genuine answer? I do not know the answer to that one.

University Places: Armed Services
2.51 p.m.
Lord Gisborough: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many university places were sponsored by the armed services in 1980.
Viscount Long: My Lords, in 1980 the Armed Forces provided financial support for a total of 1,320 service officers, cadets and bursary-holders who were undertaking first degree or postgraduate courses at universities. This figure excludes Open University courses.
Lord Gisborough: My Lords, I thank the noble Viscount for that Answer. Could he say what was the cost of these courses, and could he also tell us the system of pay and allowances for those who attended them?
Viscount Long: My Lords, the figure is about £4,000 per annum per head on average. That figure excludes university fees paid directly by the Ministry of Defence to the universities. As to the numbers who fall by the wayside, that is difficult to say; but the majority of the students stay in the services afterwards.
Lord Peart: My Lords, I hope the noble Viscount will accept that this scheme is really a successful one, and that it is important that many of our future officers should be trained in mathematics and other matters which are essential in gunnery, for example. This applies also to the Royal Navy and the Royal Air Force; and so anyattempt to have criticism would be disastrous.
Viscount Long: My Lords, I am grateful to the noble Lord for what he has just said; and, of course, the scheme is also important for recruitment into the services. As he said, it is very important for us to have the finest brains in all our services.

Pension Age for Men: Cost of Reduction
2.53 p.m.
Lord Winstanley: 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 would be the cost to public funds of a reduction of national insurance pension age for men to 63 years, if allowance is made for consequential job vacancies being filled by men or women who are at present unemployed.
Lord Cullen of Ashbourne: My Lords, if the pension age for men were reduced to 63, it is estimated that the net cost to Government funds for a full year, at November 1980 rates, would be in the order of £600 million. This estimate takes account of the savings resulting from consequential vacancies expected to be filled by people on the unemployment register.
Lord Winstanley: My Lords, while thanking the noble Lord for that Answer, so far as it goes, may I ask whether he would not agree that if we have to plan for major unemployment in the future it is surely very much better for all those concerned, and for society as a whole, that these enforced periods of leisure should come at the end of the working life rather than at the beginning?
Lord Cullen of Ashbourne: Yes, my Lords, but one cannot leave the financial aspect out of it altogether. The calculation of £600 million was based on the pattern of employment remaining the same as it is now, with men between 65 and 70, and two-thirds of the vacancies being taken up by those on the unemployment register. That is because all vacancies will not be taken up, nor will there always be qualified people available in the areas concerned to take them up.
Lord Derwent: My Lords, may I ask what the saving would be if the retirement age for ladies were raised to 63?
Lord Cullen of Ashbourne: My Lords, I could not actually tell you that, but I could say that if we made the pensionable age for both men and women 64¼ it would even itself out completely. But it might be rather difficult to sell the idea to women, who have been expecting to receive a pension at the age of 60.
Lord Shinwell: My Lords, is the Minister saying whether the proposition embodied in this Question means that, if I rendered myself unemployed, I would be entitled to all the money that emerges between 63 years of age and 96?
Lord Cullen of Ashbourne: My Lords, nobody deserves it more than the noble Lord.
Lord Shinwell: My Lords, then could I pursue the matter now that I understand that I deserve it? Is the Minister aware that I am not the only one concerned? I see around me and opposite me others here who are also concerned. There is a vast difference

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between 63 years of age and over 90. Obviously the Government owe some of us an awful lot of money!
Lord Cullen of Ashbourne: My Lords, things have changed a little in pension arrangements since the days when the noble Lord started work.
Lord Whaddon: My Lords, can the noble Lord clarify whether the figure of £600 million is calculated on the assumption that all the 63–65 year-old band would retire, or have any calculations been made as to the proportions of those who would retire and those who might wish to remain at work?
Lord Cullen of Ashbourne: My Lords, I tried to explain that. We are assuming that for people between 63 and 68 the pattern would be the same as it is now for those between 65 and 70.
Lord Avebury: My Lords, taking into account the saving in unemployment benefit that would have to be paid, has the calculation of £600 million also taken into consideration the income tax that will be paid by the young people who will find work as a result of this reduction and also of the indirect taxation such as VAT that will be paid on the additional purchasing power that would be generated?
Lord Cullen of Ashbourne: My Lords, I think all these matters have been taken into account.
Lord Kilmarnock: My Lords, arising out of the concern for the unemployed of the noble Lord, Lord Winstanley, would the Government consider raising the disregard figure which an unemployed person may earn while drawing unemployment benefits, particularly if they are thinking of taxing these benefits? May I further ask the noble Lord whether the Government would consider a two-tier unemployment benefit, allowing those who opt for the lower tier to earn on the lines permitted to pensioners such as the noble Lord, Lord Shinwell?
Lord Cullen of Ashbourne: My Lords, if I may, I will write to the noble Lord on those points.
Lord Wallace of Coslany: My Lords, would the Minister not agree that a lot of men at 65 cannot afford to retire at the present time, due to the increasing cost of living and the miserly approach of the Government?
Lord Cullen of Ashbourne: Or any other Government, I imagine one might say, my Lords. I am not sure that this is really a point I can go very far with.
Lord Leatherland: My Lords, would it not be cheaper and more beneficial than the suggestion made in the Question if an increase in pension were granted to those over 80 years of age? I am afraid I must declare an interest.
Lord Cullen of Ashbourne: My Lords, I think the noble Lord and his noble friend Lord Shinwell have a very similar view on this matter.
Lord Winstanley: My Lords, if jobs are to continue to be in very short supply, is it not high time that we started dividing such work as is available a little bit more fairly throughout the community as a whole?
Lord Cullen of Ashbourne: My Lords, I think I must make clear that it is very difficult to make any quick changes in this matter not only as far as the individual is concerned but also regarding the state and occupational pension schemes. In due course the earnings-related addition in the pensions will build up and then it will be very much easier to do these changes when people will be able to afford to retire on a slightly reduced pension.

Prayer Book Protection Bill [H.L.]
Lord Sudeley: My Lords, I beg to introduce a Bill to provide for parishioners of any parish to require certain forms of service to be used in the parish. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Sudeley.)
On Question, Bill read 1a, and to be printed.

Lloyds Bank Bill
Read 2a, and committed to an Unopposed Bill Committee.
National Film Finance Corporation Bill [H.L.]
Read 3a, and passed, and sent to the Commons.
Film Levy Finance Bill [H.L.]
Read 3a, and passed, and sent to the Commons.

Matrimonial Homes and Property Bill [H.L.]
Lord Simon of Glaisdale: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Lord Simon of Glaisdale.)
On Question, Motion agreed to.

Merseyside Development Corporation (Area and Constitution) Order 1980
3.1 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin) rose to move,

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That the order laid before the House on 27th November 1980 be approved.
The noble Lord said: My Lords, this order establishes and defines the area of the Merseyside Urban Development Corporation, which the Government propose to set up under the powers contained in Part XVI of the Local Government, Planning and Land Act 1980. Section 134 of that Act enables the Secretary of State by order to designate an area as an urban development area if, in his opinion, it is in the national interest so to do. Section 135 empowers him by order to establish a corporation for the purposes of regenerating the area. This order sets up the Merseyside Development Corporation, with the task of securing the regeneration of 865 acres of land, largely comprising discarded and under-used dock areas in Liverpool, Sefton and Wirral, as delineated on the accompanying map.
As I explained to your Lordships' House during the passage of the 1980 Bill, the Government consider that the scale of the problems in the London and Merseyside docklands requires the establishment of new bodies with sufficient resources and powers, with the specific objective of regenerating their areas, working at all times in close consultation with the local authorities, the port authority and other appropriate local interests.
Following the laying of the order in late November, it was considered and judged hybrid. This meant that petitions could be made against the order by any interested parties. Only one petition was submitted, but was shortly afterwards withdrawn. I shall deal briefly with the corporation and its powers, and then with the area.
The board at present exists in "shadow" form, comprising a chairman, Mr. Leslie Young; a deputy chairman, Sir Kenneth Thompson; and the chief executive, Mr. Basil Bean. The purpose of this arrangement, which is well precedented, was to enable some progress to be made in the start-up period while the formal procedures were in train. If Parliament approves the order, the Secretary of State proposes to confirm the appointments of Mr. Young, Sir Kenneth Thompson and Mr. Bean to the board. Other appointments to the board will be made shortly and will include those, taking the words of paragraph 2 of Schedule 26 to the Act, "having special knowledge of the locality". The corporation will be tightly staffed. It will not be an inflated bureaucracy, but will buy in expertise, including using local firms, and will work with and use the services of the local authorities.
Part XVI of the Act provides for a wide range of specific and general powers to be exercised by the corporation, in order for it to carry out the substantial task of regenerating the designated area by bringing land and buildings into effective use, encouraging development, upgrading the environment and stimulating private investment. The order makes no exclusions from the range of functions which the Act allows urban development corporations to exercise—with one caveat. There is no current intention to bring forward orders that would enable the corporation to exercise either building control functions or the powers of a housing authority. The corporation will still be able, however, to secure housing provision under its general powers. It is the Government's intention that the full range of planning authority
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powers, which the Act permits to be conferred, should be exercised by the corporation. My right honourable friend accordingly intends to lay a further order (subject to annulment) before Parliament to secure this, as well as orders proposing the vesting of certain publicly-owned land in the corporation.
My right honourable friend announced on 9th February that £82 million would be available to the London and Merseyside UDCs in 1981–82. The estimates published last week show a level of grant provision for the Merseyside Development Corporation of £16.5 million. This sum is, of course, additional to the £17 million that has been allocated to the Liverpool partnership for 1981–82, and the £2 million-plus that Wirral, as an inner city programme authority, can also expect to receive under the urban programme. However, the possible allocation of further sums to the new development coporation in 1981–82 will be considered in the course of the year.
Provision for future years has yet to be decided but will, without doubt, reflect the high priority which the Government attach to the development corporation's task. Inevitably, in the MDC's first year of operation, much of the expenditure will be for land acquisition and initial reclamation work. But provision is also being made for environmental schemes, expenditure on roads, payments to local authorities and statutory undertakers and grants and loans under the Inner Urban Areas Act.
As to the corporation's area, four main factors have determined what that area should be: first, where the regeneration task of the corporation could best be brought to bear; secondly, the need to avoid prejudicing the operational requirements of the port; thirdly, areas where the provision of port-related industry by the corporation could best assist the needs of the port; and, fourthly, the need not to cut across the existing initiatives of local authorities in, for example, the declared industrial improvement areas. Accordingly, the urban development area comprises three tightly-defined parcels of land. Most of the land is in various public sector ownerships. About 75 per cent. of the total is owned by the Mersey Docks and Harbour Company, and much of the rest is owned by British Rail. Most of the land has passed out of its original port or port-related use and is in poor condition, decaying and unattractive, with poor access and infrastructure. Nevertheless, there are areas with thriving economic activity, often comprising small firms which have moved in, taking advantage of the low rents offered, but with poor conditions and little security of tenure.
To look at the areas in turn, in Liverpool the South Docks finally passed out of operational use in the early 1970s. Open to the tide, they have filled with polluted silt. But in spite of the dereliction, the area has its assets and it is here, particularly, that many of the old sheds now house small firms. Through dock reclamation and selective clearance, sites can be created in order to attract private investment. Here, too, refurbishment, good estate management, improved access, infrastructure and environment will be required, both to sustain and to enhance the existing firms, and also to attract new ones.
The adjoining riverside area to the south includes a partly-cleared area which was used for petroleum

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storage, and there is a major opportunity here to improve the environment by landscaping, and for some residential development. In the Bootle area of Sefton, the modern docks continue in active use but back-up land nearby for port-related use is needed. The area designated by the order presents opportunities for site assembly and marketing in support of the port. On the other side of the Mersey estuary, a further dock system lies between Birkenhead and Wallasey. Access is poor and major reclamation works are needed. Around the Woodside/Morpeth dock areas, there are further old buildings housing small firms and some operational port uses. The area presents considerable opportunities, but there is need to assemble land, reclaim it, provide infrastructure and better access.
In all the three areas, the single-minded approach of the corporation, combining development and planning powers, will be needed to make improvements, but it is well understood that there must be maximum cooperation with existing tenants and with the local authorities, as well as of course with the Mersey Docks and Harbour Company.
The shadow organisation that has been preparing for the establishment of the corporation has done a great deal of work to ensure that the corporation can be effective as quickly as possible. Its development strategy is largely complete, as is the preparation of its proposed initial projects. Numerous consultations have already taken place with the local authorities and with existing occupiers within the area, and also with the existing landowners, in order to decide what land should be acquired initially by the corporation.
The renewal of the dockland areas of Merseyside presents immense tasks and challenges. But they represent also a great opportunity for enterprise to flourish in the heart of one of our great cities. I am confident that the new, single-minded development corporation, with the powers that I have indicated, and with the substantial Exchequer finance which we are making available, will be able to make a major contribution to the badly needed regeneration and additional job provision on Merseyside. With that in mind, I commend this order to the House.
Moved, That the order laid before the House on 27th November 1980 be approved.—(Lord Bellwin.)
3.12 p.m.
Baroness Birk: My Lords, first I should like to thank the Minister for his very clear and brief exposition of the order. We should be quite clear at this stage that there is a great difference between this order and the London Docklands Order which at the moment is being considered by a committee of this House. So anything I say about the order—we on these Benches are not objecting to it—does not in any way apply to what might evolve during the discussions on the London Docklands Order.
So far as Merseyside is concerned, it has been accepted by the area itself and by the Members of Parliament who represent the constituencies in that area that there should be a UDC. Nevertheless, we recall that there was great discussion about it during the passage of the last Local Government Act. We on these Benches opposed in principle the setting up of UDCs because we felt that the local authorities
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themselves would be able to cope. But that is water under the legislative bridge. We are now dealing with this order.
If the object of the exercise—the Minister stressed this very strongly and very well—is to stimulate growth in Liverpool, it is recognised that the most basic industries are the docks industry and the dock-related industries. The Mersey Docks and Harbour Company now has debts of between £16 million and £20 million. Any receipts from the sale of those assets will have to go towards the repayment of debts to the stockholders. To start with, therefore, it looks as though the initial £16 million will be taken up in the repayment of debts to the stockholders of that company. Not only will they lose their capital assets; they will also lose the revenue. At the moment something like £½ million is coming in from the rents of buildings, houses and other property owned by the company.
Whatever funding arrangements are made through the development corporation, the Mersey Docks and Harbour Company should not be disadvantaged. It should be helped to become viable. Half of the surplus land which it is selling off is in an incredibly bad state. Once the land is cleared, there will be a need for considerable infrastructure: drainage, sewerage, access, clearing of buildings, land put into good order and areas of water filled in. The betterment of the community, as I understand it, is what this is all about, but it should not be done at the expense of the dock company itself. If the legal responsibility which was imposed on the dock company in 1971 when it ceased to be financially viable were removed, the Government could and should write off the stockholders' debt. The Government should pay that debt themselves and not leave it hanging around Liverpool's neck.
In Liverpool, the biggest industries are the Ford motorworks and food products. In Liverpool also the level of unemployment is extraordinarily high. There is an unemployment rate in the Liverpool area of 18 per cent., which includes the "journey to work" community. And unemployment is as high as 30 per cent. in the inner areas. Therefore, it is absolutely essential to create a new employment image. The old image has gone. It is no good looking for palliatives. Something more fundamental is needed. When the last Government were in power we were in the process of redeploying various Civil Service departments, but this was axed by the present Government. The PSA had gone very far towards redeveloping the Exchange Station site, but this was abandoned by the present Government. This has been costly in terms of jobs and financial and economic sustenance for Liverpool. Therefore, Liverpool has already been put into a worse economic state than it needed to be in.
Turning to the structure of the board, the Minister spoke of the shadow board which exists at the moment. Its membership is extremely important. It is very important that membership of the board should not be considered as a reward for local "worthies". It is essential that there should be 11 dynamic people on the board and that membership should not be regarded as an honour or as a reward. I do not know whether the Minister can help me, but at the moment I understand that there are very strong and fairly authoritative rumours that each of the local authorities

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will have one member on the board. Those local authorities are Liverpool City Council, Sefton, Wirral and Merseyside County Council. The deputy chairman, Sir Kenneth Thompson, was the chairman of the Merseyside County Council.
If this is so, it means that there will be a very grave imbalance in representation on the board. To take for a moment Liverpool City Council, which has 60 per cent. of the proposed land within its area, for it to have only one member on the board would seem to be rather ill-balanced. It would also mean that there would not be one Labour representative on the board. There will be three Conservative representatives from Wirral, Sefton and the county council. This does not include the deputy chairman who was the Conservative chairman of the county council. Incidentally, at that time he was very much against the setting up of the UDC. Liverpool City Council will be represented by a Liberal because the Liberals have control of the chairmanships, although the Labour Party on the council has one vote more. I do not know whether the Minister can help us over that point.
I agree with the Minister that it is important that the links with the local authorities must be very close and that there should be very close, practical cooperation as well. It is essential that duplication should be avoided. The Minister stressed the importance of co-ordination. However, I cannot help thinking back to the Local Government Act 1972 and to the National Health Service Act 1973 which resulted, though I do not suppose this was the intention at the time, in enormous empire building, a great deal of duplication and unnecessary levels of both manpower and administration. I should like to ask the Minister whether it will be made very clear that when Liverpool City Council is dealing with its planning applications its own department secretariat will be used, where necessary, by the UDC—this is just an example—rather than setting up its own. It would be bad if the UDC got off to a feeling locally that the territorial stakes had been wrongly allocated.
I should also like to ask the Minister what incentives there are going to be to attract enterprise to this area. Trade and commerce are in fact needed more than industry because there is no longer a strong and long tradition of manufacturing industry in Liverpool. I ask this because it is all very well to say that £16·5 million is now being allocated. I would suggest that it is a financial drip, not even a drop, of money at this time. The Minister has said that further sums will be considered in the course of the year. We really have to be realistic about that.
We are living at a time when local government is being cut by the Secretary of State and having the stuffing knocked out of it week after week—sometimes almost day after day. We have no commitment; there is nothing on which we can accept that there will be more resources automatically forthcoming in the process of the next year or so. If we look at what is happening at the moment in Liverpool itself, the rate support grant has undergone a cut of £6·5 million; the reduction in the Government grant as a proportion of the reduced national expenditure has cost Liverpool £2 million (that is to say, the drop from 60 per cent. to 59 per cent.) and the effect of the new block grant has cost Liverpool £6 million. Therefore there has
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been a cut of £14·5 million.
In another place an honourable Member drew attention to the case of Sefton, where, according to him, £19 million has been knocked off the rate support grant. That is in column 523 of Hansard of another place for 19th March, and when the Minister wound up he did not argue about that figure. Unless local authorities have their grants restored all that is happening is a changed pattern of expense and more and more pressure resulting on the local authorities. There is a loss of operational jobs through these cuts, so I do not know how this will improve the employment situation when on the one hand there is a certain amount of money going to the UDC and on the other hand the local authorities are undergoing cuts. It is really chopping it all off from the knees. I cannot see that this will work in any constructive or positive way.
The Minister mentioned the partnership schemes and the £17 million there. I am glad to know that the Government are continuing with that, because at the time when the Labour Government brought in these schemes they were strongly opposed by the then Tory Opposition, who did not feel that the Government should have anything to do with the matter but that it should be left entirely to private enterprise. But what in fact is private enterprise going to do when there is so much groundwork to be done?
I come back to the context of our national economic position at the present time. While the Government's policies are de-industrialising Britain, it does not seem to me that there will be a great deal of comfort in Liverpool and a great surge of people wanting to go there. It would be a terrible tragedy if the hope that people are putting into this exercise is not fulfilled. On the face of it, it seems when one first considers the figure for the urban development corporation of £16·5 million that it means a lot, but if people's hopes are going to be crumbled and the human misery, of which there is a great deal in the Liverpool area, is not really going to be alleviated it could be a very grave tragedy. We have no commitments and no firm undertakings that more resources—that is really the important thing—are going to be put into the corporation or into this area.
If we cannot hear something more positive from the Minister, it would seem—and indeed it does seem to many local people in Liverpool—that it could well be a most inauspicious time to take the initiative. If the Government would stop lumping public expenditure all together and saying, "Cut, cut, cut", and instead would differentiate between public expenditure on consumption and public expenditure on investment—and this surely is an important area of investment—then a great deal could come of it, because we do wish it well. We want to see something positive happening in Liverpool, but the Government's record and the amount of resources that they are going to put in together with the number of cuts that are going on in local authorities make one anxious about the result.
3.27 p.m.
Lord Evans of Claughton: My Lords, at the time of the passage of the Local Government, Planning and Land Bill through your Lordships' House I was very much opposed to the concept of the setting up of a fresh Quango in the shape of an urban development

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corporation for Merseyside and indeed for the London docklands. I felt then—and I still feel now—that with slightly extended powers to acquire property and to raise money, the duties that have been given to the development corporation of Merseyside could, and would, have been carried out very successfully by the Merseyside County Council. They would then have been carried out by people who are properly accountable and elected. I still believe that this section of the Act is otiose and unnecessary; but nevertheless it is there, and, as the noble Baroness, Lady Birk, said, there is no point in continuing to oppose it. I believe that if it gets off the ground successfully, and it is properly based financially, it can do a great deal of good for Merseyside.
Before the Act came into being, the county council on Merseyside—as no doubt the noble Lord the Minister will know—had carried out detailed negotiations with the Mersey Dock and Harbour Company with a view to the county council taking the land interest in the South Dock part of the proposed area of the urban development corporation. We were of course inhibited by the Mersey Dock and Harbour Company's knowledge that, if they received capital payments from the freeholder, they would go direct to the bond-holders. However inconvenient it is to the Mersey Dock and Harbour Company not to have that capital, I think it is absolutely right that the bondholders should get their money back. Very many people invested in the belief that they were investing in trustee securities when they bought the bonds, and it seems right that these people, many of them now very elderly, should be recompensed. If the development corporation has done nothing else than to release the freehold so that the bond-holders have restored that which is due to them, I think that will be very important to many people who bought in the genuine belief that they were buying gilt-edged securities.
The negotiations which the county council have had in hand for some considerable time have been held up by the parliamentary procedures to set up the development corporation, and inevitably the initiative which the county council took has been delayed. But now that the Government have forced through the legislation, we on these Benches want to see the task of revitalising the dockland areas of Merseyside proceed as quickly as possible and to ensure that the development corporation has the proper tools to do the job. When I speak of the proper tools for the job I am thinking, as anyone will who has taken part in the debate here or in the other place, of two things. The first is the acquisition of the land. The second is the provision of money.
Obviously even £16½ million is welcome, but as the noble Baroness, Lady Birk, has said, because of the changes in the block grant and the availability of capital resources from central Government, we on Merseyside have the feeling that what the Lord giveth the Lord also taketh away. This view is held with some feeling and cynicism on Merseyside and I hope that the noble Lord will be able to reassure us that this £16½ million is not a once-and-for-all payment—which we know—and that when the land has been acquired more money will be available for the generation of new life in this area. I hope very much that one of the things which the corporation will do will be
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to generate money from the private sector in encouraging amounts. That is very important indeed.
The second point I wish to mention in connection with the development corporation being able to get on with its job is that there have been, I believe, very protracted negotiations between the designated development corporation and the Merseyside Dock and Harbour Company about what is and what is not an operational dock. I gather that most of these negotiations have been completed and most of the differences have been resolved except for an outstanding difficulty over the Wallasey and Morpeth Dock areas, which lie on the Wirral side of the development corporation area. If these areas are not vested in the development corporation I doubt whether there would be any purpose in having a development corporation on the Wirral side of the area. I believe this to be a very important matter and a key one. I have spoken to various members of the local authority and to designated members of the board about this matter and I hope that this remaining difficulty can be resolved. Speaking as a person who lives in Wirral, to me it would be a tragedy if a lengthy hold-up occurred over the vesting of the area of the development corporation which lies on the Wirral side of the Mersey.
I welcome the fact that the development corporation—through its chairman, deputy chairman designate and chief executive designate—is proposing to use existing local authority facilities and other facilities. As the noble Lord said, it would be an excellent thing if the corporation continued to buy in local experience in all fields and kept its own bureaucracy to a minimum. I do not believe that Merseyside, nor the country in general, would forgive the development of another great bureaucracy. In the choice of the development corporation's chairman, Mr. Leslie Young, and deputy-chairman designate, Sir Kenneth Thompson, the Government have started well. We have had our differences—not with the chairman but with the deputy chairman designate, who was until recently leader of the county council and is now chairman of the county council—but I am sure that his experience in politics and in dealing with difficult politicians, with touchy and with awkward politicians, both here and in local government on Merseyside have been of great value. I am sure, too, that the professional and manufacturing experience of the chairman designate is very important indeed.
With the large number of local and other authorities in the area of the development corporation it is so important that between the corporation and the other agencies "co-operation" is the watchword. I share the concern expressed by the noble Baroness, Lady Birk, about the appointment of the rest of the board's members, although I could not prevent a wry smile about the way in which the Labour Party objects to, as it were, the first past the post system when it does not suit them. They ought to have supported my amendment in Committee in your Lordships' House which attempted to introduce a proportional system of electing members to the board. But, quite apart from the composition of the board, I do hope that there will be local authority members. It is a pity that at this stage some of the names at least have not yet been announced. The schedule to the Act requires the Secretary of State to consult the relevant local

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authorities about the composition of the board and to include members (and I quote):
"having special knowledge of the locality".
I am a member of Merseyside County Council and what is of particular concern to me is that there has been no general consultation with my authority over membership of the board. There has been a specific reference to us—What do we think about the appointment of Councillor X? But that is not general consultation, that is just asking us what we think about one particular person, and since that person is a fairly prominent member of our local authority it is not likely that we would say anything particularly offensive about him. In Merseyside we countered that by saying that we approved of the person named but also put forward the names of people in the Labour and Liberal parties who could be members of the board; I suppose, therefore, that I should have declared my interest. If the Act does require general consultation, it does not appear to have taken place either at the level of Merseyside County Council or, so far as I am aware, among the other district authorities in the area.
With regard to the composition of the development board, will it be the Minister's intention to appoint board members from county councils before or after the results of the next local authority elections in May? There cannot be much doubt that there may well be changes next May and it might be an absurd situation to appoint someone who was representing the largest party on a district authority or county council on 1st May but who was representing a minority party by the end of that week.
From these Benches, we wish the development corporation well. We tried to strangle the infant at birth, but now that it has survived we wish it well and hope that it will do something, if only a very little, to help relieve the terrible dereliction, unemployment and other problems we have in Merseyside. If so, then it will have been worth while. We hope that, in addition to encouraging manufacturing industry, assistance and encouragement will also be given to the development of service industries on Merseyside, which seem to succeed particularly well in that area. In that rather half-hearted way, I wish the development corporation well.
Lord Barnby: My Lords, in her remarks the noble Baroness, Lady Birk, mentioned unemployment. Since unemployment has been of such importance in the recent history of the port of Liverpool, will the Minister ease the anxiety that exists in the minds of many, and which is expressed in press reports, that there still remain in the port of Liverpool a considerable number of dockers who are not required for work but who still receive full pay? What are their numbers and for how lone will this situation continue?
For the rest, may I give my support to the proposals which the Minister put to this House with such clarity and helpfulness. As one who used the port of Liverpool regularly in the early part of this century, when I made frequent visits to the United States, I remember its eminence as one of the great ports of Europe. How different is the position in which it finds itself today! Probably, therefore, the proposals he is putting forward today are helpful, and it is certainly
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promising that this is being taken in hand in this energetic manner. I hope a successful outcome may result in relieving the difficulties of the port of Liverpool which the noble Baroness emphasised so strongly.
Lord Bellwin: My Lords, if I may deal with the points raised by the noble Baroness, Lady Birk, some of those were touched on by the noble Lord, Lord Evans, and I will try to deal with them together. As regards her concern as to where the money goes—she was anxious about the money going to the bondholders—I thought the noble Lord, Lord Evans, made a very fair point on that; I think it is right that they should be repaid. Perhaps more important, as a matter of principle, is the fact that the capital receipts from the sale of the surplus MDHC land to the development corporation flow to the MDHC bondholders, and this in fact would have happened in any case, because, as I understand it, under the terms of the bond to whomsoever the land was sold—
Lord Evans of Claughton: My Lords, will the noble Lord be kind enough to give way for one second? The concept that the Merseyside County Council was proposing with the MDHC was to take a lease, which would release the MDHC from having to pay a capital figure because it was merely to be a rent rather than a capital figure.
Lord Bellwin: Yes, my Lords, I know that, but the fact is and my advice is that this point is not directly relevant to the setting up of the MDC, because the proceeds from the sale would have to go to the bondholders. The fact is that financial support for the port is being considered in another place.
Baroness Birk: My Lords, if I may intervene—I was waiting for the Minister to finish the sentence—I do want to make it clear that I was not suggesting, nor would I, that the bondholders should not be repaid. I think that would be quite wrong. What I was suggesting was that the Government should take that financial responsibility themselves so that it did not come out of the money given to the MDC.
Lord Bellwin: My Lords, I note what the noble Baroness says as to that. The structure of the board seems to have caused some concern. I would have thought that what is most needed on this, or on any other board of this kind, is the right and best people to do the job. While we have said that we want to have as much representation as we can, and indeed we will try to ensure that, and there will shortly be some further consultations with the local authorities, I hope your Lordships will agree that at the end of the day the fact that it is somebody who is a member of the council now but may not be after May is secondary to the contribution which he or she can make to making this whole enterprise a success, because that is what it is really all about. I think the days of people being appointed because they represent one body or another have to take second place to their being appointed because of the innate abilities that they may have. Until we come to that kind of thinking generally, we will not succeed in having other than bodies which may become, as the noble Lord said, otiose and all the

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rest. So, although I will note carefully what has been said about the composition of the board, I hope your Lordships will take from me what I consider to be the greater need to have the right people doing the job.
The noble Baroness went on to ask what incentives will there be to trade and commerce. She referred to the £16 million as a drip. Well, it is a pretty substantial drip and one that is not easy to find, and I can think of many authorities who would be delighted to have even a little of that drip. But in fact, with great respect, that misses the point, because the object of this exercise—and if we do not achieve it then we—fail is to encourage other people, the private sector, to come in and make their investment. The money we put in can be called pump-priming money. If we do not get the private sector—and the same applies everywhere else, enterprise zones and so on—to come in with their money, then we will have no more success than in the whole of the inner cities programme, which we also consider as pump-priming money. We must get other people to want to come and invest; that is the object of this exercise. Having said that, it should be a comfort to the noble Baroness when I say that we are not considering this as a once-for-all proposal; it is an ongoing thing and we will watch it as we go on. We have to allocate money very carefully indeed.
I do not think anyone in Liverpool would argue other than that we recognise the needs of their particular city. Although I would not want to put it into a league table, I think it fair to say that the amount of money we put into Liverpool must be among the greatest that we give to any authority. There may be some greater, but I cannot think of one offhand. I do not complain about that, but I think it reasonable that I should point that out. As for what Liverpool does or does not lose or gain in grants, I do not think this is the occasion to debate that. I would simply say that the system for paying those grants is now both fairer and more able to be analysed and seen than under any system of this kind previously. When the noble Baroness criticises what the Government have done for Liverpool, I would ask her to compare it with what the Government she represented did for Liverpool. She talked about cut, cut, cut. It may be we would not have to cut so much if her Government had not spent, spent, spent, quite so much. Nevertheless, I was pleased that the noble Baroness wished the project well. She said that categorically enough and I accept that from her.
Finally to answer the noble Lord, Lord Evans, I have touched on his point about consultation, and I hope I have given him some reassurance on that. He said, I hope with tongue in cheek, that his support was somewhat half-hearted. I suspect it is a lot more than half-hearted. His heart is very much in Liverpool, as I know. I can tell him that only this very day I was talking with other elected Members from Liverpool, some of his friends, I am sure, who were far from unhappy at what we were doing about this; quite the contrary, they welcome it, and I am glad that we are able to do it. I have not covered all the points, but if either the noble Baroness or the noble Lord wish me to give more detail on any of the points raised, they know I will be only too pleased to do so. With regard to the observation by my noble friend Lord Barnby—it is always nice to hear him speak—
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I cannot offhand reply to his point about the dockers. I cannot give him that number; I do not think he expected me to do so today. Nevertheless, I welcome also his welcome for what we are proposing.
On Question, Motion agreed to.

Matrimonial Homes (Family Protection) (Scotland) Bill [H.L.]
3.50 p.m.
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—[The Earl of Mansfield.]
On Question, Motion agreed to.
House in Committee accordingly.
[THE LORD ABERDARE in the Chair.]
Clause 1 [Right of spouse without title to occupy matrimonial home]:
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 1:
Page 1, line 13, after ("in") insert ("actual".).
The noble Earl said: I beg to move Amendment No. 1. This is an exploratory amendment because I think that it is important to establish one or two matters as regards what exactly is a matrimonial home. If it is occupied it is quite easily identified, but if it is not occupied then clearly it is not so easy to tell. I think that we all agree about the Bill, but it does enter certain very delicate personal elements. The relations between married people are very delicate, very different and vary in many circumstances. The Bill gives overriding rights to the ownership of heritage. We have always been very careful in Scotland about the exact ownership of heritage and we have had public registration for about 300 years. It is important that we are clear about this matter. Certainly the major part of my amendment is to clarify the issue so far as possible.
How do we discover whether a home is a matrimonial home if there is not actual occupation? It is quite clear that it is a matrimonial home not only when there is occupation, because, if we turn to page 2, it states:
"if not in occupation, a right to enter".
How are we to know if a house is unoccupied that a wife has the right to enter it? I ask that question because such a situation may well arise. Let us suppose that the husband sells a country cottage or some agreeable place in Scotland. Let us suppose further that somebody buys it and the wife claims it as a matrimonial home. What happens then? We should have some idea about how the matter is to be treated.
I note, as a matter of fact, that in the Scottish Law Commission report it says that this overriding arrangement—because the matrimonial home overrides all other rights in land—is only justified if satisfactory procedures are devised to notify third parties. This will be a very important element. I should like to know whether my noble friend can give some indication as to

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how this should be done. I am suggesting in my amendment—and I know that my noble friend will not accept it; indeed, I am not suggesting that he will—that it would be perfectly clear if "actual occupation" of a house made it the matrimonial home. That presents no difficulty. But when it is not occupied it presents difficulties which might lead to angry bickering in the law courts and elsewhere as to whether someone has been deceived.
I should be grateful if my noble friend could say how he proposes to deal with this. There is a burden on him to do so because the Scottish Law Commission put in a Clause 7 which meant that matrimonial homes were to be notified, and so one could find out. At present, there is no means that I know of in the Bill of finding out, and if my noble friend could give an explanation I should be extremely grateful. I beg to move.
The Earl of Mansfield: I am grateful to my noble friend for setting the scene, as it were, in our deliberations in Committee on this Bill. I think that as the Bill is considered two matters will become apparent to the Committee. The first matter is that the Government are prepared to be extremely flexible over quite large areas both as to the drafting and as to the way in which the various parties to a marriage will exercise the rights given to them under the Bill. Secondly, I think that there will be running through the Bill a theme—which will become apparent—that in many, many cases the interpretation of the Bill when it becomes an Act will be left to the courts. That is something which I, with my background, find a wholly satisfying, extremely just and equitable way of—as I quite appreciate—regularising what can be extremely unfortunate circumstances in which two parties to a marriage or two people who have been cohabiting together find themselves in disagreement. From my previous experience, which is now long ago, in the divorce world, I know that it can create more bitterness, more upset and more lasting unhappiness than almost any other condition known to man or woman.
So far as a matrimonial home is concerned, of course my noble friend will know that there is a legal definition in Clause 20, to which I have no doubt he has addressed himself. I do not think that the courts will have any difficulty in interpreting what is a matrimonial home. So far as the amendment is concerned, "in occupation of a matrimonial home" means, I think, living in the home in a more or less regular way. As we debated on Second Reading, matrimonial home can extend to a number of different residences if the couple are lucky enough to possess them—in other words, a holiday home can be just as much a matrimonial home as the main residence in a town or wherever it happens to be. I think that a non-titled spouse in this situation, living in a home in a more or less regular way, should have the right to continue living in the home without recourse to the courts.
I know that my noble friend's amendment was really a probing amendment. However, if one substituted the phrase "in actual occupation" then it could be argued that the non-titled spouse who was absent from the home for a short period—for instance, on holiday or whatever—was no longer in actual occupation and
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to that extent he or she would then be homeless unless and until the court had granted an application for the enforcement of occupancy rights. So, if I may say so, I think that my noble friend's fear is perhaps less real than apparent.
The Earl of Selkirk: I shall not press the amendment. I am concerned to a great extent about third parties. I do not think that a husband and wife will present much difficulty but with third parties it may be difficult. However, I shall not pursue the matter now. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 2:
Page 2, line 3, leave out ("includes") and insert ("does not include").
The noble Earl said: I beg to move Amendment No. 2. This is very largely a drafting amendment. I suggest, quite frankly, that the words which I am proposing are clearer than the words in the Bill. The position is quite clear. If a house is owned by two people it cannot be the matrimonial home of one of them. If a house is in shared ownership—I do not mean shared between husband and wife; I mean shared with a third party—it cannot then be declared the matrimonial home of one of the two people who own it. It seems to me important that the meaning should be brought out and I suggest that instead of saying:
"'titled spouse' includes a spouse who is entitled, or permitted by a third party,"
and then going on to say:
"only if that individual has waived his right",
we should start the other way round and say that:
"'titled spouse' does not include a spouse who is entitled, or permitted by a third party…unless that individual has waived his right".
I am not saying that there is a great difference in the wording, but there is a difference in emphasis and it makes it abundantly clear that if the house belongs to or is shared with some other party that person cannot have his rights removed by the place becoming a matrimonial home. That makes it quite clear. It is important that the position should be clear, because in those circumstances it is not a matrimonial home.
The Earl of Mansfield: I think that one should perhaps have regard to Amendment No. 3 as well as Amendment No. 2 because they both follow each other.
The Earl of Selkirk: Yes, that is right.
The Earl of Mansfield: My noble friend is seeking to change the drafting of the Bill, because he wants to have the matter stated in a negative manner rather than in the positive way which has been adopted by the draftsman in Clause 1(2). I am afraid that this is a battle of the draftsmen. I appreciate that Clause 2 is complex, but in my submission it is the concept that is complex, and not the obscure drafting which makes it complex. I appreciate what my noble friend has said, but I am afraid that I can do no more than hold to the drafting with which I have been provided, because I am informed that my noble friend's two amendments do not make the subsection any clearer than it already is.
The Earl of Selkirk: In that case, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 3 not moved.]
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 4:
Page 2, line 6, after ("his") insert ("or her").
The noble Lord said: We now come to a very important amendment which I am sure the Government will accept. It is absolutely impeccable and is in line with what the Government have done elsewhere. Indeed, it is in line with what they have done at line 14. It is to put in the words "or her", so that it reads "his or her right". The individual is not necessarily male; the individual could be female. I beg to move.
The Earl of Mansfield: In the interests of equality between the sexes, which in other respects the Bill scrupulously maintains, I am pleased to accept the amendment. Furthermore, I tell the noble Lord that I shall move amendments to Clauses 6(2) and 16(4) on Report if he likes.
On Question, amendment agreed to.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 5:
Page 2, line 14, leave out subsection (5).
The noble Lord said: This amendment is, of course, very much more important. We all approve the principle of the Bill, which is to give protection to spouses who are subjected to cruelty and, indeed, to violence. We do so by giving a new right to all spouses. Marriage in future, in respect of a home, will mean that the husband and the wife—whoever is the owner or the tenant—will have equal rights in occupation. That is the base upon which the whole Bill rests. Bearing in mind the circumstances of an application to a court in respect of confirmation of occupancy, it is wrong that we should put at the very end of this, not world-shaking but new departure in women's rights—because it is mainly women who will get the advantage of this—a way out:
"A non-titled spouse may renounce in writing his or her occupancy rights, either generally or"
particularly. Let us bear in mind the background. The background is violence. One can easily understand how duress can be used to make a wife sign a piece of paper. That is all the Bill says—"may renounce in writing". I do not think that that should be included at all.
I thought of strengthening the Bill, as has the noble Earl in some respects, but we must remember that this will never enter the minds of the great majority of spouses. But for those who are up against violence we should not give violence a triumph by making it possible for the violent attitude of a spouse to get a woman to renounce her rights, for if her rights go then this Bill departs. That, I think, is wrong. It is difficult to imagine many circumstances where it might be necessary, and it creates a huge loophole in the Bill which could adversely affect the rights of thousands. That is what the Women's Aid Committee in Scotland say, and I entirely agree with them. I hope the Government will look sympathetically at this amendment, which is much more important than the one which has just been accepted. I beg to move.
The Earl of Selkirk: I go about halfway with the noble Lord, Lord Ross. I agree that this is a very serious matter, but I cannot agree that it should be omitted altogether. I want to strengthen the position so that when a wife does renounce her matrimonial rights she does so more solemnly than is proposed in the Bill. Amendment No. 6 says that if a non-titled spouse gives up her right of occupancy of the matrimonial home she should do so either generally in writing signed before a magistrate or in a particular manner. I entirely agree that this might be a matter of coercion, and it will also be irrevocable as regards the house; so it must be done in a serious and solemn manner. But from the point of view of third parties there must be some way in which that right can be given up, otherwise no one would be willing to buy the house at all. There must be a means of doing it, and I suggest that it should be a solemn procedure which I designate in Amendment No. 6. It should either be in writing signed before a magistrate or:
"(b) in a particular matrimonial home by an attested writing in such form as the Secretary of State shall by order made by statutory instrument prescribe.".
That is how it should be done; otherwise, I entirely agree that this fundamental right should not be forced out of a wife.
Lord Mackie of Benshie: I think the Government will have to do something about this clause. As the noble Lord, Lord Ross, said, violence is at the core of the matter, and if the clause is left as it is then it is possible that a husband (and certainly in the history of matrimonial strife and violence it has been known that a husband can coerce his wife into doing practically anything under threat of violence) could threaten his wife. I shall be very interested to hear what the Minister has to say about this, but I am certain that he must do something. I do not think the clause can stay as it is. We appear to be discussing Amendment No. 6 as well. That, perhaps, would take much of the fear out of the situation, and would give a wife time to think. I shall be most interested to hear what the Minister has to say.
The Earl of Mansfield: I have a certain sympathy both with the noble Lord, Lord Ross, and with my noble friend, both of whom claim that subsection (5) is not entirely satisfactory as it stands, although they produce two very different remedies at opposite ends of the spectrum. If a renunciation made by a spouse has been obtained under duress or by virtue of some undue influence exercised by the titled spouse—and one assumes that it is most likely to be the husband in these circumstances—then, as I said on Second Reading, legal remedies are available and no court will hold it against a spouse who has been induced to renounce her rights under such circumstances. One must say that.
However, equally, I accept that the clause is not entirely right as it stands. The noble Lord, Lord Ross, asked whether there should ever be a form of renunciation. I agree with him that the circumstances in which, for instance, it might be in a wife's best interests to renounce would be rare. In its report the Scottish Law Commission produced a circumstance which it said was at any rate not unusual: where a

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wife's family, presumably with means, buys her and her fiancé or husband a house but wants to make jolly certain that the son-in-law does not have any rights in that house in the future, and where, if they were not sure, they would not produce their cash to buy the house. I believe that this happens from time to time, and one can understand that unless there is some built-in safeguard, or the house or the cash is put in trust, there would be no protection for the in-laws' money in those circumstances. So it can happen that it might be right and proper for one spouse or the other to renounce his or her rights, because one must remember that this Bill applies to either sex.
If one then considers how that renunciation should be made and in what form, one comes to my noble friend's amendment. The Government are not entirely convinced that it has to be in a form dictated by a statutory instrument. What I should like to do, if the noble Lord, Lord Ross, would withdraw his amendment and my noble friend not move his, is to take it away and think about it, and particularly take account of my noble friend's compromise proposal and see whether we can come up with something which will be fair and satisfactory at a later stage of the Bill.
Lord Ross of Marnock: We are proceeding very well indeed and very amicably. There must be something wrong wth the Scots today! This is sensible. I tried to find suitable words that would result in this half-way house. However, I do not accept the circumstances that the noble Earl thought would justify the renunciation. I have never heard of circumstances like that. It is not a very good basis for a marriage in the first place. Remember that all this has to be entered into before the home is bought. After the home is bought and they are both there, it is then that the renunciation should take place to give anybody a right of this kind.
I did not like the noble Earl's amendment. It is too complicated. I have never heard of a notary public in Scotland. I do not think there is such a term. We have all the English lawyers going to tell us what Scottish law is.
Lord Fraser of Tullybelton: Notaries public are common bodies to be found in Scotland. About half the solicitors in Scotland are notaries public.
Lord Ross of Marnock: I think we should have put in the term we all know—"solicitor"—and it would have been even clearer. On the basis that we are all going to search for better words, I am happy to withdraw the amendment.
The Earl of Selkirk: With great respect to the noble Lord, Lord Mackie, this is not simply a question of violence. This is also a question of the ordinary sale of property. If you are buying property somewhere and you have a matrimonial right overriding any form of tenure, you have to get rid of it. This will become a perfectly normal element in conveyance of property. Therefore, you have to have some simple way of doing it.
At the other end of the scale, you can have a certain amount of pressure. The words in this Bill are too slender. In a case of violence, all you have to do is to get your wife's signature on a piece of paper and put
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in the appropriate words above it. That method could be used too easily. There is need for a third party to make the position certain. That is certainly so in cases where you are giving up the right to a single matrimonial home. However, I am quite happy to accept what the noble Earl, Lord Mansfield, said.
Lord Ross of Marnock: I am sure that the noble Earl appreciates that under Clause 6(3)(a), where a house is to be sold consent in writing is written into the Bill.
The Earl of Selkirk: May we come to that in due course.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
Clause 1, as amended, agreed to.
Clause 2 [Subsidiary and consequential rights]:
4.14 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 7:
Page 2, line 22, after ("on") insert ("non-essential").
The noble Lord said: This clause deals with the question of securing the subsidiary and consequential rights of the spouses. It says:
"For the purpose of securing the occupancy rights of a non-titled spouse, that spouse shall…be entitled without the consent of the titled spouse"
to do certain things. One will be able to take over payments and perform obligations without the consent of the titled spouse. When we look at the clause we see that it deals with the question of repairs and improvements. Then it breaks up repairs into essential repairs—which I think everyone should have the right to be able to do—and non-essential repairs. But when we look at paragraph (a) we see that it says:
"to make any payment due by the titled spouse in respect of rent, rates, secured loan instalments, interest or other outgoings (not being outgoings on repairs…)".
I should have thought it was right to say there that it should be non-essential repairs.
Then we get the same thing again in line 25:
"(not being an obligation in respect of repairs …)".
People cannot perform that. But it does not differentiate between non-essential and essential. Yet when we come to paragraph (d) they are allowed
"to carry out such essential repairs as the titled spouse is entitled to carry out".
There is a conflict there. There is a confusion there in words. It would be cleared up by the words that I would insert, because later on it is said that they can do any repairs they like, be they non-essential, if the court so orders.
It would be far better when we are giving these rights and obligations to make it clear that the non-essential repairs are very different from the essential ones that they should be able to perform. Things that probably have to be done in a hurry are essential; they should not be required to apply to the courts for them. I think that is the intention of the clause. The provision would be far better with these two amendments to lines 22 and 25 inserting the word "non-essential". I beg to move.
The Earl of Mansfield: I think that the noble Lord, Lord Ross, has misunderstood the way in which the clause is set out.
Lord Ross of Marnock: We had better change it then.
The Earl of Mansfield: No, do not grumble. What it does is to set out the rights of a spouse in a logical and comprehensive manner. In subsection (1)(a) are set out a number of payments of what I might call a periodical nature, such as rent and so on, and other outgoings, which I suppose could include such matters as feu duties. Then comes the exception,
"(not being outgoings on repairs on improvements)",
which is merely to tie paragraph (a) to the periodical payments. The point is that this subsection is intended to exclude all outgoings, all periodical payments except those that are set out in paragraph (a). Then further on down the clause it tells the spouses what they can do by way of making payments in relation to either essential or non-essential repairs. The amendment which the noble Lord seeks is quite inappropriate in this particular subsection.
May I come to the second amendment to which the noble Lord spoke, that is to say, Amendment No. 8, where the noble Lord is on much stronger ground and I am much happier. If the noble Lord would not move it on this occasion I shall consider it, and in all probability put down an appropriate amendment at a later stage. The reason I say that is that Amendment No. 8 is indeed helpful because what it would entitle a non-titled spouse to do is to pay for essential repairs which in fact have been carried out but not paid for by the titled spouse. A leaking roof springs to mind as a possible example. Thus, in Amendment No. 8 the situation refers to an occasion which arose before the right of the non-titled spouse had been created, but nevertheless the legal obligation is there and has to be discharged and I hope the noble Lord will be satisfied with my admittedly rather laboured explanation.
Lord Ross of Marnock: I did not think the Minister's reply was laboured in any way. I found his remarks most interesting. For example, he told us what Clause 2(1)(a) meant, and of course it does not mean what it says. That being so, we had better start looking for words to limit what that provision says to the regular payments to which the noble Earl referred. I hope there are no cases where there may be regular payments in respect of essential or non-essential repairs, because we should have to start thinking about it again. I think we could do without the words in parenthesis.
As for the second point made by the noble Earl, I agree in that it probably would be helpful to cover that particular point, so it would be wrong for the non-titled spouse to be there in occupancy for all practical purposes, to meet all the necessary bills and then to receive one she cannot meet. That would be quite unfair to the third party. That being so, I beg leave to withdraw the amendment and, on the advice of the Minister, I will not move Amendment No. 8.
Amendment, by leave, withdrawn.
[Amendment No. 8 not moved.]
Clause 2 agreed to.
Clause 3 [Regulation by court of rights of occupancy of matrimonial home]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 9:
Page 4, line 36, leave out from ("spouse") to ("may") in line 37.
The noble Lord said: I tabled this amendment because the point made in this provision, which it is proposed to delete, seems unnecessary. It says:
"…if he or she has occupancy rights".
The whole thing arises because they have occupancy rights, and therefore I thought the inclusion of this phrase was otiose or, to repeat a phrase I heard from the Liberal Benches earlier dealing with Liverpool, "otiose and unnecessary". I beg to move.
The Earl of Mansfield: If Clause 1(5) were deleted, then of course these words would be superfluous, and I have already undertaken to examine Clause 1(5) and I therefore hope these words could fall to be examined in the same context.
Lord Ross of Marnock: In that case, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 10:
Page 4, line 41, leave out ("is satisfied") and insert ("appears to the court").
The noble Earl said: I will speak at the same time to Amendment No. 12, if that course is convenient to the Committee. These are the first of a number of amendments which enable the court to come to a view without the application going to a formal hearing of evidence—a proof—which might be necessary if the word, "satisfied" were to be interpreted in a strict sense. It is not thought desirable that the court should be required to hear evidence before coming to a decision merely because the non-applicant spouse or partner is not present or represented in court when the application is considered. There might be considerable delay if a formal proof was always required, which would be undesirable particularly where there was a history of violence. In these circumstances, prompt action is needed. In all cases the application will have been served on the other spouse, who will therefore be aware of what is being alleged. If that spouse chooses not to go to the court to challenge what is being alleged, it is reasonable that the court should be able to accept that the allegations are correct.
Lord Fraser of Tullybelton: While I do not wish to oppose the amendment, I suggest that the subsection as a whole should be looked at. It begins by saying, "The court shall grant an application". I should have thought we were here in a discretionary kind of region and that more appropriate words might be, "The court may grant an application", which would seem to go better with the substitution of words being proposed. I am not sure whether I should be making this point now or on the clause stand part.
The Earl of Mansfield: The noble and learned Lord could certainly make his observation on the clause

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stand part, if he did not wish to make it now, but I will certainly bear it in mind.
On Question, amendment agreed to.
4.25 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 11:
Page 5, leave out lines 22 to 24 and insert ("An interim order shall not be made unless the applicant spouse appears personally before the court").
The noble Lord said: The requirement for the non-applicant spouse to be afforded an opportunity of being heard or represented could of course be impossible to meet. A man might have left his wife in an owner-occupied house and disappeared, may be for weeks, months or years, yet she may need occupancy rights quickly in order to meet the payments about which we spoke earlier. From that point of view, I believe it would be wrong to impose the obligation that an interim order should not be made unless the titled spouse was heard. Bearing in mind that the application is for only an interim order which can subsequently be varied by the court in the light of the circumstances of the case, we should be justified to make this change so as to ensure speed. The words would then read:
"An interim order shall not be made unless the applicant spouse appears personally before the court"
and is able to satisfy the court of the necessity for speed and action to preserve her rights and benefits of occupancy.
The Earl of Mansfield: The reason behind the words as they appear is that if they did not it would be possible to apply to a judge in chambers for an interim order to protect a spouse's interests before the action was served against the other spouse. The interim order in such circumstances would be granted on the ex parte statement of the applicant or even simply on a written application. The existing provision requires that an interim order can be made only if the non-applicant spouse has been given an opportunity to be present in court. That will be done by serving on him or her a copy of the application and a note of the date, time and place when the court will consider the application. It is not necessary that the non-applicant spouse attend at that time; only that he be given the opportunity to do so if he wishes. This overrides the danger of a one-sided statement being given without any opportunity of rebuttal.
But the matter goes much deeper and more seriously than that because if the proviso were not to be made, a husband—let us assume for these purposes that he is the subject of such an order—might be quite unaware that he is subject to an order, and that order might restrict his occupancy rights in the matrimonial home. There could be an exclusion order and of course a power of arrest attached to that interim order, in which case he could, by coming back to the home, find that he is breaching a court order merely by going upstairs without having heard anything previously about the court hearing. I suggest that is a quite unjustifiable position. The proviso is intended to avoid it by ensuring that the husband can argue his case or be represented before the court, and I suggest that in common justice he must be given that oppor-
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tunity.
The noble Lord's alternative is unsatisfactory. It does not provide a safeguard for the non-applicant spouse, since it would enable the interim order to be made without the non-applicant spouse being given an opportunity to present his, or her, side of the case, in particular if he or she disagrees with the statements in the formal written application. In effect a person in this position could be arrested, because for these purposes service need be carried out only by post, by way of recorded delivery. So if someone were away from home, the papers would be deemed to have been served on him even though he might know nothing at all about the proceedings. I hope that with those reasons I have illustrated that the amendment is quite unsatisfactory and not acceptable.
Lord Ross of Marnock: I am not entirely happy about what the Minister has said on the matter. There remains the point that the man might have left his spouse; he might have disappeared, with no intention of returning home. How long a period must elapse before the requirements of the Bill are satisfied in terms of his having been,
"afforded an opportunity of being heard by or represented before the court"?
How is the period in which to do that defined? What is to be the time lag? Nothing at all is indicated. In the meantime the wife might be in an unfortunate position, having gone to the court and been granted occupancy, yet unable to exercise her rights simply because of this particular provision in the Bill.
We are dealing here with an interim order. We are not dealing with an exclusion order, to which different conditions apply. The noble Earl jumped ahead to the matter of an arrest, which can be attached to an exclusion order. I think that here he has gone too far in trying to meet my argument. However, I shall be satisfied if he gives some indication of the time that would have to elapse in respect of affording,
"an opportunity of being heard by or represented before the court".
In the meantime the wife and family are probably waiting for justice that they cannot get.
The Earl of Mansfield: I do not think that I can help the noble Lord beyond repeating what are the procedures in these instances. The non-applicant spouse will have served on him, or her, a copy of the application and details of the time and place of the hearing. That is as far as the applicant spouse need go. If the non-applicant spouse does not attend, or does not choose to play any part in the proceedings, then it will be up to the court to make such order as it thinks fit; but at least the non-applicant spouse will have been given an opportunity of meeting the case—and that is the important part of the matter. What I object to, and what the Government object to, is the proposal that the procedures should be started without the non-applicant spouse knowing anything about them, still less being able to defend himself or herself.
Lord Mackie of Benshie: Will it follow that if the non-applicant spouse cannot be found, the proceedings will go ahead in any case?
The Earl of Mansfield: I tried to explain that point earlier. Very often spouses go missing. They become fed up with what I might call the matrimonial conditions. In that eventuality all that is required is that the non-applicant spouses be notified of the hearing. The court will fix the time for the hearing and the parties can prepare their cases. If the non-applicant spouse chooses to ignore the notification or do nothing about it, then he, or she, will have to bear the consequences.
Lord Drumalbyn: Does my noble friend mean that the non-applicant spouse will have been deemed to have been,
"afforded an opportunity of being heard",
if notice of an application is sent to him at what is his usual address? I think that the difference between what is being said on opposite sides of the Committee relates to the point that it is very probable that the non-applicant spouse will want to ensure that he is not available. He might want to get out the way so that it is not possible for the notice to be served on him. Surely one can recall examples of other legislation where notice is deemed to have been served if it has been sent to the person concerned at the address at which he is accustomed to receive such notices. Could not a provision along those lines be added in order to resolve the difficulty?
The Earl of Mansfield: I am obliged to my noble friend, but I really do not think that there is a difficulty here. Notice of the proceedings can be served on the non-applicant spouse in person, or by post, either at his last known address or at his place of work. I also understand that the court can serve the notice by way of edict if the address of the non-applicant spouse is really not known. As the Bill stands there is no injustice towards either party. The applicant spouse can obtain his or her relief, while at the same time nothing can be done without the non-applicant spouse having the opportunity to defend himself, if his whereabouts can be ascertained. It is as simple as that.
Lord Fraser of Tullybelton: I think that the Minster is plainly right on this matter. It should be intolerable if there could be pronounced an order excluding a man from what had hitherto been his home without his knowing anything about it. He might return home and find himself in contempt of court by entering what he thought was his own house. There could well be a malicious wife who made entirely unfounded assertions against an absent husband, and he might return to find that position prevailing. In my submission, it would be absolutely intolerable to allow that to arise.
With regard to the question about difficulty of service, there is often great difficulty when a person cannot be found, but in the end edictal citation is a well-established method of dealing with that situation. The man's friends or family may pick it up and pass it on to him. If the man absents himself deliberately, makes himself inaccessible, it is his own look out.
Lord Ross of Marnock: That being so, I think that the Government ought to look at the whole of Clause 3. We are dealing, first, with the application for a court order, which does the real damage. Then there is the provision:
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"Provided that an interim order may be made only if the non-applicant spouse has been afforded an opportunity of being heard by or represented before the court".
That is the first that one hears about,
"an opportunity of being heard by or represented before the court".
It does not apply in relation to what has gone earlier.
Leaving that point aside, am I to understand that what is meant is that the court itself will decide on a date on which the hearing will take place, and that the court itself will convey that decision to the non-applicant spouse? If the non-applicant spouse does not respond to that notification, will it be taken that he has been afforded an opportunity but has not taken advantage of it, and so the proceedings will go ahead? If that is so, then the matter of timing is being left to the discretion of the court. If that is the case, I am quite satisfied, and I should be prepared to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 12:
Page 5, line 37, leave out ("the court is satisfied") and insert ("it appears to the court").
The noble Earl said: I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 13:
Page 6, line 9, after ("writing") insert ("to the court").
The noble Lord said: This, too, is familiar, because here we come back to "may renounce in writing". This is the application in respect of possession or use of furniture and plenishings. I felt that we had to strengthen it. The amendment adds the words "to the court" after the word "writing". It may be that the noble Earl is not satisfied that "may renouce in writing to the court "is strong enough. It may be that we could have a look at this again. Perhaps the Minister can tell me what form the Government think this renunciation in writing will take. The danger still arises in relation to violence.
The Earl of Mansfield: If a spouse renounces the right to apply for the possession or use of furniture and plenishings, there will be no application to the court under Clause 3(2) and in that case the court should not be concerned with the renunciation. It would be intolerable, if not unnecessary, for a court to act as a kind of filing system of renunciations in these circumstances. If the renunciation takes place after court proceedings have commenced, I am advised that court procedures will be able to take care of this situation. I am saying to the noble Lord that there is in fact no necessity, no point, in his amendment, and I hope he will withdraw it.
Lord Ross of Marnock: I can only visualise this being applied after a hearing or during the consideration by a court. I will take the word of the Scottish Office. If they say the words are unnecessary, I am glad to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 3, as amended, agreed to.
4.43 p.m.
Clause 4 [Exclusion orders]:
Lord Ross Lord Ross moved Amendment No. 14:
Page 6, line 17, leave out (""the non-applicant spouse"").
The noble Lord said: With Amendment No. 14, perhaps I may speak to Amendment No. 16. It is virtually the same. This is in the interests of clarity, to get rid of unnecessary parenthetical phrases. In one case, I have changed "that" and put in the word "other". We have in the first instance
"'an exclusion order' suspending the occupancy rights of the other spouse".
We have titled spouses, non-titled spouses, and non-applicant spouses. To my mind the subsection would be very much clearer (as also would be the following subsection) and would lose nothing in meaning if, first, we got rid of these parenthetical phrases, and if, in the second case, we got rid of "non-applicant spouse" and made it read, "the other spouse". I think that is clearer. It is otherwise very confusing and muddled. I beg to move.
The Earl of Mansfield: I appreciate that the noble Lord has tabled what is to him, possibly, drafting amendments which would improve and simplify the language. I think the removal of the words "non-applicant spouse" would create problems in other parts of the Bill, since the reference in Clause 4 implicitly defines what is meant by "non-applicant spouse". Furthermore, if it was removed it would require a number of consequential amendments elsewhere in the Bill.
I think we have to consider how this admittedly clumsy piece of English came to be in the Bill at all. The basic problem which the draftsmen of the Bill had to face was the desire to appear even-handed as far as the sexes were concerned, not only as to their rights but as to their language. Therefore, the basic problem is to avoid the use of "his" or "her". I know that the Interpretation Act covers that point happily by, in effect, equating "her" with "his"; but I do not think that would be a solution which would commend itself to the feminine interests who are particularly to be protected by this Bill. So it was in these circumstances that the term "non-applicant spouse" came to be framed. It may appear somewhat contrived, and it is one which does not have much use in normal speech—certainly not in my normal speech. Nevertheless, it is very useful in the context of the Bill.
It is more precise than the use of the word "other", which the noble Lord, Lord Ross, proposes to insert in Clause 4(2), and it can be used in circumstances when the word "other" would not do. For example, in Clause 4(6) reference is made to "the non-applicant spouse". If the words "the other spouse" were inserted in its place, the section would lose some of its clarity and a more elaborate form of words would be necessary. Something like, "the spouse other than the spouse who applied for the interim order" would have to be inserted. That is even worse than the present position. As I have said, the term is used in a number of places in the Bill and it provides a useful way of describing these particular people even if the language
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is cumbersome. The term "non-applicant spouse" can apply either to the "titled" or to the "non-titled" spouse, depending on the circumstances. I agree that simplicity of language might be a good aim, but in order to achieve clarity and, at the same time, to maintain this non-sexist stance, more contrived language would be needed.
The Government are very flexible on this and are open to suggestions. I at one moment timidly suggested that the word "respondent" might be used as being well-known and really quite easy to understand; but I am informed that while that is in common use south of the Border it is not so north of the Border, and perhaps would be undesirable. If any noble Lord has any suggestions as to how to get round this—and I am sure the noble Lord, Lord Ross of Marnock, will see that his drafting amendments, although perfectly felicitously phrased in the context of this clause, simply would not do if repeated throughout the Bill—I should be happy to consider them. In any case, we shall continue to search to see if we can find a happier phraseology.
The Earl of Selkirk: The noble Earl is flexible but I hope he will not make the Bill less clear than it is at the present time. The words "titled" and "non-titled", let alone "other spouse" and "non-applicant", are very confusing. These are specialised words, and unless they are made perfectly clear it will lead to nonsense.
Lord Ross of Marnock: In the first four lines we have "titled spouse", "non-titled spouse" and "non-applicant spouse", which, in the first instance, was an afterthought and was put into inverted commas or brackets. Frankly, I had never intended the word "other constantly to be used instead of "non-applicant spouse". If I had sought to change that, I would have done so earlier, where it is first mentioned—even in the last amendment that we were dealing with. I am concerned about the immediacy of understanding. Let us read it as amended:
"…either spouse may apply to the court for an order … suspending the occupancy rights of the other spouse".
Surely that is perfectly clear. You do not need the following words in the Bill:
"('the non-applicant spouse')".
The other suggestion I made is the words:
"for the protection of the applicant or any child from the conduct of the other spouse".
The words "applicant" and "other" go together. I am not suggesting that we should go through the whole Bill and wherever we have "non-applicant spouse" that we should change it. There are places where it is right. But it is certainly quite unnecessary here and it is confusing, surrounded as it is with words such as "titled", "non-titled", "spouses", "spouses are entitled" and then "other spouse" and "non-applicant spouse". As many a man would say, let us get rid of some of the spouses. I would get rid of this particular non-applicant spouse in line 17 of page 6.
I hope that the Government will think again. They have misunderstood the suggestions as to what I want to do. If I wanted to change that I would have sat down and done it. I should not like to keep the

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Scottish Office up next weekend the way they were probably very busy this last weekend. I have tender thoughts occasionally for that office. I shall have another look at this amendment. I am not happy about the Government's attitude. I think they are muddle-headed here. I shall beg leave to withdraw the amendment.
Lord Simon of Glaisdale: It is with great trepidation that an English lawyer intervenes on a Scottish Bill. But the noble Earl's argument went far beyond Scottish legislation in a rather alarming respect. By the Interpretation Act one can use "he" to include "she", et cetera; and that avoids a great deal of peripheracy. It is rather an alarming thought that we are now going to jettison that useful shorthand because of the susceptibilities of those who insist on a complete sexual equality which is really quite inappropriate in the field of parliamentary drafting.
The Earl of Mansfield: I am sure that, having listened to the debate, the noble and learned Lord will now understand the conditions in which this Bill came to be drafted, and the way in which it is sought to get over—if that is the word a number of difficult problems. I particularly agree with what my noble and learned friend said, that clarity is all and that through drafting one should try, above all, not to make what it is sought to be clear more obscure. I respectfully agree with the noble and learned Lord and would use the word "his". I am a titled spouse and most of those in this Committee are. I do not mind being personally labelled a chauvinist when it comes to the interpretation of statutes. Nevertheless, the Government feel that they have to tread very warily—like Agag—in certain circumstances. I think that we are going about it in the same way, although the Government are very well aware of the noble and learned Lord's strictures.
Amendment, by leave, withdrawn.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 15:
Page 6, line 19, leave out ("is satisfied") and insert ("appears to the court").
The noble Earl said: In moving this amendment, perhaps I may also speak to Amendment No. 18. These are further amendments to remove any question that in undefended cases the court need hear evidence before coming to a decision. If the spouse against whom an exclusion order is applied for chooses not to appear to defend the application, there is no reason why the applicant spouse should require to lead evidence to back up statements made in the application. If the non-applicant spouse disputes what is stated in the application, he or she can defend the case. I beg to move.
On Question, amendment agreed to.
[Amendment No. 16 not moved.]
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 17:
Page 6, line 21, at end insert ("or is likely to be").
The noble Lord said: This is more than just drafting. The subsection reads:
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"the court shall make an exclusion order if it is satisfied that the making of the order is necessary for the protection of the applicant or any child of the family from any conduct of the non-applicant spouse which is injurious to the physical or mental health of the applicant or child".
I suggest that it should better read:
"which is or is likely to be injurious".
One of the great difficulties in this whole field is proving the violence of the husband. We have not dealt yet with the question of corroboration. I have known cases where the police could go along, having been summoned by a wife, and because there is no corroboration except her actual word, they can do nothing. I have known them stand outside the house hoping the violence may be repeated within their hearing. What I want to do is try and get this before it goes too far. We should appreciate that it is enough to prove the risk of injury—mental or physical—to a child or wife, as the case may be, to get action taken.
The revised wording would allow the court to grant an exclusion order where there was a risk of conduct injuring physical or mental health. That is before the breakdown and the violence had actually occurred on this particular occasion. This is not an easy matter; but it is desirable that these words should be put in the Bill. It leaves it to the discretion of the court. There are difficulties in respect of proof and people say: "Why wasn't action taken?" Action was not taken because the court had not the power to take it.
If the court thinks that there is likely to be violence to the extent that it is going to be injurious to the health—mental or physical—of the wife or child, then they should be empowered to act. That is why I suggest we put these words in the Bill. I beg to move.
The Earl of Mansfield: The amendment would considerably widen the kinds of conduct which the court might regard as being sufficient to warrant the granting of an exclusion order. At present the court must be satisfied that the conduct is injurious to the physical or mental health of the applicant spouse. As the noble Lord said, by this amendment he seeks to extend this to include conduct which is likely to be injurious. There is a belief that in its present form the clause requires evidence that physical or mental injury has already occurred to be given, and that this evidence might not be readily available. I concede, as the noble Lord, Lord Ross, said, that the matter is by no means easy.
The granting of an exclusion order, as several noble Lords have stated, is a serious step, not least because it will almost always attract the power of arrest and, as noble Lords have equally said, it excludes the non-applicant spouse from the matrimonial home. So the Government consider it right that where the applicant spouse, or the children for that matter, require protection, a powerful remedy such as this should be available. But one has to take care that the liberty of the non-applicant spouse is not unjustly curtailed.
It is not easy to draw a dividing line between where conduct ceases to be what I might call "unpleasant" and reaches the point where it is likely to be injurious to physical or mental health. For instance, there could be a sudden loss of temper with a verbal argument, and I suppose that if the argument was sufficiently

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violent it could be regarded as likely to be injurious to mental health. Such an interpretation might well be justified if there was an earlier history of violence. In that case the earlier violence would be a factor in the court's consideration of otherwise tolerable behaviour. But in most cases I am sure noble Lords would agree that it would be inappropriate to grant an exclusion order on the basis of such loss of temper.
The Government are also alive to the possibility that if there are too many applications for exclusion orders on flimsy grounds the courts may be reluctant to grant them, even in cases where they are needed. So although I concede that there may be some anxiety that the subsection as drafted might require proof of physical or mental injury, the subsection does not say that a court shall grant an exclusion order only where there has been physical or mental injury. It says that a court shall grant such an order where it is necessary to protect a spouse or child from conduct which is injurious; that is, tending to injure. So it is up to the court to decide when conduct may be considered as being such that it is tending to injure.
I think that the noble Lord has attempted to amend the subsection in the wrong part of the sentence. I think what he is trying to cure is the situation where a court is satisfied that it is likely future conduct which is going to cause the injury rather than past conduct which is going to cause future injury. So to that extent perhaps an amendment should be drafted in a rather different form. By way of conclusion, may I say to the noble Lord that I think the whole of this part of the clause needs to be re-examined; and that I intend to do between now and the next-stage of the Bill.
Lord Ross of Marnock: I would agree with the noble Earl on that. We will need to read this with the changes that are already going to be made regarding this question of protection. There will be some changes in subsection (5) of this clause, which are mainly of a drafting nature. I, too, will have a look and see whether it is right that the anticipation of violence, or the words which I hope will lead the court to take action in anticipation of violence, should be put in somewhere else. I realise that the Minister is sympathetic towards the points that have been made, and with that in mind I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 18:
Page 6, line 24, leave out ("is satisfied") and insert ("appears to the court").
The noble Earl said: I have spoken to this amendment, and I beg to move.
On Question, amendment agreed to.
5.5 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 19:
Page 6, line 29, leave out from ("Act") to end of line 42.
The noble Lord said: We have in this Bill set out to try to protect people and to give them greater freedoms within their own homes. In this amendment I have tried to remove what I think is one of the worst features of this Bill. We are prepared to grant protection to
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everybody else but not to people who are in tied cottages. If a husband is violent and he lives in a local authority house, action can be taken, but, if a husband is violent and lives in a tied cottage, no matter what he does to the children or his wife they are going to get no help under this Bill. I know the Minister will say that that is not exactly true but, when you read this clause, together with another later one which deals with the same thing, there is no argument about it. The Bill, to my mind, takes away the discretion of the courts to act in these particular cases—that is, where the matrimonial home is part of an agricultural holding or is let as an instrument of employment, and so on.
As it stands, I think it undermines what we feel should be the paramount principle of the Bill—namely, that protection from conduct injurious to physical and mental health should be the most important consideration to the court. This clause will allow a man in a tied agricultural house or in a house which is used for business purposes to be violent to his wife without danger of exclusion. Of course, the criminal aspects of it would still come in, but, if what we seek to do here is to give the spouse and the family protection and freedom of the home, then there is no help here. The Scottish Law Commission at pages 54–55 addressed itself to this question of balance, and the members came to this conclusion:
"The court should not, we think, be precluded from having regard to such consequences"—
that is, loss of employment and so on. They finished up by saying:
"The court should at the same time have a residual discretion not to grant an exclusion order in those special cases".
They felt, however, that the court should be required to make an exclusion order if it was satisfied that the need for protecton arose, "unless there are exceptional circumstances". In other words, we leave it to the court. But here we do not leave it to the court: we put it into the statute. Would it not be better if we ended subsection (3), as I suggest, in line 29 at the word "Act", and then said:
"The court shall not make an exclusion order if it is satisfied that the making of the order would be unjustified or unreasonable having regard to all the circumstances of the case"—
rather than bringing the attention of the court specially to the question of the tied cottage, the business property and so on? I think that, because we did not take the action in. Scotland in relation to the tied cottage, though that was done in England, we are denying the wife in those particular cases the protection which, very often, a court would give her. Before an eviction took place it had to go before the sheriff, and the sheriff would usually grant the whole family six months if it were a question of eviction. But here the non-titled spouse—the wife—is going to have no protection at all, and I think that that is quite wrong. It may well be that the person who owns the tied cottage would be quite prepared to allow the non-titled spouse to stay there, but I am afraid that the whole thing is weighted here. It destroys and undermines the whole principle of a very desirable Bill. I beg to move.
Lord Collison: May I briefly support this amendment? Your Lordships would expect me to do so. I know that this is Scotland and not England and that there are

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considerations affecting the tied cottage in agriculture and houses which are used for business purposes in other industries. Nevertheless, I do not think that those considerations can override the right of the spouse to have the same protection as anyone else. It is quite wrong that these exclusions should be deliberately mentioned in the Bill, and I agree with my noble friend that it would be much better to terminate the clause at the point he suggested. People in tied cottages are at a disadvantage anyway, but your Lordships will not want me to go into that very broad subject. However, the noble Earl on the Front Bench opposite should give careful consideration to what has been said, and I hope that he can say something to us which will give my noble friend and myself some satisfaction.
Lord Mackie of Benshie: I must say that, for the first time, I disagree. I must declare an interest, because I am a farmer and in this case I can see incredible difficulties arising. It would place many farmers in an intolerable position, if the house of a stockman was taken up by his wife. There must be other solutions. What I said applies also in the case of agricultural holdings. If a farmer in a let farm was excluded from the house, it would make the running of the farm extremely difficult. I think that other solutions need to be found in this case.
Lord Drumalbyn: Before my noble friend replies, I wonder whether I may ask him to explain a little how these two legs of subsection (3) will work. I notice that paragraphs (a) and (b) are connected by the word "and". I have read that as meaning that in every case the court would have to look at Clause 3(3) together with the requirements of paragraph (b). Secondly, I do not quite understand the construction of paragraph (b). The words,
"subject to a requirement that the non-applicant spouse or, as the case may be, both spouses must reside in the matrimonial home",
are not the same as in the draft Bill which is attached to the Scottish Law Commission's report. What is the significance of that? I do not understand that. I hope that my noble friend will tell us the significance of the difference between the two drafts.
The Earl of Mansfield: If I may say so, I think that the noble Lord, Lord Ross, is under something of a misapprehension in the case of this amendment, probably prompted by his dislike of tied houses, and that has prompted the noble Lord, Lord Collison, to spring to his defence. I shall not say anything about tied houses in Scotland and their desirability or otherwise. What I shall say is that what this subsection does is to give the court a complete discretion.
What the Scottish Law Commission did when it proposed this subsection was to give the court discretion in the case of, for example, service tenancies and tied cottages. In those circumstances, the court has a discretion where occupancy of the home by the non-applicant spouse was a condition of the lease. If that spouse were excluded, the tenancy might come to an end and then the applicant spouse would lose his or her occupancy right under Clause 5(1)(b), and the object of the exercise would be frustrated. I wish to emphasise that the court is given only a dis-
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cretion not to grant an exclusion order; it is perfectly possible for an exclusion order to be granted against someone living in a service tenancy, if the court feels that it is reasonable, right and proper in the circumstances.
So what, then, is the situation which was envisaged by the Law Commission when it made this recommendation? For instance, it could be an isolated tied cottage where a husband could not find suitable accommodation which would enable him to continue his employment if he was excluded. However, in other circumstances—for instance, if suitable alternative accommodation could be found for a non-applicant husband, and his employer accepted that his exclusion from the matrimonial home did not terminate the lease—it would be perfectly reasonable for the court to make an order under Clause 4(3) and it would be at liberty to do so. Whether the exclusion order means the loss of the tenancy, with the result that the roof over both of these people disappears, is a matter for the circumstances of each case. It is a matter which each court will have to take into account.
All that subsection (3) does is to enjoin the court to have regard to these differing situations which I have tried to illustrate. The words of the clause draw to the attention of the court and the applicant spouse the conditions to which the court must pay heed before either making or not making an order, in order to avoid the court granting an order which effectively led to the applicant spouse losing his or her home and not only occupancy rights.
I am afraid that I do not know why the present draft varies from the Scottish Law Commission's draft. It is by no means unusual. But I shall let my noble friend know verbally, if I get the answer, or otherwise. He asked me how subsection (3) was constructed. Under paragraph (a), the court has to pay regard to the circumstances set out in Clause 3(3). Paragraph (b) applies only if the home is in one of the categories referred to in Clause 6(1) or 6(2). I hope that that satisfies my noble friend.
What I want to say to the noble Lord, Lord Ross, who put down an important amendment, is that nobody is being denied any rights. In effect, the court is being urged in statutory form to consider all the aspects of the case, and to do justice according to the possibilities of the situation.
Lord Ross of Marnock: I should have hoped that the court would do that anyway. If my amendment were accepted, that injunction would still be laid upon the court. Subsection (3) reads:
"The court shall not make an exclusion order if it appears to the court"—
if I include the new words which the Minister has inserted—
"that the making of the order would be unjustified or unreasonable—
(a) having regard to all the circumstances of the case including the matters"
referred to and not excluding others. There is no doubt that, by mentioning specifically the matrimonial home being an agricultural holding, a service cottage or a business carried on from there and affecting employment, that it is putting the balance away from

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the protection of the wife and family as regards the matrimonial home.
It is also taking for granted that the noble Lord and all the other farmers in Scotland would allow that kind of thing to go on. What would they do with a worker of that kind? Would they not interfere? They would probably take other extreme action. They would probably evict him, in which case the wife and children would again be homeless. But I know Scottish farmers and farmworkers. Very few of them will make applications. It will not mean ruin to those who are applying for exclusion orders on their husbands. The noble Earl knows quite well that there are no more tender-hearted people than farmers when it comes to an exclusion order which has been granted by the court. It does not automatically mean that the wife and family would be put out by a Scottish farmer.
It has been put to me—and I have a great deal of sympathy for what they say—that the tied cottage problem in Scotland is different from that elsewhere. In Scotland we have the sheriff. The noble Earl is a Scottish farmer. He could not throw people out without the sheriff coming along and safeguarding certain human rights for the individual. I do not think that this is fair. Its implication and effect are important. It has been taken by the noble Earl, looking at it from the farming point of view, to mean that whoever else the Bill applies to, it will not apply to people living in service cottages, be they tied cottages, police cottages, or anything else. That is a matter for considerable regret.
I do not propose to divide the Committee upon the amendment but I am very unhappy indeed about the Government's insistence upon the inclusion of these words. I do not think they add anything. To my mind, they take away the discretion of the court, by virtue of the fact that the court has to look specially at this, which is in addition to all the other things that they have to take into account. It is quite unnecessary and, to my mind, it is something which weakens the Bill and its effect.
The Deputy Chairman of Committees (The Earl of Listowel): Is the amendment, by leave, withdrawn?
Lord Ross of Marnock: No; but I will allow it to be voted down.
On Question, amendment negatived.
5.22 p.m.
The Earl of Mansfield The Earl of Mansfield: moved Amendment No. 20:
Page 7, line 1, after ("shall") insert (", on the application of the applicant spouse,").
The noble Earl said: Perhaps I could speak to Amendments Nos. 29 and 51 when I move this amendment. These amendments are necessary to comply with the accepted court procedure that the court may grant only what is specifically requested in the application before it. The court is still obliged to grant the orders under Clause 4 and to attach a power of arrest under Clause 14. The amendments do not provide for any element of discretion by the court. It is expected that the solicitor acting for the applicant spouse will as a matter of course include in the crave
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of the application all the orders which the Bill provides for that spouse's protection. In relation to exclusion orders, the amendment to Clause 14 needs to be read in conjunction with the amendment to Clause 4, to provide a new subsection 6(A). This has the effect of requiring every competent application for an interdict to seek a power of arrest, and the court has no discretion to refuse such a request. I beg to move.
On Question, amendment agreed to.
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 21:
Page 7, line 4, after ("interdict") insert ("inter alia").
The noble Earl said: May I take Amendment No. 26 along with Amendment No. 21. This amendment inserts the words "inter alia". The sheriff may grant an interdict inter alia prohibiting the non-applicant spouse from entering the matrimonial home. It is intended to give to the sheriff a very wide discretion as to what he wants to do. Subsection 5(a)—this is Amendment No. 26—puts in a power prohibiting the non-applicant spouse from entering or remaining in a specified area. I object to the words, "specified area". This is too vague and too uncertain. I do not know what it can mean. I am satisfied that sheriffs are sensible people. They will not do stupid things. None the less, you are giving to the sheriff a power which is completely new to Scots law and which could have an extremely wide extension.
What is a "specified area"? Is it the gardens and the immediate surroundings of a house? Is it an area, or a parish? Is it a district? Is it a town, is it a county or, I may even say, is it Scotland? All of those areas are within the power of a sheriff. I do not think that they should be extended so far as they are. I should prefer to allow the sheriff to have wide powers to do what he thought to be appropriate in this case.
I should also like to make this point. If a specified area is made and a man goes in there to make some purchases or because he has business there, immediately he is liable to arrest. This is a very strong power. I shall say a word or two presently about arrest. I am not quite certain that the free use of arrest in the Bill is not extended a great deal further than it needs to be.
I would ask the Government either to accept my amendment and to leave it for the sheriff to decide what is appropriate or to find a very much more satisfactory definition of the words "specified area". The Scottish Law Commission use words which give a much more narrow sense:
"An interdict prohibiting the husband from entering an area which includes the matrimonial home itself".
That gives a sense of it being two or three streets around the house, which could be appropriate. A "specified area" could mean anything. I would ask the noble Earl either to accept what I am suggesting, to leave the sheriff perfectly free to do what is proper, or to find some much more narrow sense in which the term "specified area" could be used. All we want to do is to prevent the wife or the husband from being molested. The words used here are widely in excess of what is essential initially for that purpose. I beg to move.
Lord Fraser of Tullybelton: I should like to support

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the noble Earl, Lord Selkirk. It seems to me that this is giving an unduly wide discretion to the sheriff. What we want to do is to, prevent the husband from standing outside the front door or at the end of the street in such a way as to frighten the wife or to annoy her every time she goes in and out of the house. If the specified area were defined as being an area immediately adjoining the house, thus putting a limit upon it, I should have thought that was what was intended and that it ought to be stated in the Bill. As the Bill at present stands, it seems to me to be unduly wide and unnecessarily wide.
Lord Ross of Marnock: The noble Earl kept using the words "in a specified area", but the Bill says "in a specified area in which the matrimonial home is situated". This is very much more limited than what the noble Earl seemed to imply. He even used the word "Scotland". If common sense is used, I think the sheriffs will be able to specify the area in which the matrimonial home is located in a very much more restricted way than that. I certainly could not support this particular amendment of the noble Earl.
The Earl of Selkirk: May I make this point to the noble Lord: it is not that I think that the sheriffs are stupid but that we are giving powers which are grossly in excess of what is required. I am always against giving powers which are wider than necessary. That is the point which my noble and learned friend Lord Fraser of Tullybelton made, and that is what I am objecting to.
Lord Ross of Marnock: I can assure the noble Earl in relation to the kind of case we are dealing with and the kind of persons we are dealing with—the violent husband who is determined to continue to be violent in respect of both the wife and the children—that shortly I am going to move an amendment which he may think is even wider but which I believe to be absolutely essential in relation to the history of the cases which have built up in Scotland over a period of time. I do not think that there is very much question about the desirability of "specified area in which the matrimonial home is situated". That really means the street and what the noble and learned Lord, Lord Fraser of Tullybelton, suggested: the immediate surroundings of the home.
Lord Drumalbyn: The difficulty is that a man's place of work may be in the same area.
Lord Ross of Marnock: But not in the area of the home.
The Earl of Mansfield: It is not wholly satisfactory that my noble friend moved Amendments Nos. 21 and 26 together. If I may take Amendment No. 21 and hopefully dispose of that, if Amendment No. 28 which I intend to move in due course is accepted by the Committee then such provides for any supplementary interdicts. It will provide for an appropriate element of discretion on the part of the court. I hope, therefore, that the noble Lord will see fit to withdraw that amendment.
I come now to Amendment No. 26. The Govern-
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ment believe that subsection (5)(a) is a necessary provision which should be open to the court. It is, for instance, intended that an excluded husband should not be allowed to loiter in the street outside the matrimonial home. If he has been guilty of domestic violence in the past, this is bound to be upsetting and can be intimidating to the applicant wife. The intention is that in more urban surroundings a close, a stair or a street might be an appropriate "specified area", but I readily concede that there may be exceptional circumstances which arise and the sheriff may wish to depart from the norm.
I appreciate that this represents a considerable departure from the existing principles of Scots law. Nevertheless, the Scottish Law Commission considered that it was justified and the Government think the same. If I may turn to paragraph 4, subparagraph 18, the Law Commission says:
"It is not presently competent under Scots law to interdict a person from being in a public place and it is accordingly not possible in cases of apprehended domestic violence to prohibit the violent husband from entering any specified public area near the matrimonial home. In our memorandum we propose that in such cases it should become competent not only to interdict the husband from entering the matrimonial home but also to interdict hint from entering a specified area surrounding that home.".
It goes on to argue and reflect and eventually comes down in approval of a system which apparently obtains in England and Wales but I dare not quote that in the presence of the noble and learned Lord from Scotland.
Be that as it may, it seems to me that the argument in that part of the report which I have quoted is—I will not say conclusive, because we are having a debate—certainly a very powerful one and I think that the power that is given to the sheriff to protect wives in this instance needs to be rather wider than it would be if the Committee were to accept my noble friend's amendment.
I cannot conceive that at the moment I can say in honesty that I will take this away and think again because it is difficult to know what the Government could do about this. What I can say to my noble friend is that, if he would like to have conversations or to make any suggestions between now and the next stage of the Bill, then, of course, the Government would be happy to consider them and to have discussions to see whether a form of words that might commend itself to the Law Society of Scotland and the Faculty of Advocates can be devised.
The Earl of Selkirk: I readily accept what the noble Earl has said but I do not think it is as difficult as he suggests. An area immediately surrounding the matrimonial home would suit me entirely, but the specified area is quite unspecified. It is an enormous area and it is, as the noble Lord said, an entirely new innovation in Scots law. If he is prepared to consider something of that sort I should be glad to have the opportunity of discussing it. I will not press this further now but I think it is an innovation which should not go without observation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.35 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 22:
Page 7, line 8, leave out ("except with the written consent") and insert ("without the express permission").
The noble Lord said: This will be a little more lighthearted. If noble Lords will glance at subsection (4)(b) they will see that the excluded spouse is prohibited
"from entering the matrimonial home without the express permission of the applicant",
but when it comes to removal by the non-applicant spouse (that is the husband) that can only be done "with the written consent". Why the change of phrase from "express permission" to "written consent"? I suggest that they should both be the same. It is as simple as that. I beg to move.
The Earl of Mansfield: I think the noble Lord and I agree that there could be circumstances in which a spouse against whom an exclusion order had been made might need to enter the matrimonial home, for instance, to collect something from it. It would be absurd to require that spouse to obtain a court order to enable him to enter the home if the other spouse has no objections. So what the Bill therefore provides is that the other spouse can permit, either entry to, or the removal of an object from, the matrimonial home. Permission to enter can be given verbally but consent to the removal of any item of furniture or plenishings has to be in writing.
This may seem to be an onerous condition, but it provides protection for both spouses and the important part is that the consent of the spouse occupying the matrimonial home in those circumstances is in fact to a degree a derogation from the court order and I would expect that such a consent would refer to a specific item or items. The noble Lord may agree that if there was a subsequent dispute as to the facts, a written record as to what permission had been given so far as the removal of effects is concerned could be invaluable.
So this really is for the protection of both spouses. Supposing it was, as the noble Lord suggests, with the "express permission" and there was subsequently a genuine complaint, the court would then be in a position where it might treat that as a breach of the interdict. But if the spouse in occupation who had given the consent had either genuinely misunderstood what was being asked or mischievously decided to go to the court, having changed his or her mind thereafter, the excluded spouse could then be accused of a breach of interdict and be liable to arrest. So we think it is better for each party to accept minor inconvenience; in other words, to have the consent put in writing and gain the safeguards, which could be very valuable. Except for children, in a disputed marriage nothing is so contentious as property.
Lord Ross of Marnock: I think the explanation has been foolproof. We have to remember that we are dealing with unreasonable and unhappy people, and it may well be that we have to give them both express permission in order to enter, and once they have entered, if they are to be allowed to take something away, it all has to be listed and duly signed and sealed. I think one of our difficulties in relation to this is that
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it is always reasonable people who have to make the laws for the safeguarding of fairly innocent people from those who are unreasonable and violent. I certainly accept the explanation given by the Minister and I beg leave to withdraw the amendment
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees (Lord Nugent of Guildford): I should perhaps explain that if Amendment No. 23 is agreed to, I cannot call Amendments Nos. 24 and 25.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 23:
Page 7, leave out lines 11 to 13.
The noble Lord said: Not for the first time have I complained of appearing to be tough in giving people rights and then suddenly putting in at the last minute a proviso that virtually destroys these rights. Before it was Clause 1 in respect of the easier enunciation; and here we are doing it again. With exclusion orders having mandated the court to take certain action if it is satisfied, we then come to this very weak two and a half lines:
"unless the non-applicant spouse satisfies the court that it is unnecessary for it to grant such a remedy as it is mentioned"—
although these words are going to be deleted at a later stage. To my mind, without the provisions of Clauses 4(4) paragraphs (a) to (c), an exclusion order would be useless, certainly as a remedy against violence, and it would only suspend occupancy rights without putting the violent person out. Surely that decision was taken a long time ago to come to this particular point. I do not see what they add to this clause in respect of the exclusion order because the court does not make an exclusion order unless it is satisfied that the making of the order would be justified and reasonable. Why do we have these words at this particular point, when we say in subsection (4) that in making an exclusion order the court shall do what is laid down in paragraphs (a), (b) and (c), unless the non-applicant spouse satisfies the court that it is unnecessary? If it is unnecessary for that it is unnecessary for an exclusion order. That is what it comes to. I suggest that these words are unnecessary in saying what we really mean in respect of exclusion orders in the earlier part of this clause.
Once again I fear that in giving this let-out one is buoying people up with the hope that they are going to be free from violence, but then leaving it to the court to be persuaded that the non-applicant spouse does not require to be treated in this particular way. If these words are necessary, one can forget all about the exclusion order; if one means what one says about the exclusion order, then these words are unnecessary. I beg to move.
The Earl of Mansfield: I would have hoped that the noble Lord would have commented on, if not covered, Amendments Nos. 24 and 25, which are Government amendments and which I believe provide a reasonable and perfectly satisfactory compromise. What the noble Lord seeks to do is to deny the court any discretion in relation to the granting of a warrant or interdict sought to make an exclusion order effective. I accept that without Clause 4(4)(b) there is little purpose in

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having an exclusion order, but there could be special circumstances. For instance, if the non-applicant spouse has left home and it is obvious he has no intention of returning, then Clause 4(4)(a) would not be appropriate, and if he had another fully furnished home neither would Clause 4(4)(c) be appropriate. Therefore, I suggest to the Committee that there should be an element of discretion in these matters. This is what I have sought to achieve in Amendments Nos. 24 and 25.
With the leave of the Committee, I should like to speak to Amendment 24 because, as has been pointed out, if the noble Lord's amendment is agreed to, that would exclude Amendments Nos. 24 and 25. I do not have very much more to say. The Government consider that Clause 4(4)(b) is an almost inevitable ingredient of an exclusion order and propose that that should be mandatory. But Clauses 4(4)(a) and 4(4)(c) in circumstances which I have sought to illustrate might not be appropriate, and in those circumstances I feel that the court should have a certain amount of discretion in the matter and that the removal of this discretion is not warranted. To put it in another way, the removal of the court's discretion in relation to Clause 4(4)(b) is a sufficient safeguard as to the effectiveness of an exclusion order. For that reason I hope that upon reflection the noble Lord, Lord Ross of Marnock, will withdraw his amendment.
Lord Ross of Marnock: I am not all that keen at times on half-way houses. I am still not convinced of the undesirability of removing these lines, but at least the Government have gone some way in remoulding, this by leaving out the Clause 4(4)(b). In view of that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 24:
Page 7, line 11, after ("unless") insert (", in relation to paragraph (a) or (c) above,").
On Question, amendment agreed to.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 25:
Page 7, line 12, leave out ("as is mentioned in paragraph (a), (b) or (c) above").
The noble Earl said: This amendment is consequential and I beg to move.
On Question, amendment agreed to.
[Amendment No. 26 not moved.]
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 27:
Page 7, line 16, after ("area") insert ("or areas, including an area").
The noble Lord said: This amendment brings us back to something we were discussing earlier; the specified area. I suggested that I was going to widen this a little—not widen the area exactly but widen the discretion of the courts in respect of the area. Sometimes the family are at risk outside the home and not just in the surroundings of the home. It has been known for violent husbands who have been dealt with by the courts to accost their wives at school when they are meeting their children or at their place of work. The implication of the effect of my amendment would
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be to leave it to the court to specify more than one area if necessary, in addition to the area in which the matrimonial home is situated. That is going to be looked at again.
This point is one that arises from experience; violent husbands have gone to the place where their wives work, or to a school, and have treated them to another dose of the violence which probably led to the original trouble with the courts. These are areas which the husband may predict from his knowledge will be used by the family or his wife. If the Minister can give me some assurance that he is prepared to look at this matter, I would not wish to delay the proceedings and will withdraw my amendment.
The Earl of Mansfield: I am tempted to say that with my noble friend, Lord Selkirk, on one side and the noble Lord, Lord Ross of Marnock, on the other the Government's drafting is probably just about right.
Lord Ross of Marnock: What a poor argument.
The Earl of Mansfield: I shall resist the temptation to do so because I am being so gracious to everyone tonight. What I do say to the noble Lord, Lord Ross, is that his amendment has difficulties which he may not altogether have appreciated. He is perfectly right in saying that it would greatly extend the areas from which the non-applicant spouse could be excluded by mean of an interdict, and it could lead to such a person being prohibited from entering areas around the other spouse's place of work, or indeed, the children's school. I do not believe this is a solution which would be favoured by the Scottish Law Commission. If this amendment or anything like it were accepted, it would be necessary to define such areas very strictly indeed, particularly if the spouses worked near to each other, for instance!
Being serious, I believe that in fact we have got it nearly right as the Bill is drafted, although I have undertaken to see whether it should be tightened. I say that for this reason. If an applicant fears that the non-applicant spouse might molest her at her place at work, for instance, or at the children's school, she can claim an interdict from the court restraining him from such conduct. This has nothing to do with the matrimonial interdict at the time she applies for it. Under Clause 13(2) it would be defined as a matrimonial interdict, and it would, therefore, or could, attract the attachment of a power of arrest under Clause 14(1)(b). So the wife or the applicant spouse would be afforded a very considerable measure of protection. I would have thought that these provisions as they stand would be sufficient to deter a non-applicant spouse without the necessity to restrict his freedom of movement unduly.
Naturally, as I have undertaken to my noble friend that I will look at this I will also look again at the points the noble Lord, Lord Ross, makes, but I am bound to point out that I think he is already catered for to an extent, or rather his spouse is already catered for, by the existing law.
Baroness Gaitskell: May I intervene for one moment in support of my noble friend and against the Minister. We hear every other day of instances where this occurs.

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I do not know why the Minister is resisting this. It is a very common occurrence. What is there against it?
Lord Fraser of Tullybelton: May I venture to encourage the Minister in his attitude? If there is a fear of the wife being accosted or molested at her work or at the school, she can get an interdict against that conduct by her husband. But this proposal is to exclude the husband from entering or remaining in an area. To say he is not to go to the area where the school is or where the wife works, which may be in a street down which he has to pass to his own work or for some perfectly legitimate reason, is quite a strong thing to do. She can get an interdict against him misbehaving there. If it is unnecessary, as I should have thought it was, to have this order excluding him from going to the area at all, I should have thought it was desirable not to extend the power beyond what it is at the moment. What the Scottish Law Commission recommended was excluding him from an area which included the house, which is I think exactly what is in the Bill. I should have thought there was great objection to extending it to other areas unless it is absolutely necessary, and as far as I can see it is not necessary.
Lord Ross of Marnock: It was because I considered it absolutely necessary that I put the amendment down. I would not have done so otherwise. This is not a question of drafting. Here was I, prepared to defend the noble Lord's and the Scottish Office's drafting against the noble Earl, and he turns round and suggests that I take a different point of view altogether. I am putting in the need for this "other area" point of view, and I am very glad of the support from the noble Baroness in regard to this. It is true that this is what happens. I had a letter from the Women's Aid Committee in Edinburgh, who are dealing with this kind of thing day in and day out. They know far more about it than people who are drafting legislation or even than those of us who are sitting solemnly deciding what should be done. They feel that protection is required because it does happen; a husband has been able to predict where his wife will be at a certain time of the day, perhaps collecting the children from school, and has gone there and made scenes. The same thing applies to the place of work.
Remember, we are dealing with a violent husband. It is going to be a terrible hardship if he has got to make a roundabout route to go to work because he is banned from the area! That is the least of what I would wish upon him. Remember, the action is only being taken because the court decides it is necessary. The discretion is there for the court. When we are dealing with the question of the situation of the home, we should deal at the same time with the question of the possibility of violence and the molesting of the wife and children elsewhere. It is not good enough to say that if it happens they can get an interdict. I know an awful lot of people who do not apply this when it comes to getting an interdict against people poaching and fishing for trout. I am not too satisfied with that business. Here we are dealing with something very much more serious and more dangerous.
I am very disappointed indeed at the reaction of the
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Minister to this suggestion. This is not drafting; this is meeting a practical problem by putting in two or three words, and it still is at the discretion of the court There is nothing very draconian about it. I am sorry if the Minister cannot see his way to accepting it, but if he is going to look at it again I will also look at it again. We have always got another stage and another go, and it may well be that we will come to agreeable solutions. In view of that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 28:
Page 7, line 29, leave out ("protection of the applicant or any child of the family") and insert ("proper enforcement of an order made under subsection (4) above or paragraph (a), (b) or (c) of this subsection").
The noble Earl said: This amendment is intended to limit the other orders which the court can make to those which are supplementary to orders of the kind specified elsewhere in Clause 4. This is desirable so that an unreasonably sweeping interdict will not be available. I beg to move.
The Earl of Selkirk: I think I rather regret this in some ways. You are confining the applicant "as aforesaid" to simply three things—the ejection of the husband, the entering of the matrimonial home and the removal of furniture. It seems to me that the Bill as drafted—"protection of the applicant or any child of the family"—gives a wider context, and is the purpose for which this whole thing has been raised. Now we are narrowing it down to three points, though I do not say they are not necessary. The circumstances in which this sort of thing happens are multitudinous, and there may be circumstances which bring in the protective element required which are not included in subsection (4). There may be some better reason the noble Earl has for doing this, but I do not see that his present reasons are adequate.
The Earl of Mansfield: I really do not think the Scottish Law Society would like to hear my noble friend talking in this way. He moved an amendment which was specifically designed to fetter the court's discretion and (as it were) to preserve the non-applicant spouse's freedom of movement. Here am I in effect moving an amendment which will give the applicant spouse all the protection that he or she could possibly need, but which at the same time will have the effect that what I call an unreasonably sweeping interdict which might unjustifiably infringe the non-applicant spouse's freedom of movement will not be available, and my noble friend then complains about that. I think that this really is quite a reasonable provision, if one stops to think about it.
On Question, amendment agreed to.
The Deputy Chairman of Committees: The next amendment—No. 29—has already been spoken to.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 29:
Page 7, line 32, leave out ("where it appears appropriate" and insert (", on the application of the applicant spouse,").
On Question, amendment agreed to.
Lord Ross of Marnockhad given notice of his intention to move Amendment No. 30:
Page 7, leave out lines 37 to 39.
The noble Lord said: This amendment deals with a point which we discussed earlier and I withdrew the amendment on that occasion. I do not think that we need to repeat the discussion and, therefore, I shall not move the amendment.
The Earl of Mansfieldhad given notice of his intention to move Amendment No. 31:
Page 7, line 39, at end insert—
(" (6A) It shall not be competent to grant an interdict ancillary to an order made under this section unless the power of arrest referred to in section 14 of this Act is attached to such an interdict.").
The noble Earl said: It is slightly unusual for the Government to say "not moved", but I must tell the Committee that we are reconsidering the drafting of this amendment and in the present circumstances I shall not move it.
[Amendment No. 32 not moved.]
Clause 4, as amended, agreed to.
Clause 5 [Duration of orders under ss. 3 and 4]:
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 33:
Page 8, line 6, after ("(b)") insert ("subject to section 6(1) of this Act").
The noble Earl said: I beg to move Amendment No. 33. This amendment removes the possibility of conflict between Clauses 5(1)(b) and 6(1)(a) so that an order under Clause 5(1)(b) will only terminate an occupancy right if the dealing, usually to sell the matrimonial home, has the consent of the non-titled spouse. As presently drafted, Clause 5(1)(b) could provide a loophole for a titled spouse to deny the other spouse his or her occupancy rights. I think that this amendment meets my noble friend's point in the next amendment, Amendment No. 34. I beg to move.
The Earl of Selkirk: I should like to thank the noble Earl. This amendment saves me the bother of moving the next amendment.
On Question, amendment agreed to.
On Question, Whether Clause 5, as amended, shall stand part of the Bill?
Lord Ross of Marnock: I should like to make only one point, and that is to draw the Government's attention to the fact that even the termination of marriage—be it divorce or anything else—does not mean to say that the troubles of the wife or the ex-wife are over in respect of the ex-husband's activities and actions. It may well be that the continuation of an exclusion order would be required.
The Earl of Mansfield: I think that the point is that on termination of the marriage different rights accrue and the courts will have different ways of preserving them.
Clause 5, as amended, agreed to.
Clause 6 [Continued exercise of occupancy rights after dealing]:
[Amendment No. 34 not moved.]
6.5 p.m.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 35:
Page 8, leave out lines 31 to 34.
The noble Earl said: I beg to move Amendment No. 35 and I should also like to speak to Amendments Nos. 44 and 79. These amendments extend the protection against any dealing which might prejudice the occupany right of the non-titled spouse, to those living in caravans, houseboats and other structures. This protection is also secured for spouses with joint title to such a home. The amendments remove the area of disadvantage which residents of caravans, houseboats or other structures had in terms of the Bill compared with spouses living in a house.
The Scottish Law Commission recommended that its main proposals relating to occupancy rights should extend to caravans, houseboats and other structures. The draft Bill, however, specifically excluded them from the definition of "matrimonial home" for the purposes of protection against an adverse dealing. This was because their scheme (which envisaged a decree of annulment of the dealing) was restricted to homes which were heritable property and so capable of being registered in the Register of Sasines or the Land Register, when it came into operation. This could not be the case with movable property such as caravans. The scheme was consistent with the original recommendations for matrimonial home notices and a greater reliance on registration as a means of securing protection, both for non-titled spouses and third parties. One of the positive results of the Government's decision not to follow those proposals is that the reasons for excluding caravans and so on from the definition of "matrimonial home" no longer apply. The amendments will accordingly bring to those living in caravans and so on, all the rights and protection available under the Bill to those living in houses. I beg to move.
Lord Ross of Marnock: A very unusual conjunction—the noble Earl, Lord Mansfield, and the Lord Ross of Marnock, but I welcome on this occasion that the Government have adopted the suggestion of a very suitable amendment. I think that it would have been unfair to limit the protection or to deny it in respect of caravans and the like. I am very glad indeed to have the support of the noble Earl as regards this particular amendment.
On Question, amendment agreed to.
The Deputy Chairman of Committees: The next amendment is No. 36. I should explain that, if Amendment No. 36 is agreed to, I cannot call Amendment No. 37.
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 36:
Page 9, leave out line 5 and insert—
("(a)" before the dealing becomes a binding obligation on the titled spouse the non-titled spouse either"").
The noble Earl said: I beg to move Amendment No. 36. The noble Lord, Lord Ross of Marnock, drew my attention to this matter in Clause 6 which is the

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normal procedure for selling a house which may be a matrimonial home. It seems to me that there are two sides to this matter. First, a buyer wants to be sure of the title he is getting. Secondly, we want to be fair to the wife or husband of the matrimonial home. It seems to me that both undertakings should be settled before the sale takes place.
Moreover, we should be quite clear that the rights of the wife are clearly stated in the documents. I do not think that there should be any doubt about that. With all respect to the great abomination which the noble Lord, Lord Ross, has for violent husbands—and I sympathise with him—we must remember that there are a great many normal sales which take place which have nothing to do with that and which must not be impeded. The sale of houses takes place constantly and it should be done as cheaply as possible.
I have rewritten this clause. It is a little complicated because I should like to deal at the same time with Amendments Nos. 38 and 39. The Bill would then read as follows:
"This section shall not apply in any case where—
(a) before the dealing becomes a binding obligation on the titled spouse the non-titled spouse either—

(i) consents or has consented to the dealing in an attested writing in such form as the Secretary of State shall by order made by statutory instrument prescribe; or

(ii) renounces or has renounced his or her occupancy rights, either generally or in relation to the matrimonial home to which the dealing relates in terms of section 1(5) of this Act."

That, as the noble Lord will recall, was the one which we discussed previously. I suggest that that is the normal way which should be adopted so that both parties are satisfied—those who acquire the house, on the one hand, and, on the other hand, those who sell, including, of course, the non-titled wife. I beg to move Amendment No. 36.
The Earl of Mansfield: So far as timing is concerned, it seems desirable that there should be as much flexibility as possible in relation to the timing of any consent. If through some oversight consent has not been obtained it is, I believe, sensible that the oversight may be simply and immediately rectified so that the dealing may not be prejudiced.
I am much more attracted by the other two amendments to which the noble Earl has spoken. I have no doubt that a prescribed form of consent would be helpful both to the legal profession and to the Keeper of the Registers of Scotland since an attested prescribed form of consent will be easily recognisable as such and if its authenticity is challenged the onus of showing the consent to be false rests on the challengers. On the other hand, there may be the danger that any prescribed form may not cater for unusual cases, and the Government would like to give further consideration to the aspect of prescription of the form of consent. So, with the assurance that we shall be considering this amendment, I hope that my noble friend will withdraw it.
The Earl of Selkirk: I am happy to do that and I am grateful to my noble friend for what he has said. I am not quite clear over what he said about timing.
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There is a considerable advantage in knowing exactly where you stand when you make a considerable expenditure, as you would with a house. I should have thought that it would be very much better for everyone if this was, if possible, before the contract took place. I am not quite sure why my noble friend objects to that.
Amendment, by leave, withdrawn.
[Amendments Nos. 37, 38 and 39 not moved.]
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 40:
For galley 52—
Page 9, line 9, at end insert—
("( ) the person having title, either as proprietor or tenant, to the house to which the dealing relates has stated in an attested writing in such form as the Secretary of State shall by order made by statutory instrument prescribe before the dealing becomes a binding obligation on the said person that the dealing is not in respect of a matrimonial home.")
The noble Earl said: This is a rather important amendment, because although it is desirable to know what matrimonial rights there are, it is also desirable to know what there are not. This is supposing the position when a house is sold which is not a matrimonial home. It is, of course, important to the purchaser to know where he stands here. There is no notice of what is a matrimonial home and, equally, there is no notice of what is not a matrimonial home. Therefore, I would ask your Lordships to accept that this is a security—not least for granting a mortgage—so that people know where they stand. If it is impossible to have this, it will make it that much more difficult for people in Scotland to obtain mortgages and securities on their properties. For that reason, so that those who wish to do so may benefit, this amendment should be included. I beg to move.
The Earl of Mansfield: This amendment would provide protection to a purchaser of a home in which an occupancy right remained if the seller had made an attested statement that the property was not a matrimonial home. Normally this would arise where he or she was unmarried or divorced. The effect would be to defeat the occupancy right if there was a spouse and the statement was false. The spouse would in these circumstances have to raise an action for damages against the seller, probably her husband.
This amendment would run completely counter to the philosophy underlying the Bill, in that the primary objective should be the protection of the non-titled spouse's occupancy rights. These rights could be defeated by a false statement and the Government cannot therefore accept the amendment. It seems preferable in any event that any declaration should relate to the titled person's marital status rather than to the nature of his home, which could conceivably be subject to the occupancy rights of a spouse of a previous owner or tenant, of which the present person with title is unaware. I regret that I have taken the view which the noble Lord, Lord Ross, might describe as "draconic". Nevertheless, it is the Government's view.
The Earl of Selkirk: To be frank, I do not quite understand what my noble friend is saying. It is

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perfectly clear that the matrimonial right is an overriding right. This would not in any way stop a matrimonial right superseding a statement of this sort. This is merely something that acts at the moment of purchase. All it says here is that it is not a matrimonial home. The person cannot possibly undertake that it will never become a matrimonial home; it may even be obvious that it should be one. I hope that my noble friend will look at this a little more closely, because I do not think that he has quite understood the situation. I do not want to press this amendment now, but it is important that I should like him to look at it a little more. If he will do that, I shall be very glad to withdraw it.
The Earl of Mansfield: I shall certainly look at what my noble friend has said in the Official Report and reconsider it.
The Earl of Selkirk: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Chairman of Committees: I should explain that, if Amendment No. 41 is accepted, I cannot call Amendment No. 42.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 41:
Page 9, line 18, leave out subsection (4) and insert—
(" (4) The Land Registration (Scotland) Act 1979 shall be amended as follows—
(a) in section 6(4)—

(i) after the words "the interest of" there shall be inserted "(i)"; and

(ii) after the words "is not a long lease" there shall be inserted—

"and
(ii) a non-titled spouse within the meaning of section 6 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981.";
(b) in paragraph (6) of section 9(4)—

(i) after the words "the interest of" there shall be inserted "(i)"; and

(ii) after the words "is not a long lease" there shall be inserted—

"and
(ii) a non-titled spouse within the meaning of section 6 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981."; and
(c) in section 28 in the definition of overriding interest after paragraph (g) there shall be inserted the following—
"(gg) the non-titled spouse within the meaning of section 6 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981;".").
The noble Earl said: This amendment removes from the Keeper of the Registers the obligation in terms of the Land Registration (Scotland) Act 1979 to note an occupancy right as an overriding interest on the title sheet or to rectify any inaccuracy in such a note. It places an overriding interest in exactly the same position as a short lease in these respects.
Among the reasons for departing from the Scottish Law Commission's original proposals for matrimonial home notices as registrable indications of an occupancy right, was the Government's conviction that the scheme was unduly complicated and afforded an unsatisfactory degree of protection to a non-titled spouse if she did not register such a notice. A further consideration was that substantial additional manpower
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would be needed in the Department of the Registrars to handle the new notices. As a result, the cost of registration would have to increase. This is similarly a factor with short leases. The proposals that the occupancy right should be regarded as an overriding interest was among other possible approaches on this point on which the Scottish Law Commission was informally consulted last autumn, after the publication of its report.
Clause 6, as drafted, however, still allows for the noting of an occupancy right as an overriding interest. This could lead to the kind of increase in manpower which was considered to be a weakness of the Scottish Law Commission's proposals. Moreover, solicitors and prospective purchasers will assume that there is an occupancy right and will make their own inquiries to establish the true position in relation to the present proprietor. Noting the occupancy right is not therefore thought to be necessary. In fact, it may be absent for any one of three reasons: first, the non-titled spouse has consented to a dealing by the titled spouse; secondly, the non-titled spouse has renounced his or her occupancy rights under Clause 1(5); or, thirdly, the owner of the property is divorced or unmarried. It would however be unreasonable to expect a purchaser or lender therefore to make inquiries about a previous proprietor.
It is intended that the Land Registration (Scotland) Rules 1980 will be amended so that the Keeper will be required to disclose the absence of an occupancy right by virtue of any of the three reasons that I have set out. In this way useful information will be available on the title sheet for prospective purchasers without diminishing the occupancy rights of a non-titled spouse or requiring anything like the same kind of manpower implications for the Keeper. I beg to move.
The Earl of Selkirk: I should like to ask only one question. In the last line is my noble friend registering the "non-titled spouse"? Would it not be wiser to register the "rights conferred on a non-titled spouse"?
The Earl of Mansfield: I will examine that.
On Question, amendment agreed to.
[Amendment No. 42 not moved.]
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 43:
Page 9, line 23, at end insert—
("(5) Section 6(1) of the Land Registration (Scotland) Act 1979 shall be amended by inserting after paragraph (f) the following:
(ff) a consent to any dealing or a renunciation of occupancy rights in relation to a matrimonial home in terms of the Matrimonial Homes (Family Protection) (Scotland) Act 1981.").
The noble Earl said: I should simply like to beg to move this amendment.
The Earl of Mansfield: As a result of my last amendment to Clause 6(4), this amendment would not be appropriate. It is intended that the existence of an occupancy right, or a consent or renunciation to defeat such a right, will not be registrable. The existence of a consent or renunciation may be noted on the title sheet as a result of a new rule amending the Land

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Registration (Scotland) Rules, which will be made after the Bill comes into operation.
The Earl of Selkirk: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6, as amended, agreed to.
Clause 7 agreed to.
Clause 8 [Provisions where both spouses have title.]:
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 44:
Page 10, line 35, leave out ("The definitions of "dealing" and "matrimonial home"") and insert ("The definition of "dealing"'').
On Question, amendment agreed to.
Clause 8, as amended, agreed to.
Clauses 9 to 11 agreed to.
Clause 12 [Transfer of tenancy.]:
6.20 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 45:
Page 13, line 25, leave out ("without intimation to the landlord").
The noble Lord said: The amendment suggested is to subsection (5) in line 25, where the court makes an order granting an application for the transfer of the tenancy to somebody else. I see the words: "without intimation to the landlord". I question whether this is fair. When the hearing takes place the landlord would be there and have a chance of being heard, but when the decision is made nobody is going to tell him about it. Why this "without intimation to the landlord"? Is it right? Could not we do without these words altogether? I beg to move.
The Earl of Mansfield: I anticipate that my noble friend Lord Selkirk is going to move his next amendment, which is Amendment No. 46. This seeks to ensure that the landlord is notified of any court order which transfers the tenancy. The Government accept that it is appropriate that the landlord should be notified of any change of tenant. I am not entirely happy with my noble friend's drafting. If and when he does move the amendment I shall suggest that I take it away and consider the matter. I hope that that will persuade the noble Lord, Lord Ross, to withdraw his amendment too.
Lord Ross of Marnock: I shall gladly withdraw my amendment in the knowledge that the Government have realised that they have sinned, and that they are going to do penance in some other way. The penance is that the poor old draftsmen in the office will sit down for hours and decide what to put in its place. I could give them a few ideas, but they are there to do the work and we are just here to make them do the work and see that it is right. I shall not press this amendment, and I am glad to withdraw it.
Amendment, by leave, withdrawn.
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 46:
Page 13, line 28, at end insert—
("( ) An order made by the court in terms of subsection (5) above shall be served on the landlord within 48 hours of the making of the order.").
The noble Earl said: I am grateful for what my noble friend has said. I am quite happy for this amendment to be redrafted. The point is that the application is made to the landlord but when the court comes to a decision he is not informed. Obviously he should be informed, and it is right and proper that he should be. I hope that the noble Earl will agree. I beg to move.
The Earl of Mansfield: Where my noble friend's amendment is defective is that it does not say who is going to serve the notice, and neither does the clause as it stands. That is what we have to think about.
The Earl of Selkirk: I beg to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Ross of Marnock Lord Ross of Marnock had given notice of his intention to move Amendment No. 47:
Page 13, line 29, leave out subsection (6).
The noble Lord said: We have had the main argument about the tied cottage, et cetera, before. I am not going to repeat it. Not moved.
[Amendment No. 47 not moved.]
[Amendment No. 48 not moved.]
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 49:
Page 15, line 1, leave out subsection (10).
The noble Lord said: This amendment I must move. This refers to the Tenants' Rights, Etc. (Scotland) Act, Schedule 1 paragraph 6. Under this the landlord—here being mainly the local authority—who wishes to transfer the secure tenancy of the dwelling-house to the spouse, or former spouse, of the tenant or person defined, and so on, has the grounds for repossession to enable this to be done. At the moment it is relatively easy for a wife who is having the kind of trouble we have been discussing today to be able to go to the local authority and to have the tenancy transferred to her. Now we are taking that away and relying entirely on Clause 12. I wonder about the wisdom of this. Transfer of tenancy to be done by the court on application by the non-titled spouse is going to mean expense, if not for those concerned then certainly in regard to legal aid, whereas the question of dealing with it through a local authority direct is very simple; there is no question of expense involved at all. Not only that, but being nearer to the ground, much nearer to the events, it tends to take place much more speedily and satisfactorily than, say, at the sheriff court.
I would suggest that the Government forget about subsection (10). It does not naturally follow. It would then he open to the non-titled spouse either to do it through the courts or, in the case of a local authority, to do it direct with the local authority housing department. Nothing would be lost. In fact, the people who would gain would be the Scottish non-titled spouses. This court avenue would not be open

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to tenants similarly placed in England and Wales, but there is no reason why we should not advance the protections for the non-titled spouses in Scotland in this particular way. I think it would be wise to delete subsection (10), and it certainly would not be to the disadvantage of Scottish tenants. I beg to move.
The Earl of Mansfield: The Tenants' Rights, Etc. (Scotland) Act, 1980, which conferred security of tenure on public sector tenants, would have prevented such administrative transfers as the noble Lord has spoken about, but interim provisions were included permitting administrative transfer to continue until the Scottish Law Commission's report, and the recommendations which it contained for transfer by the courts, were implemented. I should emphasise that it was always intended that the Tenants' Rights, Etc. (Scotland) Act 1980 should merely deal in this field on an interim basis.
The Government consider that the transfer of tenancies by the courts is more satisfactory than administrative transfer by local authorities since the courts are in a position to hear all the people involved. The question of accommodation is often before the courts in divorce and other matrimonial proceedings. It is convenient and easy for the courts to be able to deal with this aspect. If this amendment were accepted there would then be two separate methods of transferring tenancies, one of which was never intended to be permanent. I suggest that that would be confusing and illogical. The intention, as I have stated, is that once this Bill is enacted the provisions of subsection (10) will supersede the temporary provisions in the Tenants' Rights, Etc. (Scotland) Act 1980.
Lord Ross of Marnock: I cannot understand why the Minister says that it was never intended to be permanent. Scottish local authorities have had the power to transfer tenancies since there were local authority houses. Who is going to stop them? Who tried to stop them? Nobody. They can still do it, and they will continue to do it. What I am suggesting is that in respect of this there is no justification for saying take away this power from these particular people under the schedule which I have before me.
I admit that there would then be two courses of action open to the aggrieved tenant who wanted a change of tenancy. Remember, the clause does not deal only with the violent husband; it is a court order which could be applied in matters other than that, and I believe it would be wrong to suggest that where there are difficulties concerning local authority housing the aggrieved tenant should have to go to the courts.
The Minister says the courts can hear all the evidence, but do we need to worry the courts with this sort of thing when local authorities are doing it practically every week? If the Minister thinks there is a lack of opportunity for people to be heard by housing committees, he is wrong. It is a simple and easy process, and while it may not satisfy everybody—in which case anybody could use the provision in the Bill—please do not deny people the opportunity of using the easier local authority method by insisting on sticking to this provision.
I hope the noble Earl will look at the matter afresh and will talk to his officials about it. I cannot see
1110
that any harm would arise from getting rid of this provision and giving tenants in Scotland a choice—either the courts or through the local authority administration. Is the Minister prepared to reconsider the matter?
The Earl of Mansfield: Frankly, no. I have explained that the Tenants' Rights Act, which was enacted in contemplation of the Scottish Law Commission's report and recommendations, contained temporary provisions which were good enough while they lasted. Now we have an excellent system of transferring tenancies under Clause 12 of this measure and it is, I suggest, for the courts to regulate the rights as between spouses. That is why we have courts.
It would be easy for me to say, "Yes, I will look at it again", but what would be the point? We are creating a satisfactory method of transfer of tenancy in a proper case by courts of law which have all the facilities and experience to go into the rights and wrongs of the conduct of the spouses, and so on. I do not see it would be of the slightest use for me to say I will look at it again because, with respect, the noble Lord has not adduced one cogent reason why he wants local authorities to be allowed to maintain a parallel, separate and, as I have said, illogical system.
Lord Ross of Marnock: Local authorities are landowners. They own the houses. It is to them that tenants pay rents and it is they, not the courts, who decided who the tenants should be in the first place. I assure the noble Earl that for generations they have been able to change the tenancies. Indeed, recently they have been making them joint tenancies in Scotland without reference to the courts or anybody else. I really do not understand the Minister's attitude on this.
The Earl of Mansfield: I assume the noble Lord is being genuine and is not just making debating points. In Clause 12, for instance, the court is enjoined to have regard to all the matters specified in Clause 3(3)(a) to (d) of the Bill. Is the noble Lord really suggesting that it is within the competence of a housing committee, however honest, experienced and able it is, to carry out its functions as a democratically-elected local authority, to go into this sort of matter which I suggest, particularly when it comes to matrimonial matters, is so much better done by a court in privacy?
Lord Ross of Marnock: It is being done now and they have been doing it for long enough. The answer to the noble Earl's question is, Yes; that is what they are there for. The people elected them and they have been carrying out these responsibilities for long enough. I am surprised that the Minister refuses to see the point. There are two ways of dealing with this issue, one simple and costing little or nothing. But, no, if it must be done then it shall be done in a costly way. The noble Earl speaks like a lawyer. He should have declared an interest. I am approaching this as a simple, humble peasant who has not been in the law courts in his life. I know something about local authorities, however, and how the people of Scotland react.
The power I am speaking of has been used by local authorities and is being used now, and I suggest the

1111
Minister speaks not to his legal advisers at the Scottish Office but to his housing officers, and they will tell him that this provision is unnecessary and, in my view, undesirable. If, as he believes, it is so efficacious to go to the courts, people will not be prevented from going to the courts; the choice will be theirs. If the Minister takes my advice, as I hope he will, he will get rid of subsection (10), and then I know where local authority tenants will go. They will do it through the administrative practices of the local authority.
On Question, amendment negatived.
Clause 12 agreed to.
6.37 p.m.
Clause 13 [Interdict competent where spouses live together]:
The Earl of Selkirkhad given notice of his intention to move Amendment No. 50:
Page 15, line 17, leave out from ("home") to end of line 18.
The noble Earl said: I am raising here the whole question whether arrest should automatically follow a matrimonial interdict. In the many and varied circumstances which arise, I suggest that the Bill takes too dictatorial a line. This is not a question of a wife being hit but of whether one is in breach of an interdict. If one is, then one can be arrested without warrant—
The Earl of Mansfield: I am sorry to interrupt my noble friend, but I think Amendment No. 50, to which he is speaking, was consequential on No. 26, which he has already withdrawn.
The Earl of Selkirk: I apologise to the Committee. I do not move Amendment No. 50.
Clause 13 agreed to.
Clause 14 [Attachment of powers of arrest to matrimonial interdicts.]:
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 51:
Page 15, line 19, after ("shall") insert (", on the application of the applicant spouse,").
The noble Earl said The noble Earl said: I have already spoken to this amendment. I beg to move.
On Question, amendment agreed to.
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 52:
Page 15, line 19, leave out ("arrest") and insert ("detention in terms of section 2 of the Criminal Justice (Scotland) Act 1890").
The noble Earl said: I wonder whether the exclusive or almost obligatory use of arrest on interdict dealing with matrimonial matters is necessary; whether it is not too dictatorial and whether, being so dictatorial, it will not arouse antagonism. This is not a policy of being soft to people but a question of how best the provision can be enforced. This is putting a man who breaches an interdict in line with a common criminal, but the difference in this case is that there is no bail. What is required in many of these cases is a cooling-off period, and I believe that that could be done very well by detention.
When the Scottish Law Commission reported detention had not been invented. Indeed, strictly speaking it has not been invented yet, but I am told it will come into operation this summer. I believe detention should be given either as an alternative to arrest or preferably in place of it. In this case it would mean that a man would be detained, he would go to the police station for perhaps six hours of course, he could be arrested if he showed every inclination of doing some action which was clearly wrong—and at the end of that time it would be normal to release him if he promised to behave himself and appear before the sheriff on the next occasion. If the man is arrested, he will he kept locked up in the police station until the sheriff court meets, and then a procedure which is peculiar to the Bill will be adopted. I should have thought that it would be much easier to take the course laid down in the Criminal Justice (Scotland) Act, which provides for the man to be detained, and those who carry out the investigation can decide what should be done.
I fear that if the proposal as stated here is carried out, the impression will be given that it is unjust, and so the whole matter will be brought into disrepute. The approach should be more moderate in the first place; further powers can be used later, if necessary. I should be glad if the Minister will consider the matter. If he says that he will do so, I shall not move a number of other amendments which are connected with this proposal. I beg to move.
The Earl of Mansfield: I tell my noble friend at once that the Government are to reconsider the entire clause, because, as the Committee will appreciate, it poses a number of quite severe problems. It was inherent in the proposals of the Scottish Law Commission that a power of arrest should be attached to a matrimonial interdict, unless the non-applicant spouse could satisfy the court that that was unnecessary; and to that the Bill gives effect. My noble friend in his amendment seeks to remove the power of arrest attached to a matrimonial interdict, which could be exercised by the police in circumstances where a breach of interdict appears to have been committed. Under the amendment of my noble friend reliance would have to be placed on the police powers to detain in the context that a criminal offence has been committed, since that is the purpose of Section 2 of the Criminal Justice (Scotland) Act.
I think it wholly inappropriate that one should seek to draw into an arena of the civil law—which is particularly delicate as it affects the relationships between spouses—a provision of the criminal law that is designed specifically for purposes of detention and interrogation. As my noble friend might recall, that provision is hedged about with a number of safeguards, most of which were inserted in the Act by your Lordships' House because it realised that new, and what could be considered sweeping, powers were being taken by the police. I do not believe that it is appropriate to try to make use of those powers in order to help an angry, and probably male, spouse to "cool off"—to quote the term used by my noble friend.
We must have some power of detention—I use the phrase in a relatively neutral sense—because otherwise there would be no deterrent effect on the court's

1113
interdict. One must bear in mind that these matrimonial affairs blow up very quickly, and it is absolutely essential to give the courts, the police, or at any rate society, the power to deal with them as quickly as they blow up. That is one of the main points of the Bill.
I think that both my noble friend and I are uneasy about the period following the spouse's arrest, in which he is in custody. Under the present arrangements for the sitting of sheriff courts in Scotland, if, in the circumstances with which we are concerned, a person flushed with the intoxicating results of his pay packet, is arrested on a Friday, he will not appear before a sheriff on the Saturday or the Sunday, and if the Monday happens to be a Bank Holiday he will not appear on that day, either. So his first appearance before the sheriff will be a Tuesday. All of us are somewhat concerned about that period of time. If under the Bill the fiscal decides to take criminal proceedings against the husband, then in all probability the husband will be granted bail at the fiscal's discretion. But if the fiscal does not decide to take criminal proceedings, then in the circumstances that I have outlined the husband will not get bail. It is as obvious to the Government as it is to my noble friend that that is a matter which must be looked at, and we intend to do just that. We are to give further consideration to these points, and I very much hope that some form of sanction which will be effective, yet just, will emerge.
Lord Ross of Marnock: I am more than slightly worried because we are dealing with Clause 14 (relating to the power of arrest) whereas everything that has been said by the Minister of State seemed to apply to what will happen after the arrest, which is dealt with in Clause 15, which we have not yet reached. Is the Minister saying that he is to look at Clause 14 and Clause 15, or is he satisfied with Clause 14, and does his concern lie with what follows after arrest?—a matter which is not before us at the moment. All that is at present before us is Clause 14—indeed only the first line of the clause. I should like to know the position.
The Earl of Mansfield: My noble friend said that if I were able to satisfy him on the amendment that he moved—Amendment No. 52—he might not move a number of other amendments. I am very much hoping that he will not move Amendments Nos. 54, 56, 58 and—dare I suggest?—63 and 65, which would certainly lighten our labour. I perfectly appreciate that I have, as it were, discussed the effects on the citizen following his arrest, but I am sure my noble friend will agree that the series of amendments commencing with Amendment No. 52 flow on into the next clause of the Bill.
The Earl of Selkirk: I am grateful to the noble Earl. What he has said is perfectly correct. I had anticipated a series of events. It is not simply the question of the arrest, but also what happens afterwards with which I am concerned. I believe that in many cases such action is not necessary. We should never take too powerful a weapon in order to crush what is a small matter. I am very happy to hear that the noble Earl has this point in mind. The difficulty here is that the
1114
police cannot give bail. The man may take only one step inside the area that he is forbidden to enter, and then he finds that he is in prison for three days. That is the kind of thing that embitters people, and I feel that we must be very careful about it. I suggested a slightly more simple process, but I shall not press the matter this evening. I am grateful to the noble Earl for stating that he is willing to look at the point, and I hope that wisdom will go with his counsel. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.48 p.m.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 53:
Page 15, line 27, at end insert—
("(1A) A power of arrest attached to an interdict by virtue of subsection (1) above shall not have effect until such interdict is served on the non-applicant spouse, and such a power of arrest shall, unless previously recalled, cease to have effect upon the termination of the marriage.")
The noble Earl said: This amendment clarifies the timing of the effectiveness of the power of arrest and the fact that it ceases with the termination of the marriage, usually by divorce. It is thought desirable that the power of arrest should not become effective until the non-applicant spouse has been served with the interdict containing the power of arrest. That avoids the situation where the court considers the interdict in the absence of an allegedly violent husband and he finds himself liable to arrest for breach of interdict, of which he was unaware, when he returns to the matrimonial home. In most cases, he will know of the date of the court hearing, but sometimes—for example, where he has been out of the country—such a circumstance as I have mentioned could nevertheless arise.
The power of arrest, together with the interdict itself, ceases to have effect following divorce because it no longer relates to a matrimonial interdict. If the behaviour of the ex-husband towards his former wife, or their children, continues to cause her apprehension, she will have to seek a fresh, and non-matrimonial, interdict from the court, to which no power of arrest may be attached. Since they will no longer be related by marriage it is not considered necessary for the exceptional powers provided for in relation to matrimonial interdicts to continue to apply. The normal rules applying to interdicts between strangers would therefore apply. I beg to move.
On Question, amendment agreed to.
[Amendment No. 54 not moved.]
6.50 p.m.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 55:
Page 15, line 29, leave out ("may") and insert ("shall").
The noble Lord said: Here we are at the nub of the arrest and the draconian powers to which the noble Earl objects. There was a long argument within the report about the power of arrest and this question of the virtual merging of the civil law and the criminal law. On Second Reading I agreed (as did most people) with the Scottish Law Commission that we want to keep this out of the criminal courts as far as we can. But such was the gravity of the offences that had

1115
occurred in respect of the interdict on violent parents that it was felt in Scotland that we should take the power of arrest. That power of arrest is already there in England and Wales; it is not so in Scotland.
The mandatory element was there in relation to the power of arrest: the right to arrest, the power, shall be attached. Then when we read on we discover that the carrying through of it is left to the police. There is nothing mandatory there. In line 29 it says:
"… a constable may arrest without warrant if he has reasonable cause for suspecting that spouse of being in breach of the interdict".
This is one of the troubles. As I understand it from my reading of the Commission's report and the evidence, in England and Wales (where they have this power and have discretion for the police) the police are most reluctant to intervene and arrest. But the person who suffers therefrom is the wife who is the subject of this violence; and the protection is removed.
I know that the noble Earl has been very sympathetic towards the loss of freedom for the individual. But I hope that he appreciates the counterbalance: that the individual loses his freedom initially because of the danger of injury, of violence affecting health and mental wellbeing, to a woman and probably a family. In view of the experience in England and Wales of the reluctance of the police to use their power, the Government should go the whole way and, instead of "may arrest", they should say "shall arrest". I think that probably it would be more suitable to the police. They would rather have an order to do something than a discretion—especially in cases of this kind, where it is not easy and where they would use that discretion not to intervene. And if they do intervene too late, then serious damage may be done.
I would suggest that having taken the mandatory power to attach a power of arrest then, where a police constable has reasonable cause for suspecting that a spouse is in breach of the interdict, he "shall" arrest, not "may" arrest. "May" is a very unsatisfactory word in this context. I suggest that "shall" would be far better and more reasonable from the point of view of the protection that we would suppose it to afford. I beg to move.
The Earl of Mansfield: The usual statutory language empowering constables to arrest without warrant is "may". Recent examples are in Sections 18 and 294 of the Criminal Procedure (Scotland) Act 1975 and Section 1(6) of the Criminal Justice (Scotland) Act 1980. In all instances, it says:
"A constable may arrest without warrant any person …"
and:
"A constable may take into custody without warrant …".
I think the innuendo behind the noble Lord's remarks is that in some way a police officer, if given any discretion at all, will seek not to do his duty because (let us face it) matrimonial offences tend to be unpleasant and messy and police officers, who have the same feelings and susceptibilities as the rest of us, no doubt do not wish to get involved unless it is their plain duty so to do. I do not think that that is a sufficient reason for putting into this Bill no discretion at all. One can readily imagine situations where if a constable has no
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discretion it could cause hardship and injustice. Supposing there was an unintentional and trivial breach of an interdict, somebody who returns to the matrimonial home to collect urgently-needed belongings, not wishing to make a scene, not wishing in any way to impose upon his spouse and, as it were, is caught.
He may go to the matrimonial home when the non-applicant spouse is absent. He may try to do everything that he can not to exacerbate a situation which the court has taken cognisance of. Is the noble Lord suggesting that in that trivial case a constable is to have no discretion at all? That is what acceptance of this amendment would mean. Taking the Bill as it is at the moment, it could mean—because the fiscal would certainly not take criminal proceedings—that for a breach of interdict which could cause minimal harm and may possibly be even unintentional, a man might spend four days in jail without bail. I suggest to the Committee that in this particular instance it is proper and sensible to give police constables the usual and very limited discretion that they have whether to arrest somebody or not.
Lord Ross of Marnock: I almost had tears in my eyes when I heard about this trivial case. How did the noble Earl know it was trivial? How did he know the intent or purpose of the person going to the matrimonial home? Surely that is for the court to judge. I admit that "may" is an advance on the present position. But we must draw from the experience of others. And the experience of others in respect of this kind of case in England is a decided reluctance on the part of the police to use their power. They have the discretionary power implied in "may"; and they can arrest upon that.
This was discussed by the Law Commission when they drew up their report. It was with a certain measure of reluctance, but also with firmness that they said that they required this power of arrest. To my mind, if that is so, then whether we like it or not, we have to appreciate all that is involved and not start to withdraw the protections that we have, after reluctance, built up. The word "may" should really be changed to "shall". In Parliament I have argued long and often whether "may" and "shall" have the same meaning. Learned Solicitors General and Lord Advocates 30 years ago were telling us that it did not make any difference. I am still convinced that "shall" is a much more effective word than "may", and that we should make this change. I am sorry that the Government are not going to change it. For the moment, I shall rest my case on that.
The Earl of Mansfield: I know the noble Lord would not want to mislead the Committee. Paragraph 4, subparagraph 35, of the Scottish Law Commission report said in effect not that the police were reluctant to arrest but that the courts in England were reluctant to attach a power of arrest in any particular instance. That is a very different matter. If the noble Lord is going to consider his position between now and the next stage I am sure he will want to bear that in mind.
Lord Ross of Marnock: I shall bear all these things in mind. I shall read and re-read again the Law

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Commission's report. It has been my bedside reading for the past three weeks.
Amendment, by leave, withdrawn.
[Amendment Nos. 56 to 58 not moved.]
7.2 p.m.
The Earl of Mansfield The Earl of Mansfield moved Amendments Nos. 59 and 60:
Page 15, line 33, leave out ("the solicitor acting for")
Page 15, line 34, leave out (", messenger-at-arms or sheriff officer").
The noble Earl said: Amendments Nos. 59, 60 and 61 are intended to clarify the manner in which the police are to be notified of the existence of a power of arrest. It places the responsibility for doing so on the applicant spouse; the responsibility for the service of interdicts also normally rests with the applicant. The original Scottish Law Commission recommendation was for the messenger-at-arms or sheriff officer serving the interdict to deliver to the relevant chief constable the documents notifying the attachment of a power of arrest. This was on the basis that the same officer would be involved so that speed of notification and care that the interdict had already been served would be secured.
In practice, the same officer need not do both the service of the interdict and the notification of the power of arrest to the chief constable. It was therefore considered that the actions of a single solicitor might be equally effective. However, the present wording, which refers to a solicitor acting for the applicant spouse, messenger-at-arms and sheriff officer, may itself be confusing because it is not clear which of them has the primary responsibility.
Since it is usual for the applicant's solicitor to serve an interdict, it was thought desirable to delete the reference to the court officers. It is in any event open to the solicitor to employ them for the service of the interdict and police notification in this context. By the same token, since service must be done by a solicitor or a court officer, the reference to the applicant's solicitor was also considered to be superfluous. In practice, the applicant spouse will be reminded by his or her solicitor of the obligation to notify the chief constable of the power of arrest. The result of the amendments is considered entirely compatible with the thinking of the Scottish Law Commission in that the applicant spouse (through her solicitor) can ensure prompt notification to the chief constable and the non-applicant spouse can be sure that the sequence of events is such that the chief constable will only be informed after the power of arrest becomes effective. I beg to move
On Question, amendments agreed to.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 61:
Page 15, line 36, leave out ("deliver") and insert ("ensure that there is delivered").
The noble Earl said: I have spoken to this amendment. I beg to move.
Lord Fraser of Tullybelton: I should like to welcome this amendment in principle. I suggest that the drafting is not entirely satisfactory. It provides that
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the applicant shall ensure that there is delivered to the chief constable the order. There is no sanction provided. An order on someone to ensure that something happens without any sanction is unsatisfactory and is apt to be disregarded. It would be much better, I suggest, if the wording were copied from Amendment No. 53 (which the Committee have agreed to) which provided that an interdict shall not have effect until it is served on the non-applicant spouse. The same provision could be copied here so that it shall not have effect until it has been intimated to the chief constable. In some way a sanction of that sort could be provided. I suggest that might be considered.
The Earl of Mansfield: I am obliged to the noble and learned Lord. I shall consider the matter before the next stage.
On Question, amendment agreed to.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 62:
Page 16, line 4, leave out subsection (4) and insert—
(" (4) Where any matrimonial interdict to which, by virtue of subsection (1) above, there is attached a power of arrest is varied or recalled, the spouse who applied for the variation or recall shall ensure that there is delivered—

(a) to the chief constable of the police area in which the matrimonial home is situated; and

(b) if the applicant spouse (within the meaning of subsection (5) below) resides in another police area, to the chief constable of that other police area,

a copy of the application for variation or recall and of the interlocutor granting the variation or recall.").
The noble Earl said: This amendment replaces subsection (4) with a fuller statement of the action which has to be taken by the spouse who applied for the variation or recall of the interdict. It removes the possibility that the subsection could be interpreted as requiring a husband (as the usual non-applicant spouse) having to serve a recall on himself. The amendment distinguishes the fact that a different spouse is likely to be the applicant in subsections (3) and (4). I beg to move.
Lord Fraser of Tullybelton: Exactly the same point about ensuring arises here. It is not so easy to provide the sanction here but it ought to be possible in some way.
On Question, amendment agreed to.
Clause 14, as amended, agreed to.
Clause 15 [Procedure following arrest]:
[Amendment No. 63 not moved.]
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 64:
Page 16, line 35, leave out ("(1)") and insert ("(2)").
The noble Earl said: This amendment corrects an erroneous reference to subsection (1) when in fact the procurator fiscal brings the arrested spouse before the sheriff under subsection (2). I beg to move.
On Question, amendment agreed to.
[Amendment No. 65 not moved.]
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 66:
Page 17, line 14, leave out ("and").
The noble Earl said: This is a purely drafting amendment. I beg to move.
On Question, amendment agreed to.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 67:
Page 17, line 20, at end insert ("or any child of the family").
The noble Earl said: This amendment provides that the sheriff in reaching a decision can take account of the risk of violence against a child as grounds for further detention as well as against the applicant spouse. This secures a consistent approach since Clause 4(2) provides that exclusion orders may be granted for the protection of the applicant (spouse) or any child of the family. A matrimonial interdict to which a power of arrest may be attached may prohibit any conduct towards a spouse or any child of the family. I beg to move.
On Question, amendment agreed to.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 68:
Page 17, line 22, leave out ("but").
The noble Earl said: This is a drafting amendment. I beg to move.
On Question, amendment agreed to.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 69:
Page 17, line 23, at beginning insert ("where the non-applicant spouse has been in custody for forty-eight hours; or").
The noble Lord said: I move this amendment because I am concerned about the inequality of treatment depending on the day that a person is arrested. The Minister of State himself at an earlier stage drew attention to the seeming unfairness. Many of these cases will happen on a Friday night and they will not be dealt with, at the earliest, before Monday morning. I felt that there could be unfairness in this generalised ruling in respect of the further period not exceeding two days. Somebody may have been there for virtually four days.
I use the opportunity of this amendment to ask the noble Lord whether he is going to look at the whole procedure laid down in Clause 15. I got the impression earlier on that he was going to do that. He will remember the suggestion from the Law Commission was not that this should be inserted in this form but that it should be left to the rules of the court. I think that was in paragraphs 4.10 and 4.11 of their report. If we are going to write it down then we must be fair, and so I should like to know exactly what the noble Earl intends to do to ensure fairness of treatment as between those already in detention or those who have been arrested and detained for three or four days, as compared with the others. I beg to move.
The Earl of Mansfield: What I undertook to do very simply and briefly was really in relation to two matters. The first was in relation to whatever sanction is going to flow from a breach of an interdict, which at the moment is dealt with under Clause 14 and which my noble friend Lord Selkirk was concerned about, and in respect of which he had tabled a series of amendments. The other matter, which we discussed shortly, was what happens when someone has been taken into
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custody, how long they should be in custody before they appear in front of a court or how otherwise they should be dealt with. This is Clause 15, and I have undertaken to consider what is to happen to someone in these circumstances when he has been taken into custody on a breach of an interdict. That I will do, and I hope it will satisfy the noble Lord, Lord Ross.
Lord Ross of Marnock: Since we are going to have another look at this I will gladly beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 15, as amended, agreed to.
Clause 16 [Occupancy rights of cohabiting couples]:
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 70:
Page 17, line 36, leave out ("satisfied") and insert ("it appears").
The noble Earl said: I have in effect spoken to this. I beg to move.
On Question, amendment agreed to.
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 71:
Page 17, line 37, after ("house") insert ("and they have been cohabiting for at least three years").
The noble Lord said: Amendments Nos. 71 and 72 deal virtually with the same point, I think. What I am concerned about is how you construe a person as having been cohabiting. I put in the provision that they had been cohabiting for at least three years. What I omitted to take note of is the fact that one of the proofs of fertile cohabitation is the presence of children, and of course that can take place long before three years. So I was attracted by the reference in the amendment of the noble Earl, Lord Selkirk, to the fact that if there were children then that should in itself be definitive, and I am prepared to bow to that when it comes to reconsideration. However, I am not so sure about other things. I feel, too, that in relation to the grant of occupancy by the court a period not exceeding three months is just not right. If we are going to construe these people as having a stable relationship and liken it to husband and wife, I think we have to leave it to the discretion of the courts to apply exactly the same rules to the (I do not know what the name would be) "non-applicant" or to the "non-titled cohabitee". We have not got this in yet, have we?
The Earl of Mansfield: "Non-titled partner".
Lord Ross of Marnock: We must think of one or two more. We must not have the thing too clear, you know. So I am concerned with two points: first, to be able to establish that there has been, by length of time, some stable arrangement; and, secondly, having established that, then the same rights as are given in subsection (1) of the clause to the non-titled wife should be given to the non-titled partner, and not just this question of three months. I think that would be most unfair. I beg to move.
The Earl of Selkirk: I think we are up against a problem of trying to define "cohabitation", and I do

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not feel terribly competent to say what exactly should be laid down. I fully agree with the noble Lord that if there is a child of the union obviously that applies, but I think really the test is the word "stable". But how do you define that word? One has to remember that it could be grossly and superbly misused. You take a girl and cohabit with her; then eventually you hit her in the face. She excludes you, and you leave her permanently in the house, indefinitely. Then you start off with another girl and do the same thing there. This raises possibilities for those who want to misuse the thing to a really quite startling extent.
I have suggested in my amendment that there should be a period of stable relationship of three months. That may not seem too long, but the test is the word "stable". I think there must be some definition here, otherwise the grossest misuse could be made of this sort of thing, which would not be right. I shall not do more than refer to my amendment here, in which I put down that cohabiting means "living together where there is a child." Secondly, as regards a stable relationship, what creates a stable relationship? I said, more modestly, three months. With respect, I think three years is too long because you can have two or three children in that period; and so I would have thought three to six months would be a pretty reasonable period initially. I will not say any more for the moment.
The Earl of Mansfield: I will deal first with Amendment No. 71, under which the noble Lord, Lord Ross, seeks, as it were, to ensure that couples are not to be said to have been cohabiting within the meaning of this Bill unless they have been doing so for at least three years. Therefore, to him, "cohabiting is defined by the length of the period they have been living together.
Lord Ross of Marnock: I was thinking of the question of occupancy, because that is what is at stake—occupancy of the house. We remember the noble Earl's own Act, which was to give secure tenancy. Within that secure tenancy is included purchasing a house, and I think three years was the time laid down by the Government in respect of a local authority house.
The Earl of Mansfield: Yes. It is somewhat obscure whether the noble Lord means in one house, in a number of houses, in a lodging-house, in a tent or whatever. For myself—and I am afraid this is the lawyer in me coming out again—I think the courts are supremely able to estimate whether the conduct of two people is such that they can be held to be cohabiting. I remember that when I used to draft divorce petitions I used to say "living as if man and wife", and that seems to me a perfectly reasonable way of deciding whether or not people are cohabiting—whether they are living together as man and wife.
Then one has to ask the question whether it is desirable that there should be some fetter on the court's discretion and should say that unless they have been living together as if man and wife for a certain period then the rights conferred by this Bill shall not arise. I personally believe that the noble Lord's period and his way of looking at this is much too narrow. For instance, if they had been living together for less than
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three years they could well have had twins. In every sense, other than the fact that they had not been living together for three years, they would be in a position where either one of them might well want to see the relief which this Bill will give. So I think that the noble Lord's idea is, at once, simplistic and could lead to unfairness.
I now come to the next amendment in which he wishes to leave out the phrase "not exceeding 3 months". In this instance, he believes that there is too much of a fetter on a court. I am sure he realises that, after the initial period of three months, applicants can go back to the court as many times as they like and can get as many periods as they can persuade a court to give them, each one of them not exceeding six months. So, in fact, this could become a permanency. I do not see that a court needs to be fettered in any way, although one has to acknowledge that in this type of case occupancy rights for people who are not married, and who yet have split up, are unlikely to be needed for more than a temporary period. That is why the clause is so drafted that the applicant can come back after the initial three months for periods not exceeding six months. So, certainly, I should be resistant to that amendment, too.
I now come to the amendments of my noble friend Lord Selkirk. He puts in a test not so much of time as of a child of the liaison. People could be living together for years and years and be either unable or unwilling to have children. In that instance, are they not to be said to be a cohabiting couple, and is one or other spouse not be be entitled to take advantage of the provisions of this Bill? That seems to me to be quite unfair.
Lastly, my noble friend says "All right, they must have had a stable relationship for not less than three months prior to the making of the application for the order." It is a funny kind of relationship which is going to be stable for three months, and yet end by such violence that one or other of them comes forward to seek the relief of the court in such a way. One would have supposed that, if things were coming to that pass, the relationship would have been very far from stable well before the three months prior to the making of the application for the order.
There are two elements. I say at once that I will take this away and reconsider it, because it is a difficult point, and I am grateful to both noble Lords for their amendments and for the different ways in which they think that the problem should be approached. First, there is a need to assist the court in deciding when a couple are cohabiting, I do not think one can lay it down too closely or too narrowly by statute, but it may well be that a court needs assistance to make up its mind.
Secondly, what occupancy rights does one give to cohabiting couples, if there is to be a more narrow definition of "cohabiting couples" than there is at the moment? It seems to me that, somehow, we shall have to try to steer a middle course between both of these difficulties, so I shall take this away and ponder over it between now and the next stage of the Bill. I think that my noble friend's Amendment No. 77 is not really in point to what this debate has been about, so I shall rest my argument there.
Lord Ross of Marnock: I do not propose to go any further with this amendment. I think the Minister appreciates the problem and the difficulties that the courts will be in, if we leave the matter entirely to them. They are the people who will be blamed or otherwise. But I appreciate the fact that the noble Earl will now be looking at practically the whole of this Bill in order to improve it. I certainly beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 72 not moved.]
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 73:
Page 18, line 5, after ("modifications") insert ("(a)").
The noble Earl said: Perhaps I may speak to Amendments Nos. 73 and 74. These amendments are intended to make it clear that the protection provided by the Bill to cohabiting couples should also extend to any children living with the couple, in the same way as it does to the children of a marriage. The amendment also provides that the subsidiary and consequential rights in Clause 2 shall, as appropriate, be available to one of the parties if he or she is exercising an occupancy right. The Clause 2 rights are necessary to make the occupancy right effective.
The draft Bill had not extended the rights of cohabiting couples in this way, because the Law Commission's recommendation was for a maximum duration of any occupancy rights of six months. In such a temporary situation, it was not thought that these further rights were needed. The present Bill permits greater flexibility in the form of a strictly indefinite number of further periods of six months. Since this will mean that the occupancy rights could remain for a matter of years rather than months, it is thought to be necessary for the partner occupying their house to have the consequential rights provided in Clause 2. Otherwise, his or her occupation would be unreasonably spartan; for example, if furniture on hire purchase was removed from the house because the other partner had defaulted on the payments. I beg to move.
On Question, amendment agreed to.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 74:
Page 18, line 6, at end insert—
("and
(b) have effect in relation to any child of the cohabiting couple as they have effect in relation to a child of the family—
section 2").
The noble Earl said: I beg to move.
Lord Ross of Marnock: To the extent that this amendment comprehends and accepts Amendment No. 75, I welcome it.
On Question, amendment agreed to.
[Amendment No. 75 not moved.]
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 76:
Page 18, line 26, at end insert—
(""cohabiting couple" means

(i) a man and a woman who are living together where there is a child of the liaison; or

(ii) a man and a woman who are living together in a stable relationship and have been so living for a
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period of not less than three months prior to the making of the application for the order.").

The noble Earl said: In moving this amendment, I should like to thank my noble friend for what he said. I think that he is taking a very sensible line towards something to which there is no simple answer. The point is that, according to the amendment which I have put down, children and a stable union may create an obligation. If you marry someone, you immediately enter into an obligation. When you have someone living with you for a week or so, you do not enter into an obligation; or, at least, it is on a very modified scale. But, eventually, if the relationship continues for long enough, a sense of obligation arises. That is what my noble friend has to solve. At what point does an association change from an entertainment into an obligation? I am not certain about this, but I have made a suggestion here. I admit that it is a pure cockshy and I leave it at that. I beg to move.
The Earl of Mansfield: I am obliged to my noble friend. I am not sure whether his description of his effort is entirely appropriate for couples who are not married. But, certainly, I will go into the matter before the next stage.
Amendment, by leave, withdrawn.
Clause 16, as amended, agreed to.
Clauses 17 to 19 agreed to.
Clause 20 [Interpretation]:
7.30 p.m.
The Earl of Selkirk The Earl of Selkirk moved Amendment No. 77:
Page 19, line 27, after ("any") insert ("dependent").
The noble Earl said: It seems to me that in this context a dependent child should be included, who may be above what we usually consider to be the age of a child, and may even be 25 or more. I suggest that the term "dependent child" would be better than "child of the family". I beg to move.
The Earl of Mansfield: If this amendment were accepted the court would not be able to consider the needs and interests of a non-dependent child—that is to say, a child over the age of 18 who is living at home but working or attending university. This lack of discretion would extend to most of the orders which we have been dealing with: occupancy rights orders, exclusion orders, orders dispensing with the consent of the non-entitled spouse to a dealing by the titled spouse relating to the matrimonial home, an order transferring the tenancy of the matrimonial home, and and order delaying the sale of a jointly owned matrimonial home.
Perhaps more seriously, a child who was in care in a residential establishment but who could be returned home if the violent spouse were to be excluded would not be regarded as dependent if the amendment were to be accepted. So this would be contrary to the views of the Scottish Law Commission.
Perhaps on reflection my noble friend will agree that his amendment is not so desirable as he first thought.
The Earl of Selkirk: A child who is strong enough to go to university is probably quite capable of dealing with an irate father. But what about a genuinely dependent child? He may be defective in some respects, or incapable of something. One is limiting this entirely to the case of a child who is included in the technical term "child". It seems to me that this requires extension. It should be extended to certain young people who have grown up but who are incapable of looking after themselves. They are particularly defenceless people when there is a violent husband.
May I ask the noble Earl to look at that point. I understand the point which he is making, but what is much more important is to include children who are genuinely dependent but who technically are above the age of childhood. If the noble Earl would care to do that I should be grateful and would withdraw the amendment.
The Earl of Mansfield: I will certainly look at the definition.
Amendment, by leave, withdrawn.
Lord Drumalbyn Lord Drumalbyn moved Amendment No. 78:
Page 19, line 38, after ("include") insert—

("(i) any article reasonably required by either spouse in connection with his employment, profession, trade, business or calling, or his personal leisure or recreational activities; or

(ii)")

The noble Lord said: The purpose of the amendment is to ensure that a spouse who is excluded from the matrimonial home by order of the court is entitled to retain or to recover possession of anything which forms part of the tools of his or her trade or anything which he or she uses in connection with his or her own personal leisure or recreational activities.
I looked through the Bill to see whether this point is already covered. I think there is at least a doubt about it. That is why I have put down the amendment. Clause 3(2) allows the court to make an order in relation to possession or use in the matrimonial home of furniture and plenishings. Subsection (4) of the same clause enables the court on the application of either spouse to make an interim order in relation to furniture and plenishings and also personal effects. Subsection (3) of the same clause requires the court to take into account the respective needs of the spouses—this is linked with financial needs and may therefore be very restricted—and the extent to which the matrimonial home is used in connection with a trade, business or profession of either spouse.
It seems that subsection (3)(d) envisages only the matrimonial home and the furniture and plenishings. I am not sure what is meant by the phrase "personal effects". Perhaps the noble Earl can tell me. It probably covers a shooting gun because that is registered, but does it cover a fishing rod or a billiard table? Would it cover a collection of coins or butterflies? Would it cover a treasured collection of gramophone records? Would it cover a sewing machine? I cannot see that any of these things are furniture or plenishings and I am not sure that they are personal effects. I do not think that is the normal meaning of "personal effects".
But there are articles which can be put either in
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the furniture class, or in the leisure activities class, or in the tools of the trade class. To some, a television set is a source of entertainment. To others, it is something only to be used for obtaining information in connection with one's trade or calling—for example, politics. To some a piano is an article of furniture, possibly to be surmounted with an aspidistra. To others, it may be a source of joy as a leisure activity, though it is probably less of a joy to others. To a professional musician who teaches music or who performs at concerts and the like it may be an essential tool of his trade. Therefore it is not furniture; nor is it personal effects. Things like typewriters may be one or the other.
May I ask my noble friend to consider this point very carefully. All I am anxious to do is to make certain that people concerned in these kinds of troubles do not have their troubles enhanced by being deprived of things which are part of their lives. It is in those terms that I commend this amendment and beg to move.
The Earl of Mansfield: If my noble friend's remarks emphasise anything, it is that we are utterly dependent upon our courts to exercise a sensible discretion if such a situation should arise as the noble Lord has postulated. One cannot, by means of a statute or even an enormous schedule setting out typewriters and aspidistras, try to legislate between the parties.
The definition of "furniture and plenishings" provides that only an article which is reasonably necessary to enable the home to be used as a family residence is included. If an article serves a reasonably necessary domestic use, it is surely right that the full enjoyment of the occupancy right should permit it to be regarded as part of the furniture and plenishings of the matrimonial home, notwithstanding its business or recreational character.
As I have said, I think that the courts can be relied upon to exercise a sensible discretion. But the matter goes slightly further. Under Clause 3(3)(d), before the court makes any order giving the possession or use of furniture and plenishings it must have regard to all the circumstances of the case, including
"the extent (if any) to which the matrimonial home is used in connection with a trade, business or profession of either spouse".
That wording is also reflected in the definition of a cohabiting couple's house in Clause 18(4). So I think the difficulty which is foreseen by my noble friend is perhaps more apparent than real.
Lord Drumalbyn: I wish it were more apparent than real. My noble friend seems to me to be satisfied that an amendment of this kind—I do not say this amendment—is not necessary. I am not sure that he has completely satisfied me upon that point and I hope that he will look at it again. The courts can only make a division of goods either on the basis of their own judgment of what is necessary to each of the parties and so on, or else according to the terms laid down in the Bill. My amendment shows that whatever you do the judgment of the courts will be necessary, but I doubt whether they are given enough guidance as to how to make this allocation. I should be grateful if my noble friend would look again at this point just to satisfy himself that there is sufficient guidance for the

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courts to make not only a sensible allocation but an allocation that they are permitted to make by the wording of the Bill.
The Earl of Selkirk: May I just point out that after all if a person goes bankrupt the tools of his trade cannot be taken away from him. Surely this should be perfectly specific, whatever they may happen to be.
The Earl of Mansfield: I cannot see the difficulties which my noble friend Lord Drumalbyn, in particular, seems to envisage but I will certainly look at it again in order to see if some difficulties are lurking.
Lord Drumalbyn: I am much obliged. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
7.40 p.m.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 79:
Page 19, line 41, leave out (", subject to section 6(2) of this Act,").
The noble Earl said: I have spoken to this amendment. I beg to move.
On Question, amendment agreed to.
Lord Drumalbyn Lord Drumalbyn moved Amendment No. 80:
Page 20, line 2, leave out ("and usually occupied with").
The noble Lord said: This fills in the definition of a matrimonial home which lists the various things which are or have become,
"provided or made available by one or both of the spouses as, or has become, a family residence and includes any garden or other ground or building attached to, and usually occupied with, or otherwise required for the amenity or convenience of the house",
et cetera. I should like to ask first whether the words "and usually occupied with" are intended to relate to the particular building in question or whether they are related to the sort of building which is usually occupied with that sort of residence. I am not quite sure what it is, and it does make a difference.
Secondly, I am worried about the terms, especially as they follow the words
"or other ground or building attached to and usually occupied with".
Does that mean that it is physically attached? Here, again, I have an interest in music and I remember very well a man who retired to live in a very small house which would not accommodate his grand piano, so he built what I think is called a Colt house outside which, in the unlikely event of that marriage breaking down, could be removed and set up elsewhere. I am doubtful whether the words are necessary at all; that is why I tabled this amendment. But I think certainly there must be circumstances in which it would be legitimate to remove a movable building where it was used particularly by the person who was losing occupancy of the house. I beg to move.
The Earl of Mansfield: One would hope that the cohabiting couple envisaged by my noble friend would invest in a caravan or a houseboat rather than try to detach their Colt house from the realty, but I suppose
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all things can happen. The words "and usually occupied with", which I may say is exactly the wording used for a dwelling-house in Section 8(6) of the Succession (Scotland) Act, relates to the building and not generally, so to speak. The type of situation which is envisaged in this part of the definition is where there is an outbuilding which perhaps the wife or occupying spouse uses, perhaps to keep her deep freeze or her washing machine in, and in this instance it will be up to the court to decide whether or not such a building is part of the matrimonial home. I do not know that I can take the matter very much further than that.
If this amendment were agreed to it could widen the definition so that any garden or other ground or building attached to or otherwise required for the amenity, and so on, would then become the test as opposed to the slightly more restricted wording which has been used. I doubt whether I have satisfied my noble friend, but I live in hope.
Lord Drumalbyn: I think the noble Earl has gone a long way towards satisfying me. I am not all that difficult to satisfy. But it seems to me that there are buildings which do not necessarily go with the house. They go with one of the two people in the house and if the building can be removed it would be quite a good thing for a specific provision to be made for it to be removed. What about a workshed outside? That can be removed. These are things to which people attach the very greatest importance. The noble Lord, Lord Ross, may not attach much importance to these things, but people do attach a lot of importance to them and they will even dismantle greenhouses. These things play a very large part in the lives of the people concerned. However, I think on this occasion the noble Earl has satisfied me, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 20, as amended, agreed to.
Clause 21 [Short title, commencement and extent]:
Lord Ross of Marnock Lord Ross of Marnock moved Amendment No. 81:
Page 20, line 19, after ("day") insert ("not later than 3 months after the date of passing of this Act").
The noble Lord said: This is the last amendment on the Marshalled List and I think we have done pretty well, bearing in mind the importance of what we have been dealing with. I am very glad that the noble Lord who has just spoken was not here earlier or my presence at a very important international gathering in Glasgow tomorrow might have been imperilled—Hampden Park.
Lord Drumalbyn: I have been here for most of the time; I was away for just over half an hour.
Lord Ross of Marnock: Yes, the noble Lord was here but not heard, we are glad to say.
This Bill has been welcomed by most people. I think on Second Reading I suggested that it must break some record because here we have a Law Commission Report in, I think, July of last year and it looks as though within the year it will become law and we have certainly done our part today. I want to see it not only go on to the statute book but actually come

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into operation. My amendment is this. Whereas at the moment under Clause 21 it is left to the Secretary of State to decide on an appointed day after the passing of the Act when it will come into operation, I suggest that it should not be later than 3 months after the date of passing of this Act. I think that gives reasonable time for the Government to make what administrative arrangements have to be made.
I say that, bearing in mind that we have already waited a fair length of time to get this legislation and certainly the people most seriously affected by it want it to be brought into force as quickly as possible. I am also conscious of the fact that in 1920 the Scottish Education Act empowered the Secretary of State on an appointed day to declare when the school-leaving age would be raised to 15. It was not until 1946 that that was done—a matter of 26 years. We do not want anything like that to happen here. I hope that the Government will see there their way to accepting this amendment, but, if not, I am sure they will appreciate the reason why I put it down. We believe it is a piece of worthwhile legislation, and we want it introduced and operated as quickly as possible—not later than 3 months after the date of the passing of the Act.
The Earl of Mansfield: There certainly has been no delay in the introduction of this Bill. The Commons only ordered the report of the Law Commission to be printed in July of last year and we are already at Committee stage on the result of the Bill. Bearing in mind the dust that some of these reports gather, it is pretty good going.
Some of the provisions in the Bill will have a considerable effect on conveyancing practice and it is important that persons and organisations such as solicitors and building societies, pay regard to their current practices and if necessary adapt them, and The Law Society must be given time to advise its members. It will also be necessary to make rules of court in relation to certain provisions. Sheriff clerks will have to be advised of the implications of the new legislation for court procedure, and the police, too, will have to look to their practices. It would be detrimental to everybody if the Bill were to be brought into operation before the proper arrangements could be made. I am very much in sympathy with what the noble Lord, Lord Ross of Marnock, has said, and with the spirit behind this amendment. But while I can undertake that the Government will take steps to ensure that the provisions of the Bill are brought into effect promptly once it has received the Royal Assent, I cannot commit the Government to a specific time period and certainly not one so short as three months.
Amendment, by leave, withdrawn.
Clause 21 agreed to.
House resumed: Bill reported with amendments.

Water Bill
7.53 p.m.
Lord Skelmersdale: My Lords, on behalf of my noble friend Lord Bellwin, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, that the House do now again resolve itself into Committee.—(Lord Skelmersdale.)
On Question, Motion agreed to.
House in Committee accordingly.
The LORD DRUMALBYN in the Chair.]
Clauses 1 to 5 agreed to.
Lord Underhill Lord Underhill moved Amendment No. 8:
After Clause 5, insert the following new clause:
("Water charges equalisation
. Notwithstanding anything in this Act relating to the charges payable to water authorities, section 1(1) of the Water Charges Equalisation Act 1977 shall have the effect as if before the words ("by order") the word ("may") shall be replaced by the word ("shall").").
The noble Lord said: This amendment seeks to insert a new clause relating to the Water Charges Equalisation Act. That Act, which was passed in 1977, provides for payment of equalisation levies and payments by and to water authorities. Section 1 of the Act provides that if in any year it appears to the Secretary of State that the relevant financing cost of a water undertaking are less than the average for all undertakings in England and Wales, he may—and note the word "may"—by order direct the particular undertaker to pay a levy which shall be distributed to other undertakers in the form of equalisation payments.
I need hardly stress that water is a basic commodity for the entire community and the purpose of the 1977 Act was to move towards some sense of equalisation of water charges. The Government have announced their intention not to move orders in connection with this Act for the next financial year and this is made possible because of the permissive nature of Section 1 of the Act to which I have referred. The purpose of the amendment is to make it mandatory upon the Secretary of State to make an order in any year, should it appear to him that there is an inequality in financing costs between the various water undertakers.
On Second Reading I questioned whether the Government were content just to let this matter slide or whether they had any other plans for the future. The noble Lord, Lord Skelmersdale, was unable to give me any information at that juncture, but he has kindly let me know that the Government have decided to give help to the Welsh Water Authority in lieu of any action under the Water Charges Equalisation Act, and that the Government have no intention of replacing this Act with any other scheme. This is very disappointing because I understand that there are other authorities which could be affected by equalisation, if not now then in the future.
The purpose of the Water Charges Equalisation Act was not just to secure fair treatment for Wales; it was also to introduce some form of strategy into water supply and lead towards equalisation of water pricing. It was a step towards removing anomalies. I must emphasise that, although my amendment will make it mandatory for the Secretary of State to make an order, the order need be made only if it appears to him that there is inequality in the cost of the various water undertakings. I hope the Government will feel able to accept this amendment because it still leaves the matter for the Secretary of State to see whether there is any inequality, and if the Government cannot concede this

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amendment I hope they will declare what intentions they have towards some form of equalisation on the principles of the 1977 Act. I beg to move
Lord Skelmersdale: I must chalk up another failure on my score card. My hope was that I had already explained this to the noble Lord in my letter, but obviously I did not go far enough, and with the permission of the Committee I will make another attempt. This amendment seeks to cover ground which I believe was extensively covered in another place. The amendments discussed there related to the charges payable for bulk supplies of water by one authority to another. As I understand it, the aim of this amendment is much the same; that is, to draw attention to the level of water charges in Wales and to seek some means of offsetting the loss of payment to the Welsh Water Authority following abandonment of the Water Charges Equalisation Scheme.
It is true that the charges made by the Welsh Water Authority for water services, in particular for water supply, are higher than the average, although they are not—and this is a popular misconception—the highest in the country. In 1980–81 the average bill for water supply alone within the Welsh Water Authority area was £30·87. Two English water authorities have charges 8 per cent. and 3 per cent. above those of the Welsh Water Authority. While it is true that charges in Wales are above the average, they are not so fat above the average as charges in some parts of England. However, it was concern about the levels of charge in Wales that led the previous Administration to pass the Water Charges Equalisation Act 1977, which is now the subject of this amendment.
As the Committee will know, the Government do not consider that this Act works in a way that can be justified. It was intended—as the noble Lord has said—to bring the domestic water supply bills of consumers closer to the average, by equalising the historic financing costs of water undertakers. While it succeeded in this objective—to the extent that slightly more than half the consumers affected had bills which move nearer to the average—it failed in that 43 per cent. of the consumers had bills which moved further away from the average. About 18 per cent. of the consumers whose unequalised bills were above the national average were shifted even higher above it. Some 25 per cent. whose unequalised bills were below were shifted even lower. In the Thames Water Authority area, for example, the average bill moved from 12 per cent. above the average to nearly 18 per cent. above. In the Northumbrian area, the average bill went from 18 per cent. below to nearly 25 per cent. below. The Committee will see from this that, although the Act in question is called the Water Charges Equalisation Act, for almost half of domestic consumers it was a disequalisation Act. We could not possibly defend such an arrangement. That is why we decided that there should be no more full orders under the 1977 Act, and indeed that the Act itself should be repealed.
It could well be asked: If the scheme under the 1977 Act worked so badly, could not a better scheme be devised? In the first place, the Act permits only one scheme to be used, the scheme it contains, so there is
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no flexibility there. Secondly, no one, not even from Wales or the South West, has so far suggested a scheme which would work better. Thirdly, and most importantly, there is the issue of principle. Should charges be equalised at all? Water charges are charges for services rendered, not a tax. It is, in our view, basically right in principle that costs for services should be paid by those to whom the service is given, subject only to giving through the social security system assistance to individuals in need. We will come on to this in a later amendment. Equally, it is wrong in principle that individuals should contribute to the cost of services they do not receive.
That is not to say that we are not concerned about the level of water charges in Wales; of course we are. The loss of payment under the equalisation scheme amounts to some £3·1 million to the Welsh Water Authority. In our view this requires giving that authority special consideration in view of the effects on its charges. The authority has been given five years, instead of three as in England, to achieve a rate of return of 1¼ per cent. on its net revalued assets. The Government have increased its external financing limit—that is, the amount of money it may borrow—from £21 million to £29 million, an increase of 38 per cent., as compared with an increase of only 13·4 per cent. for the English authorities. This will enable it to carry on with its capital programme with the least effect on annual charges.
I have explained why we can no longer continue to make orders under the 1977 Act. We are, however, aware of the implications of this decision for charges in the Welsh Water Authority's area, and have taken steps to mitigate the situation. It would be wrong to expect the Government to make further orders under this ineffective legislation. I must, therefore, ask the noble Lord to consider these facts—and I hope I have achieved a better explanation this time than I did in the letter to which he referred—and withdraw this new clause.
Lord Underhill: The explanation from the noble Lord, far from satisfying me, gives the view of the Government quite clearly, and it is one which frankly we could not accept. The very fact that there are English authorities with charges higher than those in operation in Wales justifies what I said in moving the amendment, that we are not just concerned with the position in Wales. With regard to the statement that the Act does not work, surely nothing can be more equal than to say that there should be some balancing where (I am reading from the Act)
"the financing costs of a statutory water undertaking are less than the average of the relevant financing costs of all statutory water undertakings in England and Wales".
It is related to cost.
I am rather surprised—perhaps I am not really surprised—that the Government should say that they have grave doubt, in fact great objection, as to any suggestion of equalisation of charges at all. Nobody queries that we can post a letter from here to just a mile around the corner for 14p but it is still only 14p to send it up to Orkney. There are many other examples. Surely the principle is that there should be equalisation of charges, because it is easier for some water undertakings to get supplies of water than

1133
for others. That is a very important factor, which was the principle behind the Water Charges Equalisation Act.
It is clear that the Government will not accept the amendment. It is regrettable that the Government have no intention of replacing the Equalisation Act with any other measure. While, in view of the thin Committee, I will not seek to divide on this, I think there is such a principle involved that this amendment must be moved and negatived.
On Question, amendment negatived.
Lord Underhill Lord Underhill moved Amendment No. 9:
After Clause 5, insert the following new clause:
("Water rate rebate scheme
. Notwithstanding anything in this Act relating to the charges payable to water authorities, after section 30(6) of the Water Act 1973, there shall be added the following new subsection:—
"(6A) Nothing in this Act, or in any enactment passed before this Act in relation to a water authority, shall be deemed to operate in a way which precludes any water authority from undertaking a water rate rebate scheme to alleviate the impact of water rates on such groups and categories of water rate payers who otherwise would be caused personal hardship by the level of water rates they would have to pay.".").
The noble Lord said: It may be for the convenience of the Committee if I speak to Amendment No. 10 at the same time, because both these amendments seek to give power to a water authority to operate rebate schemes for its customers. Amendment No. 9 relates to a water rebate scheme and Amendment No. 10 to a rebate scheme in respect of sewerage charges. These amendments are necessary in order to introduce a more equitable basis of charging, because Section 30 of the Water Act 1973 places an obligation upon water authorities not to differentiate in respect of charges between different classes of consumers. This has been held to prevent the operation of any rebate scheme for either water or sewerage rates.
I referred to this matter at Second Reading, following which the noble Lord, Lord Skelmersdale, again kindly wrote to me to explain the Government's attitude. He pointed out that a matter of this kind can be best dealt with through the social security or taxation systems. But there are schemes for rent and rate rebates operating through local authorities, so I am not proposing anything new. Moreover, although fuel charges are mentioned specifically in connection with supplementary benefits, I believe I am correct in saying that water charges are not mentioned specifically. There is a legal provision for rate rebates for services operated by local authorities, and but for the establishment of the separate authorities with responsibilities for water supply and sewerage the rate rebate schemes of local authorities would still include rebates in respect of those services. I think it is correct to say that approaching three million ratepayers receive rate rebate, but there are many persons in receipt of rate rebates who do not come within the supplementary benefit schemes. It is these people who are in the poverty trap with which we are concerned.
These persons could not be covered by the benefit services as mentioned in the noble Lord's letter. Moreover, over the past few days it has been stated that many additional persons will be caught in the
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poverty trap in consequence of the Budget measures to keep benefits below the level of inflation and not to raise tax allowances. This greatly strengthens the arguments I am making. Time and time again there are issues in respect of which people who do not qualify for supplementary benefits get excluded, and hence we have this poverty trap. These are the people with whom we are primarily concerned. They would have qualified, no doubt, for rate rebates if it were not for the establishment of the water undertakings. Therefore, I hope the Government will see the principle involved in this and will accept the amendment. I beg to move.
Lord Skelmersdale: I am grateful to the noble Lord, Lord Underhill, for speaking to both these amendments together. It is often suggested that water authorities should introduce a rebate scheme, but this suggestion shows a misconception of the nature of water charges. The general rate is a tax on the beneficial occupation of property; I am sure we would all agree with that. Charges for water services, on the other hand, are raised in respect of services provided, in much the same way as other public utilities raise charges. Within the taxation system it has been the practice to provide rebates to reduce, either wholly or partially, the liability of those on low incomes. Outside that system, however, the suggestion of rebates raises difficult questions. Who should be paying for whose water, and why?
Before I leave that, I have in front of me Social Security Statutory Instrument No. 1299, which came into operation on 24th November last. Paragraph 19 of that says:
"The amount, calculated on a weekly basis, of the following miscellaneous outgoings payable in respect of the home shall be applicable under these regulations.".
Then there are seven or so of these, the second of which is,
"charges or rates in respect of water, sewerage and allied environmental services".
So I think that perhaps on this score the noble Lord has got it a little wrong.
Under Section 30 of the Water Act 1973 water authorities are required to operate charging systems which are cost-related and do not discriminate unduly against, or show preference to, any class of consumer. If there were a rebate system, either the cost of rebates would have to be recovered from other consumers in the form of higher charges for the services which they receive, which would be contrary to the Act, or the deficit in revenue would have to be met by a grant from the Exchequer. This would increase public expenditure and taxes.
There are thus no plans to introduce a rebate scheme. Successive Governments—including the last one supported by the noble Lord—have adopted the policy that if help needs to be given it is done through the social security system and not by subsidising prices. As I have said, the full cost of water services charges is taken into account when calculating supplementary benefit.
A further addition is that a variety of payment facilities is provided by water authorities to help their consumers ease the burden of payment. These include instalment systems and savings stamp arrangements in some areas, and a comparable example would be the

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TV licence stamps. The Anglian Water Authority hopes to introduce an instalment plan for domestic consumers who are unemployed or in receipt of supplementary benefit or rate or rent rebates. Those consumers will be able to pay their bills in 10 instalments. All water authorities will enter into special arrangements for cases of real hardship, each case being decided on its merits. Disconnection of supply for non-payment is taken only as a last resort according to the authority's code of practice.
I would emphasise that if relief is needed it should be provided through the social security system. That can be done at present. Any system such as the noble Lord proposes would be complicated and bureaucratic to operate. There is no good case for this proposal which was not supported, as I have said, by the noble Lord's party when in Government. I would, therefore, hope that the noble Lord would feel able to see his way to withdraw the amendment.
Lord Winstanley: Before the noble Lord, Lord Underhill, replies and decides what steps he will take with regard to his amendments, I should like to put one point to him which I think he may not have considered. My understanding of the rules governing supplementary benefit is that any person in receipt of supplementary benefit is barred from receiving a rate rebate or a rent allowance. Indeed, there have been many occasions on which I have had to advise certain elderly people who are in a borderline situation that they are sometimes very much better off by forgoing supplementary benefit and then claiming rate rebates and/or rent allowances. I think that unless this particular matter is cleared up there could be a difficulty.
I am entirely in favour of people in difficulties being assisted with regard to water rates or sewerage rates. But the fact remains that if they are introduced in the same form as a rate rebate or a rent allowance people in receipt of supplementary benefit would automatically be excluded from receiving them. I wonder whether the noble Lord, Lord Underhill, has considered that point.
Lord Skelmersdale: Before the noble Lord, Lord Underhill, does so perhaps I should point out that the noble Lord, Lord Winstanley, is talking about the old water rate. At the moment we are talking about something rather different—that is to say, the water charges for services rendered.
Lord Underhill: It would appear from the last interchange of views that I shall certainly have to look to see whether the noble Lord, Lord Winstanley, is correct. There obviously seems to be a slight difference about the matter. I am grateful to the noble Lord the Minister for giving me information about the statutory instrument. That shows how much I must improve my own personal research services. I am grateful to him. However, it does not get over the problem to which I have referred—namely, the problem about people who are not in receipt of supplementary benefits. Those are the people about whom we are concerned.
Nevertheless, it is pretty clear that the Government would have some problems if this amendment were
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carried. I think that the principle that we are trying to implement is a correct one, and I would be happier if the Government were to make some offer to try to look at the position of these people who are in the poverty trap. However, as we have raised this question as regards so many other issues and received no answer, the only thing that I can do is to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 10 to 13 not moved.]
House resumed: Bill reported with the amendment.

Forgery and Counterfeiting Bill [H.L.]
8.15 p.m.
Viscount Colville of Culross: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, that the House do now resolve itself into Committee.—(Viscount Colville of Culross.)
On Question, Motion agreed to.
House in Committee accordingly.
[THE LORD DRUMALBYN in the Chair.]
Clauses 1 to 10 agreed to.
Clause 11 [Amendments of Mental Health Acts]:
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 1:
Page 7, line 25, leave out ("a medical recommendation or") and insert ("any recommendation for admission or guardianship or medical").
The noble Viscount said: I beg to move Amendment No. 1. None of the amendments that I have put down tonight is of any very great substance, but they do correct some errors and omissions. In Clause 11 we are assimilating to the phraseology of the Bill some specific offences which were created by the Mental Health Acts in England and Wales and Northern Ireland respectively. At the top of page 7 is the list of documents under the English Act, forgery of which is an offence, and a similar list occurs half way down page 7 in relation to the Northern Irish Act. Unfortunately, the formulation in New Clause 98 (1B) of the Northern Irish Act does not fit in with the phraseology elsewhere in that Act and this amendment puts it right and puts the wording in line with the rest of the phraseology in the Northern Irish Act. Therefore, that would be an improvement on the Bill. I beg to move.
On Question, amendment agreed to.
Clause 11, as amended, agreed to.
Clauses 12 to 19 agreed to.
Clause 20 [Prohibition of importation of counterfeit notes and coins]:
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 2:
Page 10, line 15, leave out ("Subject to subsection (2) below.").
The noble Viscount said: I beg to move Amendment No. 2 and with the Committee's permission I wish to speak also to Amendments Nos. 3, 4, 5 and Amendment No. 10 in the schedule. Clause 20 deals with the importation of a counterfeit coin or a currency note and Clause 21 deals with the exportation of it. Why anybody should want to import or export counterfeit coins or currency notes I have no idea, but the fact of the matter is that, under the present law, if one wants to import them one can do so if one gets a permit from the Customs and Excise under Section 2(2) of the Revenue Act 1889.
Similarly, under Section 7(1)(b) of the Coinage Offences Act 1936 you can export counterfeit coins if you have a lawful authority. Unfortunately, the provision for a lawful authority to export coins under Clause 21 has somehow been missed out in the drafting, and it seemed to those who advised me that the simplest thing to do was to make it a matter that in both cases can simply be done by the consent of the Treasury. Therefore, instead of preserving subsection (2) of Clause 20, which deals with the special arrangements for importation, and in order to make good the omission of a power to permit the exportation of these counterfeits, in both cases we simply make the matter subject to the consent of the Treasury. It greatly simplifies everything and enables one to repeal reference to the 1889 Act in the schedule.
With that explanation I move Amendment No. 2. Perhaps we can take the others formally when we reach them. I beg to move.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 3:
Page 10, line 17, after (" coin ") insert (" without the consen of the Treasury ").
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 4:
Page 10, line 18, leave out subsection (2).
On Question, amendment agreed to.
Clause 20, as amended, agreed to.
Clause 21 [Prohibition of exportation of counterfeit notes and coins.]:
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 5:
Page 10, line 23, after (" coin ") insert (" without the consent of the Treasury ").
On Question, amendment agreed to.
Clause 21, as amended, agreed to.
Clauses 22 to 25 agreed to.
8.23 p.m.
The Earl of Mansfield The Earl of Mansfield moved Amendment No. 6:
After Clause 25, insert the following new clause:
("Amendment of Schedule 1 to the Criminal Justice (Scotland) Act 1980
. In Schedule 1 to the Criminal Justice (Scotland) Act 1980 there shall be added at the end the following—
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"CUSTOMS AND EXCISE MANAGEMENT ACT 1979. The following provisions in so far as they have effect in relation to the prohibitions contained in sections 20 and 21 of the Forgery and counterfeiting Act 1981 namely:— Sections 50(2) and (3) Section 68; and Section 170 (various offences committed in connection with contraventions of prohibitions on the import and export of counterfeits of currency notes or protected coins)."

Two officials authorised to do so by the Secretary of State, being officials of the authority or body which may lawfully issue the currency notes or protected coins referred to in column 3 hereof.

That the coin or note identified in the certificate by reference to a label or otherwise is a counterfeit of a currency note or protected coin; where "currency note" has the meaning assigned to it by section 26(1)(a) of the Forgery and Counterfeiting Act 1981, and "protected coin" means any coin which is customarily used as money in the United Kingdom, any of the Channel Islands, the Isle of Man or the Republic of Ireland.

THE FORGERY AND COUNTERFEITING ACT 1981 sections 14 to 16 (certain offences relating to counterfeiting).

Two officials authorised to do so by the Secretary of State, being officials of the authority or body which may lawfully issue the currency notes or protected coins referred to in column 3 hereof.

That the coin or note identified in the certificate by reference to a label or otherwise is a counterfeit of a currency note or protected coin: where "currency note "has the meaning assigned to it by section 26(1)(a) of that Act, and "protected coin" means any coin which is customarily used as money in the United Kingdom, any of the Channel Islands, the Isle of Man or the Republic of Ireland.".").

The noble Earl said: This is a minor but useful amendment which will help to solve problems which arise in trials in Scotland. In England and Wales Section 9 of the Criminal Justice Act 1967 permits evidence to be given by written statements in criminal cases. However, in Scotland there exists a general rule that all evidence must be given orally by witnesses in open court unless there is a good and justifiable reason for departing from that rule. Although the Government believe that this general rule should be retained for Scotland, there are occasions when benefits do occur where it is relaxed for certain types of evidence; for example, where the evidence, although crucial to the proof of the case, tends to be of a routine nature and is rarely contested in court.
The Government wish to take this course in relation to the present Bill and, in effect, wish to make provision for certificate evidence on the counterfeit nature of notes and coins in the counterfeiting part of the present Bill. An amendment on this line will save officials of the Royal Mint and note-issuing banks in the United Kingdom having to travel to Scottish courts to give evidence personally in cases of this nature at vast public expense and no little trouble to themselves.
In Scotland it is competent to examine only the witnesses named in the indictment, and substitutes cause problems if these officials, about whom I have spoken, are unable to come to a trial at the last moment. Our procedure does not permit last-minute changes of witnesses. So in the past trials have had to be adjourned at no little inconvenience and cost. Therefore, this procedure offers a small but useful saving in public expenditure and will prevent delays caused by substitute witnesses.
Under the procedure contained in Section 26 of the Criminal Justice (Scotland) Act 1980, which will apply to counterfeit currency certificate evidence, the rights of the accused to challenge the evidence are specifically retained, and he is given an adequate period within which to decide whether or not to challenge the evidence contained in the certificate. The prosecution is required to serve a copy of the certificate on the accused at least 14 days before the trial, and if the accused wishes to challenge the evidence, qualification or authority of the witnesses mentioned in the certificate he must do so by serving notice on the prosecutor at least six days before the trial.
In the event of such a challenge the prosecutor is required to prove the counterfeit nature of the note or coin in the normal way by the witnesses being called to give oral evidence in court. The use of certificate evidence in no way lessens the burden of proof laid on the prosecutor; nor can it be seen as changing the onus of proof from the prosecution to the accused, as the prosecution is still required to prove the matters in the certificate. Therefore, I commend this minor but useful amendment to the Committee. I beg to move.
Viscount Colville of Culross: All I need say is that I am wholly convinced by the argument of my noble friend that this would be an improvement to the Bill.
On Question, amendment agreed to.
Clause 26 agreed to.
Clause 27 [Meaning of "counterfeit"]:
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No 7:
Page 15, line 20, after ("coin") insert ("(a)").
The noble Viscount said: Amendments Nos. 7, 8 and 9 stand together, so perhaps I may move Amendment No. 7 and speak also to Amendments Nos. 8 and 9. Clause 27 is one of the definition clauses and defines a thing as a counterfeit of a currency note or a protected coin:
"…if it is not a currency note or a protected coin but resembles a currency note or protected coin (whether on one side only or on both) to such an extent that it is reasonably capable of passing for a currency note or protected coin of that description".
The reference to something which is not a currency note or protected coin but which resembles one is included to ensure that coins which are issued by the Republic of Ireland, for instance, and which resemble British coins, are not caught by the definition of "counterfeit".
However, upon reflection the effect of this reference has been to cast some doubt on whether a protected coin—an ordinary British coin—of one denomination
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which is altered so as to pass for a protected coin of another, inevitably higher denomination is a counterfeit under the Bill. I understand that an abuse of this sort is already known, though far be it from me to explain in your Lordships' Committee what it is or how it is done. It occurs to me that it might become even more common with the introduction of 20p and £1 coins, which we hear are to come in the future.
Therefore, the intention is to clarify the position under the Bill and make it clear that the protected coins which are altered to resemble other protected coins are, indeed, counterfeits under the Bill. That is what Amendment No. 8 seeks to do. Amendment No. 7 is, of course, purely paving. Amendment No. 9 has the effect merely of deleting subsection (3), because that was a definition of the word "making", and I think that it is clear from what I have already said that the alteration of the shape, size or colour is already covered by the amendment to which I have just referred. Therefore, that subsection is no longer necessary and, again, we can simplify the Bill and deal with a current problem. I beg to move Amendment No. 7.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 8:
Page 15, line 24, at end insert—
("or
(b) if it is a currency note or protected coin which has been so altered that it is reasonably capable of passing for a currency note or protected coin of some other description.").
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 9:
Page 15, line 35, leave out subsection (3).
On Question, amendment agreed to.
Clause 27, as amended, agreed to.
Clauses 28 to 33 agreed to.
The Schedule [Repeals]:
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 10:
Page 19, line 31, at end insert—

("52 & 53 Vict. C 42.

Revenue Act 1889.

Section 2.").

On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 11:
Page 20, leave out lines 41 to 43.
The noble Viscount said: Amendments Nos. 11 and 12 go together. What in fact has happened is that the two Northern Irish Acts referred to have been consolidated by the Road Traffic (Northern Ireland) Order 1981. Therefore, we should have a reference to the up-to-date order if we have anything at all. In fact, the two offences now in existence under that order are very similar to some offences in England and Wales, possibly in Great Britain, under other legislation which, because of certain technicalities, it has been thought better not to try to include in this Bill at all. The equivalent Great Britain legislation is

1141
not being repealed and is not being made part of the Forgery and Counterfeiting Bill. It therefore makes pure sense to leave out the equivalent Northern Irish legislation altogether, and there should be no reference to this part of the Northern Irish statute book at all. I therefore beg to move that these two references be left out. I beg to move Amendment No. 11 first.
On Question, amendment agreed to.
Viscount Colville of Culross Viscount Colville of Culross moved Amendment No. 12:
Page 20, leave out lines 56 to 59.
On Question, amendment agreed to.
The Schedule, as amended, agreed to.
The Deputy Chairman of Committees: The Question is, That I report the Bill to the House with amendments.
Lord Davies of Leek: Before we pass on, may I, as a layman, ask a very simple question? I apologise for not being here at the beginning of this debate. In Clause 13 the offence of forgery at common law is abolished. In Clause 33 the citation says:
"This Act may be cited as the Forgery and Counterfeiting Act 1980.
Lord Denham: If the noble Lord will forgive me, we have already passed this part of the Bill. It really would be out of order to go back and discuss a part of the Bill that we have already gone past.
Lord Davies of Leek: I am discussing the citation of the Bill, which calls it the Forgery and Counterfeiting Act, but I gather that forgery is abolished at common law.
Lord Denham: We have already passed the citation of the Bill. We have already passed the Title of the Bill. The Question before the House is, That the Bill be reported back to the House with amendments.
Viscount Colville of Culross: If it would help, the simple answer is, yes, the common law offence of forgery is being abolished. It is being replaced by a new statutory set of definitions, of which the Bill contains the whole detail.
House resumed: Bill reported with the amendments.

Petrol Tax: Proposed Increase
8.34 p.m.
Lord Underhill Lord Underhill rose to ask Her Majesty's Government what consideration has been given to the effect on industry and also on public and private transport in rural areas of the increase in petrol tax introduced in the Budget.
The noble Lord said: My Lords, the Question which I beg leave to put is not intended to cover all the various measures of the Budget nor the full consequences of the Budget. The Question is concerned with the effects of the increased tax on petrol and diesel fuel. Mr. Michael Foot, the Leader of the Opposition, has observed that the 20p increase in petrol and fuel tax will inflict serious injury on the economy and
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make it infinitely more difficult to embark upon any process of recovery.
On the morning after the Budget the Guardian stated:
"Britain's road users, from the private motorist to the operators of large commercial fleets, are reeling from the Chancellor's Budget proposals".
A spokesman for the Automobile Association has commented:
"The Budget is a kick in the teeth for motorists who have been lumped together with the luxuries of life to place them in the forefront of the Chancellor's tax increases".
The point of the AA is of course that this affects not only the individual but the whole of industry, and they say it has been lumped together with taxation on the luxuries of life.
There can be few who do not agree that this tax increase will have a disastrous effect on the rural areas. Inevitably it must have effects on jobs, services, and general living standards. Many noble Lords, with their close knowledge of rural areas, will understand only too well that this is what will happen. Those in rural areas are more dependent on their cars than are other people. In so many areas bus transport is either inadequate or non-existent, and in only a small number of areas are there any train services.
Many people living in the villages have to travel some distance to work, and they are compelled to rely on car transport. Shops are limited. In fact, many village shops are closing or have closed, and this process continues. For major shopping and access to many other services there has to be reliance upon the car. Often to visit a hospital from the village to the town requires reliance upon either one's own car or somebody else's car. One survey indicates that 81 per cent. of journeys in rural areas are by car compared with 66 per cent. in the towns. In some of the remote areas the percentage is even higher. For the rural car owner it is estimated that there will be at least £1 extra to the weekly cost of running a car, and that is an estimate on a very modest annual mileage.
This is not all. Smaller garages in many villages have of necessity to charge a higher pump price. Whereas in most towns petrol can be obtained at about £1·50—I can get it for between £1·48 and £1·49—in rural areas it is around £1·60, and in the more isolated places even higher. It has been made clear too that the higher tax will also add to delivery costs, and these will be reflected in the rural areas in higher costs, and higher prices for most items.
Although there are many people who are better off living in villages outside towns, it has to be kept in mind that generally rural incomes are some 10 per cent. below the national average. Fortunately, this increased tax will not directly affect bus services as fuel tax has been rebated for bus operators I believe since 1974. But there is nothing within the Budget to help operators to start or extend bus services. Therefore, there has to be this reliance on the private car. In passing, it is feared that the problems of local council financing, and the reduction in Government transport supplementary grant to county councils, may lead to a reduction in grants to bus operators in some areas. This obviously will add to the problems of rural transport.
There will be few people, if any, who will be exempt

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from the effects of this increased petrol and fuel tax. It will be an added burden of cost to the farmer. The fishing industry, which is going through very hard times, will have this added burden of costs which it will have to face. Local councils, who are being forced to cut services—and almost every day we read of the increased rates which councils, no matter who controls them, are having to request from their ratepayers—are now to face a substantial increase in petrol and fuel costs, which for many local councils will be very heavy indeed.
I have referred to the position of small rural garages. The Motor Agents' Association have pointed out that a retail dealer taking a 6,000 gallon petrol delivery will now face an instant bill for a further £1,200. The association has warned that the prospects for independent outlets are very bleak indeed. Large retail shopping concerns have stressed that the costs of distribution caused by the added petrol tax will have to be passed on to consumers. That is exemplified by this statement by the Co-operative Union, the body which speaks for the network of Co-operative shops:
"The substantial rise in petrol and derv duty will make for vast increases in costs to the Co-op Movement and our competitors and can only be a calamity for working people".
I have dealt so far in the main with the effects of the increased petrol tax on the individual. What will be the effect on industry? On the morning after the Budget the Financial Times commented:
"Industrialists were shocked last night by the Budget's lack of help for most of industry, despite the cut in minimum lending rate".
Referring in particular to the increased petrol and fuel tax, the paper observed:
"This seems an odd thing to do if the objective of the Budget is to help industry".
Various transport organisations have expressed their deep concern. The Freight Transport Association estimates that the tax will add 4 per cent to transport costs. That, they say, will be passed to their customers who in turn will pass on the increase to consumers. The British Road Federation commented that the tax on petrol
"is now 62·3p per gallon, with another 20p for VAT, all this at a time when industry is being exhorted to invest and workers to produce more goods".
The Road Haulage Assocation stated that because hauliers were already in serious difficulties there would be no alternative but to pass on the 4 per cent. cost increase, which must push up the price of goods carried. According to the association, haulage operating costs rose by 17·3 per cent. last year, meaning that hauliers now need 23 per cent. more revenue to cover costs compared with the previous year. I referred to the morning after statement by the Financial Times. After a week's reflection, that paper stated on 19th March:
"British industry could not be hit much harder by the Chancellor's measures on fuel prices than has been realised".
The article went on to say that the 20p additional tax on derv was likely to have
"a more severe impact on United Kingdom industry than even the petrol increase because the pump price of derv is now higher than in most Continental countries".
I understand that figures issued by the Department of
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Energy give the pump price of derv in the United Kingdom as 161p per gallon. The next highest of seven West European countries are Germany, 120p, or 41p lower; France, 116p; and Belgium, 113p. I will not quote the others, which are even lower than those. Even before the Budget increase, the tax on derv plus VAT was higher in the United Kingdom than in most Continental countries. Now our industrial concerns will be up against the even lower transport costs of those competitors. In addition to the increase in transport costs, those industrial concerns which use oil for power and heating will be faced with similar increased costs. All that is over and above the costs of other energy supplies which, as has been stressed time and again, are much higher than for our Continental competitors.
I appreciate that the Government have introduced some allowances for large users of energy, but the general view is that they are inadequate and that crippling energy costs are facing our industrialists. That view was expressed, for example, in recent days by the Chemical Industries Association, which is deeply concerned about the tax on heavy fuel and has stressed the problem it will be for its members to meet those costs and compete against their competitors in the export market.
To sum up, while I am not suggesting that what I have spoken of is the main thing wrong with the Budget, the increased tax on petrol and fuel can only make life much harder for those living in rural areas. It must be inflationary in causing prices to rise in consequence of the increased transport costs. It will also be a further blow to industry by increasing its costs for transport and power. I therefore believe I am justified in asking the question: Has all this been taken into consideration by the Government?
8.44 p.m.
Lord Mackie of Benshie: My Lords, the noble Lord, Lord Underhill, has asked a Question which many people, including a large number of lifelong Tories, have been asking. I think it extraordinary that the Government do not appear to understand what goes on in the country, and I shall briefly underline what the noble Lord, Lord Underhill, said. The countryside today—this applies particularly the further north one goes, and especially to the countryside from where I come—is wholly dependent on the motor car. Every man on my farm has a car. Although it costs a lot to run their cars, they must do so because there is very little public transport, making the car essential. Indeed, the whole life of the countryside revolves around the motor car. They cannot go to the village shop any more and buy goods at a reasonable price; they must go to the supermarkets, which are situated some distance away, before they can get food and other goods at the same price as their industrial counterparts.
Every aspect of life in the country, particularly in the Highlands, is dependent on the motor car, and when it comes to derv and the increase in the price of fuel for transport, I wonder if the Government really appreciate the state agriculture is in. I know that the big grain growers have had a fair year this year. But if one takes a look at the income of Scottish agriculture, which I know most about, one finds the figure which I

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shall use in tomorrow's debate; namely, that the overdrafts of the farmers have gone up so much that they now pay the banks three times the amount of money they receive in net income. That is the state of agriculture all over Scotland, and 20p on the price of their transport fuel is another of the straws which will do immense harm to the industry.
I do not know what the exact figure is for inflation on the tax, but I imagine it is about 7p. I think people would have said, "We shall have to play our part and accept the fact that the tax on fuel might have to go up with inflation", but a rise of 20p is far and away beyond that sort of figure. If one looks at industry overall in Scotland—and I am speaking of Scotland because I know the rural areas there—one finds that a great many competent firms are in a very poor state indeed, and to them this appears to be just another tax—another burden and another straw on the camel's back—and I cannot understand what the Government are playing at. They are supposed to know the rural areas. Indeed, most of their Members are from the rural areas, and they must be aware of what is going on in those parts; witness the revolt against the tax.
It is all very well to have a single main plank of policy, which I understand to be the need to keep down inflation; but at the same time one must look at what is happening to industry, both rural and urban. Nobody who reads the financial reports of the companies in the papers can doubt that we are in an extraordinary position. I shall be interested to hear the Minister's reply, because he must tell us that the Government intend to use some skill and in some way help vital industry and agriculture in this country. It appears that until now they have been taking the money away from the industrialists, the people who work, and giving it to the bankers. Now they are going to take it away from the bankers in one form or another, and there will be much waste somewhere in between.
I shall not continue, because it seems to me that the case is self-evident, and in any case it has been extraordinarily well made. I shall be most interested to learn how an intelligent Minister, such as we have here in the noble Lord, can justify this extraordinary increase—out of all proportion to inflation—imposed on fuel that is absolutely vital for the regeneration of industry.
8.50 p.m.
Lord de Clifford: My Lords, I rise to speak because I live in a deeply rural area, which for some years now has found life becoming increasingly difficult. When we consider the cost of petrol we have to go back a few years to when the price was suddenly raised by OPEC. That decision caused considerable trouble in the rural areas, particularly in areas such as that in which I live. People in the rural areas, in particular the smallholders, lost all their deliveries. We used to have our milk delivered, but we lost that delivery. We used to have food delivered for our birds and animals, but we lost that delivery, too; and we lost much more besides. So we had to do it ourselves, and that meant spending a considerable amount of money.
After that there were price rises—natural, I suppose, during times of inflation—and then all of a sudden another 20p a gallon has been added to the price of
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our petrol. This is a most emotive subject. The people in the rural districts want to know why they are being picked on. Car tax has been increased; the cost of insurance has gone up. Everything has gone up. Then on top of that 20p a gallon is added to the price of petrol.
It is easy to sit in this Chamber and feel that perhaps there is some very good financial reason why the rural areas should be picked on to be hammered. But consider the situation when one has to go out to get food for one's animals. In the past fortnight or so one has had to go through perhaps four floods, wondering whether one will be able to get there, and afterwards get back. One is not quite sure whether one's place will be there when one returns. That kind of journey has to be undertaken in order to keep one's stock alive. In such circumstances people reach a state where, in a rather vulgar tone, they say, "Oh, let's give it up". But the people in the rural areas are rather tough; they will not give up. However, these increases will more and more force people out of rural areas.
It is nice to think that one can go out and catch a bus in order to go somewhere. In my area we are seven miles from the nearest big town. One has to travel three and a half miles to get a bus. How can anyone expect elderly people to walk three and a half miles for a bus? They have to depend on their cars. Now the price of petrol has gone up and so there is an extra strain on their pockets merely in getting to a bus. One wonders what will happen to people when the prices in the shops go up yet again—and go up they must.
Take as an example the farmer, who has a delivery of fertiliser. The raw material for the fertiliser comes off a ship and goes into the manufacturer's premises, where the first increase in cost is imposed. After being manufactured the fertiliser goes to a distributor and another increase is involved. It then has to be delivered to the farmer—another increase. The farmer produces the stock and takes it to market—and that involves yet another increase in cost.
It seems to me that the rural areas are getting the hammer in every way. The noble Lord who is to reply to the debate can produce all kinds of statistics about the need to control inflation, but he must also produce a story that the rural areas are prepared to accept; otherwise the Government will be in dead trouble in these areas.
8.56 p.m.
Lord Davies of Leek: My Lords, following the constructive speech that we have just heard I do not want to try to ram my points home, after we have had a busy day. The points are self-evident, but I want to look at this matter from another angle. Recently financial publications of various kinds have used the colloquial term that
"The Government have knocked the stuffing out of British industry".
I would add that the same has happened to agriculture and to the countryside in general. Throughout the ages the great Conservative Party has tried to preserve the special philosophical outlook of the countryside of Britain. The Conservative Party has been the countryside's protector. But has the Conservative Party now abandoned that position? I am quite sure that that

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question will be asked of the traditional Conservative in the rural areas at the next General Election, whatever may happen to any other party.
I used to talk to farmers at cattle markets during election time. A farmer would say to me, "I can't possibly vote for you. My father would roll in his grave". Occasionally, a farmer might say, "I won't vote against you, but I can't possibly vote for you. Our family has been Conservative all my life". A person who does not understand the countryside might scoff at that; but in the past the Conservative Party had a great amount of coinage in rural England. Now much of that has been spent.
The English countryside derives a peculiar characteristic from the way in which arable and pastoral life have been combined: cattle, crops and cottages knit together throughout the ages in a symphony of production, orchestrated with the rivers, the fishing, the village school, the village church. The village school has gone. It was the focal point of the social life of the village. Now in thousands of villages it has gone.
I want to look at this question from the point of view of the farmers, too. I shall put the argument, whether it be right or wrong. Farmers are asking for a 15·3 per cent. rise in EEC farm prices. Rural communities are complaining. Even before the Budget's swingeing 20p increase on petrol, in the United Kingdom costs had risen faster than in other EEC countries, due to inflation, increasing more quickly month by month. The Chancellor of the Exchequer, Sir Geoffrey Howe, after a meeting of EEC Finance Ministers in Brussels, emphasised that an increase in farm prices had to be kept as low as possible. How can that be expected when we have this swingeing tax on petrol, oils, and other fuels? Everything in country life is overburdened with transport costs. The railways are derelict, railways that may have been kept alive despite the "Beechingitis" which crippled the country many years ago.
I think there is an important point for both sides of the House and whatever party may reign in the future. Budgets will have to be brought to the country in a new spirit. I know from my brief work in No. 10 that too small a group of people are "in the know". All this rubbish about leaking! You had a complete leak, or a complete constructive analysis, of what the Budget might be. There may have been a few rogues who have tried to make money; but there have been few in the history of the British Government of any political party who have tried to make money by knowing the secrets. Perhaps the Minister who is to reply, who is a most capable and constructive Minister, will be able to inform me. When this Budget was made, were the Ministers of Energy and Agriculture and other people of importance in the economy of the land brought in for discussion? There should be fuller discussions, whatever party is in power, among people in the key areas of the economy and agricultural and industrial production.
I remember Aneurin Bevan talking in the smoke room of the other place more than 20 years ago about the need for more people in key positions in Government to put in their say about the Budgets of the future. I think that was not done. What consultations take place?
Taking one argument for horticulture, which has not
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been mentioned, this Government have done nothing but throw stones at the important glasshouse industry of Britain. The other day more than 500 glasshouse owners lobbied the Minister of Agriculture. It had never been known before. Why They suffer unfair competition; they suffer from subsidies to Holland of about 40 per cent. on gas prices; and as little as possible is done to help them. The president of the National Farmers' Union took the lead in the demonstration for horticulture and fishing. Most important is the diesel and derv oil for the fishing industry. Horticulture and fishing are probably the most hardly-burdened with fuel costs. The NFU calculate that the Dutch Government give Holland's growers a cost advantage of £10,000 an acre overall against heavy fuels and twice as much against light oils. The Department of Energy should be consulted on this. It is not only 20 per cent. on petrol, it is 20 per cent. on diesel engine and road vehicle liquids, light oil and heavy oil. All are needed in the agricultural industry.
Having made that point, I make another point before I sit down. The noble Lord will know what I am talking about when I say that the phenomenon of fiscal drag is increasing. Income tax is affected too because of the progressive structure in an inflationary environment. The higher that money incomes go, the less reality there is about the amount of income tax paid. I cannot go into this at this hour. The noble Lord knows what I am implying. We have got to get rid of the fiscal drag. Countries like Canada, Denmark, Holland and Sweden have adopted measures to try to prevent this. I believe that, far from this Budget succeeding in revitalising British agriculture and horticulture, it will set it back. Consequently, I hope we shall see in the future a completely new approach to the Budget, whatever party may he in power.
9.5 p.m.
Lord Lee of Newton: My Lords, the case has been well made that this impost is going to push large sections of our industry backwards in comparison with their competitors; yet every day the Government complain about most of British industry being uncompetitive. And then they proceed to ensure that it becomes more so by stupid actions of this sort. I will not go over it all again. My noble friend spoke about the effect on the chemical industry. He is right. I can give examples of half a dozen other major industries: cement, glass, brickmaking, et cetera which will be heavily handicapped in consequence of the oil impost in this budget. I want to approach it from a different angle. I happen to have been at the Ministry of Power when Sir Maurice Bridgeman, then chairman of BP, gave me the glad news that the finds of gas in the North Sea were a commercial proposition. We knew from the geologists that we would get oil as well. It was a great day.
One envisaged a complete change in the economic fortunes of this nation. Instead of that, what have we got? Our export charges are determined by OPEC. We are now permitting them to condition our own internal charges as well. Indeed, you cannot possibly play about with the prices of petrol, derv and so on without making a complete distortion of the whole of our oil products. I recall that when we were having companies setting up in Britain to get oil, American

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oil companies, we always insisted that when they got a certain percentage of the market they should build their own refineries. Therefore, the continuity of turning heavy oil into petrol and so on was a continuous process. The petro-chemical industry became a great industry from the by-products of the oil when it was partly refined. It seems to me the Government at the moment have no particular type of energy policy at all.
This, under modern conditions, is almost criminal. If one looks at the 1980 Coal Act, they were there telling us that the NCB must stand on its own feet, must break even, by 1983. The future of much of our coal is in oil. But what are we doing, my Lords? Are we ensuring that as we research—I and am not speaking about the distant future; I am speaking about a year or two from now—we shall be getting large quantities of our oil from indigenous coal? Are we really going to go on with huge imposts of this type on the newest breakthrough that we have in our research and development so far as energy is concerned?
I mentioned gas a moment ago. When Sir Maurice Bridgeman told me that it was a great success I went out by helicopter to the "Sea Gem". That was the rig carrying out the drilling. She went down later, with a heavy loss of life. That great find gave us the opportunity to produce our own energy; but, prior to that, we had been dependent upon imports and indeed were importing methane from Algeria as well as from other parts of the world.
At the moment we are not utilising that remarkable discovery to the advantage of our industries. As a matter of fact, the charges that we are making for gas to industry are utterly and completely exorbitant, quite over and above anything that the industry either requires or wants, in order to subsidise the public sector borrowing requirement. Having done that—and it is almost lunacy from the point of view of policy for such things—we are forcing up prices artificially to industries which are already in very great difficulty in competing abroad. I remember when the West Midlands gas industry broke down. Every motor car factory in Britain stopped immediately. They could not continue without the gas. Here we are trying like mad to get BL into a competitive position and to get other sectors of the British car industry competitive, and we are now making absolutely certain that they have not a cat in hell's chance of competing with countries which have not any oil or gas of their own.
Heaven help us! The great finds which were to some of us going to revolutionise the whole of British industrial prospects are now gone. We are doing nothing whatever to give ourselves an advantage. Some time ago we had the artificial fibre industries pleading with the Government to help them. Why? It was because the American fibre industries were getting cheap oil, and in an oil-based industry such as artificial fibres we could not possibly compete with the Americans.
I am not trying to make a party political case at all; I am trying to make a case for a proper energy policy for this nation. The noble Lord, as much as I do wants to see us get out of this awful slump into which we have degenerated. I ask him to use his influence with his colleagues—especially at the Department of
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Energy—to try to make them see some sense. My colleagues—and, indeed, the noble Lord opposite—have shown that in the rural areas they are despondent. Transport costs to huge industries are now getting out-of hand. I am saying that in many of our manufacturing industries this Budget has been almost a death knell. I hope that the noble Lord will see to it that his Cabinet colleagues understand that in this day and age a nation cannot go on without a policy on energy. They really will have to make some sense out of the great discoveries that they have made.
The alternative is to go on as we are: spending the proceeds of the North Sea on unemployment benefit. At the end of that our great assets will have gone. It will be a criminal shame if that happens.
9.13 p.m.
The Minister of State, Treasury (Lord Cockfield): My Lords, if I may quote from Edmund Burke:
"To tax and to please is not given to any man".
The noble Lord, Lord Underhill, started by quoting statements made by representatives of the road haulage industry and by the motoring organisations criticising the increase in the tax on petrol. My Lords, what did he really expect them to do? Did he expect them to welcome these increases? Did he expect the brewers to welcome the increase in the tax on beer or the distillers to welcome the increase in the tax on whisky? Did he expect the tobacco manufacturers to welcome the increase in the tax on tobacco? When the Labour Government were in power, did he expect the income tax payers to welcome the continual increases in income tax that the Labour Government imposed upon the suffering British people? Surely he is not as naive as all that.
We regret the necessity for increasing taxes in this way, but necessity indeed it is, and I must therefore refer briefly to the background which has made these measures essential. In the year just ending—the present year—the Government's borrowing requirement (that is, the amount of their expenditure exceeding the amount of revenue the Government collect) is £13½ billion. If nothing were done, the borrowing requirement in the coming year would be £14 billion on a conventional basis and £15 billion on a revalorised basis. The judgment of my right honourable friend the Chancellor of the Exchequer was that it was essential to reduce that borrowing requirement to £10½ billion, both to maintain the downward path of inflation and to allow interest rates to be reduced. These were the two main objectives of the Budget and they are both of very great value to industry and to the private citizen, as well.
May I remind the noble Lord that the expenditure plans bequeathed to the present Government by the Labour Party would have involved expenditure of no less than £5 billion a year higher than in fact it will be next year. With the Labour Party in power, therefore, we would be talking not in terms of 20p a gallon on petrol but in terms of £1 per gallon increase on petrol if we were to finance the profligate plans the Labour Party had set out in detail in their then programme. Since then, of course, they have committed themselves—if "committed" is the right word—to an even higher level of public expenditure, which

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would carry with it an even higher level of taxation.
But given the overriding necessity of reducing the amount of the Government's borrowing requirement, it was essential that substantially increased taxation should be raised, and this necessarily involved significant increases in indirect taxes. My right honourable friend proposed increases in all the indirect taxes amounting in the aggregate to approximately £2½ billion. The noble Lord in fact claimed that petrol was being "lumped in" with taxation imposed on the luxuries of life. One of the principles of taxation which was learnt many years ago is that one is enabled to raise these large sums of money on the taxation of alcohol, tobacco and in these days petrol, because they are no longer regarded as the luxuries of life: they are part of the conventional standard of living. If they were not, it would not be possible to raise revenue on this scale.
Of the total increase of £2½ billion proposed in the Budget in indirect taxes, nearly half comes from the increased taxation of petrol and derv. It would be quite impossible to raise a sum of this magnitude from indirect taxation in any other way. I will not go through the figures in detail, but if noble Lords care to study the Budget red book, the financial statement in the Budget Report, they will see how totally impossible it would be to raise the required sums of revenue unless substantial increases of taxation were imposed upon both petrol and derv.
We realise, of course, that these are very significant increases but it still remains the position that the price of four star petrol, in real terms, is just about the same as it was at this time last year. Despite the increase of 20p, the actual price of four star petrol at the pump is almost exactly the same as it was last year. The price is actually lower in real terms than it was under the Labour Government in 1974.
I have been talking about the price of petrol. If we now look at the tax, that is less in real terms than it was in 1950; it is less in real terms than it was in 1960 and it is less in real terms than it was in 1970. Before the Budget, the price of petrol in the United Kingdom was the lowest in the European Community, with the exception of Germany. After the increase now made, the United Kingdom price will be broadly in line with the rest of the Community, with only Germany and the Netherlands significantly lower.
It is perfectly true that derv prices are higher in this country than they are on the Continent. This is a position which has existed for many years. But several of the European countries with low derv prices have rates of vehicle excise duty on diesel engine vehicles which are much higher than those charged in the United Kingdom. It is necessary, therefore, if one looks at derv to look also at the burden of the vehicle duties.
May I turn from that to the question of the impact of the increase in the tax on the rural community? We, of course, all sympathise with the points made by my noble friend Lord de Clifford. We realise the great problems that many people in rural areas face. But I do not think that we should blame all of those on to the motor-car or on to petrol.
May I say in passing that, while it is true that in rural areas people are particularly dependent upon the motor-car, the same is increasingly so in other parts of
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the country as well. There are currently about 14½ million private motor-cars on the road, and another 1½ million motor-bicycles and three-wheeled vehicles, making a total of 16 million. The number of households at the last count was, in fact, about 18½ million. So that, even allowing for the fact that some people have more than one motor-car, most households have access to a motor-car, whether they are living in town or in the country.
It is true, of course, as my noble friend has said, and as, indeed, other noble Lords have said, that the rural driver tends to cover a somewhat higher mileage, but not, I may say, dramatically so. For example, one recent study put the higher mileage at about 8 per cent. Very largely, this higher mileage is offset by a lower petrol consumption, and there is no conclusive evidence that the actual user of petrol, in terms of gallons, is significantly higher in rural areas than it is in the towns—
Lord Underhill: My Lords, will the noble Lord kindly give way? The important question is not whether there is access to a car in the towns, but the dependence upon it. Whereas in the towns there is usually alternative transport, in rural areas there is not.
Lord Cockfield: My Lords, I am aware of the point that the noble Lord makes. What is important is the extent to which the vehicles are used and the quantity of petrol that they burn, because this is what determines the amount of tax which is paid. Whether or not there is public transport, there is very extensive use of private motor-cars by people commuting into the large towns. In fact, in many ways the people who probably cover the highest mileage of all are those who live in the country and work in the towns. There are one or two misconceptions on this that I should like to clear up. The first one is this.
Tractors and other agricultural machinery do in fact use gas oil which is charged at only 3½ pence per gallon, and the duty on gas oil has not been increased in this Budget. The same, broadly, is true of fishing vessels. Most fishing boats get full relief from the duty and in most instances they would use gas oil rather than derv. There is also an arrangement under which stage buses are given relief in respect of the duty on either the petrol or the derv that they use. This is done by way of fuel duty grant from the Department of Transport. This is the same as the duty itself and it has been increased in line with the duty. Therefore, so far as public transport by way of stage bus services in the rural areas is concerned, they are completely protected from the increase in the duty. In the case of the railways also, diesel cars use gas oil which pays duty again only at 3½ pence per gallon. The suggestion which was made by the noble Lord, Lord Davies of Leek, that glasshouses are heated with petrol or derv is a new one to me. So far as I know, they use neither of these fuels. They are not therefore affected by the increase in duty which is the subject of the Question asked by the noble Lord, Lord Underhill.
May I now turn to the question of industry. The impact on industry should not be exaggerated. As I have said, the increase in the price of petrol, for example, is much in line with the increase which has occurred in prices generally and the increase in derv will add a

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comparatively modest amount both to transport costs and to total business costs. I think perhaps it is only fair that I should remind noble Lords opposite that under the Labour Government, derv was charged at a higher rate of duty than was petrol. We abolished that differential last year, with the result that derv is now charged only at the same rate of duty as is petrol.
There is a further point of importance: that a business is entitled to treat the VAT element in the cost of either its petrol or its derv as a deduction against its output tax, and this is equivalent to a relief which reduces the figure to no less than 17·4p per gallon. We do of course realise that these increased duties will impose a burden on industry. There is no escape from that. At the same time, however, they form part and parcel of a budget which gives substantial relief to industry generally. This relief amounts, in a full year, to somewhat over £650 million. The most important item is the new stock relief which will give industry a benefit in relation to its 1981 profits of no less than £450 million. There is a whole series of new enterprise reliefs in my right honourable friend's Budget which will give relief amounting to £89 million in a full year. The special help which is now being given with fuel costs will give a further benefit of £120 million a year to industry. But the most important effect of all, so far as industry is concerned, is the reduction in minimum lending rate which the Budget has made possible. MLR has been reduced by two percentage points from 14 per cent. to 12 per cent. It now stands very significantly below the peak of 17 per cent. which was reached in the autumn of 1979, and as economic circumstances permit it is our intention to reduce rates of interest further. That is as circumstances permit.
The important point about this Budget is that it has paved the way for a progressive and continuing reduction in the rate of inflation. It has paved the way in the medium term for lower rates of interest. Both those matters are of substantial benefit to industry. An immediate price has to be paid in terms of increased taxation, but in the long run that price will be a price well worth paying.
I am grateful to the noble Lord for tabling his Question. It has enabled me to explain the background which has necessitated the increase in these duties, to put the matter into much better perspective and, above all, to indicate that the Budget offers real hope for the future by way of a lower rate of inflation and, in the medium term, lower rates of interest.

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