Sitting of 6 May 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    BRITISH RAILWAYS (PENSION SCHEMES) BILL
    Considered; to be read the Third time.
    WESTERN ISLES ISLANDS COUNCIL (BERNERAY FERRY) ORDER CONFIRMATION BILL
    Considered; to be read the Third time tomorrow.
Oral Answers to Questions
  ENVIRONMENT

    Water and Sewerage Charges
    Mr. Marlowasked the Secretary of State for the Environment what progress he has made in considering alternative methods of charging for water and sewerage.
    Mr. R. C. Mitchellasked the Secretary of State for the Environment whether, in view of the special burden of the large increase in water rates on low-income families, he will now consider alternative methods of charging for water.
    Mr. Lofthouseasked the Secretary of State for the Environment what representations he has received for the inclusion of water rates in the rebate scheme.
    The Under-Secretary of State for the Environment (Mr. Giles Shaw): With permission, I will answer this - question and questions 8 and 10 together.
    The National Water Council has concluded that the best way to alleviate the present sense of unfairness about the charging system is to extend optional metering to domestic households. Where this option does not exist at present the council recommends that water authorities should draw up a timetable for its introduction in the next few years.
    The council also concluded that, despite the representation which both it and the Government had received, the present legislation does not allow means-related rebates for water services and it reaffirms its belief that assistance to consumers should remain with the social security system.
    Mr. Marlow: Many people will look upon that answer as disappointing, because it costs £60 to instal a meter and a large amount of money to service it. Does my hon. Friend agree that water rates are the unfairest burden of an unfair rating system, that the water authorities are not sufficiently accountable democratically and that the
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    Government are committed to doing away with the present abhorrent rating system? Will he, as a start, consider the possibility of transferring the water rates to general taxation where the cost will amount to less than 1 per cent. of VAT? That would prove far more reflective of people's use of water, because those who bought most would use most. At the same time the water authorities would be put under a better system of democratic control.
    Mr. Speaker: Order. Question Time must not be used to argue a case. It is unfair to other hon. Members.
    Mr. Shaw: The Government share my hon. Friend's concern to see water rates reduced. As a result of our action in the spring, water charges estimated for the following year were reduced by £87 million in consumer terms. We are also seeking to implement a fairer system of charging based on voluntary metering. A transfer to general taxation would be inconsistent with the Government's policy of seeking to make regional water authorities more accountable. It would indicate less efficiency, and there would be a significant increase in value added tax.
    Several Hon. Members rose—
    Mr. Speaker: Order. I propose to call first those hon. Members who have tabled questions 8 and 10.
    Mr. Mitchell: I thought that it was customary to notify hon. Members if their questions were being linked with others.
    As the increased water rate imposes a heavy burden on widows, pensioners and those on low incomes just above the supplementary benefit level, will the Minister reconsider his decision and include water rates within the rate rebate scheme, which would at least help poorer people?
    Mr. Shaw: It has been the Government's policy to see that water, like other energies, is charged for according to consumption. The difficulties of those who are unable to meet the charges should be alleviated through the supplementary benefit scheme. I fully understand the hon. Gentleman's anxiety.
    I apologise for failing to notify the hon. Gentleman of the bracketing of the questions.
    Mr. Chapman: As many people, rightly or wrongly, believe that a metering system would be fairer than the present system, does my hon. Friend agree that the real cost is not that of the water itself, but that of getting the water from its source to the home? It therefore matters little, if charges are levied through a metering system, whether a household uses 10 gallons or 1,000 gallons of water a day.
    Mr. Shaw: My hon. Friend is right. That is why we favour optional metering, which provides a choice. In many cases that might not be a desirable solution. My hon. Friend is also right in saying that the cost of what comes out of the tap is less than the cost of the capital works involved.
    Mr. Stephen Ross: Although metering might be the long-term answer, surely the Government can do something about people who, like myself, have to pay a water rate for a building that has no water or sewerage system, but only water coming off the roof into the drains.

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    It is nonsense that one has to pay the full rate for that service. Cannot some legislation be arranged to prevent that?
    Mr. Shaw: I accept that the hon. Gentleman has a point about the disposal of surface water only, but he will appreciate that the water authority that operates in his area, as in others, has to pay for the disposal of foul water, from whatever source.
    Mr. Garel-Jones: Does my hon. Friend accept the argument of the hon. Member for Southampton, Itchen (Mr. Mitchell) that elderly people, particularly those living on their own, find the present method of charging for water grossly unfair? Since the best that my hon. Friend seems able to do is to offer voluntary metering, will he consider making a grant to elderly people who wish to install meters?
    Mr. Shaw: The best and fairest solution seems to be to change from the basic rateable value system to payment by other means. Gas, electricity and water should be paid for on the basis of consumption, and the benefits available under the social security system should be used for redress.
    Mr. Andrew F. Bennett: As there is a combined charge for water and the disposal of sewage, does the Minister suggest that sewage disposal should be metered? Is it not crazy that many of my constituents pay twice as much for their water and sewage disposal as for their general rate because the rebate applies to one and not the other?
    Mr. Shaw: The hon. Gentleman will be interested to know that some water authorities propose, by some means, to measure sewage and effluent discharges from houses. There are ways in which that can be done, although not in the way that the hon. Gentleman suggests. We must ensure that the consumption of water and the disposal of foul water is charged for realistically, but I appreciate the difficulty.
    Mr. Durant: Will my hon. Friend consider using new technology for metering? Is he aware of new systems that would make metering much cheaper? Will he also consider establishing a water consumers' council? If we are to be chained to the present system, should not the consumer have a voice in what happens?
    Mr. Shaw: My hon. Friend will recall that the majority of the members of water authorities are from elected bodies. The Government believe that the needs of the consumer are met in that way. However, I note my hon. Friend's suggestion. I accept that there are many aspects of the problem. The Water Research Centre is examining the new technoloy.
    Mr. Graham: When the Minister considers how water authorities should bill consumers, will he reflect on the outcome of the recent diktat by the Secretary of State? Will he also reflect on the words of the chairman of the Thames water authority when he complained that the Secretary of State had insisted that more risks should be taken and that standards of service were no longer sacrosanct? Will he condemn the policy that forces authorities to jeopardise the health of consumers as the price for fiddling the books?
    Mr. Shaw: I repudiate the suggestion that to reduce consumer charges from a 19 per cent. increase to a 13 per cent. increase is fiddling the books. It is a genuine attempt
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    by the Government to ensure that consumers get a fair deal and value for money. We shall continue to pursue that policy.

    Council House Sales
    Mr. Allan Robertsasked the Secretary of State for the Environment how many council houses have been sold since the passing of the Housing Act 1980; what is the average discount given to those who have purchased them; and what percentage of the total are flats.
    The Secretary of State for the Environment (Mr. Michael Heseltine): Figures are collected quarterly. In the second half of 1980, 34,100 local authority dwellings in England were sold at an average discount of 40 per cent. It is estimated that nearly 2½ per cent. of the dwellings sold were flats. Figures for the first quarter of 1981 are not yet available.
    Mr. Roberts: Do not the figures reveal that few flats are being sold? Does the Secretary of State accept that only the best council houses are being sold at give-away discounts? Is he aware that that is creating ghetto housing, since the worst houses are being left in the public sector?
    Mr. Heseltine: The figures show nothing of the sort. They show that up to now completions for the sale of flats under the right-to-buy policy have not taken place. Under the earlier enactment of that policy few councils sold flats. I understand that many right-to-buy applications are for flats. If the hon. Gentleman is so concerned about our policy of selling council houses, he should accept that it is a popular policy with people who want to buy their homes. The real criticism should be made of Labour-controlled authorities which are trying to frustrate the Government's mandate.
    Mr. Adley: Does my right hon. Friend agree that Parliament has given tenants the right to buy and that it is intolerable and undemocratic for local authorities to seek to frustrate that right? Will my right hon. Friend confirm that any local authority tenant has the right to apply to buy his council home? Will he ensure that tenants' rights within the law are upheld?
    Mr. Heseltine: Tenants' rights within the law will certainly be upheld. Any council tenant can apply, and a large proportion of them have the right to buy. That right to buy was enshrined in the mandate under which the Government came to power.
    Mr. Frank Allaun: Is not the Secretary of State forcing tenants to buy by raising rents? Secondly—and I ask the Minister to answer—does he intend to impose an additional rent increase beyond the current £3·25 by a further removal of subsidy?
    Mr. Heseltine: The hon. Gentleman is aware that each year the Government reach conclusions about the public expenditure balance. The Government will continue to do that, just as the previous Government did. Today is not the right time to discuss the relative balance between one factor and another. The hon. Gentleman is aware that the policy of selling council houses has nothing to do with future levels of rent increases. The Labour Party is always calling for improved standards of maintenance for council houses, without realising that rent payments have to be made to cover the costs.
    Mr. Squire: In support of my right hon. Friend's earlier statement, may I ask whether he is aware that in the London borough of Havering the majority of tenants applying for purchase live in flats? Does he agree that that is evidence that the premise behind the original question is false?
    Mr. Heseltine: I agree. The first indications are that there has been a significant increase in the number of applications to buy flats, which were not previously available for sale.

    Council House Rents
    Mr. Dormand asasked the Secretary of State for the Environment what representations he has received on the Government's statement on council rents increases for 1981–82.
    The Minister for Housing and Construction (Mr. John Stanley): Some 570 letters on the subject of council house rent increases have been received since my right hon. Friend made his housing statement on 15 December.
    Mr. Dormand: Why has the Secretary of State been so strangely and untypically quiet recently, particularly about rent increases? Could it be that, although county councils have no direct responsibility for rents, he believes that what is said on the subject might rub off and have an effect on the county council elections tomorrow? Will the Minister come clean and be honest and admit that the vast increases in rents, which many people in the Northern region will find difficult to meet, are due entirely to Government policy?
    Mr. Stanley: The hon. Gentleman must realise that the previous Government's policy was to increase rents in line with earnings and that they failed to discharge that policy. In four out of their five years the increase in rents was below the increase in earnings. As a result, the relationship between earnings and rents is now one of the lowest on record. In 1980–81 rents were 6·5 per cent. of earnings. If the hon. Gentleman is exercised by the number of letters that we have received—about 570—he should know that we have received nearly 10 times that number from council tenants wishing to buy their council homes. That suggests that council tenants are less concerned about the level of rents than about being frustrated by Labour councils in their right to buy.
    Mr. Heddle: Will my hon. Friend confirm that at least 45 per cent. of council tenants do not have to meet any rent increases in full, and that 25 per cent. do not have to meet any increase at all?
    Mr. Stanley: My hon. Friend is correct. About 46 per cent. of local authority tenants receive help with their rents. Of those, more than 1¼ million will have to pay no increase in rent because they receive supplementary benefit. More than 1 million tenants will have about 60 per cent. of any increase met because they receive rent rebates. The Government extended the rent rebate system in the Housing Act 1980. More recently, we increased the maximum ceiling for rent rebates in London to £35 a week and to £30 a week outside London. That provides real protection for people on low incomes.
    Mr. Joseph Dean: On the subject of council house rents, will the Minister reflect on an answer that he gave during the previous Environment Question Time, on 1
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    April, when he said that last year Manchester provided £37 million for its housing revenue account from the rates? As a Manchester ratepayer, I know that that figure is wrong by £10 million. The figure is £27 million. Will the Minister take this opportunity to correct that error?
    Mr. Stanley: I assure the hon. Gentleman that I shall look into the matter, but the figures that I gave were closely checked by my Department. I assure the hon. Gentleman that the burden of rates in Manchester over many years has had a serious effect on small and medium-sized businesses in that city.

    Local Authorities (Planning Departments)
    Sir William Elliottasked the Secretary of State for the Environment if he will advise local authorities to review their staffing establishment in their planning departments.
    Mr. Heseltine: I am constantly reminding local authorities of the need to review their staffing levels and make reductions in all departments, including planning, if the Government's expenditure targets are to be met. The net effect of the changes that we have introduced to make the planning system more efficient should be a reduction in the overall numbers of staff required.
    Sir William Elliott: Does my right hon. Friend recognise that ratepayers, particularly in large cities, will welcome any reduction in the extent and scope of planning procedures? Is my right hon. Friend satisfied that private firms are being used sufficiently by local authorities in their planning procedures?
    Mr. Heseltine: I am grateful to my hon. Friend. There are many opportunities in the public sector, including local government, to use the private sector on a larger scale. I agree that the extent to which local government keeps down rates will have a direct beneficial effect on investment and job creation. One cannot help noticing that Labour authorities are largely bent on increasing rate levels to unjustifiable levels.
    Mr. Steen: Is my right hon. Friend aware that East year about 8,000 houses in the principal towns and cities were demolished because of planning approval, and that at the same time, according to the second land utilisation study, about 60,000 acres of good agricultural lard were destroyed because of urban sprawl resulting from planning decisions? Is my right hon. Friend happy about that arrangement?
    Mr. Heseltine: My hon. Friend raises two important issues. There is, unavoidably, a certain amount of demolition of old and inadequate housing, particularly in urban areas. There is no way to escape the irreducible minimal destruction that takes place. Wherever possible, we want property to be restored. That is happening with the new freedom that local government has to apportion its housing allocations more to renovation and improvement than to the new build that characterised earlier programmes.
    On the second question, I am aware of my hon. Friend's concern about land in the countryside that could be protected if better use were made of urban land. He is aware of the initiatives that have been taken by the Government to put mechanics on the statute book, for the

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    first time, to enable much publicly owned land to be driven into the market place, where more profitable use can be made of it.
    Mr. James A. Dunn: Is the Secretary of State aware that, although some of us share his apprehension about what has happened, we hold his Department partly responsible because when a clearance order for demolition is submitted it must always have his Department's permission? Can the Secretary of State assure the House that when planning matters are being considered every effort will be made to ensure the complete impartiality of those who are employed as servants and agents of councils?
    Mr. Heseltine: I have no doubt that this country enjoys as impartial a Civil Service and local government service as it is possible to find anywhere in the world. I would defend that statement against all arguments. However, we all realise that the demolition of large parts of our inner cities went too far. With hindsight, we should probably have pursued other policies. I believe that we are right to have moved the emphasis away from demolition to rehabilitation.
    Mr. Lyell: Is my right hon. Friend aware of the number of planning staff that are required to monitor our elaborate building regulations? Can he say what measures are being considered by his Department to simplify the regulations?
    Mr. Heseltine: My hon. Friend will be aware of the announcements that we made about the simplification of the planning system and the new regime that we propose to introduce for building regulation procedures. I have not sought to give specific directions to local government about the ways in which it should seek to economise on staff. I have given general directions. I think that it is right for individual authorities to pursue their own staff economies as their local priorities demand. I have no doubt that there is still room for considerable economies.
    Mr. Hardy: Will the Secretary of State advise his hon. Friend that good agricultural land is consumed and developed, not because of the existence of hundreds or thousands of planners, but because of the demand that exists because agricultural land may be cheaper than inner urban land? The planning legislation is grossly inadequate to afford proper protection for good quality land in many areas.
    Mr. Heseltine: I do not agree that planning procedures are inadequate to protect land. A rigid system of planning constraint exists, particularly for green belt land—and rightly so—and it is administered by my Department. However, another phenomenon causes even greater concern, namely, that it is easier to use agricultural land because it has few constraints or past dereliction associated with it. Too often we have gone for the easy option of agricultural despoliation, as opposed to reclamation in inner cities, where large acreages of publicly owned land have not been used because of the apparent difficulties of using it. I want to reverse that policy.

    Allerdale District Council
    Mr. Campbell-Savoursasked the Secretary of State for the Environment if he will undertake a review of the housing investment programme allocations for Allerdale district council.
    The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): No, Sir. Allerdale district council was given a fair share of the housing resources available for 1981–82.
    Mr. Campbell-Savours: Is the Minister aware that the HIP allocations to Allerdale have been cut since 1979, when they were £5·6 million, to just over £3 million this year? Is he further aware that that has destroyed the new start of the Allerdale district council's construction programme, cut to shreds its improvement programme and greatly damaged the possibility of Allerdale being able to provide for the 2,170 people who desperately need accommodation?
    Mr. Finsberg: We understand what the hon. Gentleman is saying. Allerdale's allocation for 1981–82 is generous in the difficult circumstances of the year. Its percentage share of the regional total has increased significantly, and it could be topped up with right-to-buy receipts.

    New Towns (Defective Houses)
    Mr. Newensasked the Secretary of State for the Environment when he expects to receive a report from the National Building Agency on claims made by new town authorities under section 10 of the New Towns (Amendment) Act 1976, in respect of design defects in houses transferred to them; and when he anticipates he will be in a position to come to a settlement on this issue.
    Mr. Geoffrey Finsberg: I refer the hon. Member to the reply that I gave to my hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) on 27 April.
    Mr. Newens: Does the Minister recognise that as councils cannot remedy all the defects in new town houses, which are causing great inconvenience and hardship to many residents, his reference of the matter to the National Building Agency means that those defects will have to go unremedied for several years? Does he accept responsibility for that? As he is so anxious to save public money, will he say how much this study, which is merely a delaying action, will cost?
    Mr. Finsberg: I have told the hon. Gentleman ad nauseam that we are discussing this matter with the Association of District Councils. I have said over and again in the House that we have made it clear that if authorities proceed with urgent repair work it will not prejudice their claims for assistance.
    Mr. Newens: How much is it costing?
    Mr. Foster: Is the Minister aware that it is costing Sedgefield district council about £15 million to do all these repairs, and that such money is not available to a district council? Is he further aware that there is a widespread belief in all the district councils concerned that he is dragging his feet? When will he draw these negotiations to a close?
    Mr. Finsberg: The hon. Member doubtless chooses to forget that these defects did not occur during the past two years. He also chooses to forget that my Labour predecessor delayed making a decision because no Government could accept at face value all the claims without an investigation of the public interest.
    Mr. Michael Morris: Is my hon. Friend aware that the reference to the National Building Agency is welcomed by

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    the majority of Members who represent new towns? Does he realise that, at the end of the day, when the transfer takes place, there may be some unforeseen defects in the properties—for example, the problems with cladding that have occurred after 10 years with the tower blocks? Will there be some safeguards to deal with any unexpected defects?
    Mr. Finsberg: We shall consider my hon. Friend's point. However, it is right to say that the houses were handed over by the Government to local authorities at an advantageous price.
    Mr. Graham: Is not the saga of the frustrated section 10 claims a disgrace and a scandal? Should not the Minister shoulder a major share of the blame for the delays caused by his continual attempts to restrict the criteria for claims? How does he expect new town councils to deal fairly with inherited problems when they have been dealt with so unfairly in the HIP and rate support allocations?
    Mr. Finsberg: With limited exceptions, the criteria for judging claims were those laid down by the hon. Member for Greenwich (Mr. Barnett).
    Mr. Dormand: Does the Minister realise that it is almost two years since he and I discussed this matter in an Adjournment debate? Does he recall that during that debate he conceded that Peterlee new town in my constituency was the worst affected new town in Britain? Is that not evidence of a scandalous dragging of feet? Does he also recall telling the Easington district council that it would be reimbursed and could get on with its work? Is it not true that it has not yet received a penny? Is not the answer to set a target date for the report, so that some resources can be made available to the new towns?
    Mr. Finsberg: The hon. Gentleman is aware that I have already said that the National Building Agency report will be available next May. We shall take a decision as soon as possible thereafter.

    Council House Sales (Sheffield)
    Mr. John H. Osbornasked the Secretary of State for the Environment if he will take steps to ensure that the Sheffield metropolitan district council no longer obstructs and threatens council house tenants who wish to purchase their homes and carries out the steps and requirements of recent legislation designed to promote the sale of council houses.
    Mr. Stanley: I refer my hon. Friend to the statement I made in the House on 15 April. The Department wrote to Sheffield on the same day to give formal warning that my right hon. Friend is contemplating using his powers of intervention and seeking by 13 May the latest information on progress by the authority. If it then appears to my right hon. Friend that Sheffield's tenants have, or may have, difficulty in exercising the right to buy effectively and expeditiously, a notice of intervention will be served on the council.
    Mr. Osborn: I welcome the statement made on 15 April. Has my hon. Friend had time to study the dossier given to him by Conservative councillors outlining the appointment of people to dissuade tenants from buying their houses and also dealing with the difficult issue of the intimidation of those who want to buy their council homes? What reaction has he received from Sheffield?
    Mr. Stanley: My right hon. Friend the Secretary of State has not yet received a definitive reply from the city of Sheffield. We have been assured that it will be sent to us by the due date. The papers referred to by my hon. Friend have been studied. As I have said, if a local authority can recruit staff to dissuade people from exercising their right to buy, it must have sufficient staff to help people obtain their legal rights.
    Mr. Flannery: Does the Minister remember that I recently sent him a petition with 20,000 signatures about council house rents? Does he remember saying that he had nothing to do with the matter and that local councillors raised rents? Did he think that we would accept that? Does he recall that the council has repeatedly pointed out to him that it has 27,000 people on the housing list, that the list is developing, and that he has cut down its staff while expecting it to have sufficient staff to sell council houses? Cannot the council legitimately complain that it costs money to obtain staff? Does he accept that the hon. Member for Sheffield, Hallam (Mr. Osborn) has no contact whatsoever with council house tenants and just does not understand the issue?
    Mr. Stanley: My hon. Friend the Member for Sheffield, Hallam (Mr. Osborn) is as closely associated with his electorate as the hon. Gentleman is with his. Because of my hon. Friend's representations, we are aware that almost 4,000 tenants in Sheffield have applied to buy their homes. The latest figures available from the local authority show that at the beginning of April precisely five houses had been referred for valuation, no offer notices had been served and no completions had taken place. That is why a letter has been sent to the Sheffield city council saying that the Sectretary of State will intervene if satisfactory replies are not received by 13 May.

    Council House Sales
    Mr. Dobsonasked the Secretary of State for the Environment what is his estimate of the total income from council house sales in 1980–81 that councils will be able to devote to new house building.
    Mr. Stanley: It is for individual local authorities to decide what proportion of their accumulated unspent housing and non-housing capital receipts at 1 April 1981 they devote to new house building in 1981–82.
    Mr. Dobson: Does the Minister realise that his response is misleading? Is he aware that if we allow for a 40 per cent. average discount—as the Secretary of State mentioned earlier—for the 50 per cent. of the takings which are trousered by the Government, and take into account that 60 per cent. of council tenants seek a council mortgage to buy their properties, that means that less than 10 per cent. of the total proper valuation of the houses sold is available to councils to spend on new house building and rehabilitation?
    Mr. Stanley: That does not match up with my figures for receipts of certain local authorities from the sales of council dwellings last year. Six authorities had more than £2 million each from the sale of council dwellings during the first nine months of last year. They are all Conservative authorities. That shows vividly that the Labour authorities which failed to sell during the last financial year have suffered a self-imposed cut in their housing programmes.
    Dr. Mawhinney: Does my hon. Friend agree that if the colleagues of the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) were to encourage their tenants to buy council houses, rather than try to obstruct them in doing so, they would have more money available for new house building?
    Mr. Stanley: My hon. Friend is right. It is not only the question of the sale of houses to sitting tenants, but the possibility of selling land which scores 100 per cent. if a local authority wishes to increase its capital receipts. There are considerable examples of large areas of valuable land throughout Britain in local authority ownership which could be sold. That fact has been exposed by the land register that my right hon. Friend the Secretary of State is compiling.
    Mr. Alton: Does the Minister seriously believe that sufficient funds are coming in from the sale of council houses to compensate for the loss of homes caused by public expenditure cuts? Has he had time today to read the report of the Catholic Housing Aid Society about the state of Liverpool's housing stock? Does he believe that the money collected in receipts in Liverpool alone will be sufficient to compensate for the loss of money available to local authorities?
    Mr. Skinner: You voted for the sale of council houses.
    Mr. Stanley: I hope that the hon. Member for Liverpool, Edge Hill (Mr. Alton) will make every effort to ensure that in Liverpool and elsewhere the sale of council houses progresses as rapidly—[Interruption.]—as possible.
    Mr. Speaker: The hon. Member for Bolsover (Mr. Skinner) really must try to restrain himself. It is discourteous and unfair to other hon. Members if he continues to talk as I heard him talk.
    Mr. Skinner: I was just pointing out—
    Mr. Speaker: Order.
    Mr. Stanley: Every possible effort should be made in Liverpool to dispose—
    Mr. Heffer: On a point of order, Mr. Speaker. My hon. Friend the Member for Bolsover (Mr. Skinner) merely said to the hon. Member for Liverpool, Edge Hill (Mr. Alton)—
    Mr. Speaker: When an hon. Member has been called, any sedentary interruptions are out of order. We have allowed a great many to pass, but it is unfair when they are constant.
    Mr. Douglas-Mann: Will the Minister—
    Mr. Heffer: My hon. Friend said it was hypocrisy and it is.
    Mr. Douglas-Mann: Will the Minister come clean and tell the House to what extent he challenges the assumptions made by my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson)? Does he disagree that only one-third of council house sales will be funded by other than local authority mortgages? Does he disagree that the average discount will be 40 per cent.? If he does not disagree with those assumptions, how can he dispute the figure put forward by my hon. Friend that only 10 per cent. of the proceeds of council house sales will be available for investment?
    Mr. Stanley: If the hon. Gentleman reads the written answer that I gave to the hon. Member for Holborn and St. Pancras, South (Mr. Dobson), he will note that there is a detailed breakdown of the assumption for housing capital receipts for the financial year 1981–82. It is a breakdown of £413 million. That was based on the assumption that about 120,000 sales would be completed in that financial year. By 31 December 1980 120,000 right-to-buy applications had been received. If local authorities do not complete those sales, the responsibility will be that of the authorities.
    Mr. Lofthouse: On a point of order, Mr. Speaker. I have been in the House since 9 o'clock this morning, but it was not until 10 minutes to 3 o'clock, when I arrived in the Chamber, that I was notified that my question, No. 10, would be coupled with No. 1. I have not had the opportunity of speaking to question No. 10.
    Mr. Cryer: Scandalous.
    Mr. Speaker: If the Department of the Environment did not notify the hon. Gentleman in time, I shall allow his question to be called at the end of Question Time.

    Planning Applications
    Mr. Chapmanasked the Secretary of State for the Environment if he is satisfied that local planning authorities generally are adopting positive attitudes in determining planning applications, with particular reference to the location of new housing sites.
    Mr. Heseltine: I am satisfied that many authorities are adopting a positive approach but there is still much scope for improvement.
    Mr. Chapman: Does my right hon. Friend agree that there is strong evidence that certain local planning authorities have been far too negative in exercising development control procedures? Does he agree that, once it is accepted that a particular development should be on a particular site, planners could be much more positive in meeting applicants and making decisions on vehicle access points or the width of pavements? This assumes even greater importance when the planning applications relate to houses or housing estates.
    Mr. Heseltine: My hon. Friend has great knowledge of the working practices of individual authorities when dealing with these issues. It is impossible to give a general answer to his question because working practices are so different. However, I am concerned about the general issues that he has raised with me. I hope that he will accept my assurance that I shall consider what he has had to say sympathetically.
    Mr. W. Benyon: Is my right hon. Friend aware that one of the least positive attitudes in planning concerns the change of use for buildings for industrial purposes? Does he recall that this was the subject of circular 22/80 from his Department? What is really infuriating is that this negative attitude appears to be taken by the inspectors appointed by my right hon. Friend's Department. Will he bring to their attention the need, at a time of high unemployment, to give the maximum assistance to change of use for industrial and commercial premises?
    Mr. Heseltine: I hope that my hon. Friend will be kind enough to let me have any examples where he feels that

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    the inspectorate is not complying with the circular that I issued. It is my intention that my inspectors should uphold the policies set out in the circular.

    New Towns (Housing Assets)
    Mr. Hal Millerasked the Secretary of State for the Environment whether he has yet determined the financial terms for the transfer of housing assets in second generation new towns; and if he will make a statement on the issues so far unresolved.
    Mr. Geoffrey Finsberg: My right hon. Friend is considering the position in the light of the Association of District Council's reaction to the proposals we put forward. Our intention is that transfer should not place a major burden on the receiving authority and it is largely a question of deciding how this should be done in the light of the new housing subsidy system.
    Mr. Miller: I thank my hon. Friend for the constructive remarks and positive attitude that he displayed this morning on repairs and staff. Does he accept that news of his proposals has not, for instance, reached the Redditch district council? There is great concern about the terms and time of transfer. Will he take this opportunity of confirming that he would approve of an agency agreement in the absence of any agreement on terms of transfer being reached in the near future?
    Mr. Finsberg: Negotiations take place between the Government and the Association of District Councils. I cannot say what communications the association has had with individuals, although one member of Redditch council is a member of the committee that negotiated with me. I can only assume that the association has not yet put a view to individual authorities. I have already said to my hon. Friend that we would not oppose agency agreements as a transitional stage.
    Mr. Newens: What guarantee can the Minister give that the same disgraceful delay will not take place over the settlement of the financial arrangements for second generation new towns as has taken place over the settlement for the transfer of houses in first generation new towns, to which we have already referred during Question Time in respect of section 10 grants?
    Mr. Finsberg: There are two reasons why this will not happen. First, we anticipate that the overwhelming bulk of the stock will be in good condition when it is transferred. Secondly, we firmly believe that if the association had accepted the offer that I made to it several months ago the issue could well have been settled.

    Empty Domestic Properties (Inner London)
    Mr. Michael Morrisasked the Secretary of State for the Environment what is the latest estimate of the number of empty domestic properties owned by local authorities in inner London.
    Mr. Geoffrey Finsberg: The latest estimates of the number of empty council dwellings owned by local authorities in inner London are contained in the authorities' HIP returns for 1981–82 and they show the position as at 1 April 1980. A copy of each authority's HIP return is in the Library.
    Mr. Morris: Is my hon. Friend aware that I have not had the chance to go to the Library to look up the figures?
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    However, I am aware that they run to several thousands. Is he aware that the Labour Party's GLC manifesto calls for a massive programme of new building? Is not that a hollow policy when there are thousands of empty properties controlled by Labour councils in inner London?
    Mr. Finsberg: I am sure that my hon. Friend will, wish to spend the early hours of the morning reading the HIP returns. It might help him if I remind him that Lambeth had 3,100 empty properties, that Islington had 2,800, that Southwark had 2,700 and that Hackney had 2,300.
    Mr. Jay: Has the Minister any powers under existing legislation to compel the Wandsworth borough council to rent the many council homes that it has been holding empty for many months in a futile attempt to sell them?
    Mr. Finsberg: Wandsworth has had a remarkably good housing record and I see no reason to join in criticism of it.
    Mr. Squire: Does my hon. Friend agree that, in the unfortunate event of a change of control of the GLC in the near future, one possible slight benefit might be that the leader of Lambeth council, who has such a great knowledge of managing empty properties, will be in an excellent position to do something similar within the GLC because of his party's rates policy, which will lead only to more empty properties in London?
    Mr. Finsberg: If the leader of Lambeth council does to the GLC what he has done in Lambeth, Heaven help the ratepayers of London.
    Mr. Cartwright: Will the Minister accept that many of the vacancies result from the lengthy delays on the part of many local authorities of all political persuasions in reletting empty properties? Will he acknowledge that this causes great resentment among those on waiting lists? Will he take steps to try to encourage local authorities to cut through their bureaucratic processes? Finally, will he accept that we might get a better use of the existing housing stock if tenants are given a greater element of choice so that they are able to live in properties in which they wish to reside rather than have local government officers telling them what they should have?
    Mr. Finsberg: I remind the hon. Gentleman that quite recently the housing services advisory unit produced a report called "Reducing the Number of Empty Dwellings''. It is a constructive document dealing with how the number of vacant properties could be reduced. Of course, local authorities could follow the excellent homesteading scheme that was introduced by the GLC.
    Mr. Graham: The Minister has given us the figures of empty domestic proerties in Labour-controlled Lambeth and Islington. What is the number of such properties that are owned by the Tory GLC?
    Mr. Finsberg: I cannot answer that question without notice.
    Mr. Dobson: There are 6,000.
    Later—
    Mr. Clinton Davis: On a point of order, Mr. Speaker. May I advert to the answer to question 16?.
    Mr. Speaker: Order. I hope that the hon. Member has a point of order that I can rule on.
    Mr. Davis: I hope so, but it remains to be seen. How can the House be protected from deceptive answers? The Under-Secretary of State must have known that 6,000 houses were empty.
    Mr. Speaker: Order. It is unfair to try to score points on a bogus point of order.

    Rate Support Grant
    Dr. Edmund Marshallasked the Secretary of State for the Environment by what percentage he estimates that the shift of rate support grant from district to county councils will increase the total grant paid to county councils in England in 1981–82 compared with 1980–81.
    Mr. Heseltine: Block grant is paid to each authority individually. In 1980–81 most of the previous grant nominally paid to districts was passed on to counties through the precept. When this is taken into account, there has been a shift of an estimated 0·47 percentage points from districts to counties in shire areas and 1·08 percentage points in metropolitan areas.
    Dr. Marshall: Is not the shift in Government grant in favour of the county councils, which is equivalent to county rates of as much as 78p in the pound in Lancashire and Northumberland and 80p in the pound in Cumbria, deliberately designed to coincide with the county council elections and to disguise bad financial management by outgoing Tory county councils?
    Mr. Heseltine: The hon. Member will be aware that the Labour Government took £350 million from the provinces to concentrate it in London. I have readjusted that balance this year, as I believe it to be fair in the light of the new measured needs of individual authorities. The hon. Member will be interested to learn that Humberside was a grant loser and has still managed to reduce its rate levels in a way that Conservative authorities have proved is possible.
    Mr. Rhodes James: Has my right hon. Friend's attention been called to the decision by the valuation court in the matter between Westminster council and Imperial College, London, whereby the rateable value of Imperial College has been substantially increased? Has he realised the serious implications of that for all universities and colleges of higher education?
    Mr. Heseltine: That is a most important matter. I shall take an early opportunity to consider those implications with my other colleagues, who will be as interested as I in the outcome.
    Mr. Kaufman: Why is the right hon. Gentleman deliberately concealing the information which he has locked away in his Department about the number of Conservative-controlled county councils which have budgeted to overspend on his spending targets and which could be liable to his penalties? Is not he conducting that discreditable cover-up to prevent the voters in the county elections learning that, because of those prospective penalties, a vote for the Conservatives tomorrow means higher rates, because there will be a claw-back through those penalties, worse services and more redundancies than have so far been brought about by all the Tory councils?
    Mr. Heseltine: Obviously the right hon. Gentleman has woken up to the fact that there are some elections
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    tomorrow. He must be aware that Labour parties that are trying to take over the control of councils are already planning supplementary rates to finance inflationary policies which have done so much damage to the areas already controlled by the Labour Party. He must already be aware that I have not sought to conceal figures. The right hon. Member for Manchester, Ardwick (Mr. Kaufman) must be aware that I would have been able to provide more information about the level of expenditure in local government in the present budgeted year but for the fact that when I examined the detailed figures in the last few days I found that some authorities had still not sent in their returns. I discovered which authorities were involved. The principal authorities were Labour-controlled Leeds and Hackney. I asked whether the returns of those authorities had come in and discovered that they had come in that day. The outstanding authority that came to my mind at that time was Bolsover.
    Mr. Kaufman: As the right hon. Gentleman now admits that he has the returns from every Conservative-controlled county council, will he tell us about the budgets of those councils? How many have overspent his 5·6 per cent. target, and how many will be subject to his penalties? Do not voters tomorrow have the right to the information which he is suppressing?
    Mr. Heseltine: The voters tomorrow will know all too well that the increases in rates this year in Labour authorities have been at twice the rate of those in Conservative authorities. The one thing about which voters tomorrow can be sure is that if they want their rates to increase they should vote Labour.
    Mr. Durant: Will my right hon. Friend tell Labour Members that high rates cost jobs?
    Mr. Heseltine: My hon. Friend is absolutely right. There is no faster way to ensure the destruction of the industrial economy than to put up the rate burden to a degree which industry cannot afford.
    Dr. Marshall: 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 at the earliest opportunity.

    Sporting Activities (Gleneagles Agreement)
    Mr. Roy Hughesasked the Secretary of State for the Environment what arrangements are made for consultation between Her Majesty's Government, the Sports Council, the Central Council for Physical Recreation and the governing bodies of various sports when sporting events are planned that might contravene the Gleneagles agreement.
    The Under-Secretary of State for the Environment (Mr. Hector Monro): Responsibility for arranging sporting events lies with the independent governing bodies and/or their member clubs. All are familiar with the terms of the 1977 Commonwealth statement and know that the Government will always offer advice on its relevance in particular circumstances. There is no formal consultative machinery.
    Mr. Hughes: Is it not time that the Minister realised that merely going through the motions of quoting the Gleneagles agreement is beginning to be regarded as a wink and a nod to go ahead? Is it not time for more

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    attention to be paid to the political and economic ill effects upon this country of those sporting links, let alone the possible loss of the Commonwealth Games—or are free Christmas holidays in sunny South Africa now regarded as being more important?
    Mr. Monro: I do not know what was the point of the hon. Gentleman's final remark. The governing bodies and the clubs know the position relative to our duty under the Commonwealth statement. Since the Government came to power we have reaffirmed the position and made it clear where we stand. There is nothing more to be done except for the governing bodies to take advice.
    Mr. Stokes: Does not my hon. Friend agree that it might be better for everyone concerned and that it might also save the taxpayer money if those bodies were closed down altogether?
    Mr. Monro: My hon. Friend has misunderstood. One cannot close down the Football Association and the Rugby Union. That is not the way sport works in this country.
    Mr. Ioan Evans: I appreciate that the Minister has written to the Welsh Rugby Union criticising the possibility of the Welsh Academicals going to South Africa. Will he contact the Ministers in the Welsh Office, who do not appear to have been informed of this, as they have allowed representatives of the South African rugby organisation to meet in the Welsh Office?
    Mr. Monro: The hon. Gentleman is misinformed. I have been in touch with the president of the Welsh Rugby Union and he knows the Government's views about the Welsh Academicals.
    Mr. Brotherton: Is my hon. Friend aware of the widespread satisfaction that the Irish Rugby Football Union has refused to be bullied by the Irish Government and is continuing with its policy of sending a team to South Africa this weekend? Is he further aware that in this instance Ireland is united—the 26 counties of the South and the six counties of the North?
    Mr. Monro: My hon. Friend is entitled to his opinion, but it is not one which I share.

    House Building
    Mr. Skinner: asked the Secretary of State for the Environment what are the latest house building figures, starts and completions; and if he will make a statement.
    Mr. Heseltine: The seasonally adjusted figures for England for the three months December 1980 to February 1981 show that there were 32,500 housing starts and 48,900 completions. The number of starts showed a 14 per cent. increase on the figure for the previous three months.
    Mr. Skinner: There is bound to be an increase on the worst figures which we have had during the past 50 years. [HON. MEMBERS: "Question".] Is the Minister aware that those scandalous figures are set against a background of 300,000 building workers in the Tory dole queue, about 600 million bricks in stock and brickworks closing down amongst the 7,000 firms which went bankrupt last year, and at least 1¼ million families looking for a roof over their heads? What a way to run a Department and a country. Do not those figures show that the Government are more concerned about inciting people to buy nuclear shelters than about providing families with roofs over their heads?
    Mr. Heseltine: No, Sir.
    Mr. Dover: Does the Secretary of State agree that the private sector house building figures are more important than the public sector figures? Will he confirm that there is a 25 per cent. increase in the number of private houses started this year?
    Mr. Heseltine: The House will be pleased to note the forecasts of the house building industry, to the effect that house building in the private sector will rise by 20 per cent. this year and is likely to rise by a further 20 per cent. in the following year. The House will understand that the figures for new construction in local authorities may be disappointingly low, but that is because local authorities are now spending more money on renovating their existing stock.
    Mr. Kaufman: Will the right hon. Gentleman draw aside the veil over the information that the Under-Secretary of State refused to give about vacant council properties in London and reveal to the House that the Tory-controlled GLC has 6,000 vacant properties? As the right hon. Gentleman is ready to accept forecasts about private building, will he tell the House whether council house starts in England in 1981 will be as many as 15,000 or whether the number will be the worst for 60 years?
    Mr. Heseltine: The right hon. Gentleman will have heard clearly what I said. House builders have only forecast their figures. Individual local authorities make their own judgments and will make their own forecasts. If the right hon. Gentleman is concerned to see a larger council house building programme, I would welcome his support in persuading those Labour authorities that are denying themselves the resources by not selling houses to speed up the process.
    Mr. Speaker: I promised to call the Minister to answer question 10, standing the in the name of the hon. Member for Pontefract and Castleford (Mr. Lofthouse), at the end of Question Time.

    Water and Sewerage Charges
    Mr. Lofthouseasked the Secretary of State for the Environment what representations he has received for the inclusion of water rates in the rebate scheme.
    Mr. Giles Shaw: The National Water Council has concluded that the best way to alleviate the present sense of unfairness about the charging system is to extend optional metering to domestic households. Where this option does not exist at present the council recommends that water authorities should draw up a timetable for its introduction in the next few years.
    The council also concluded that, despite the representation which both it and the Government had received, the present legislation does not allow means related rebates for water services, and it reaffirms its belief that assistance to consumers should remain with the social security system.
    Finally, I apologise to you, Mr. Speaker, and to the hon. Member for Pontefract and Castleford (Mr. Lofthouse) for not advising him of the bracketing of his question.
    Mr. Lofthouse: Will the Minister accept that his answer will disappoint my constituents, particularly the lower-paid workers? Is he aware that if the change to

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    metering will cost the tenants money, the lower-paid will not be able to afford it? Will the hon. Gentleman therefore consider replacing the water authorities with a democratically elected body?
    Mr. Shaw: We have no intention of abolishing the water authorities. The majority of the members of the authorities, including the Yorkshire water authority, are drawn from elected bodies. Any problems that the lower-paid may have over the cost of changing to metering are best left to the social security system. The change to metering will be a slow process, but the choice will be offered.
    Mr. Dormand: On a point of order, Mr. Speaker. My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) said earlier that he had not been notified that his question was to be grouped with other questions.
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    You will recall that much the same happened to me recently when my question was No. 9 on the Order Paper. Hon. Members frequently have other matters to attend to before coming to the Chamber for Question Time. Are the Government being inefficient and incompetent, or are they following a deliberate policy? Such problems did not arise under the previous Government. Should not Departments notify hon. Members whenever questions are to be taken together?
    Mr. Speaker: It is in everyone's interests for hon. Members to be notified when this happens. Normally, they are, but human errors do occur and sometimes the notice does not arrive.
    Mr. Shaw: I repeat that it was an error by my Department, for which I have apologised. It was not deliberate, and we shall do better in future.

Local Authority (Empty Properties)
3.34 pm
Mr. Allan Roberts: I beg to move,
That leave be given to bring in a Bill to give local authorities and certain other public bodies a duty to maximise the use of empty residential property in their ownership and to prohibit the demolition of buildings before public inquiries.
Having listened to Ministers during Question Time, I expect their support in the Lobby if there is a Division on this motion. The proposed Bill tackles the scandal of houses being empty when there are many homeless families. Clause 1 would read:
"It shall be the duty of every local authority to consider the short-term or temporary or emergency housing needs of their district and for that purpose to use or facilitate the use as living accommodation of vacant property held or acquired for development, rehabilitation or non-housing purposes."
Many local authorities and other public bodies own residential properties which are empty awaiting improvement or demolition and which could be occupied until required. Local councils purchase property in advance of road, educational or city centre development and homes stand empty, sometimes for years, if the schemes are delayed or even cancelled. With limited expenditure, such property could be used by single people, co-operative housing groups or even homeless families.
The problem is more acute now than ever before. The Government's cuts in housing expenditure and their recent moratorium on house building and improvement mean that many more properties that have been acquired by councils and housing associations are standing empty. There is suddenly no money to improve them, because the Government have switched off the tap. In 1980, 100,000 publicly owned houses in England and Wales were empty, waiting to be altered and redeveloped. About 30,000 were in London, and about 23,000 were empty for more than a year. In that year, 30,000 families—which is a massive number—were accepted as homeless by local authorities. About 6,000 are living in bed and breakfast or hostel accommodation. To keep a family in such accommodation costs £100 a week, and these families could easily be accommodated in short-life housing, saving the ratepayers a considerable sum.
Councils may ask where the money is to come from to unbrick, repair and upgrade empty properties, but in the end it would save money as it costs about £3,000 a year to keep a house empty, including lost rates and rent and the cost of boarding up.
Local authorities are rightly concerned about standards and do not want single people or homeless families to be housed in substandard accommodation. Unfit houses should be demolished if they cannot be satisfactorily improved, but many empty public properties would provide decent accommodation. They are often acquired not because they are unfit to live in but because of development schemes. Many can be put into a decent condition with minimum expenditure. Grants for short-life houses are still available from the Housing Corporation, although, regrettably, even that money has been cut by the Government, whose only answer seems to be to keep public housing empty until it can be sold. Consequently, houses stay empty.
Councils are also concerned about obtaining vacant possession when the properties are needed for the purpose for which they were acquired, but the Housing Act 1980 allows licences to be issued for short-life houses instead 154
of establishing tenancies in certain circumstances. The Housing Emergency Office, which is a Shelter-backed organisation, states that it has always been possible to guarantee vacant possession of properties let on short-life terms.
In addition to putting a duty on councils to consider using empty property and to develop short-life housing schemes, the Bill would outlaw prior demolition—that is, where councils acquire houses in order to demolish tern for some development scheme to go ahead and actually demolish, gut or break up the houses in advance of the Secretary of State's public inquiry to consider whether the development should go ahead. In this way, councils destroy good housing in an attempt to pre-empt public inquiries. If the proposed development is then not approved by the Government, we have derelict, tinned-off sites and houses are needlessly demolished. The unnecessary destruction of good homes is as scandalous as houses being kept empty when thousands of people have nowhere decent to live.
I shall give some examples, first, of the type of people who could benefit from short-life housing schemes, and, secondly, of properties acquired and kept unnecessarily empty. Seventy single men in Kensington and Chelsea will soon be in need of housing because the local authority is about to make them homeless. Within the authority's area is a hostel, owned by the GLC and managed by the Stonham housing association, which currently provides accommodation for 70 single men. Money has been promised by the Housing Corporation for modernisation of the hostel in 1982–83, but the local authority has decided, at a closed meeting, to develop the site for commercial purposes. Kensington and Chelsea could have had a hostel free. Instead, 70 men will be homeless.
Where can those people go? They could find houses empty in my constituency of Bootle. In the centre of the old town, further city centre redevelopment was cancelled in 1973 and 1974 and houses are still standing empty as a result. They could go to Liverpool where, after 7 May, when the Labour county council cancels the inner ring road, residential property now standing empty can be used. In London, among the many houses standing unnecessarily empty are numbers 1–11 Lockside Cottages, Narrow Street, E14. Those six cottages, owned by the British Waterways Board, have been empty since 1970, when the nearby lock was filled in, and left to rot, as they are now doing. The 70 people being made homeless could live in Bromley Street, E1. The GLC acquired that street, with more than 80 houses, in May 1971. After constant bureaucratic muddles and mistakes, which seem to be a speciality of the GLC, those properties—now grade II listed buildings—still stand empty awaiting improvement.
I hope that all Members will support the proposed Bill, which is designed to destroy the problem of empty properties existing side by side with homeless families. I do not pretend that, if implemented, it would solve the nation's housing problems. Waiting lists are growing; homelessness is increasing. Only a sustained programme of council house building and improvement can solve the nation's housing problems. But the Bill would make a contribution to the solution.
There is nothing more annoying for people who want homes than to see houses standing empty. I hope that on this occasion the Government will put their support and their votes where their campaigns have been. They have criticised Labour local authorities, but some of the worst

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local authorities keeping properties empty are Tory controlled. The Government have not yet taken action to ensure that empty properties are improved and used because the money has not been available.
Question put and agreed to.
Bill ordered to be brought in by Mr. Allan Roberts, Mr. Robert Kilroy-Silk, Mr. Jack Straw, Mr. K. J. Woolmer and Mr. Frank Dobson.

Local Authority (Empty Properties)
  LOCAL AUTHORITY (EMPTY PROPERTIES)
  Mr. Allan Roberts accordingly presented a Bill to give local authorities and certain other public bodies a duty to maximise the use of empty residential property in their ownership and to prohibit the demolition of buildings before public inquiries: And the same was read the First time; and ordered to be read a Second time upon Friday 19 June and to be printed. [Bill 137.]
Orders of the Day

  Finance Bill
  (Clauses 1, 4, 19, 23, 27, 29, 88, 89 and 122; and schedules 1, 2 and 11.)
  Considered in Committee [Progress 5 May]
  [MR. BERNARD WEATHERILL in the Chair.]

  Finance Bill
    Clause 1

      SPIRITS, BEER, WINE, MADE-WINE AND CIDER
      3.45 pm
      Mr. Jack Straw: I beg to move amendment No. 53, in page 1, line 21, leave out '"£18·00" and "£0·60"' and insert '"£15·00" and "£0·50".'.
      The effect of the amendment would be to increase the excise duty on beer by 15 per cent., which is roughly the rise in the cost of living in the relevant period. It would add about 1½p to the price of beer compared with an increase of 4p announced by the Chancellor of the Exchequer in his Budget. As hon. Members are aware, the Chancellor announced an increase in the duty on spirits of 60p and in the duty on wine of about 12p per bottle. The increase of 4p on a pint of beer is staggering in terms of the percentage rise that it represents. The 60p per bottle on spirits represents an increase of just under 15 per cent., the 12p increase on wine about 17 per cent., but the 4p per pint on beer represents an increase of no less than 38 per cent.—twice the rate of increase on wine and spirits.
      The amendment, which seeks to index the duty on beer as well as on wine and spirits, would achieve fairness as between those three categories of drink instead of being wholly discriminatory against beer. The Committee will know that beer is by far the most popular drink in this country. It is drunk by people of all social classes, but unquestionably it is the drink of working men and women— the same working men and women whom the Prime Minister and her colleagues so assiduously courted from 1974 to 1979. They were promised substantial cuts in direct taxation and no doubling of value added tax. Indeed, they were promised more jobs, as the hon. Member for Horncastle (Mr. Tapsell) reminded the Chancellor only last Thursday.
      Yet, with the exception of the unemployed, it is those same working men and women who have been hit hardest of all by the activities of the Government. The Government have forced up indirect taxation. Yesterday we witnessed an extraordinary performance by the Financial Secretary, wriggling as usual and trying to pretend that the increase in VAT from 8 per cent. to 15 per cent. did not amount to nearly doubling VAT. In seeking to prove that proposition to my hon. Friend the Member for Edinburgh, Central (Mr. Cook), the Financial Secretary had the extravagance to include in his calculation not only those goods which before the Budget were taxed at 8 per cent. and at 12½ per cent., but even those which were not taxed at all. He said that if one included goods that were not taxed at all before, and those which were not taxed at all after, the May 1979 Budget, then with some arithmetical gymnastics, and presumably some "massaging" through the Treasury computer—I

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      understand that that is the vogue word in the Treasury nowadays—the increase was not a doubling but only from 5 per cent. to 8 per cent.
      The British people, particularly working people, know differently. They know that the increase was virtually a doubling. In addition, they have had to suffer an increase in direct taxation and substantial increases in the price of essentials. Their rents have increased by at least £3 in the past year and more the previous year. There have been increases in their mortgages, despite the recent welcome reduction in interest rates. There have been increases in the price of domestic fuel—in gas, electricity and heating oil—as well as in the price of petrol and in fares.
      Living standards for all working people on average wages have been squeezed dramatically by the Government, and they will be squeezed even more. For the additional 1 million people who have lost their jobs during the past year, living standards have dropped catastrophically, not only because of the increased prices of essentials, which unemployed people still have to buy—Conservative Members seem all to often to forget that—but because of the cuts in the real level of benefits.
      On top of all those increases in prices and in direct and indirect taxation which have hit working people and the unemployed, the Government seek to tax and tax again one of the few pleasures that are left to them under Conservative rule in 1981. The price of drink in the pub, a club or at home has been forced up and up. Last year, the Government imposed an increase of 2p a pint on beer, and this year they have increased it by 4p. We do not know whether that 4p increase is only the first instalment, because during the last week's debate on diesel fuel the Chancellor announced a concession which will cost £85 million. He said that the country would have to pay for it. Despite repeated efforts by many hon. Members to discover how the Chancellor intended to meet that £85 million shortfall, no information was forthcoming.
      Will that shortfall of £85 million be met by another 1p on a pint of beer? We remain perplexed. When Conservative Members gave notice that they might rebel on the petrol and derv increases unless there was some concession, the Chancellor had from 16 March until last Thursday to work out the concession as well as how to pay for it. However, he offered no information on how the concession would be paid for.
      Perhaps the Minister of State will now say whether the Government intend to add another 1p on a pint of beer, because conveniently that would bring in another £95 million which would pay for the concession which the Chancellor has made. Alternatively, do the Government propose to add another 17p on a bottle of wine? That would also bring in the £85 million which the Chancellor now says he needs.
      As a result of the increase in the price of beer which has already been announced, and other cost increases which have fallen on brewers and other industrial companies, the price of a pint in a public bar has rocketed. In May 1979, in the halcyon days of the Labour Government—by God, they look like a golden age compared with the hell experienced under this Government—a working man could buy a pint for 36p. By last year, the Tory Government, who claim to work in the interests of the country as a whole, had forced up the price to 44p. By November, it had gone up to 51p, and now my friends who go into public houses tell me that a typical pint cannot be bought for less than 56p or 57p.
      Mr. Donald Thompson: The hon. Gentleman will be lucky.
      Mr. Straw: Well, perhaps in the hon. Gentleman's area beer costs even 60p a pint. I bow to his superior judgment. In two years, the price of a pint has risen by 20p, from 36p to 56p—an increase of at least 60 per cent. The beer drinker has consistently been hit twice as hard as the wine drinker or the spirits drinker. Beer drinkers have been discriminated against not only this year, but in previous years. Overall, the duty on beer has increased by 66 per cent. in two years, while the increase in wine and spirits has gone up by less than half that figure.
      Let us compare the Conservative Government's record with the Labour Government's record. The Labour Government were concerned to protect domestic industry, such as the brewing and whisky distilling industries, and during their period of office the duty on wine rose significantly more than the duty on spirits and beer. If we take an index of 100, in 1974, spirits went up by 160, beer by 188 and wine by 237.
      When Labour Members claim that the Conservative Party is a narrow, class party, Conservative Members hold up their hands in innocence and refuse to recognise the image that we offer of them. We accept that some Conservative Members still believe that the ghost of Disraeli is around the corridors of Conservative Party headquarters. However, a party must be judged on its deeds, not on its words, history or fantasies, and in every area of economic decision making we find that the Conservative Party has acted in its narrow, class interests and has taxed the poor to help the rich.
      Mr. Kenneth Lewis: I hope that the hon. Gentleman realises that many Conservative Members drink beer and that many Conservative supporters outside also drink beer.
      Mr. Straw: Of course I realise that, but I am sure that the hon. Gentleman accepts that drinking habits tend to be a matter of social class. I can assure him that not much wine is drunk in the working men's clubs in my constituency. I dare say that not much wine is drunk in the working men's clubs of his constituency. If the hon. Gentleman is saying that drinking habits are homogeneously shared across social classes, that is an even greater argument for the equal and fair treatment of beer alongside spirits and wine. There can be no argument on fiscal or other grounds for discriminating against beer.
      As I was saying, in every area of economic and fiscal decision making, the Conservative Party has favoured the rich and hurt the poor. It has given massive tax handouts to the rich at a time when in area after area it has taxed those who are least able to afford it.
      Sir Frederick Burden: The hon. Gentleman has alleged that at all times the Labour Party cares for the poor and the Conservative Party cares only for the rich. In case he does not remember, I remind him that in 1975–76, the Labour Party refused to pay old-age pensioners their £10 Christmas bonus.
      Mr. Straw: The hon. Gentleman should not swap tales about Labour's record on old-age pensions compared with the record of the Conservative Party. I distinctly remember the Labour Government refusing to pay the £10 bonus. I also remember that in July 1974 the Labour Government gave pensioners the largest increase in pensions they had

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      ever received. I remember, too, that in 1975 it was written into the law that old-age pensioners should receive an increase in line with prices or earnings, whichever was the greater. I remember that the present Government shamefully removed the link between earnings and prices and the old-age pension.
      In addition, they have extended 52-week years to 54-week years. On old-age pensions, above everything else, our record stands up to examination compared with the record of the Conservative Party.
      I am not saying that the Conservative Party has never cared about working people. There was a time when it followed the advice of Disraeli and was concerned about one nation—for example, under Harold Macmillan. However, the Conservative Party has now become an extremist and doctrinaire party which has retreated into representing its narrow, class interests.
      One consequence of the higher tax on beer has been a drop in consumption and less employment in the brewing industry. In March 1981, there was a drop in brewing of 17½ per cent. compared with the same month in 1980. That has meant a drop of one-fifth in the number of bulk barrels produced. If we take the quarterly figure this year and compare it with last year we find that there has been a drop in production of 6½ per cent., and that is before the full effects of the Budget increases are taken into account.
      Almost weekly, we read of pubs closing, working men's clubs in difficulties and jobs being lost in the brewing industry. Brewing is an important industry, especially to many working people for whom it is their livelihood.
      4 pm
      In 1979, 68,000 people were employed in breweries. The big 10 national and regional breweries employed ¼ million people. However, employment in the brewing industry, as narrowly defined, has dropped by 10,000 since the general election. that is a drop of 13 per cent. in the number of those employed in the brewing industry and compares with a 4 per cent. drop during the five years of the last Labour Government.
      Mr. Chris Patten: What about brewers?
      Mr. Straw: Of course, brewers are yet another group of industrialists who have discovered that their least successful investment was the one that they made in the Conservative Party. The hon. Member for Bath (Mr. Patten) should know about brewers because I believe that he worked at Conservative Central Office and the brewers paid his wages. No group of industrialists has been more generous or consistent in its donations to the Conservative Party. Indeed, of the top 10 regional and national breweries, only three failed last year to give anything to the Conservative Party. One brewery, Allied Breweries, gave £62,000 to the Conservative Party and to its various front organisations.
      I am proud to say that one of the breweries that failed to give a penny to the Conservative Party was Matthew Brown, which is based in my constituency. It is also one of the few breweries not to have declared any redundancies. It is interesting to note the relationship between the amount of money invested in the Conservative Party by brewers and the increase the following year in their profits. Indeed, a new economic law can be
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      pronounced, namely, the more money that a brewery puts into the Conservative Party, the less well the shareholders do. Greenall Whitley did not give any money to the Conservative Party and showed a 40 per cent. increase in its pre-tax profits. Matthew Brown showed a 17·1 per cent. increase in its pre-tax profits. However, Allied Breweries put massive sums into the Conservative Party and showed a measly increase of 0·6 per cent. in its pretax profits.
      Sir Frederick Burden: Is not the hon. Gentleman clearly illustrating that the Conservative Party pays less regard to the money that it receives from brewers and acts more in the interests of the country? It would be a good thing if the Labour Party adopted the same attitude towards trade unions.
      Mr. Straw: I had expected that reply from a Conservative Member. None of the brewery company directors who put money into the Conservative Party in 1979 and few industrialists anticipated that the economy would go this way. Indeed, on 12 June 1979 the CBI said that the Budget was one of opportunity that would lead to a regeneration of British industry. The directors were fools to put their money into the Conservative Party, just as they were fools in their judgment about the Government's likely performance.
      Having established that the increase is highly discriminatory against beer drinkers it is important to examine the reasons for it. One argument in favour of increasing the price of alcohol by disproportionately raising the tax on it is to try to achieve a drop in consumption in the interests of health and of securing a reduction in alcoholism.
      I am sure that all hon. Members are concerned about the rise in reported alcoholism over the past few years. They will also be concerned that new groups, which were not high in the league tables, appear to be coming into them. I refer particularly to young people and to women. That is a matter of genuine concern.
      It is argued that the real price of alcohol should be increased or brought up to the level that existed some years ago. We accept that the real price of alcohol has dropped. It is argued that raising the price would deter heavy drinking. Indeed, there was a debate on that subject in last year's Finance Bill Committee. A notable contribution was made by the leader of the Scottish puritanical party, my hon. Friend the Member for Edinburgh, Central. He spoke powerfully about the need to check the growth in alcohol abuse by raising prices.
      We understand that the Government are concerned about the relationship between the price of drink and alcoholism. In a leak to The Sunday Times of 14 November 1980 we were told:
      "A consultative Green Paper will be issued early next year, aimed at arousing public concern and support for tougher action … To remedy this increased ease of purchase, much stiffer taxation policy is being urged. As Mrs. Thatcher is strongly opposed to direct tax rises in next year's budget"—
      we knew about that, but despite our opposition such rises have taken place—
      "indirect taxes look increasingly certain to take the strain, with alcohol and tobacco in the forefront."
      It is said that pricing policy is considered crucial. The leak promised that there would be a Green Paper. Perhaps the Minister will tell us where it has got to. The Government have become so leaky that they now regard a chat with a Lobby correspondent as equivalent to a Green Paper.

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      Some of us prefer to get our Green Papers from the Vote Office than from the cuttings service of the Library. I hope that the Minister will reply.
      We know that the Government are concerned, just as we are, about this matter. There is some evidence to show that in other areas such as Scandinavia, efforts have been made to control the consumption of alcohol by price. However, it should be borne in mind that the Scandinavian experience is not unequivocal. Scandinavia has a serious drink problem, although there is a law that requires the price of alcohol to be raised in line with general prices.
      Earlier today I had an opportunity to talk to a Swedish trade union leader. He said that the Swedes had been so worried about the drink problem that the measure was one of the few that had had all-party agreement for many years. Between 1922 and 1955 alcohol was rationed and each person was issued with a ration book entitling him to three litres of hard spirits a month. That amount seems unlikely to deter the heavy consumption of spirits. Even in the House of Commons with its slurred reputation for drink, there are few hon. Members who get through that amount. However, I exclude my Scottish friends from that statement.
      Whatever view one may take about the relationship between price and alcohol consumption, and even if it is unquestioningly accepted that the price of alcohol should be increased to deter heavy consumption and ill health, there is no justification for this increase. It doubles the increase on beer compared with wine and spirits. If the price of alcohol is to be increased on order to deter consumption and alcoholism, it is only logical that the price of the harder forms of drink—wine and spirits—should be increased more severely than beer. However, perverse as usual, the Government are placing far more duty on beer than on wine and spirits.
      Mr. Ron Leighton: From my hon. Friend's reading of the reports of the proceedings on last year's Finance Bill did he notice that the Minister admitted that the Government were increasing the tax on beer to a greater extent than that on wine because of a decision of the EEC court? As a result of a complaint from the French, the court invited the British Government to even up the taxes. That is why the brewers have been treated in such an ungrateful manner.
      Mr. Straw: That is one reason. However, there is another. Increasing the duty on beer raises much more revenue than increasing the duty on wine. The Government are avaricious and are ever ready to take hard-earned money out of people's pockets and to put it into the Exchequer. The hon. Member for Hertford and Stevenage (Mr. Wells) may laugh. He and other Conservative Members went round the country preaching Conservative propaganda about tax cuts. I have not had the benefit of reading his election address to the people of Stevenage, but I am sure that he said that if the Conservative Party was returned to office income tax would be cut and VAT would not be doubled.
      If I am wrong the hon. Gentleman will correct me. That was written in the Conservative manifesto, but in reality the Government have increased income tax and direct taxes far more than previous Governments. Moreover, they have taxed the poor savagely, so that people now come into the income tax thresholds when they are
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      receiving only 38 per cent. of average earnings. That is far below the figure achieved in any year of the Labour Government.
      Mr. Bowen Wells: In my election address to the people of Hertford, Stevenage and Ware I did not refer to VAT. The hon. Gentleman will recall that that discussion was initiated by his party. An accusation was made, too.
      The hon. Gentleman implied that we misled people at that election. In sharp contrast to the aim and objectives of the Labour Party, which is avaricious in its taxing policies, the aim of our party is to reduce taxation. However, we have increased taxation in the Budget. Does that not prove to the hon. Gentleman that, far from being dogmatic, the Government are pragmatic in dealing with the problems that they face? I invite him to agree with that even though it is against the objectives of the Government when they came to power.
      Mr. Straw: I have heard many arguments for the Government's twisting and turning record for the past two years, but that takes the biscuit. If the hon. Gentleman is so proud of the pragmatic nature of the Government—I cannot say that I have noticed their becoming pragmatic—why did he not say in his election address "We might increase taxation or reduce it. We might double VAT or reduce it. We are not sure. It all depends"?
      Sir Frederick Burden: On a point of order, Mr. Weatherill. The debate should be taking place on a comparatively narrow point. It is being extended far beyond the amendment.
      The Chairman: Order. I am grateful for the hon. Gentleman's help. The amendment refers to duties on beer. The hon. Member for Blackburn (Mr. Straw) was deflected by allowing an intervention. He should return to discussing the amendment.
      Mr. Straw: Order is a matter for you, Mr. Weatherill, but it hardly lies in the mouth of the hon. Member for Gillingham (Sir F. Burden) to complain about our getting back to the point when he raised the issue of the Christmas bonus and pensions. If the Government accept our amendment—as we expect that they will—they may say that they want to raise income tax even more. The Government's election manifesto, on which the hon. Member for Hertford and Stevenage stood, said:
      "We shall cut income tax at all levels to reward hard work, responsibility and success; tackle the poverty trap; encourage saving".
      They have tackled the poverty trap: they have made it deeper and wider.
      The Chairman: Order. That is what I was hoping would not happen. The hon. Member must return to the question of the duty on beer.
      Mr. Straw: I shall, of course, get back to that matter, Mr. Weatherill.
      My hon. Friend the Member for Newham, North-East (Mr. Leighton) made an intervention which was directly in order. There are two reasons why the Government have been forced to increase beer duty. One is that because of their economic policies they decided that they were strapped for revenue and increasing the duty on beer was one of the few ways in which they could raise money. There is no doubt that taxing beer is an easier way to raise revenue than many other methods.

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      I hope that the Minister will explain whether the estimates of yield given by the Chancellor in his Budget Statement on 10 March take into account the already substantial drop in beer consumption. What estimate does he make over the next 12 months about the elasticities involved? Also, will he explain a strange sentence in the Chancellor's speech when he said that the yield of the various increases in drink duties would yield £500 million in 1981–82 and £515 million in a full year? The Budget took place before the fiscal year 1981–82 began. I do not understand how the figure is £500 million for one full year and £515 million for the following year. What is the Government's estimate of the yield? In the light of the 6½ per cent. drop in consumption so far, is it likely to drop further, especially if there is a bad summer?
      4.15 pm
      In our view the rates should be increased only in line with inflation. The difference, which would be about £200 million, should not be made up elsewhere. We object to the deflationary nature of the Budget. Any decision of the Committee that moderates the deflationary nature of the Budget, together with the fact that £5,000 million will be taken out of the economy, is to be welcomed. However, if hon. Members decide that the extra £200 million should be found, there are other ways that would hurt the better-off rather than those who are poor and would be far better than taxing beer. It would be better to load the tax on wine rather than beer because, on the whole, wine is consumed by people in higher income groups and, moreover, is not made in this country.
      The Government cannot, however, load duty on wine, despite the fact that that is the fairest and most sensible action to take for British drinkers and British industry, because of the Common Market's harmonisation rules and the Government's failure to stand up for British interests in the EEC institutions. In one sphere after another the Government claim stalwartly to defend British interests, but behind all the rhetoric the reality is concessions and humiliations all down the line. We see it in agriculture where the British Government have allowed other countries, especially France, to get away with near murder.
      Sir Frederick Burden: On a point of order, Mr. Weatherill. The hon. Gentleman is wrong to talk about agriculture under a clause dealing with beer.
      The Chairman: I thank the hon. Gentleman for his help. I am listening carefully and the hon. Member for Blackburn is deploying an argument.
      Mr. Straw: I accept that I may have strayed a little earlier, but my remarks are germane and central to our argument. The Government have accepted all sorts of humiliations on agriculture. The Minister of Agriculture has not told us how the French Government, in clear contradiction to article 93 of the EEC treaty, last December announced aid of 4,100 million francs to French Farmers over and above the assistance provided by the common agricultural policy. In clear breach of the EEC rules those aids were announced by President Giscard D'Estaing to gamer the votes of French agricultural workers. Those aids are still being paid.
      Ministers have not told the House how the French and Belgians are still going ahead with massive schemes of aid
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      to their textile industries—again, in apparent breach of EEC rules. However, the Minister of State told us how the Government will comply abjectly with the initiative on harmonisation on wine. That was debated in the House on 3 December.
      The Chairman: Order. The hon. Gentleman should deploy these arguments on clause stand part. They will be more appropriate when we deal with wine and other items.
      Mr. Straw: My comments are central to the argument because the harmonisation initiative requires that the ratio of the rates of duty on wine and beer should be reduced from 5:1, as it was before the Budget, to 3:1. That means that the Government had to reduce the rate of duty on wine or increase the rate on beer. The Government increased the rate on beer in order to comply with the harmonisation rules.
      In the debate on 3 December the Minister of State made it clear that the Government were moving towards compliance with the ratio which is based on an assessment of the alcoholic content of wine and spirits. The EEC claims, under its ridiculous rules, that because the alcoholic content of beer and wine is in a ratio of 3:1, the duties should therefore be in the same ratio.
      My right hon.Friend the Member for Llanelli (Mr. Davies) questioned the Minister of State about the effects of accepting that ratio. The Opposition said that the clear effect would be to add 4p to the price of a pint of beer. The Minister of State replied:
      "The right hon. Member for Llanelli misunderstands the position. It could happen on certain broad limits on the beer-wine ratio … there are about three or four possible permutations."—[Official Report, 3 December 1980; Vol. 995, c. 606.]
      An article in The Economist at about the same time said that, according to the Minister of State, the ratio could be put into effect in one of three ways—by raising the duty on beer by 4p a pint, which would yield an extra £440 million to the Treasury, by cutting wine duty by 19p a bottle, which would cost £50 million in lost revenue, or by raising beer duty by ½p a pint and cutting wine duty by 17p a bottle, which would be financially neutral to the Exchequer. The article concluded:
      "But there should be no panic buying of beer, or popping of champagne corks in celebration. Whichever solution is adopted, it will be phased in over seven years."
      The Government tell the House and the British press that they will stoutly defend British interests. Indeed, as late as 17 April we read in the excellent Agence Europe reports from Brussels that the Government had asked for a further delay in the consideration by the European Court of Justice of the cases involving the high tax charged on wine in the United Kingdom compared with that charged on beer, so that the Government could present reports. The Government have been making noises in Brussels and telling British newspapers that they will stand up for British interests and have offered soothing words to the brewers, saying that the increases will be phased over seven years, but during that time they have been preparing, and are now implementing, the full increase, not in seven years and not even in seven months.
      The Government said that it would take many years to implement the harmonisation initiative, but they have implemented it with a vengeance and in a way which causes the maximum harm to British drinkers and British industry and the maximum benefit to the drink industries of Italy, Germany and France. That might just be bearable,

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      even to those of us who object to our membership of the Common Market, if other members of the EEC had played the game. But in February 1980 the European Court issued a decision against France, Italy, Ireland and Denmark, saying that their excise duty regimes discriminated heavily against whisky.
      The court may pronounce, but only domestic Governments can act. As far as I have been able to ascertain, the decision of the court, taken well over a year ago, has still to be implemented. It is said that Italy has changed the State prices of strong spirits, but France has adopted measures, including only a partial change this year, that will take two years to come into effect. The changes proposed by Denmark are still the subject of discussions with the Commission.
      Another aspect that is often overlooked is that, despite the requirement of the EEC directive that there should be a clear ratio between the duty on beer and that on wine, I understand that there is no requirement on countries to have a duty on wine. It is only if they impose such a duty that there has to be a ratio between that and the beer duty.
      At the end of last year, Germany and Italy were insisting that we should raise our duty on domestically produced beer, but they had no duty on their domestically produced wines. Is that still the case? Does the Minister of State agree that it is a scandal and an outrage that Germany and Italy should insist that we increase the price of beer to our consumers, causing great damage to our drinkers and our domestic industry, while those countries are allowed to get off scot-free, because there is no requirement on them to tax their wines?
      Mr. Arthur Lewis: My hon. Friend is right to ask the Minister of State for that information, but should he not also ask the absent Liberal Party and the one SDP Member who is in the Chamber to point out that, as they are 110 per cent. pro-Common Market, they are 110 cer cent. in favour of the rooking of the British public? My hon. Friend should blame not only the Government, but the SDP and the absent Liberal Party.
      Mr. Straw: The Liberals are well represented by their surrogate, the hon. Member for Gateshead, West, (Mr. Horam) who will no doubt speak for them. It will not lie in the hon. Gentleman's mouth to complain too much about a further iniquity of the Common Market, since he was one of those who forced us into it.
      Mr. John Horam: As a matter of historic record, I voted against entry into the Common Market.
      Mr. Straw: I am pleased to hear that the SDP is as catholic as the Labour Party, but I wonder why the hon. Gentleman joined the SDP. I shall look forward with interest to finding out whether his party follows his advice rather than that of the right hon. Member for Plymouth, Devonport (Dr. Owen).
      The 40 per cent. increase in beer duty is wholly unjustified. It hits at one of the few pleasures left under this Government and puts up the cost of living. It has been forced on the Government partly because they prefer to tax working people to pay for tax cuts for the rich and partly by their slavish adherence to the Common Market and their refusal to stand up for British interests. We shall oppose the increase and we invite other hon. Members to do so.
      Mr. Eric S. Heffer: The intervention of the hon. Member for Hertford arid Stevenage (Mr. Wells) intrigued me, because I was born in Hertford and I had relatives in Ware in the hon. Gentleman's constituency. I remember that when I was a lad the great thing about Hertford was the number of pubs in the town. In Maidenhead Street there was a pub next to a shop next to a pub next to a shop next to a pub. It was that sort of street and most of Hertford was like that.
      I doubt whether the people of Maidenhead Street and Fore Street in Hertford will be loudly singing the praises of the Government's decision to put up the price of beer by 4p a pint. Like other workers, they like their pint after a hard day's work, and that is the important point which my hon. Friend the Member for Blackburn (Mr Straw) was making.
      Beer is the drink of most ordinary working men on building sites, in coal mines, in shipyards, on the roads and in the fields.
      When they come back from a hard day's work they like to wet their whistle and they go into the pub on the corner for a pint or two. There is nothing wrong with that but it is a bit grim when they are faced with an increase of 4p per pint, because that is what it means.
      4.30 pm
      It has been said that Conservatives also drink beer. Of course they do. I do not think those Conservatives are enthusiastic about it either. I am sure they will be just as angry and fed up as beer drinkers who vote Labour.
      The whole thing is a conspiracy against the Labour Party. [Interruption.] Some hon. Members say, "Ah". The brewers have been great contributors to Tory Party funds. Rather like the builders, they must be a bit fed up and wonder what they are getting for their contributions. There are Labour clubs throughout the length and breadth of the country. Although we get a political levy from trade unions, much of the finance for the Labour Party at local level comes from contributions from Labour clubs. If the price of beer is increased, less is drunk and smaller contributions are made to Labour Party funds which makes it much more difficult for us to fight the Conservatives. That is what is behind this increase in duty.
      In all seriousness the increase in duty will affect Labour clubs. The people who go there are not buying as much beer because they cannot afford it. We must consider the 2½ million unemployed. Those who come from areas of high unemployment are finding it difficult anyway to buy their pint; with the increase of 4p it becomes even more difficult for them.
      I am not going to join in the debate about the Common Market. I do not like talking about it and I wish we were not in it. It would be much better if we did not get involved in such discussions. What I am concerned about is the effect of the increase in beer duty on the lives of ordinary working men and on those who have retired. There has been a reference to the effect on pensioners who watch television and then go off to the local pub or Labour or Tory club to have their pint. As each pint costs 4p more, the pensioner has not two, but only one.
      That is the sort of answer which the Government have to economic problems. They wish to place the burden on the shoulders of ordinary working men and women. I am not a great beer drinker; I have never taken much to beer. I do not mind paying a few pence more for what I drink. If I am going to have a glass of wine I am happy to pay

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      the extra. But this is an added burden for the working chap who is suffering because of the policies of the Government. I hope that every Member, including all the Conservatives who drink beer, will stand up for the working class and support the amendment.
      Mr. Kenneth Lewis: I thought the hon. Member for Blackburn (Mr. Straw) sparked off an interesting debate leading to interventions. Rutland is famous for its independence and because it used to be a county. What is not so generally known is that it is also famous for its beer. We have a very good small brewery, Ruddles. Its beer can be bought in London and it is infiltrating all over the South of England. It has not yet found its way into the House of Commons. I put in a claim for it but I am told that there are so many different beers in the House of Commons put there at the request of Members that there is hardly any room for more kegs.
      Mr. Heffer: Is it better than McMullans, which is made in Hertford? That is a very good beer.
      Mr. Lewis: I have never had McMullans. Ruddles is better than some of the lagers which are frequently advertised on television. We do not need television advertising; we can sell it without any difficulty. It is available even in supermarkets.
      I lean towards the beer drinker. I like a beer myself. I intervened earlier because I thought the hon. Member for Blackburn was being grossly unfair when he said that hon. Members on this side of the House do not drink beer. Plenty of them drink beer. Millions of Conservatives will be going to the polls tomorrow to vote Tory; they will be having a beer before they go or after they have voted. Whether they will be having a few beers on Friday to cheer themselves up or to drown their sorrows we are not sure; we will wait and see. I would rather my right hon. and learned Friend had been able to manage his Budget without putting 4p on beer.
      The one thing the hon. Member for Blackburn did not tell us was where the money was going to come from if the amendment was passed. I think the cost would be £200-odd million. When the Chancellor gave the concession to those of us, including myself who tabled an amendment in relation to duty on derv, he announced that in due course there would be a replacement tax. We do not yet know what it is going to be. The hon. Gentleman said that it might be 1p more on beer. I hope not. He also said that it might be 1p on one-armed bandits which would affect Labour clubs, Conservative clubs and other clubs. In so far as people would be spending more on one-armed bandits, they would have less to spend on beer, so either way it would hit them.
      When there is a large public sector borrowing requirement, if the Government want to avoid increasing income tax or putting up national health insurance too much they have to get revenue somewhere. We fought the election on the principle that people should have more money in their pocket in take-home pay and should have to pay more in tax on what they spend rather than the other way round. I stick to that policy, although it has slipped a bit. The Government are moving in the right direction.
      The Government have been in office for only two years although it may seem longer. As long as my right hon. and learned Friend the Chancellor can promise me that in the
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      next three years we are going to have further reductions in income tax so that people have more in take-home pay, we will not object to an increase in the duty on beer.
      The official Opposition would have done almost the same if they had been in Government. They might have had to put twice as much on the price of beer, because the extra expenditure that they present to the Government week by week would require such a large increase in revenue that the tax on beer would have to be increased rather than reduced.
      I am as unhappy about increased taxes, including the increase on beer, as anyone else, but if there has to be an increase in taxes, it is better for it to be on optional expenditure than on necessities.
      Mr. Horam: I must remonstrate with my former colleagues on the Opposition Front Bench, particularly with the hon. Member for Blackburn (Mr. Straw) who moved the amendment. It is disappointing to go through all these conventional hoops all over again. What have the Opposition done during this series of debates on the Finance Bill?
      The right hon.Member for Stepney and Poplar (Mr. Shore) in his speech on the Budget put forward a whole raft of public expenditure proposals—with some of which I agree—which would involve higher public expenditure. In the debate on the Finance Bill the Labour Opposition have promoted a series of measures to decrease taxation. First, they wanted to bring down the petrol and derv duty to 8p in the pound. Then they wanted to index the tax threshholds fully and to reinstate the lower rate band. That was a controversial measure in the previous Labour Government; there was considerable disagreement between the Chancellor of the Exchequer and the Prime Minister at that time. Now they come on to beer. Where is the arithmetic? When shall we know the arithmetic behind this massive increase in public expenditure on the one hand and this series of attempts to decrease taxation on the other hand?
      Nothing so far has been said about whether the arithmetic adds up or does not add up. The hon. Member for Blackburn will recall the speech made by his right hon. Friend the Member for Stepney and Poplar on the Budget. That was followed by a speech made by the right hon. Member for Down, South (Mr. Powell) who commented on the way the bill was added up. He invited the right hon. Member for Stepney and Poplar to intervene and tell him what was the arithmetic. He speculated that the proposals put forward by the right hon. Gentleman on that occasion would add £15 billion to the public sector borrowing requirement, and he asked the right hon. Gentleman to say whether he disagreed. But the right hon. Member for Stepney and Poplar did not comment.
      Mr. Robin F. Cook: It was a specious speech.
      Mr. Horam: It was not. The hon. Member for Down, South made a very telling point. No attempt was made by the Labour Party to give any details of the arithmetic. All the Opposition say is that there must be vastly increased public expenditure and greatly decreased taxation. They never say what the final sum will be. When challenged to do so by the right hon. Member for Down, South in a negative but brilliant speech, the right hon. Member for Stepney and Poplar sat mum. He may be acting under instructions. I remember, when I was sitting on the

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      Opposition Front Bench during a debate initiated by the Liberal Party, the Shadow Cabinet could not make up their minds about an incomes policy, so I was not allowed to speak in the debate. I was roundly condemned for being like a Trappist monk. The right hon. Member for Stepney and Poplar may be in that position; he may not be allowed to say what the figures are.
      It is time that the Labour Opposition made some comment on this aspect. I am making this point not in favour of the Conservative Party but on behalf of ordinary people who want to know how this adds up.
      Mr. Heffer: Am I to assume, on the basis of the argument of the hon. Member for Gateshead, West (Mr. Horam), that Professor David Marquand, who used to be a member of the House of Commons, is right in saying that the hon. Gentleman's views are not similar to Mrs. Williams' views, because she argues the case that is being put forward by the Prime Minister?
      Mr. Horam: That is a poor intervention by the hon. Member for Liverpool, Walton (Mr. Heffer)—
      Mr. Heffer: Is it true?
      Mr. Horam: I am not arguing—
      Mr. Heffer: The hon. Gentleman is arguing—
      4.45 pm
      Mr. Horam: I am seeking to reply to the hon. Gentleman. I am not arguing in favour of the Government's policies. I have spoken against them in this series of debates, as have other hon. Members from the Liberal Party and the Labour Party. All I say is that it is about time we got away from the conventional game we always have in debating the Finance Bill of asking for cake and wanting to eat it at the same time.
      Mr. Straw: Does the hon. Gentleman still agree with the view he expressed last year in Committee on the Finance Bill when he said that he was certain it was a badly chosen time to increase Excise duties as the Government had done. I know that the hon. Gentleman wore a different hat last year, but he was the same person. Does he still take that view?.
      I assure the hon. Gentleman that the Opposition are under no instructions to remain silent about our alternative policies. There is no reason why the hon. Gentleman should study the press releases which I put out, but with my colleagues in Opposition I have issued several statements about alternative policies and they have been tasted and worked through the Treasury's economic model. Whenever we seriously attempt to work out the costings we are derided by Government supporters. Serious efforts are being made by the Opposition and inside the Labour Party to cost the proposals
      There was no reason why my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) should reply to the right hon. Member for Down, South (Mr. Powell). What the right hon. Member for Down, South said was so self-evidently preposterous that it needed no answer. The right hon. Member for Down, South will admit, if it is put to him, that he was taking the cost of an expansionary Budget over four or five years and suggesting that that would be the cost in one year. That is how he reached his figure of £20 billion.
      Mr. Michael Brown: On a point of order, Mr. Weatherill. I am listening to the debate
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      to see what is the difference between the Social Democratic Party's view of beer and the Labour Party's view of beer. I am worried that no one else seems to be able to join in this private discussion.
      The Chairman: That is perhaps a long enough intervention.
      Mr. Horam: I feel that I have been generous in allowing such a long intervention.
      If the hon. Member for Blackburn has these figures, why does he not bring them out in the debate? I have seen no costings, although I have looked back through all the debates. I have been present at most of the debates since the Budget. The arithmetic of the Opposition's amendments, combined with their expansionary proposals, has not been presented to the House of Commons in a thoroughgoing manner. I see nothing in Hansard to contradict that.
      I will give the hon. Member for Blackburn credit for being an improvement on his Leader. He said that he would wish to increase the impost on wine to make up for the revenue that would be lost on beer if the amendment were carried. He must know that that is a preposterous proposition, because wine is a much smaller source of revenue than beer. The amount raised from beer could not be raised from wine. It is not a practical proposal. He also has to consider buoyancy.
      The hon. Gentleman referred to that matter but the Committee has heard nothing profound from him. Has the hon. Gentleman done any calculations? Is he simply not telling the House about them because they do not sound very good? The proposal that he put forward does not bear examination. The Labour Party is refusing to make choices.
      I supported strongly the case made yesterday about the Government's failure to index the tax threshold. That is the most serious consequence of the Bill. It will have devastating effects on low-paid workers. I thought that the Opposition combined well to make a forceful case against the Government. Ministers have not replied to the real charge about the increase in the tax burden that results from this and previous Budgets. The Government have failed lamentably to answer the real challenge on the extent of the tax burden and the degree to which it has fallen on the shoulders of those least able to bear it.
      However, the revenue for the expansionary measures supported by the Opposition—I agree with some of them—has to be raised somehow. A choice has to be made of the measures to be taken to raise the revenue to pay for the expenditure. Hon. Members have not heard from the Opposition where their choices lie. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) was challenged directly yesterday by the Financial Secretary to the Treasury. The right hon. Gentleman refused to reply when he was asked whether the Opposition would have foregone the attempt to raise the threshold on income tax if their amendment on the petrol increase, which I supported, had been passed. The Opposition were not making choices.
      If we are to have honest debates which fill the Chamber more than this debate, and more than yesterday's debate did when the main Opposition party had to whip in people to speak, and which command the attention of people both inside and outside the House, we should discuss matters more frankly The Opposition are simply going through the motions. I know that the Opposition have a new team.

      171
      I was a member of the old team last year. I had hoped that the new team would be more original than simply to go through the hoops of putting forward amendment after amendment which do not add up to a convincing policy.
      Mr. Cook: I should like gently to draw the hon. Gentleman back to the subject of beer. He has mentioned that he was a member of the old team. I presume that I was a member of the old Back Bench team. Last year, we debated a similar issue. I made a speech in which I chided the Minister for not putting up Excise duties by more than the amount he proposed, particularly in relation to spirits. If the opportunity arises, I may make some remarks about wine later this evening.
      In last year's debate the hon. Gentleman said that it was an extraordinarily badly chosen time to increase Excise duties. If the hon. Gentleman is to make a speech attacking the official Opposition, he has an obligation to explain what great revelation has occurred to him between last year and this year that transforms what, last year, was an extraordinarily badly chosen moment into what he now says is the correct time to increase Excise duties.
      Mr. Horam: The hon. Gentleman must be aware of the answer. We argue that there should be increases in public expenditure to deal with the present economic problems. We want to be less deflationary than the Government. We believe, like the Labour party, that there should be an increase in public sector projects. Those projects have to be paid for. I have stated in the House that I would have raised the standard rate of income tax to pay for some of these projects. That would be more expansionary and prove more helpful to industry than the Government's deflationary methods. The hon. Gentleman cannot argue the point he has made.
      The Chairman: Order. I am sorry to interrupt again, but we are getting away from the amendment, which is concerned with beer and not the general Budget strategy. Will the hon. Gentleman please return to the question of beer?
      Mr. Horam: Certainly, Mr. Weatherill. I believe that the argument about the EEC is a little spurious. The Government have increased the tax on beer by the amount in the Budget because they needed the revenue. That is the brutal truth.
      Mr. Cook: Does the hon. Gentleman support it?
      Mr. Horam: If one has to raise revenue, I would rather raise it by this means than by failing to index the tax thresholds. I voted in favour of the Labour Party amendment yesterday. If I have to choose between the two—
      Mr. Cook rose—
      Mr. Horam: I cannot give way to the hon. Gentleman. You are already looking at me askance, Mr. Weatherill. The hon. Gentleman has already intervened.
      The Chairman: Order. It will help everyone if the hon. Gentleman addresses me and confines himself to the subject of beer.
      Mr. Horam: The argument about the EEC is thin. It is obvious that the Government raised the tax on beer because they needed the revenue. If the Labour Party had
      172
      won the last election and had been confronted with the same problem of EEC harmonisation, I doubt whether it would have behaved very differently from the Government. These identical problems arose over tobacco taxation in the lifetime of the previous Labour Government. For the Opposition to pretend that they would have behaved in a radically different manner when confronted with these problems is less than honest. I do not think that it is a good point to raise the EEC issue. We have to face reality.
      If hon. Members, like me, want higher spending on public sector projects to help to reflate the economy—I am prepared to accept a higher public sector borrowing requirement than the Government—the fact still remains that revenue has to be found somewhere. I am more prepared to find it by increases in some Excise duties than through a failure to index the income tax thresholds. I supported the main Opposition yesterday, but I see no case for supporting this amendment today.
      The Minister of State, Treasury (Mr. Peter Rees): I am a little diffident about intervening in what has become an interesting and perhaps even perceptive and illuminating debate involving the hon. Member for Gateshead, West (Mr. Horam), representing the Social Democratic Party, and various Opposition Members. I believe that the hon. Member for Gateshead, West, with all the detachment that he can now bring to the debate, was able, in his encounter with the hon. Member for Edinburgh, Central (Mr. Cook), to illuminate some of the central problems that bedevil the Opposition.
      I hope, Mr. Weatherill, that it will not be taken as a criticism of the Chair when I say that we have had a fairly wide-ranging debate. At times, it might have escaped the attention of the Committee that we were debating amendment No. 53, designed to reduce the proposed increase in Excise duty on beer to 15 per cent., which would have involved, as the hon. Member for Blackburn (Mr. Straw) stated, an increase of 1½p instead of 4p on a pint. I do not know whether the hon. Gentleman was disposed to emphasise that this would have involved a loss of revenue of £240 million. The hon. Gentleman candidly admits that fact.
      As the hon. Member for Gateshead, West reminded the Committee, we have to consider the revenue implications of these amendments. I emphasise to my hon. Friend the Member for Rutland and Stamford (Mr. Lewis) that no hon. Member, certainly none on the Government side, is particularly anxious to introduce any tax or duty. There may occasionally arise external reasons for doing so. However, our Finance Bill debates are essentially concerned with the balance of taxation. As the requirements of Government increase and since we are less ready to borrow than previous Administrations, we must scratch around for increases in revenue. One of the areas that we chose was the duty on alcohol and in particular on beer.
      5 pm
      The hon. Member for Blackburn phrased his attack in three ways. He said that the increase would hit one of the few pleasures left. That was a slightly apocalyptic view of what is happening in Britain. The hon. Member for Isle of Ely (Mr. Freud) could tell the hon. Gentleman a thing or two about the pleasures left throughout our happy isle. The hon. Member for Blackburn was partly supported by the hon. Member for Liverpool, Walton (Mr. Heffer), who

      173
      always makes powerful contributions to our debates. However, he has a romantic view of British life. His emotions are fixed where Wat Tyler's were before he was struck down. The hon. Gentleman regards beer as the prerogative of the ordinary working man. I have news for the Labour Party. The ordinary working man—and I resent the narrow interpretation of that phrase—has broadened his tastes. He is enjoying wine, and I am delighted.
      We are not aiming at the ordinary working man, but we must consider how best, in a difficult time. We can increase our revenues. It might be thought that we are singling out beer. The proposal in clause 1 increases the duty by 38 per cent. I remind the Committee of what the right hon. Member for Leeds, East (Mr. Healey) did in April 1975 since I want to demonstrate that there is noting socially divisive about our proposals and that we are not singling out any group of our fellow countrymen.
      The right hon. Gentleman increased VAT. He increased the basic rate of income tax from 33 per cent. to 35 per cent. He increased the duty on beer by 2p—a 40 per cent. increase. The increased duty on beer in 1975 was proportionately perceptively greater than the increase proposed this year.
      Mr. Joseph Dean: What was the 40 per cent. a proportion of?
      Mr. Rees: It was a 40 per cent. increase on the previous duty.
      I shall remind the Committee of the Labour Administration's curious record. For example, the duty on beer was increased by 35·7 per cent. in 1974. In 1975 it was increased by 46·2 per cent. We propose an increase of only 38 per cent. I concede that the increase tailed off in 1976–77 and that there was no increase in 1978–79. We are redressing the balance. We are bringing back the real rate of duties to what it was under the Labour Administration.
      Let us put the problem in perspective. The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) will recall the increase in beer duties which he supported. In his Budget Statement the then Chancellor, in the ringing phrases to which he is prone, said:
      "Now, however, when I am forced to call for general sacrifices, when rich and poor alike face increases in essentials like rent and rates and fuel prices, it would clearly be wrong to leave untouched such forms of consumption as smoking and drinking, when the effective tax burden on them would otherwise continue to fall. Instead of changing the rate of VAT on these goods, I have decided that the duties should be increased to give precise effects on the bar or retail prices of all these goods across the board. I hope it will be appreciated that the size of these increases reflects the fact that in the circumstances of this Budget the alternative to them would have been either a higher target for the revenue from direct taxation or an increase in the standard 8 per cent. rate of VAT."—[Official Report, 15 April 1975; Vol. 890, c. 305–6.]
      Mr. Heffer: Is the Minister of State aware that some Government Back Benchers at that time thought that their Ministers were not listening enough to their own supporters?
      Mr. Rees: History might vindicate the hon. Member for Walton, who has always taken an idiosyncratic line. I shall leave him to justify his part in supporting or not supporting the Labour Administration. I want to put the problem in its true historical and political perspective.
      Mr. Robert Sheldon: In putting the problem in its true perspective, the Minister quoted the
      174
      former Chancellor of the Exchequer. We are objecting not only to the increase but to the particularly heavy impost on beer.
      Mr. Rees: The right hon. Gentleman is entitled to say that we are proposing a 31 per cent. increase in the duty on fortified wine, 17 per cent. on table wines and 14½ per cent. on spirits. He will remember that under the Administration of which he was a distinguished ornament the balance of duties was distorted. For example, the duty on wine was increased by 98 per cent. in 1975 and by 66 per cent. the previous year. There must be a balance. I assume that the right hon. Gentleman does not want his fellow countrymen to concentrate exclusively on beer. He will want them to sample wine so that the pleasures of life may be widely diffused.
      The hon. Member for Blackburn made a trumpery point and said that the increase was to subsidise cuts in tax on the rich. He will find it hard to find such cuts. Perhaps he is thinking of capital transfer tax. The current year's cost of the reliefs proposed is only £5 million. The hon. Member's argument does not stand close scrutiny.
      The hon. Member for Blackburn said that we are imposing the tax because of our slavish adherence to the European Community. That view was echoed by some of his hon. Friends. Proposals have emanated from the Commission to harmonise throughout the Community the duties on alcoholic drinks. We have been the subject of infraction proceedings before the European Court. Neither the Commission's proposals nor the infraction proceedings have been brought to a firm conclusion. We had an interesting, if short, debate in December last year about the proposals. I explained the Government's position then. It remains the same.
      The Commission's proposal is that the ratio between wine and beer duties should move over seven years to the ratio of 3:1. If the increases in beer and wine duties encapsulated in clause 1 find favour with the Committee, the ratio will be 4·2:1. There is no slavish adherence.
      Mr. Les Huckfield: The Minister does not understand the central issue of my amendment, which has not been selected. Cannot he understand that under the Labour Government the ratio between beer and wine went up to 5:1? As a result of the Budget judgment, it is being reduced to nearly 4:1. Is the Minister saying that his right hon. and learned Friend's attitude and proposals have not been influenced in any way by the infraction proceedings? Is he saying that this has nothing to do with the European Commission and the court?
      Mr. Rees: It would have been perverse of the Government, in the face of the court's interim judgment and in the face of what we know about the proposals, to have tilted the balance still further against wine.
      Mr. Huckfield: It is still there.
      Mr. Rees: The ratio that is implicit in clause 1 will only put back the ratio to what it was when we entered the EEC. I want to rebut the absurd suggestion—the point may have escaped the hon. Member for Nuneaton (Mr. Huckfield), who usually has a quick and agile mind—that clause 1 has been introduced by this Government in slavish adherence to the EEC proposals.
      Mr. Straw: Does the Minister of State accept that if the EEC initiative had not been made the Chancellor

      175
      would have had a greater discretion in deciding on the balance between the increase in duty on beer and that on wine and spirits?
      Mr. Rees: It is a statement of the obvious if the hon. Gentleman is saying that there might have been no infraction proceedings and that therefore those proceedings could have been totally disregarded. I am concerned to rebut the frivolous suggestion that we are slavishly adhering to a proposal that is not yet Community law.
      I hope that my proposition will find favour, if not with Opposition Members, at least with the people who follow our debates outside the Chamber. It is not for me to enter the domestic debates between the hon. Member for Blackburn and his former colleague, the hon. Member for Gateshead, West. On close examination, the three bases on which the hon. Gentleman mounts his case fall apart. The real question, to which he did not address himself, was properly drawn to our attention by the hon. Member for Gateshead West.
      I have costed the various amendments that have been put forward so far by the Opposition. First, we debated an amendment to reduce the proposed increases in the duty on petrol and derv. That amendment, if carried, would have cost £700 million. Yesterday we debated an amendment that was designed to reintroduce a lower rate band, which would have cost £1,100 million. Later yesterday we debated an amendment fully to valorise and index personal allowances. That would have cost £2,200 million. Today's amendment, if it found favour, would cost £240 million. I am bad at mental arithmetic, but I am told that the total cost of the Opposition amendments would be £4,240,000,000. At a rough calculation, that would involve an increase in the basic rate of tax of over 5 per cent.
      Mr. Robert Sheldon: The argument that the Minister is using has been used on many previous occasions. It was demolished best by the late Iain Macleod, who said, in reply to an intervention of that kind, that if he were in Government he would be able rationally to produce an alternative Budget but all that he could do, knowing that some of his amendments would fall, was to table those amendments that he would like to be debated and, if the amendments were successful, the time would come to look at those matters again.
      5.15 pm
      Mr. Rees: If the right hon. Member for Ashton-under-Lyne had said candidly "These amendments are in the alternative", his intervention might have carried more weight. As it is, we have been confronted with an irresponsible and frivolous series of amendments.
      Cynical observers of our debates outside would say that there is an irreducible minimum of humbug in democratic adversarial politics, but on this occasion the Opposition, lashed to a synthetic frenzy by the imminence of the county council elections, have gone beyond the irreducible minimum. How synthetic their frenzy has been can be demonstrated by the palpable lack of support on the Opposition Benches. The amendment demonstrates, if demonstration is needed, how utterly frivolous and irresponsible the conduct of affairs of the Opposition would be. I ask my right hon. and hon. Friends to reject the amendment with total contempt.
      Mr. Straw: I have to work myself into a synthetic frenzy, but I need lessons from the Minister of State on how to do that.
      The central issue raised by the hon. Members for Rutland and Stamford (Mr. Lewis) and for Gateshead, West (Mr. Horam) and the Minister of State is how to pay for the amendments that we tabled today and earlier. The Minister and the hon. Member for Gateshead both know that the role of an Opposition in tabling amendments to a Finance Bill is necessarily different from the role of the same people presenting a Budget. That does not mean that an Opposition should be irresponsible, flippant or frivolous—to use the Minister's words—in tabling amendments; it means that if we were sitting on the Government Benches we should have the weight of expert advice, and would be able to offer a comprehensive judgment of the state of the economy. When the Minister of State was recently asked what level of public sector borrowing requirement he had in mind in his alternative policies to those of the Labour Government, his answer was:
      "Our answer then was what the market would take".—[Official Report, 12 March 1981; Vol. 1000, c. 1089.]
      He consistently refused to put a figure to the alternative economic policies of the Conservative Opposition.
      We have expressed both here and outside our views about the scale of reflation. In summing up in the Budget debate on 12 March, I mentioned the TUC's proposal for a £6 billion reflation of the economy. That is not necessarily what we would adopt if we came to power tomorrow, but it is the kind of reflation that is desperately needed. The figure is more than the total of our tax amendments, which the Minister put at £4,240,000,000.
      The Financial Secretary to the Treasury (Mr. Nigel Lawson): Will the hon. Gentleman explain what he means by a £6 billion reflation? What public sector borrowing requirement would that involve for the coming year?
      Mr. Straw: I shall be delighted to explain that. One interesting fact that has emerged from the work done by the Library is that if the economy is reflated by £6 billion the increase in the public sector borrowing requirement is only about £3 billion.
      Mr. Lawson: Rubbish.
      Mr. Straw: The work is available in the Library. It has been done on the Treasury's own computer model. If the Financial Secretary thinks it is rubbish, let him have it analysed by his own economists who are responsible for the equations in the Treasury model, and then come back to the House with his comments.
      Mr. Lawson: It is an illusion.
      Mr. Straw: The right hon. Gentleman says that it is an illusion. I referred to it in my speech on 12 March, but not a word has been said about it since then. I hope that he will now study the matter. That run on the Treasury's model showed that if demand was increased by £6,000 million, the PSBR would go up by only £3,000 million. We are arguing for substantial reflation. If we were sitting where the right hon. Member is sitting we would be able to argue for that in terms not only of reductions in income tax but of increases in public expenditure.
      Mr. Horam: The House does not expect the main Opposition party to have available the full research facilities which produce a full Budget in the same way that

      177
      the Government have such facilities available. That would be ludicrous. However, surely the hon. Gentleman could have produced at least a list of priorities. Does he think that reducing the increase in beer tax is more important than reducing the petrol duty? How do income tax reductions fit into the general picture?
      Mr. Straw: This is a specific debate about an amendment relating to the increase in beer duty. It would not be appropriate to make the points suggested by the hon. Gentleman. However, I accept his general point. If he had bothered to listen to what we have been saying he would know that we have put forward a coherent and costed alternative. If he has any doubt about that he should read Hansard of 12 March.
      We tabled the amendment because we object to the way in which the beer drinker is being heavily discriminated against. He is bearing a 38 per cent. increase compared with a 17 per cent. increase for wines and spirits. Even within the Government's economic strategy it would have been possible to raise the same revenue by placing an equal amount on wine, beer and spirits. The Government did not do so because of the so-called initiative of the EEC. The Minister's remarks about that initiative were wholly unconvincing. He said that it would be perverse to tilt the balance against wine. I took that as an admission that the Government had been forced to tilt the balance against beer. If he is saying that the EEC initiative has nothing to do with the Government's decision, it is an extraordinary coincidence that only in December he said that it could be applied in Britain by raising duty on beer by 4p. Only four months later, the Chancellor announced an increase in beer duty of exactly 4p. That may be coincidence, but we believe it to be more than that.
      Because we find the Government's arguments about the EEC directive unconvincing, and because we believe that the overall increase on beer is discriminatory against beer drinkers and the domestic beer industry, we shall vote for the amendment.
      Question put, That the amendment be made:—
      The Committee divided: Ayes 234, Noes 285.

      Division No. 173]

      [5.25 pm

      AYES

      Abse, Leo

      Clark, Dr David (S Shields)

      Adams, Allen

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

      Allaun, Frank

      Cohen, Stanley

      Alton, David

      Coleman, Donald

      Anderson, Donald

      Concannon, Rt Hon J. D.

      Archer, Rt Hon Peter

      Conlan, Bernard

      Ashley, Rt Hon Jack

      Cook, Robin F.

      Ashton, Joe

      Cowans, Harry

      Atkinson, H.(H'gey.)

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

      Barnett, Rt Hon Joel (H'wd)

      Craigen, J. M.

      Beith, A. J.

      Crowther, J. S.

      Bennett, Andrew(St'kp't N)

      Cryer, Bob

      Bidwell, Sydney

      Cunliffe, Lawrence

      Booth, Rt Hon Albert

      Cunningham, G. (Islington S)

      Boothroyd, Miss Betty

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

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

      Davidson, Arthur

      Bray, Dr Jeremy

      Davies, Rt Hon Denzil (L'lli)

      Brown, Hugh D. (Provan)

      Davies, Ifor (Gower)

      Brown, Ron (E'burgh, Leith)

      Davis, Clinton (Hackney C)

      Brown, Ronald W. (H'ckn'y S)

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

      Buchan, Norman

      Deakins, Eric

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

      Dempsey, James

      Campbell, Ian

      Dewar, Donald

      Campbell-Savours, Dale

      Dixon, Donald

      Canavan, Dennis

      Dobson, Frank

      Cant, R. B.

      Dormand, Jack

      Carmichael, Neil

      Douglas-Mann, Bruce

      Carter-Jones, Lewis

      Dubs, Alfred

      178

      Duffy, A. E. P.

      McMahon, Andrew

      Dunn, James A.

      McNamara, Kevin

      Dunnett, Jack

      McTaggart, Robert

      Dunwoody, Hon Mrs G.

      McWilliam, John

      Eadie, Alex

      Magee, Bryan

      Eastham, Ken

      Marshall, D(G'gow S'ton)

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

      Marshall, Dr Edmund (Goole)

      English, Michael

      Marshall, Jim (Leicester S)

      Ennals, Rt Hon David

      Martin, M(G'gow S'burn)

      Evans, loan (Aberdare)

      Mason, Rt Hon Roy

      Evans, John (Newton)

      Maxton, John

      Ewing, Harry

      Maynard, Miss Joan

      Faulds, Andrew

      Meacher, Michael

      Field, Frank

      Mellish, Rt Hon Robert

      Fitch, Alan

      Mikardo, Ian

      Flannery, Martin

      Millan, Rt Hon Bruce

      Fletcher, Raymond (Ilkeston)

      Miller, Dr M. S. (E Kilbride)

      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)

      Mulley, Rt Hon Frederick

      Freeson, Rt Hon Reginald

      Newens, Stanley

      Freud, Clement

      Ogden, Eric

      Garrett, John (Norwich S)

      O'Halloran, Michael

      Garrett, W. E. (Wallsend)

      O'Neill, Martin

      George, Bruce

      Orme, Rt Hon Stanley

      Gilbert, Rt Hon Dr John

      Palmer, Arthur

      Ginsburg, David

      Parker, John

      Golding, John

      Parry, Robert

      Gourlay, Harry

      Pavitt, Laurie

      Graham, Ted

      Pendry, Tom

      Grant, George (Morpeth)

      Penhaligon, David

      Grant, John (Islington C)

      Powell, Raymond (Ogmore)

      Grimond, Rt Hon J.

      Prescott, John

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

      Price, C. (Lewisham W)

      Hardy, Peter

      Race, Reg

      Harrison, Rt Hon Walter

      Radice, Giles

      Hart, Rt Hon Dame Judith

      Rees, Rt Hon M (Leeds S)

      Haynes, Frank

      Richardson, Jo

      Healey, Rt Hon Denis

      Roberts, Albert (Normanton)

      Heffer, Eric S.

      Roberts, Allan (Bootle)

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

      Roberts, Ernest (Hackney N)

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

      Roberts, Gwilym (Cannock)

      Home Robertson, John

      Robertson, George

      Homewood, William

      Robinson, G. (Coventry NW)

      Hooley, Frank

      Rooker, J. W.

      Howells, Geraint

      Ross, Ernest (Dundee West)

      Huckfield, Les

      Ross, Stephen (Isle of Wight)

      Hughes, Mark (Durham)

      Rowlands, Ted

      Hughes, Robert (Aberdeen N)

      Sever, John

      Hughes, Roy (Newport)

      Sheerman, Barry

      Janner, Hon Greville

      Sheldon, Rt Hon R.

      Jay, Rt Hon Douglas

      Shore, Rt Hon Peter

      John, Brynmor

      Short, Mrs Renée

      Johnson, Walter (Derby S)

      Silkin, Rt Hon J. (Deptford)

      Johnston, Russell (Inverness)

      Silkin, Rt Hon S. C. (Dulwich)

      Jones, Rt Hon Alec (Rh'dda)

      Silverman, Julius

      Jones, Barry (East Flint)

      Skinner, Dennis

      Kaufman, Rt Hon Gerald

      Smith, Rt Hon J. (N Lanark)

      Kerr, Russell

      Soley, Clive

      Kilroy-Silk, Robert

      Spearing, Nigel

      Lambie, David

      Spriggs, Leslie

      Lamborn, Harry

      Stallard, A. W.

      Lamond, James

      Steel, Rt Hon David

      Leadbitter, Ted

      Stewart, Rt Hon D. (W Isles)

      Leighton, Ronald

      Stoddart, David

      Lewis, Arthur (N'ham NW)

      Stott, Roger

      Lewis, Ron (Carlisle)

      Strang, Gavin

      Lofthouse, Geoffrey

      Straw, Jack

      Mabon, Rt Hon Dr J. Dickson

      Summerskill, Hon Dr Shirley

      McCartney, Hugh

      Thomas, Dafydd (Merioneth)

      McDonald, Dr Oonagh

      Thomas, Jeffrey (Abertillery)

      McElhone, Frank

      Thomas, Dr R.(Carmarthen)

      McGuire, Michael (Ince)

      Thorne, Stan (Preston South)

      McKay, Allen (Penistone)

      Tilley, John

      McKelvey, William

      Tinn, James

      MacKenzie, Rt Hon Gregor

      Torney, Tom

      179

      Urwin, Rt Hon Tom

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

      Varley, Rt Hon Eric G.

      Williams, Sir T.(W'ton)

      Wainwright, R.(Colne V)

      Wilson, Gordon (Dundee E)

      Walker, Rt Hon H.(D'caster)

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

      Watkins, David

      Winnick, David

      Welsh, Michael

      Wright, Sheila

      White, Frank R.

      Young, David (Bolton E)

      White, J. (G'gow Pollok)

      Whitehead, Phillip

      Tellers for the Ayes:

      Wigley, Dafydd

      Mr. James Hamilton and Mr. Joseph Dean

      Willey, Rt Hon Frederick

      NOES

      Adley, Robert

      Edwards, Rt Hon N. (P'broke)

      Aitken, Jonathan

      Eggar, Tim

      Alexander, Richard

      Elliott, Sir William

      Amery, Rt Hon Julian

      Eyre, Reginald

      Atkins, Robert(Preston N)

      Fairbairn, Nicholas

      Baker, Kenneth(St.M'bone)

      Fairgrieve, Russell

      Baker, Nicholas (N Dorset)

      Faith, Mrs Sheila

      Banks, Robert

      Farr, John

      Beaumont-Dark, Anthony

      Fell, Anthony

      Bell, Sir Ronald

      Fenner, Mrs Peggy

      Bendall, Vivian

      Finsberg, Geoffrey

      Bennett, Sir Frederic (T'bay)

      Fisher, Sir Nigel

      Benyon, Thomas (A'don)

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

      Benyon, W. (Buckingham)

      Fletcher-Cooke, Sir Charles

      Berry, Hon Anthony

      Fookes, Miss Janet

      Best, Keith

      Forman, Nigel

      Bevan, David Gilroy

      Fraser, Rt Hon Sir Hugh

      Biffen, Rt Hon John

      Fraser, Peter (South Angus)

      Biggs-Davison, John

      Gardiner, George (Reigate)

      Blackburn, John

      Gardner, Edward (S Fylde)

      Blaker, Peter

      Garel-Jones, Tristan

      Body, Richard

      Gilmour, Rt Hon Sir Ian

      Bonsor, Sir Nicholas

      Glyn, Dr Alan

      Bottomley, Peter (W'wich W)

      Goodhew, Victor

      Bowden, Andrew

      Good lad, Alastair

      Boyson, Dr Rhodes

      Gorst, John

      Braine, Sir Bernard

      Gow, Ian

      Bright, Graham

      Gower, Sir Raymond

      Brinton, Tim

      Grant, Anthony (Harrow C)

      Brittan, Leon

      Gray, Hamish

      Brotherton, Michael

      Greenway, Harry

      Brown, Michael(Brigg & Sc'n)

      Griffiths, Peter Portsm'th N)

      Browne, John (Winchester)

      Grist, Ian

      Bruce-Gardyne, John

      Grylls, Michael

      Buchanan-Smith, Alick

      Gummer, John Selwyn

      Budgen, Nick

      Hamilton, Hon A.

      Burden, Sir Frederick

      Hamilton, Michael (Salisbury)

      Butcher, John

      Hampson, Dr Keith

      Butler, Hon Adam

      Hannam, John

      Cadbury, Jocelyn

      Haselhurst, Alan

      Carlisle, John (Luton West)

      Hastings, Stephen

      Carlisle, Kenneth (Lincoln)

      Havers, Rt Hon Sir Michael

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

      Hawkins, Paul

      Chalker, Mrs. Lynda

      Hawksley, Warren

      Chapman, Sydney

      Hayhoe, Barney

      Churchill, W. S.

      Heddle, John

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

      Henderson, Barry

      Clark, Sir W. (Croydon S)

      Heseltine, Rt Hon Michael

      Clegg, Sir Walter

      Hicks, Robert

      Cockeram, Eric

      Higgins, Rt Hon Terence L.

      Colvin, Michael

      Hill, James

      Cormack, Patrick

      Hogg, Hon Douglas (Gr'th'm)

      Corrie, John

      Holland, Philip (Carlton)

      Costain, Sir Albert

      Hooson, Tom

      Cranborne, Viscount

      Hordern, Peter

      Critchley, Julian

      Howe, Rt Hon Sir Geoffrey

      Crouch, David

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

      Dean, Paul (North Somerset)

      Hunt, John (Ravensbourne)

      Dickens, Geoffrey

      Hurd, Hon Douglas

      Dorrell, Stephen

      Irving, Charles (Cheltenham)

      Douglas-Hamilton, Lord J.

      Jenkin, Rt Hon Patrick

      Dover, Denshore

      Jessel, Toby

      du Cann, Rt Hon Edward

      Jopling, Rt Hon Michael

      Dunn, Robert (Dartford)

      Joseph, Rt Hon Sir Keith

      Durant, Tony

      Kershaw, Anthony

      Dykes, Hugh

      Kimball, Marcus

      Eden, Rt Hon Sir John

      Knight, Mrs Jill

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      Knox, David

      Renton, Tim

      Lang, Ian

      Rhodes James, Robert

      Langford-Holt, Sir John

      Ridsdale, Sir Julian

      Latham, Michael

      Rifkind, Malcolm

      Lawrence, Ivan

      Roberts, M. (Cardiff NW)

      Lawson, Rt Hon Nigel

      Roberts, Wyn (Conway)

      Lee, John

      Rossi, Hugh

      Le Marchant, Spencer

      Rost, Peter

      Lester, Jim (Beeston)

      Royle, Sir Anthony

      Lewis, Kenneth (Rutland)

      Sainsbury, Hon Timothy

      Lloyd, Ian (Havant & W'loo)

      St. John-Stevas, Rt Hon N.

      Lloyd, Peter (Fareham)

      Scott, Nicholas

      Loveridge, John

      Shaw, Giles (Pudsey)

      Luce, Richard

      Shaw, Michael (Scarborough)

      Lyell, Nicholas

      Shelton, William (Streatham)

      McCrindle, Robert

      Shepherd, Colin (Hereford)

      Macfarlane, Neil

      Shepherd, Richard

      MacGregor, John

      Shersby, Michael

      MacKay, John (Argyll)

      Silvester, Fred

      Macmillan, Rt Hon M.

      Sims, Roger

      McNair-Wilson, M. (N'bury)

      Skeet, T. H. H.

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

      Smith, Dudley

      McQuarrie, Albert

      Speed, Keith

      Madel, David

      Speller, Tony

      Major, John

      Spence, John

      Marland, Paul

      Spicer, Jim (West Dorset)

      Marlow, Tony

      Spicer, Michael (S Worcs)

      Mates, Michael

      Sproat, Iain

      Mather, Carol

      Squire, Robin

      Maude, Rt Hon Sir Angus

      Stainton, Keith

      Mawby, Ray

      Stanbrook, Ivor

      Mawhinney, Dr Brian

      Stanley, John

      Maxwell-Hyslop, Robin

      Steen, Anthony

      Mayhew, Patrick

      Stevens, Martin

      Mellor, David

      Stewart, Ian (Hitchin)

      Meyer, Sir Anthony

      Stewart, A.(E Renfrewshire)

      Miller, Hal (B'grove)

      Stokes, John

      Mills, lain (Meriden)

      Stradling Thomas, J.

      Mills, Peter (West Devon)

      Tapsell, Peter

      Miscampbell, Norman

      Taylor, Robert (Croydon NW)

      Mitchell, David (Basingstoke)

      Taylor, Teddy (S'end E)

      Moate, Roger

      Temple-Morris, Peter

      Montgomery, Fergus

      Thomas, Rt Hon Peter

      Moore, John

      Thompson, Donald

      Morgan, Geraint

      Thorne, Neil (Ilford South)

      Morris, M. (N'hampton S)

      Thornton, Malcolm

      Morrison, Hon C. (Devizes)

      Townend, John (Bridlington)

      Morrison, Hon P. (Chester)

      Townsend, Cyril D, (B'heath)

      Murphy, Christopher

      Trippier, David

      Myles, David

      van Straubenzee, W. R.

      Neale, Gerrard

      Vaughan, Dr Gerard

      Needham, Richard

      Viggers, Peter

      Nelson, Anthony

      Waddington, David

      Neubert, Michael

      Wakeham, John

      Newton, Tony

      Waldegrave, Hon William

      Onslow, Cranley

      Walker, Rt Hon P.(W'cester)

      Oppenheim, Rt Hon Mrs S.

      Walker, B. (Perth)

      Osborn, John

      Waller, Gary

      Page, Rt Hon Sir G. (Crosby)

      Walters, Dennis

      Page, Richard (SW Herts)

      Ward, John

      Parris, Matthew

      Warren, Kenneth

      Patten, Christopher (Bath)

      Wells, John (Maidstone)

      Patten, John (Oxford)

      Wells, Bowen

      Pawsey, James

      Wheeler, John

      Percival, Sir Ian

      Whitelaw, Rt Hon William

      Peyton, Rt Hon John

      Whitney, Raymond

      Pink, R. Bonner

      Wickenden, Keith

      Pollock, Alexander

      Wiggin, Jerry

      Porter, Barry

      Wilkinson, John

      Prentice, Rt Hon Reg

      Williams, D.(Montgomery)

      Price, Sir David (Eastleigh)

      Wolfson, Mark

      Prior, Rt Hon James

      Young, Sir George (Acton)

      Proctor, K. Harvey

      Younger, Rt Hon George

      Pym, Rt Hon Francis

      Raison, Timothy

      Tellers for the Noes:

      Rathbone, Tim

      Mr. Robert Boscawen and Mr. Peter Brooke

      Rees, Peter (Dover and Deal)

      Rees-Davies, W. R.

      Question proposed, That the clause stand part of the Bill.
      5.30 pm
      Mr. Cook: I am slightly hesitant about rising to exercise the Opposition's constitutional right to challenge the Government's legislation, because of the Minister's most recent speech. I assure him that I am not required to lash myself into a synthetic frenzy, as there are no local elections in my constituency tomorrow. We satisfactorily disposed of many Conservative councils last year in Scotland and no doubt we shall dispose of some additional ones next year without any synthetic frenzy on our part.
      Three issues raised by the clause were not dealt with fully and comprehensively in the preceding debate on amendment No. 53 on beer. These issues deserve to be aired in the House of Commons and the Committee is entitled to some response from the Treasury Bench.
      The first of these issues is the rate of duty on spirits. The Bill increases the duty on spirits by 14 ½ percent. That is virtually 15 per cent., and that is the percentage by which it would have been necessary to increase personal allowances to carry out the terms of the Rooker-Wise amendment. That would have been necessary for the full uprating.
      The Opposition accept the case for revalorisation for spirits. We accept it also for uprating personal allowances. If an explanation is required, it must come from the Treasury team, which accepts the argument for revalorisation for spirits but rejected the very same principle when it considered uprating personal allowances.
      I understand why the Treasury team accepted one case and not the other. It would cost revenue to uprate personal allowances and it increases revenue to uprate and revalorise the rate of duty on spirits. The Opposition will not let any such self-serving considerations cloud their logic. We pressed for the uprating of personal allowances, as the hon. Member for Gateshead, West (Mr. Horam) was kind enough to remind us, and we accept the requirement for an uprating of the duty on whisky and other spirits in line with inflation. I said last year in Committee that I had been a member of the Select Committee on Expenditure that submitted a report five years previously on preventive medicine. The committee recommended
      "that the price of alcoholic drink should remain at the same level relative to average incomes".
      In the four years since the report was lodged, earnings have increased by three-quarters. The retail prices index has increased by two-thirds. The duty on spirits has increased by only one-quarter. The level of duty on spirits and the overall price of spirits has fallen relative to income and to the RPI. That has resulted in an inevitable increase in consumption. It has faltered slightly over the past year but the level of spirit consumption stands 25 per cent. higher than in 1977 when we submitted the report.
      I am aware that in the right quantities spirits can be a life-enhancing force. I shall not suggest what the right quantity is. Each member of the Committee will have his own idea of what the right quantity is for him or her. Nevertheless, it is plain that we cannot sustain this growth in total consumption without spirits being consumed increasingly in the wrong quantities.
      Therefore, it is inevitable that the House should accept the case for increases in duty as a contribution to stabilising the consumption of spirits. Therefore, the Opposition accept the case for increasing the duty on
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      spirits in line with inflation. I appreciate that within that overall increase in consumption, there has been a change in drinking pattern which has affected many of the hon. Members whose constituencies produce whisky.
      There has been a shift within the overall consumption pattern to increasing consumption of white spirits—vodka and gin. I find that pattern incomprehensible, particularly as I note that those who drink the gin and vodka can only bring themselves to drink such spirits by adding other substances to obscure the taste. Nevertheless, that pattern has undoubtedly created difficulty in the whisky industry. It is right to serve notice on the Minister that, when in Standing Committee we debate clause 11, which makes some fairly sweeping changes to the arrangements of Excise on whisky, some of the Committee, particularly Scottish Members who represent distilleries, may want to draw attention to the anxiety about the state of the whisky industry.
      That is the first point raised by the clause, to which we did not refer in detail in the preceding debate. The second point was touched upon in the preceding debate by way of comparison and contrast to what was being done with the rate of duty on beer. That is the rate of duty on wine.
      I regret that the hon. Member for Gateshead, West has absented himself from the Chamber because I hoped that he might be here to support and sympathise with the thrust of my general comments. [Interruption.] I shall not speculate whether he was dealing with wine, beer or spirits, but it was hard that he should have tackled the Opposition Front Bench for being under instructions when he was obviously well briefed on the case against increasing the tax on wine.
      As the Minister will be aware, the duty on wine proposed in the Finance Bill is to be increased by 17 per cent. That is not even one half of the increase of the duty on beer. The Committee is entitled to ask why. Earlier, I developed the general social case for uprating the level of duty on alcoholic drink in order to try to stabilise consumption. If we attach weight to that argument, there is a much more compelling case for increasing the duty on wine faster than the duty on beer because over the last five years consumption of beer has been static. There is no social case for using the price signal to try to stabilise the consumption of beer—it is stable. The consumption of spirits has risen by 20 per cent., but the consumption of wine, in the same five years, has risen by 35 per cent.
      Therefore, if we attach weight to the social argument—the requirement to try to stabilise the consumption of alcohol—that case applies with greater force to wine than to beer. In the Finance Bill, logically we should expect to find a proposal for a rate of increase in the duty on wine which is higher, not lower, than the rate of duty on beer. We find instead the reverse.
      That brings me to the third point that must be developed during the debate. As my hon. Friend the Member for Blackburn (Mr. Straw) said in the previous debate, some of us nurse the suspicion—perhaps it is unworthy, and the Minister may be able to remove it when he responds—that we can detect, in the curious preference for wine rather than beer and the curious penalty on the beer drinker rather than the wine drinker, the unseen hand of Brussels once again drafting our fiscal policy.
      In response to the previous debate, the Minister said that it would have been perverse, in the light of the discussions in the Common Market, to increase the rate of duty on wine faster than the rate of duty on beer. With

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      respect, in our amendment in the preceding debate, we asked him not to do that but to increase the rate of duty on beer by no more than the increase in the rate of duty on wine—in other words, that there should be a comparable increase. That would not have been perverse; it would have preserved the status quo. I should have thought that such an argument would have carried some weight with a Conservative at heart. We are not asking for the sort of change which the Minister implied in his response.
      There was a debate on that matter last December. Around that time, the Minister made a number of statements to the papers which were properly interested in and anxious about that matter. He said to The Times that as a result of the EEC pressure,
      "he thought it extremely unlikely that the beer duty would be sharply increased, contrary to what has been claimed by the British brewers."
      5.45 pm
      The Minister said to The Economist:
      "Whatever solution is adopted, it will be phased in over seven years."
      In the House on 3 December, he said that the requirements of the Commission could be achieved if he were to reduce the rate of duty on wine by 17 per cent. and raise the rate of duty on beer by ½p on a pint.
      A mere five months after that relaxed attitude to the requirements of the EEC, we have suddenly lurched in with a sharp increase—the sort of sharp increase which the brewers feared last December—and on the Minister's sums, we are already half way to achieving the ratio which was required by the EEC. We have moved from 4.9:1 to 4.2:1. Our target is about 3.5:1. That is the ratio which the Minister is arguing for in Brussels.
      It is as well to remind the Committee that the movement in the ratio is not in the interests of the British economy. Therefore, it is perhaps unfortunate that we should be faced with a Treasury team which is making a move towards that ratio in the Finance Bill at the request of pressures which are not responsible for the British economy. One of its colleagues the hon. Member for Southend, East (Mr. Taylor) said in the debate in December last year that if that change took place—in other words, if the duty on beer were increased or if the duty on wine were decreased—and if we believed in capitalism, more wine and less beer would be drunk. The hon. Member probably slightly confused his terms. Presumably he meant to say, "If we believe in market forces". However, it was plain what he expected to happen. Without wishing to subscribe to the same credo of the belief in capitalism as the hon. Member for Southend East, I entirely agree that that is what one would logically expect to result from such a shift. People would drink more wine and less beer.
      Britain imports the bulk of the wine which we drink. Some wine is produced in England and is excellent in its own way, but it is a small fraction of the total amount of wine consumed in Britain. One of the reasons why the Commission is anxious to make the change is so that we can drink some of the confounded wine lake which has been the result of the common agricultural policy. Even in that matter, the Continent's aggressive agricultural policies find their way into influencing our fiscal policies.
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      The other side of the coin is that, just as we import almost all the wine we drink and therefore an increase in consumption of wine will result in pressure on the balance of payments, so we produce the great bulk of the beer which we drink in Britain at home. It is domestically produced. A shift from the consumption of beer to the consumption of wine will result by that token, in a reduction in employment in our economy. Those are two results from such a change in fiscal policy which are adverse to the interests of the British economy and which should be of concern to the Treasury team.
      I do not make that statement to prove that our membership of Europe has not been in the best interests of the British people and the economy. That is so self-evident that it no longer requires frequent repetition.
      If, as a result of our membership of the EEC we must truckle to the Community even in the matter of fiscal policy about where we put excise duty on beer and wine and if in the course of so doing we must penalise the beer drinker as against the wine drinker, surely we should at least be seeking the economic advantage which we can obtain in return. The obvious place to look, as my hon. Friend the Member for Blackburn said, is to the removal of discrimination against our whisky exports in other member States. It continues in France, Italy and Denmark, despite our having secured a court ruling.
      It is interesting to contrast the attitude of other Governments to pressures for EEC harmonisation with our ready submission. The French Government were challenged before the European Court last year about discriminating against whisky. Not only is it taxed at a heavier rate than brandy, but the French will not allow it to be advertised with the same freedom as cognac. When pressed, the French advocate stated that, since whisky and gin are drunk as aperitifs, on an empty stomach, they are dangerous, whereas cognac, drunk after the meal as a digestif, is safe. One can only applaud the commitment to national self-interest that can produce such a tenuous argument with a straight face. If other governments indulge in procrastination and delay over harmonising excise duties, why should we rush with indecent haste to implement the Excise duty regime required of us, even before the final outcome of the proceedings before the European Court?
      I await with eager anticipation the Minister's axplanation of why, in deciding which Excise duties should be increased to produce a given amount of revenue, the Government have chosen to favour wine at the expense of beer? I hope that he can state a logical and rational principle to defend the choice.
      Mr. Albert McQuarrie: The hon. Gentleman said that the increased consumption of spirits in the United Kingdom may be as much as 25 per cent., but much of the 25 per cent. increase was exported outside the EEC. The increase has helped those rural areas in which distilleries are the only source of employment. If we over-tax spirits, employment will be lost and those areas will become depopulated.
      Mr. Cook: The figure that I quoted was for consumption within the United Kingdom. I was not talking about increased exports. It was a crude figure for the increase in consumption of all spirits, which conceals a shift from whisky to other spirits. For social reasons, the increased consumption is regrettable and should cause us

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      concern, but the consumption of whisky has declined, which will concern the hon. Gentleman's constituents. As a patriotic citizen, I am doing my best to reverse the pattern. The employment in distilleries is important, and we shall be pressing the Minister on the matter when we debate clause 11, which proposes relaxing the Excise regime for bonded warehouses and which will cause a significant number of redundancies. If we did not have such high unemployment, that might be bearable in the central belt in major urban areas, but it would have a major impact on small rural populations, where only a few redundancies can run down the local economy. I am ad idem with the hon. Gentleman on that point.
      I was coming to a conclusion, I hope without lashing myself into a synthetic frenzy. I hope that the Minister will not dwell on EEC pressure, but will give us a logical and rational explanation of why the increase in duty on beer it so much higher than that on wine. I hope that British economic interests will not once again be surrendered to Brussels pressure.
      Mr. Paul Dean: I wish to make two points—and I declare an interest.
      First, the law of diminishing returns will continue to operate in the current financial year. That is clearly shown in the figures for the production and sale of beer, which, in turn, affects Excise duty and VAT. Exactly the same is true of spirits. In the 1980 Budget forecast, the revenue expected from duty on spirits was calculated as £1,270 million. The figure was revised down by £110 million, and even if the revised figure is achieved, there will be less revenue in real terms from spirits in 1981–82 than in the previous year, and there is likely to be a further loss in 1981–82.
      Governments of all political colours have used tobacco and drink as a convenient milch cow to raise additional revenue, but the reliance on an almost automatic increase in revenue from those sources is becoming doubtful. I hope that the Government will take account of the serious revenue implications of the trend.
      Secondly, the increases in duty in clause 1 highlight the need to defer duty on wines and spirits. Every time that the duty increases, the trade has to borrow more to finance payments. The Government hope to simplify the revenue control on wine and spirit warehouses, and a later clause deals with some aspects of that.
      The Government have a wholly welcome objective of saving Customs and Excise and Inland Revenue staff and simplifying procedures, as outlined in the discussion paper put out by the Customs and Excise in September 1980. In terms of that objective, the proposals are no doubt very welcome, but we must accept that they will almost certainly transfer to the trade concerned some of the cost and administration now carried by the Customs and Excise. It is therefore reasonable to suggest that if the trade is to co-operate with the Government in trying to introduce simpler procedures, a reasonable quid pro quo for that should be the credit period for duty. I hope that my hon. and learned Friend the Minister of State will be able to give us information on the progress being made in negotiations in this regard.
      6 pm
      Mr. J. Grimond: I am glad to follow the hon. Member for Leeds, West (Mr. Dean), who has drawn attention to the diminishing returns caused by
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      increases in duty on beer and spirits. The Committee should be reminded of the immense contribution that the whisky industry in particular makes to the Revenue. It also provides valuable employment in parts of Scotland where diversity of employment is often difficult to achieve. The industry now faces considerable difficulties. Among them, as has been mentioned, has been the high rate of interest and the general recession.
      Chancellors of the Exchequer are apt to treat whisky as though it came out of some bottomless well in Revenue terms. Indeed, they seem as addicted to increasing charges on whisky as others are to drinking it. The industry is an considerable difficulties, at any rate in some parts. To illustrate the contribution made to the Revenue, I point out that the Highland Park distillery in Orkney has, in current stock, whisky that will pay £40 million to the Revenue. The Scapa distillery in my constituency, on the other hand, has reduced its production from 13,000 gallons per week to 1,000 gallons per week. That is an extremely serious reduction.
      We are apt to underestimate the importance of the whisky industry both to certain parts of Scotland and to the Revenue. When one takes into account the tax that it provides, from the point of view of my constituency it is a more valuable resource than oil. For a start, it is renewable. It has been made for 200 years and will continue long after oil has run out. Even at this moment there is whisky worth £40 million to the Revenue lying in barrels in one distillery in my constituency.
      I do not altogether begrudge Chancellors what they can get from the industry, as it is clearly a very easy touch, but I beg Ministers to take care, as the old saying goes, not to kill the goose that lays the golden eggs. It would be disastrous for my constituency and for other parts of Scotland if the industry were seriously contracted.
      I therefore ask the Minister, when he winds up the debate, to tell us how firm the Government's expectations are. As has been pointed out, last year they overestimated. If the duty were reduced consumption and revenue might well be increased, although some might argue that that would be dangerous in that it might encourage drinking. How firm are the Treasury estimates?
      Secondly, what are the Government's expectations with regard to exports? As we all know, whisky is an extremely important export. One cannot conduct an export industry without a firm home base. There have already been difficulties about whisky in the Common Market. Johnny Walker Red Label has had to be withdrawn from the home market owing to difficulties in selling it abroad. What do the Government feel about the export prospects of the industry?
      My general plea, which I think was also the plea of the hon. Member for Leeds, West, is therefore that the Government should carefully monitor the state of the industry and not take it for granted that they can get out of it just as much as they want in order to balance their books. They should recognise that the law of falling demands may come into play if the industry is too heavily taxed. Above all, they should remember that all this takes place against a background of depression and of very high interest charges which are only now beginning to fall.
      Mr. Les Huckfield: I hope that the right hon. Member for Orkney and Shetland (Mr. Grimond) will forgive me if I do not follow him in what he said. I wish to refer to the amendment that I put down but which, unfortunately,

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      was not selected. That is, of course, no reflection on you, Mr. Weatherill. The subject of that amendment and the main burden of my remarks appertain to a matter already mentioned several times today—the European Commission's proposals as subsumed in its consultative document 7854/79. Before proceeding to that I declare an interest, in so far as an interest needs to be declared, in that I have recently been re-elected as political secretary of the National Union of Labour and Socialist Clubs, which represents nearly 150 Labour clubs affiliated to the Labour Party. As such, they have a very definite and specific interest in the matters under discussion in amendment No. 53 and, indeed on clause stand part.
      The part of the Budget that traditionally clobbers the working man is the part that we have been discussing this afternoon. The Chancellor's proposals this year, however, have not only clobbered the working man by increasing the duty on beer more than proportionately to the increase in duty on wine. There is also a rather sinister twist. The Government are in fact making him pay even more towards the cost of supporting the common agricultural policy, because that is the basic aim of the consultative document to which I have referred.
      I oppose the increases and I support the Opposition amendment. The purpose of my amendment was to highlight the relationship between the duties on beer and on wine. I ask the Committee to bear with me while I explain briefly the historical backround to the points about the relationship and the ratio that I seek to make.
      The history of the Commission's endeavours to harmonise beer and wine duties is best and most succinctly explained by the European Communities Select Committee in another place in the 1979–80 Session, in its sixty-fifth report, entitled "Taxes on Alcoholic Drinks", document 7854/79. As that report makes plain, we are now disussing a European Commission compromise because its initial attempts at harmonisation in 1972 failed. It is therefore on the compromise proposals submitted by the Commission in 1977 that I suspect that the Government intend to base much more of their progress than the Minister of State would admit today.
      The essential ingredient of the Commission's compromise, as embodied in the document to which I have referred, is, first, that all member States of the European Community should have the same rates of VAT on alcoholic drinks, but, most important—and this is the point that we have tried to bring out today—the ratio between wine and beer duties should not exceed 3:1. That is based not on the volume or quantity, but on the alcoholic strength.
      The Commission's compromise also suggests that beer excise duty should be based on final volume. That would also have implications for our industry, but I shall not dwell on that this evening. The essential point is that, much more precisely than ever before, the Commission's compromise tries to tie the hands of the Government by specifying excise duties and the ratio between them, particularly with regard to beer and wine.
      The Minister of State cannot deny that. That is the intent of the document and its proposals. It seeks to fetter the hands of the United Kingdom Government by specifying the relationship between those two sets of duties.
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      I do not accuse the hon. and learned Gentleman of deceiving the Committee, because he used a rather nice turn of phrase in what he said, but he said that the Commission's proposals did not seem to matter that much. I suggest that they matter a great deal. In fact, they very much influenced what the Chancellor did in the Budget.
      Paragraph 14 of the report from another place states:
      "The Commission takes the view that the Council's failure to act in the alcoholic beverages sector is particularly serious, since this is an area in which there are infringements of the directly applicable provisions in Article 95 of the Treaty."
      In other words, the Council and the Commission must take those proposals seriously because they appertain to article 95 of the treaty. That is why the Commission started infraction proceedings and why we had the interim judgment of the Court in February 1980.
      I do not wish to dwell upon the Court's judgment against France, Italy and Denmark, except to say that I would not mind betting that both the Court and the Commission would welcome the swift adherence of those countries even to its interim judgment in the same fashion as the British Government propose to respond. This is only an interim judgment, yet the United Kingdom Government have responded almost with alacrity and keenness. That has not been the attitude of the other countries to which I have referred, and they have a final Court judgment against them.
      Even if the hon. and learned Gentleman pretends not to be that concerned about it, his right hon. and learned Friend the Chancellor was when he wrote to me—this must have been uppermost in his mind when framing his Budget—on 6 February and said:
      "The allegation"—
      that is, the allegation made by the Commission and the Court—
      "is that the level of duties indirectly protects home-produced beer against imported wine".
      That is what the Chancellor thinks the Commission's proposals are all about, but page 2 of the main Commission document states
      "The Community's policy must be to secure some reduction in the overall level of taxes levied on wine in order to improve outlets for wine production".
      There is no doubt in the mind of the Commission or the Court about what that consultative document purports to do.
      The Customs and Excise memorandum of 24 April last year said:
      "The Court's interim judgment found beer and wine to be in competition"—
      I do not accept that they are in that direct kind of competition—
      "and felt that the evidence supported the view that duty movements in the United Kingdom since accession showed 'a protective trend' against United Kingdom imports of wine."
      That point was further reinforced in the Customs and Excise prepared memorandum of 17 November last year,which said:
      "The Commission has alleged that by charging a lower duty on beer than on wine the United Kingdom is indirectly protecting the United Kingdom beer industry against imported wine and that this amounts to a breach of Article 95 of the Treaty of Rome".
      That memorandum went on to suggest how that could be remedied by an increase in beer duty, a decrease in the duty on wine or a combination of both.
      I must refer to the Minister of State personally, because in our debate on December 3 he replied on behalf of the Treasury. That speech was remarkable for giving no indication at all of how the Government would respond to

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      those proposals. Although on that occasion he did not give the House any indication of how the Government would respond, I suggest that the Government had already decided how to respond to that Commission document—by an increase in beer duties. The Government want to make that adjustment as speedily as possible because the hon. and learned Gentleman will have to attend a ministerial Council meeting on 4 June, and he will want to be able to say that the United Kingdom has already made the adjustments so that the Council of Ministers, the Commission and the Court have nothing more to worry about. I suggest that that is what is behind the increase in beer duties in the Finance Bill.
      What worries me about the keenness and speed with which the Government want to move into conformity with the Commission document and Court judgment is that if the duties on beer protect our beer industry, they also protect the people who drink the beer. If we impose a duty against wine to protect the beer industry, that duty also protects beer drinkers. That is why I am concerned that, without telling the House of Commons, the Government have already made up their minds about how they will respond to that document. They ought to have made a statement to the House before announcing these increases in duty, and that was the purpose of my amendment.
      6.15 pm
      The Select Committee was clear in its recommendation about how the Government ought to respond to the Commission, when it said in paragraph 31
      "In the United Kingdom case, the Committee consider that excise duty should be brought into this ratio by lowering duties on wine, not raising those on beer".
      The Government have done exactly the opposite. No wonder the hon. and learned Gentleman would not commit the Treasury in that December debate. In fact, in an excellent speech, my right hon. Friend the Member for Llanelli (Mr. Davies) pointed out that the Germans and Italians did not have duties on their native wine and asked why we should have this imposition forced on our beer industry.
      My right hon. Friend also pointed out that, by what he seemed to say, the Minister of State was almost proposing that many of the Chancellor's powers should be stripped and taken away. In fact, the hon. and learned Gentleman went almost as far as to admit that. My right hon. Friend accused him of being forced to negotiate under duress, and he replied:
      "We are concerned to try to harmonise the structure of Excise duties. Of course, to a degree that involves a circumscription of the rights of the House and the Government."—[Official Report, 3 December 1980; Vol. 995, c. 605–6.]
      In other words, the hon. and learned Gentleman actually admitted that he was about to cave in. Even if the Minister of State now pretends that in some way the Commission's directive and document do not matter that much, he was certainly paving the way for the great sell-out when he made that speech before Christmas.
      The effect of the increase in beer duties and the less than proportional increase in the duty on wine is that we have now reverted to the ratio position prior to our accession to the Community. In other words, the "protective trend" that the Court and the Commission were worried about—the holding down of a beer duty that protected the beer industry against imported wine—has been abolished by the Government. The Government have carried out precisely what the Commission document sought to correct and
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      what the Court judgment sought to implement. To say that it "would have been perverse to have done otherwise" is to conceal and fudge what the Government have achieved. The Minister could almost go the Council of Ministers meeting on 4 June and stick out his chest with pride because of the speed with which his Government have conformed with the directive.
      I am worried because, having abolished the protective trend—which was the Commission's concern and the Court's accusation—the Minister must go further if he is to implement the directive completely. He knows that the directive's ultimate aim is a 3:1 ratio. Currently, as has been said, there is a 4·2:1 ratio. The ratio is to be based on alcoholic strength. If wine has an alcoholic strength of about 12 per cent. and beer has one of 3·5 to 4 per cent., there is some way to go before we achieve full harmonisation. In future, there may be even steeper increases in the duty on beer.
      I tabled an amendment, but it has not been selected. I do not blame you, Mr. Godman Irvine, for that. It sought to expose the Chancellor of the Exchequer's strategy. I suggest that the Government have made up their mind about their response to the Commission's directive. They have put themselves in a position that will enable a pronouncement to be made at the Council of Minister's meeting to the effect that the Government have already conformed because they have already sold out. The Government have clearly caved in as a result of European pressure.
      For the sake of European harmony and harmonisation, I wish that the Danes, the French, the Italians and others would cave in speedily as a result of that pressure. Indeed, the Government have gone further. They have surrendered, yet again, the tax-gathering powers that the House has fought to retain over the years. One of the fundamental reasons for the existence of the House is demonstrated by the fact that over the years it has defended its tax-gathering powers. The hon. and learned Gentleman and the Government are busy selling out those powers.
      Such steps have been taken in order to help the owners of French and continental vineyards. Members of Labour clubs and working-class men in pubs will be asked, once again, to subsidise those who are far better off and who live in France, Italy and so on. A double burden will be imposed on the working man. A burden will be placed on him to raise money not only for the Government, but to protect well-to-do and traditionally well-heeled French vineyard owners.
      Once established, what else will the mechanism be used for? With the accession of Greece to the Community, the price of assistance to retsina producers will be another 1p on the pint. No doubt every country that joins the EEC will insist that its vineyards, wine-producing industries and wine lakes deserve assistance. By putting more duty proportionately on beer, the mechanism could be used for such protection.
      Many Labour Members are worried because there have been one or two leaks from the Treasury to the effect that because it had to make a concession on diesel—which it was well advised to do—it may be tempted to make the amount up by putting even more duty on beer. The Government have caved in to European pressure. They are making the working man pay, as he has always had to. However, this time the situation is more sinister, because working men are also paying for the wine lakes of the Common Market.
      Mr. Roger Sims: I declare an interest in the affairs of the Scotch whisky industry. For several reasons I am disappointed that my right hon. and learned Friend the Chancellor of the Exchequer has responded to the representations made on behalf of the industry and by hon. Members by increasing the duty on spirits by about 14·5 per cent. That seems to maintain the disparity between the duties levied on various types of alcoholic drink.
      We have heard a good deal from the hon. Members for Edinburgh, Central (Mr. Cook) and for Nuneaton (Mr. Huckfield) on the difference between the duties levied on beer and wine. I draw attention to the difference in the duties on beer, wine and spirits. The duty and tax on a 10oz drink of beer is about 6·3p. On a comparable measure of imported table wine, the duty and tax is about 9·5p. On a similar measure of imported sherry the duty and tax amount to about 8·2p. However, the duty levied on a comparable measure of Scotch whisky is nearly 15·5p. I hope that we can move towards some form of harmonisation or rationalisation of the rates of duty on the various forms of alcoholic drink instead of maintaining such a disparity.
      It is fair to point out that spirits are taxed disproportionately compared with other products. I wonder whether 82 per cent. of the retail price of any other product goes to the Government by way of duty and VAT. I wonder how many of those who pay about £5·85 for a bottle of whisky realise that only just over £1 of that sum goes to the industry. The amount of tax is disproportionate.
      I doubt whether the proposed increase will be effective. My hon. Friend the Member for Somerset, North (Mr. Dean) has given figures which show that the point of diminishing return on spirits has been reached, and probably passed. The right hon. Member for Orkney and Shetland (Mr. Grimond) suggested that there might be an interesting effect if the duty were lowered. The right hon. Gentleman has no need of speculation. Curiously, that happened. In 1973, the excise duty on Scotch was reduced in order to compensate for the introduction of VAT, which is levied on both the whisky and the duty. The net effect of that action was to knock only a few pence off the retail price of a bottle of whisky. That year, the Government's revenue from duty on Scotch whisky rose by 14 per cent. Needless to say, the Government increased the duty again the following year. Therefore, one does not necessarily have to increase the duty in order to increase revenue.
      Mr. Cook: In Britain, the consumption of spirits this year is 15 per cent. higher than for the year following that cut in excise duty, which was 1974. That gives rise to other considerations of social policy. Is the hon. Gentleman happy to contemplate an indefinite increase in the consumption of spirits in order to assist the Government's revenue?
      Mr. Sims: In terms of assisting Government revenue, I should have thought that on purely fiscal grounds there was no argument against that. The hon. Member for Edinburgh, Central raised another question. I hope that the Government will not be unduly influenced by what the hon. Member for Edinburgh, Central refers to as social arguments. I suspect that he means health arguments, but he seems to think that it is inherently bad that more alcohol is being consumed. If certain individuals are consuming
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      more alcohol than is good for them, of course, that is bad. However, if more people are drinking a moderate amount—as I suspect—that is not especially bad. I hope that my hon. and learned Friend the Minister of State will not be persuaded by ill-founded arguments.
      6.30 pm
      Alcoholism is a serious problem. I do not underrate it, as it is a subject in which I have taken a great interest. It must be tackled in various ways, but I am not persuaded that raising the price is one of them. I hope that my hon. and learned Friend will not accept the health argument as a reason for increasing the price of alcohol. I do not see why we should penalise the 98 per cent. of purchasers of alcohol who use it properly simply because less than 2 per cent. abuse it. If prices are increased the addict will not reduce his consumption but will continue to buy as much alcohol as before and spend less on the necessities of life, such as food. Alternatively, he will buy an inferior quality of alcohol with all the harm that that involves. The problem of alcoholism is not a straight price problem.
      Another aspect of the increase in duty is the level of unemployment. The Government should encourage rather than discourage the creation of more jobs, yet last year the whisky industry had to reduce its work force by nearly 9 per cent. The industry fears that the duty increase in clause 1 will further reduce consumption, and it is already forecasting a reduction in jobs in the coming year of about 4 per cent. We would all regret that. If the Government believe that it is essential to make the increase they could help the industry by agreeing to deferment of duty, to which my hon. Friend the Member for Somerset, North referred. That facility is enjoyed by providers of other forms of alcohol in the trade. It is not necessary for me to develop the arguments in favour of the facility being extended to the Scotch whisky industry. My hon. and learned Friend will be familiar with that. The case is irrefutable. However, I am sure that we shall be told, "It costs money. We canot afford it this year." That is always the argument against it.
      If the Government insist on placing a further burden on the industry by the imposition of yet more duty they could help the industry, if not by introducing deferred duty now, at least by holding out some hope that it will be introduced in the near future.
      Mr. Joseph Dean: I shall develop further the point made by my hon. Friend the Member for Nuneaton (Mr. Huckfield). I want to bring into the debate the part of our social life that the increases affect heavily and, in some cases, dramatically.
      I hope that the Minister will seriously reconsider the problem before the Chancellor recoups the concession made on derv by placing a further burden on beer drinkers. There are already leaks in the press that he might do that. Before I came into Parliament I was the secretary of a large Labour club. I speak not only from that experience, because since I have been the Member for Leeds, West I have visited local working men's clubs in the little time that I have left from my political and constituency business. I am a member of a number of working men's clubs in my area.
      I hope that the Government will look seriously at the effect on clubs of continuing increases in taxes on the most popular drink in those clubs. I know that it will be said that the members, rather than the club, are paying the increase, but the members are the club. I do not know how clubs

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      operate in the South, but working men's clubs in the industrial constituencies in the North are social centres for communities. During the Easter Recess I visited one such club that opens its doors on Tuesday afternoons, for a social function for elderly people from the area. A number of clubs do that.
      I should explain to the Minister what has happened over the past 20 years. When I was secretary of a club I liaised with, and knew what was happening in, all working men's clubs. Most clubs kept their heads above water financially by the bar takings. However, that can no longer happen. No working men's or political club that sells alcoholic beverages can keep its doors open without recourse to gaming machines and tombola, which have recently become legalised. In the old days, clubs had to survive on what came in over the bar. Due to inflation under successive Governments, the clubs would be in serious financial difficulty and would quickly go out of business but for the gaming machines and tombola, which contribute massively to the clubs' financial successes.
      Clubs are not just beer-drinking dens. Most working men's, Club and Institute Union and Labour clubs are well-appointed buildings with a variety of facilities for members, from a lounge where one can drink and chat, to a large games room with facilities for snooker and so on and a concert room for those who like that sort of entertainment. But all clubs must be subsidised by gaming machines and tombola.
      Putting 4p on a pint of beer will have serious consequences, because, although the bar takings in clubs have risen dramatically, the percentage of profits has reduced equally dramatically. The 4p paid on the pint looks good on the bar takings balance sheet on an annual basis, but the calculation of percentage of profit on gross sales dips remarkably.
      These organisations are social centres for their areas. In the main they are run or managed within the law as good examples of how people can organise themselves. The CIU clubs are run by men because they still do not accept women in their clubs. Some people have tried to make them progress, but there is little movement in that direction. Clubs are generally managed by officers and members of a committee on a honorary or amateur basis. There is a little remuneration in the form of expenses or honoraria, but that cannot compensate for the number of hours spent by those running the clubs. I know how the decisions of successive Governments to increase the price of beer are greeted by those who use working men's clubs.
      I do not want to get involved in a wider political argument, but I know one club, which is not in a highly rated area, that faces a £2,000 increase in its rates this year. That club will need bar sales of between £8,000 and £10,000 to meet that additional cost. In addition, there have been enormous increases under successive Governments in lighting and heating charges. I was appalled when I compared this year's balance sheet and expenses with the levels of seven years ago when I was secretary of that club.
      Club members and committees are becoming increasingly concerned and disappointed that Governments appear to regard them as the goose that lays the golden egg. I hope that if the Chancellor of the Exchequer is thinking about transferring the cost of the derv concession on to those who like a pint of beer, the Minister of State will convey to him the points that I have made.
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      It was claimed earlier that the Opposition were being parochial, political and class-conscious in wishing to protect the beer drinker rather than the wine drinker. I accept that the working-class are drinking more wine. Working-class people tend to buy the occasional bottle of wine to drink with a meal at home at weekends, but there is no doubt that beer from the pumps, supplemented by bottled beer, accounts for the vast majority of bar sales in working men's clubs and political clubs.
      I hope that the Government will take into account the effects of an increase in the price of beer and will not treat the issue too lightly. I am putting down a marker for the future, so that the subject will be considered.
      Mr. Peter Rees: We have had a temperate and far-ranging debate, moving easily from Brussels to working men's clubs. I assure the hon. Member for Leeds, West (Mr. Dean) that I listened to him carefully, and he will appreciate that his comments do not apply only to working men's clubs and Labour clubs. Members of Conservative clubs may express similar sentiments.
      It was interesting to hear from both sides of the Committee how many geese are laying golden eggs which the Chancellor of the Exchequer may be threatening My right hon. and learned Friend is acutely conscious of the supply of golden eggs and their source, whether it be the whisky industry, working men's clubs or wherever.
      It is a perennial concern of Chancellors to strike the right balance and to ensure that a fair proportion of revenue is extracted from various sources and that none is subjected to the law of diminishing returns. The hon. Member for Edinburgh, Central (Mr. Cook) asked why more duty was not piled on whisky. The answer came more eloquently and effectively that I could have given it from the right hon. Member for Orkney and Shetland (Mr. Grimond) and my hon. Friend the Member for Chislehurst (Mr. Sims), who has a well-known interest in, and experience of, the whisky industry.
      Whisky has contributed a fair proportion to our revenue over the years. The increased revenue as a result of the Budget will be about £60 million, and we are sensitive to the charge that if we increase duties unduly whisky will be subject to the law of diminishing returns.
      Our researches demonstrate that the elasticity of demand for whisky is greater than that for beer. The researches are not subject to total scientific accuracy, but they show that the elasticity of demand for whisky is 1·3 and that for beer is 0·2, which demonstrates the point made by the right hon. Member for Orkney and Shetland and my hon. Friend the Member for Chislehurst.
      6.45 pm
      Mr. Cook: I remind the Minister of State, for the record, that I did not press for more duty to be placed on whisky or other spirits. I accepted and supported the Government's policy to revalorise duties in line with inflation as a step towards stabilising consumption.
      Perhaps I may fortify the hon. and learned Gentleman's resolve to take that step. He will recall that I quoted from a report of the Expenditure Committee in 1976 in which we recommended that the rates of duty on alcohol should keep pace with the rise in earnings. The hon. Member for Chislehurst (Mr. Sims) sat on that Committee, signed the report and did not dissent from that recommendation. I do not know why he dissents from it now.
      Mr. Rees: I am always happy to be fortified by the hon. Member for Edinburgh, Central, provided we are moving in the right direction. I hope that I did not give a wrong dimension to his remarks. I understood that the main thrust of his first point was that we should preserve the general pattern of excise duties that we inherited from the previous Government. However, that was a slightly distorted pattern. For whatever reason, the duty on beer had been allowed to diminish proportionately after the substantial increases in 1975, which went way beyond the increases that we propose.
      We have to take into account other factors, including changing public tastes—the public are acquiring enthusiasm for, interest in, and a taste for wine—and the future of the whisky industry, which has made a substantial contribution to our revenues and to exports.
      It was invited to comment on the export performance of the whisky industry. It has been remarkably successful. Exports have risen from 62 million proof gallons in 1970–71 to 107 million proof gallons in 1979–80. It may be encountering a period of slight difficulty. Tastes may be changing in Japan, Suntory whisky may have acquired a hold on the affections of the country that produces it—it is not for me to comment on its charms or otherwise—and the pattern of tastes in the United States may be changing. Such factors have to be taken into account. The right hon. Member for Orkney and Shetland and my hon. Friend the Member for Chislehurst were right to remind us of the contribution of the whisky industry over the years, and I hope that nothing that I say will demonstrate any lack of concern.
      The hon. Member for Edinburgh, Central asked me why the duty on wine had not been increased by more. He and his hon. Friend the Member for Nuneaton (Mr. Huckfield) widened that point into a consideration of the harmonisation of duties within the EEC. I shall come to the more general point, but one cogent reason for not further increasing the duty on wine is that the duty was increased considerably in the first two years of the previous Labour Government. If we are looking for a pattern of duties, I must remind the Committee that in 1974 the increase in the duty on wine was about 66 per cent. and the increase in the duty on beer was about 35 per cent. The increase in 1975 was 98 per cent. for wine and 46 per cent. for beer.
      Mr. Les Huckfield: Can the hon. and learned Gentleman tell the Committee how he gets those figures? He said that that was the percentage increase on the previous duty. What does he think the previous duty was, to give increases of that order? Also, he is saying that the last Labour Government put big increases on beer and on wine. Which charge is he making?
      Mr. Rees: On the previous amendment a powerful attack was mounted from the Opposition Benches that we were discriminating against beer, which was alleged to be the drink of ordinary working men, although I think the taste for it is widely diffused. I said that that was a doubtful argument, given the record of the last Administration. I go a stage further and point out that, even by reference to the extraordinary increases in the duty on beer in 1974–75, there were yet more extraordinary increases in the duty on wine. If we are looking at the pattern, I do not think that we can necessarily freeze it on the basis on which we inherited it from the last Adminstration. Those are the only two points I wish to make.
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      I turn to the question of the harmonisation of duties under the aegis of the European Community. The hon. Member for Nuneaton, who made his case in more extravagant language than did the hon. Member for Edinburgh, Central, was endeavouring to expose the strategy of my right hon. and learned Friend the Chancellor of the Exchequer. He said that we succumbed with alacrity and too great a speed to the blandishments or threats—I do not know which—of the Commission or the European Court.
      We have to view the problem in a slightly different dimension. It could be that, with all his assiduity, the hon. Member for Nuneaton did not follow our debate last December—I do not recall his taking part; he may have had good reasons for not doing so—with all its nuances as closely as those who actually took part. I remind the Committee that we are a member of the European Community, and that to a degree that involves a slight circumscription of our national sovereignty. That may be a matter of regret to right hon. and hon. Members, not only on the Opposition side of the Committee, which includes the right hon. Member for Stepney and Poplar (Mr. Shore) who is well known for his views.
      This issue was a matter of negotiation and debate under a succession of Administrations, Conservative and Labour. It was put clearly to the country in the referendum organised by the Administration of which the right hon. Member for Stepney and Poplar was a distinguished member. I do not think one need go too deeply into all the principles underlying our membership. It is implicit in our membership that there will be a certain circumscription of our national sovereignty.
      There are corresponding advantages to be set against that. [HON. MEMBERS: "No".] I am coming to that in a moment. On the harmonisation of excise duties Labour Members have made it appear that harmonisation was designed—I cite the unattractive phrase that was used—to clobber the British beer-drinker. "A sinister clobbering of working men" was the phrase used uncharacteristically emotively by the hon. Member for Nuneaton. I do not know what has stirred him on this occasion. It may be that the synthetic frenzy to which I referred in the previous debate has been carried over into this debate. But for one or two uncharacteristic phrases, it was a temperate debate.
      One aspect of the harmonisation of duties is the introduction of a ratio between the duties on wine and those on beer. As I said, these are only proposals and no conclusion has yet been reached. There are other aspects which would be of considerable advantage to certain parts of the country. For example, if we could ensure that there was no discrimination duty-wise against whisky then I am sure that even the hon. Member for Nuneaton would recognise the advantages. Certainly they would be recognised by my hon. Friend the Member for Chislehurst and the right hon. Member for Orkney and Shetland. We must look at the package when it finally emerges. It would be doing less than justice to the debate if the hon. Gentleman concentrated on one aspect.
      If clause 1 commends itself to the Committee, all that will happen is that the ratio between wine and beer duties will be 4·2, or slightly less, to 1, which was approximately the ratio when we entered the European Community. Therefore it is difficult for hon. Gentlemen to say that there has been a shameful sell-out to the Common Market. All we have done is to move back to the pattern that existed in 1972–73.
      Mr. Huckfield: I do not want to keep pressing this point, but it is the crucial one that we have all been talking about. The last Administration deliberately raised wine duty proportionately more than beer duty because they realised that there was a social implication and that beer and wine drinking were not directly in competition. The Government are reversing that whole policy. The hon. and learned Gentleman cannot pass it off just like that. There has been a quite dramatic reversal of policy which, I submit, has been caused because his Government have sold out to the Common Market.
      Mr. Rees: There has been a dramatic reversal of policy in many fields consequent on the decision of the electorate on 9 May 1979. For some reason the hon. Gentleman does not appear to have noticed the passage of years and the decision of the electorate. This is one of the consequences that he must face. We do not accept the social implications which his right hon. Friends affected to detect when they constructed their Budgets in 1974–75. The hon. Gentleman does not appear to have noticed that the social pattern and social tastes have changed. The hon. Member for Edinburgh, Central has recognised that there is a wider taste for wine. I do not think that we should be expected to express a moral view on that. We recognise it and it reinforces the pattern that we are endeavouring to establish by this budgetary measure.
      The idea that there has been undue deference to the Commission is false. We should have been absurdly perverse and had our heads in the sand if we had not taken some account of what was happening. There has been an interim judgment in the infraction proceedings. There has been no final decision yet, and the Commission's proposals have not reached finality. It may be that they will come up for debate in June. The hon. Gentleman assumes too much. These matters take a certain time to establish. May I remind the Committee and the hon. Gentleman in particular that what was proposed was a ratio of 3:1 over seven years?
      Obviously the hon. Gentleman has not paid close attention to the figures. If clause 1 commends itself to the Committee we will have a wine-beer ratio of 4·17:1. I do not notice the hon. Gentleman, who was in the House at
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      that time, object strenuously to a ratio of 4·2:1 back in 1972 or 1973. That was achieved independently of our negoiations for entry into the Common Market.
      Mr. Cook: Without putting too many charges of "sell-out" or otherwise, may I put to the hon. and learned Gentleman a simple question? If there were no Common Market or if this matter had not attracted the attention of the Common Market would he, of his own volition, have chosen an increase in excise duties on the same pattern as is contained in this Bill?
      Mr. Rees: That is a hypothetical question, but I shall endeavour to answer it. Yes, I suspect that we would. We shall be raising an additional £370 million of duty by the increase in the duty on beer. Sums of that order cannot be found from an increase in the duties on whisky and wine, or even on whisky, wine and fortified wine.
      As I said in the debate on the previous amendment, no one on the Government Benches, unless moved by temperance arguments, relishes increasing the duties, but the money has to be found. We can debate the balance and the pattern. It is dragging in a red herring to suggest that this is a shameful, dishonourable sellout to the forces of Brussels. The hon. Gentleman must use what language he likes, but it does not advance the level of debate to make that kind of point. There are perfectly sound fiscal reasons unconnected with the harmonisation proposals which led my right hon. and learned Friend to make these proposals.
      I hope that, on reflection, and having given the subject a full airing, the Committee will recognise that, although there is a change in the pattern of excise duties by reference to what we inherited from the Labour administration, there are sound reasons for adopting the new pattern and, in the absence of constructive suggestions as to alternative sources of revenue, I hope that the clause will commend itself to the Committee.
      Question put and agreed to.
      Clause ordered to stand part of the Bill.
      Schedules 1 and 2 agreed to.
      To report Progress and ask leave to sit again tomorrow.—[Mr. Peter Rees.]
      Committee report Progress; to sit again tomorrow.

  Supreme Court Bill [Lords]
  Order for Second Reading read
  7.3 pm
  The Attorney-General (Sir Michael Havers): I beg to move, That the Bill be now read a Second time.
  I do not know whether it is through the lack of sex appeal of the Bill or because tomorrow there are to be certain elections, but, with the exception of the right hon. and learned Member for Warley, West (Mr. Archer), whom I welcome, the Opposition Benches are deserted. If it is the latter, perhaps we could have local elections more often to speed up the dispatch of the business of the House.
  The primary purpose of the Bill is to consolidate the existing statutory provisions governing the constitution, jurisdiction and practice of the Supreme Court, that is, the Court of Appeal, the High Court and, since 1971, the Crown court. It also contains a number of amendments to the existing law, where necessary to improve on that law in the light of current conditions. So it is not a Bill which could be passed through the House under the normal procedure for consolidation Bills, of which the House will be agog to hear there are two to be considered later this evening.
  A consolidation measure in the technical sense would not have been satisfactory, for two reasons. In the first place, many of the principal provisions relating to the Supreme Court date back to the 1870s, when that court was first created by the Supreme Court of Judicature Act 1873. Although those two Acts were consolidated with the subsequent Acts and other cognate provisions in the Supreme Court of Judicature (Consolidation) Act 1925, that Act was a pure consolidation, so that most of its provisions still in effect date back to the 1870s. Not only is a good deal of the language somewhat outdated, therefore, by comparison with more modern provisions relating to the Supreme Court, such as those in the Administration of Justice Act 1970 and the Courts Act 1971, but it contains many provisions which are now, after more than 100 years, no longer needed. It has, accordingly, become desirable to restate this body of law in shorter and more modern form.
  The second reason why consolidation alone would not have sufficed is that, in addition to restating existing statutory provisions, it is desirable to make a number of changes in the substance of the law. Before I describe the more important changes it might be helpful to the House if I outlined briefly the history of this important body of legislation providing, as it does, for the administration of justice at first instance and on appeal in all the more important cases, both civil and criminal, falling to be dealt with by the courts in England and Wales.
  Before the 1873 Act there were seven superior courts, each administering civil justice, with their jurisdictions overlapping and sometimes conflicting. It had been so for centuries, but the Royal Commission presided over by Lord Cairns which reported in 1869 proposed that the separate courts of Queen's Bench, Common Pleas, Exchequer, Chancery, Probate, Divorce, and Admiralty should all be consolidated into one Supreme Court, and this is what was achieved by the 1873 Act.
  That Act provided for the Supreme Court to consist of the High Court, to deal with matters at first instance previously dealt with in the seven old courts, and for the
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  Court of Appeal to hear appeals from the High Court and exercise several earlier appellate jurisdictions. The Act also provided for the abolition of appeals to the House of Lords. The latter provision was, however, deleted from the 1873 Act by the Act of 1875, passed before the earlier Act was brought into force and, in 1876, the Appellate Jurisdiction Act made fresh provision for appeals to the House of Lords. By then the modern edifice as we know it had been created. There was one Supreme Court consisting of the High Court and the Court of Appeal. The business of the High Court was allocated, for convenience, to five separate divisions, reduced to three in 1881.
  Since the 1925 Act, major institutional changes have been the creation of the criminal division of the Court of Appeal, replacing the old Court of Criminal Appeal, which was done by the Criminal Appeal Act 1966. It may be of interest to the House, although it is totally irrelevant to the Bill, to know that there were 35 attempts in Parliament to create a Court of Criminal Appeal before it was established.
  The major reorganisation of jurisdiction under the Administration of Justice Act 1970, which established the family division, created the post of vice-chancellor in the Chancery division and set up the Admiralty Court and the Commercial Court within the Queen's Bench Division and the Crown court as part of the Supreme Court.
  This last change was, of course, the result of the work of the Royal Commission on quarter sessions and assizes under the chairmanship of Lord Beeching, which perhaps bears some comparison with that of the commission under Lord Cairns which reported exactly 100 years before. The Beeching report, published in 1969, was radical in its analysis and practical in its recommendations, although those have not been altogether accepted by everyone connected with the law. Within well under two years of the report's being signed, the Courts Act 1971, establishing the Crown Court in place of court of assize and quarter sessions, had received the Royal Assent. More recently, the Patents Court was established as part of the High Court by the Patents Act 1977.
  In a Bill of this nature some degree of choice requires to be exercised over what should be included and what should be left out. There are two main classes of exclusions, as indicated in the second paragraph of the explanatory and financial memorandum to the Bill, which I am sure all hon. and right hon. Members will have read avidly and with the greatest care. These are matters that conveniently form a separate code of their own—for example, the existing provisions about funds in court in the Administation of Justice Act 1965 and the provisions for criminal appeals in the Criminal Appeal Act 1968. The memorandum draws attention to all the changes of any importance that are made by the Bill. I shall not take up the time of the House by rehearsing every one, but there are certain to which I feel I should refer. My hon. and learned Friend the Solicitor-General may refer to others when he deals with points raised during the debate.
  Perhaps the most important group of changes, which I welcome particularly, are those designed to facilitate the dispatch of business in the Court of Appeal in both its civil and criminal jurisdiction. The present pressure of business in the Court of Appeal, especially in the civil division, is very heavy. The waiting time between the setting down of a final appeal and the hearing is about eight or nine months. This is partly due to two other factors. First, restrictions on access to the Court of Appeal have not been

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  kept up to date. Secondly, there is no system whereby routine preliminary matters can be dealt with other than by the judges themselves.
  In December 1978 a working party under Lord Scarman recommended certain changes to help in these matters.
  The most important change recommended by the working party and implemented by the Bill is the creation of a new office of registrar of civil appeals. This appears in paragraph 9 of part II of schedule 2 and the provision in clause 58(1) whereby rules of court can give single judges and the registrar jurisdiction to deal with preliminary and incidental matters.
  The House will be surprised to hear that, at present, the Court of Appeal has no staff of its own except the clerks to the Master of the Rolls and the individual lords justices. Nor does it have any judicial officer apart from the Master of the Rolls and the lords justices who can deal with interlocutory questions and see that cases are properly prepared for presentation and made ready for the court to hear. The three divisions of the High Court all find it necessary to have judicial officers to deal with interlocutory matters. In addition, the criminal division of the Court of Appeal finds it essential to have appellate cases properly prepared. In this, the criminal division is well served by the registrar of criminal appeals and his staff. I pay a particular tribute to the registrar and his staff. I am convinced that the great deal of work that they perform is instrumental in speeding up the passage of criminal appeals.
  The new arrangement for the civil division will relieve the lords justices of work that does not require to be dealt with by them. I hope that the new arrangement will therefore make a contribution towards expediting civil appeals.
  Other changes in the civil division will be that applications for leave to appeal can be finally determined by a single judge under clause 54(6) and the Lord Chancellor will have power by order made with the concurrence of the Master of the Rolls and therefore subject to parliamentary control to extend the classes of case that can be determined by a two-judge court rather than a court composed of three judges. The types of appeal to be prescribed might include certain county court cases.
  Finally, in connection with the civil division of the Court of Appeal, schedule 3(10) enables the Lord Chancellor to prescribe by order classes of proceedings in which appeals from county courts to the Court of Appeal will require the leave of either the county court judge or the Court of Appeal. Appeals from county courts currently make up a third of final appeals outstanding. I was astounded to discover that the present limit on such appeals have not only stood a long time, but that the present limit is £20 on appeals on questions of law. One is not surprised to learn that this situation dates from the nineteenth century. The £200 limit on questions of fact dates from 1938. This power will again be subject to parliamentary control by negative resolution. It is the intention of my noble Friend the Lord Chancellor to bring forward an order under the new power to come into force with the Bill.
  In the criminal division of the Court of Appeal, waiting times for the hearings of appeals are far too long. For sentence appeals the average is 20 weeks, while for appeal against conviction it is 40 weeks. One is aware of the tremendous amount of work done by the judges in the criminal division of the Court of Appeal in trying to make
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  up the backlog. They have had substantial success. I would also like to pay tribute to the success of the Divisional Court in making startling improvements to the waiting time in that court.
  Mr. Ivan Lawrence:: Is my right hon. and learned Friend aware of the enormous pressure put on the shoulders of the criminal judges, who often have to consider the subject matter of appeals in the late afternoon and evening, sometimes stretching into the night, after their daily work is done? That is not a desirable state of affairs. There may now be too much pressure on some judges in the Court of Appeal criminal division. I wonder whether my right hon. and learned Friend will examine the matter, to see whether the pressure can be relieved.
  The Attorney-General: My hon. Friend is right. When possible, as he will know, the Court of Appeal criminal division tries to arrange what is called a reading day, when the judges do not sit in order to enable them to catch up. It still means, however, that they have to sit, often at home, late into the night, reading. The burden on the single judge dealing with applications for leave is often impossible. My hon. Friend will notice that the Bill increases the number of High Court judges. I hope that this will enable more rotation and so avoid leaving judges with an excessive amount of work for an unnecessarily long period. The burden on a High Court judge, whether sitting in the court that we have been discussing or in a Crown Court, is far greater than ever before. This reflects the increase in crime and the increased time taken by so many trials. I would like to pay tribute to all those concerned with the administration of justice, who are doing so well against the odds.
  I was saying that the waiting time for appeals against conviction in the criminal division of the Court of Appeal is 40 weeks. One cause of delay is the need to wait for a transcript. This element of delay has been reduced by a third in the past year. There is a simple explanation. If a shorthand writer is in court all day, and will be in court again every day of that week, he has to try to produce the transcript when he gets home. It may be some distance between the court and his home. In the past, shorthand writers would not have been in court every day. They would have been allowed time off to prepare transcripts. The demand on shorthand writers has been great but they have responded magnificently and the delay has been reduced.
  If sentencing appeals could be dealt with by a court consisting of two rather than three judges, this would make a substantial contribution to reducing generally the delay in hearing appeals. Clause 55(4) accordingly extends the jurisdiction of two-judge courts to enable them to deal with appeals against sentence only. Such appeals are generally less weighty than appeals against conviction, but the Lord Chief Justice will retain the discretion to direct the use of a three-judge court for such cases as appear to be weighty enough to warrant it. It will continue to be mandatory for appeals against conviction to be heard by a court of not less than three judges. If there is any anxiety about what will happen when there are two judges who take differing views, the Bill provides that the appeal is heard by a full court of three.
  Another important change made by the Bill relates to the transfer of civil proceedings between the High Court and the county courts. Schedule 3(7) inserts two new

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  sections into the County Courts Act 1959 which both codify the existing miscellaneous powers to order transfer of cases from the High Court to a county court, and vice versa, and extend the power so that in future the court will have power to make such an order of its own motion instead of on the application of the parties as at present. The purpose is to ensure that, as far as possible, cases are tried in the forum appropriate to the amount in dispute or the degree of complexity of the issues. It is hoped, therefore, that there will be less reliance on the use of deputy judges in the Queen's Bench division.
  The Lord Chancellor is the president of the Chancery division, reflecting the historical fact that for many centuries the Lord Chancellor and the Chancery Court were practically one and the same. That position will be retained. However, nowadays the day-to-day administration is conducted by the vice-chancellor, who is a simple Chancery judge. That is perhaps an impolite way of expressing myself. He is nominated from among the Chancery judges by the Lord Chancellor. For all practical purposes the vice-chancellor is one of the heads of divisions, as are the Lord Chief Justice, the president of the family division and others. The Bill provides for him to be recognised as such. Thus, he will be appointed by the Queen and will be an ex-officio judge.
  The existing rights to trial by jury in civil actions in the Queen's Bench division, are reproduced in clause 69, with one signifcant change. That change clearly does not meet with total approval. At present, if a party to one of the types of proceedings in which a jury trial might currently be ordered—cases of fraud, libel, slander, malicious prosecution or false imprisonment—applies for jury trial, such a trial must be ordered unless it requires prolonged examination of documents or accounts or a scientific and local investigation that cannot conveniently be made with a jury. Responding to a recent trial and to feelings expressed for a number of years, the Bill adds a second ground. The court may refuse jury trial if it is satisfied that the probable length of the trial makes the action one that cannot conveniently be tried by jury. It will be within the discretion of the judge to whom the application is made.
  The change was made by an amendment in another place tabled by three members of the judiciary and accepted by the Government. They were prompted by the action brought against the Daily Mail by the Unification Church. Originally it was estimated that that trial would last for three days. It ran from early October to the end of March—nearly six months.
  The jury discharged its duty with great dedication, but it made representations to the judge that no future jury should have to suffer such a lengthy term of duty. It is intolerable that ordinary citizens should have their lives disrupted for such a long time for the purpose of determining a private dispute. Therefore, clause 69(1) gives the court a discretion to refuse a jury if the case is likely to take an exceptionally long time.
  The Bill contains a number of other detailed changes with which I shall not weary the House. If any cause anxiety, they will be dealt with later. The Bill was welcomed in the other place. I commend it to the House. It provides a coherent and economical restatement of an important body of constitutional legislation and contains some useful amendments to existing provisions.
  7.23 pm
  Mr. Peter Archer: I thank the Attorney-General for his kind references to me. He noted that the Opposition Benches were not exactly packed to suffocation. If he looks round he will see that his colleagues are not exactly in danger of suffering from claustrophobia.
  In the debate on the Supreme Court of Judicature Act 1873, Mr. Matthews, who was the hon. Member for Dungarven, made a speech. I quote from the 3rd Series, Vol. 216, c. 676 of Parliamentary Debates. In accordance with practice, reported speech was used.
  "Mr. Matthews said, the fact of the debate having been carried on in a very thin House was not encouraging to the friends of Law Reform, for though the Bill was one which vitally affected the interest of every subject of the Queen who had to go into a Court of Law, the debate upon it had been addressed to only 12 or 20 hon. Members."
  I referred to that passage on 14 January in the debate on the Courts Act 1971. I said that they had beaten our score. That is also the case tonight.
  I regret that not more of our lay colleagues are taking part in the debate. I wish that we could induce them to participate because they are concerned with the ways in which our legal system can better serve their constituents. They can bring their experience to bear on where the shoe pinches. The law is too important to leave to the lawyers. It is no great relief to lawyers that their lay colleagues write them a blank cheque.
  In a debate last week I criticised Government policy. This Bill offers less opportunity for controversy. It is an attempt to make the administration of justice as smooth, expeditious and fair as possible. We can approve of much of the Bill. Much of it is consolidation. Consolidation measures do not change the course of history or even provide the standard topic of conversation. They facilitate the task of busy people who have to administer the law. We shall not seek to discourage the Government from introducing consolidation measures.
  We read with pleasure some of the Bill's contents. The Attorney-General referred to the office of Vice-Chancellor being given statutory recognition among the heads of divisions in clause 4. In clause 10 the position is recognised as a royal appointment and it is included with ex-officio Court of Appeal status, in clause 2. That means that the work of Sir Robert Megarry, who has occupied that office with great distinction for some years, will now be recognised. That is right.
  We are also pleased that the Government have given thought to the problems of the Court of Appeal. They are only part of the wider problem of staying abreast of the volume of work which is always breathing down our necks and outdistancing the running which we have to do to stay in the same place, with a consequent lengthening of the time before cases are heard.
  One aspect has been much discussed recently and was referred to by the Lord Chancellor—the length of time occupied by some jury proceedings. I should be out of order if I embarked on a discussion about whether we should remove the right of jury trial, for example in criminal trials for fraud. The House will have other opportunities to debate how we reconcile the need to expedite cases with such important safeguards for individual liberty as the right to jury trial. I accept that if a jury is to consist of a typical cross-section of the

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  community there must be a limit to how long we can ask 12 people, chosen at random, to devote each working day to something other than their normal occupation.
  In relation to the right to jury trial in certain civil proceedings, the Bill proposes an important change in the law. At present, each party has a right to jury trial in certain cases, particularly fraud and defamation. By the amendment in the other place to which the Attorney-General referred, that right is replaced by a discretion. I understand the reason for sparing jurors long periods of absence from their normal business, but the Bill removes, almost by a side wind, what has been considered an important constitutional right, and one which has proved itself in practice to be an effective institution worthy of the confidence that it has won from the community.
  The Attorney-General confirmed that it was a reaction to one case. We should like to be assured that it is not an over-reaction. We shall return to this matter. I hope that we shall be told, if the principal criterion is likely to be the length of the trial that a case is estimated to take, what, broadly, would be regarded as an unacceptable period. If other factors are to be taken into account, what will those other factors be?
  Mr. David Mellor: I support what the right hon. and learned Gentleman says. I draw his attention to the terms of the amendment that was proposed in the other place, which appeared to suggest that durations of four, six or eight weeks were excessive. Is that not rather disturbing?
  Mr. Archer: I agree with the hon. Member for Putney (Mr. Mellor). It would make what appears to be a serious inroad into a person's right to trial by jury.
  One other matter that puzzles me as a matter of logic is that the case referred to by the Attorney-General, and by the Lord Chancellor in another place, was one in which what went wrong was the failure to estimate the probable length of the case. The new provision can operate only if the probable length of a case is estimated accurately. When the length of a case is known with reasonable accuracy, potential jurors can be warned beforehand, and provision can be made for any problems that may arise. I do not see how the Bill will solve the problem of inaccurate estimates. We shall return to the matter later.
  I come back to the Court of Appeal. It has been an open secret for many years that the lords justices are among the most overworked officials in the country. They may be called upon to pass judgment in issues arising from any part of the law of England and Wales. Of course, the whole point of a court of appeal is that the legal system should develop as a whole, so that the reasoning in an issue of criminal law shall not be inconsistent with the reasoning in an issue of Revenue law or Admiralty law. The United Kingdom has deliberately chosen as a matter of policy to have a single Court of Appeal whereas, as Lord Wilberforce said in another place, many continental systems deliberately choose a multiplicity of courts of appeal.
  It follows that lords justices should be familiar with recent decisions across the whole field of law. That, as we all know, is a time-consuming exercise. But that is not all that we expect of them. Our judges should be men of the broadest learning, to ensure that the law does not develop in isolation from other disciplines—the natural and social sciences, literature, the arts, psychology, technology and all the other branches of learning.
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  Then there is the matter of keeping abreast of current news. In Standing Committee A, as the Attorney-General knows—at the cost of demands on his time—the Contempt of Court Bill is being considered. We are discussing whether our appellate judges should be protected from public discussion, even in specific cases which they may have to consider, or whether they may be positively helped to know how the current of public opinion is running. We say cheerfully that judges are spokesmen for the public in expressing condemnation of certain activities and the need to protect others. If that is true, it is vital that they should not be insulated from public opinion. But how can they remain abreast of opinion if no waking moment is available to them, when they have time to read current newspapers and journals?
  In another place, Lord Scarman recollected that his working party, which reported in December 1978, recommended that lords justices should be afforded one working day each week when they were free to write their judgments and prepare for forthcoming cases. That contrasted sadly with what was said by Lord Roskill, that lords justices work a seven-day week, 14 hours a day. How can we ask them to remain abreast of what is happening in the outside world when those are their working conditions?
  One possible solution is to adopt a procedure to admit of more expensive written submissions. That would effect a substantial saving of time in court—the long time that is spent, after opening the case, going through all the papers. I recollect spending a happy morning in the New York Court of Appeals, when they disposed in that one morning of three appeals, each of which in this country would have taken one-and-a-half to two days. Of course, that entailed a lot of paper work—written briefs, and many hours of work in chambers, but it achieved an overall saving in judicial time.
  We may not need to swing so far as that towards reliance on paper work and away from oral argument, but if we keep judges in court for the whole of each working day, we cannot expect that quiet reflection which should form part of their job. The standard of our Court of Appeal, compared with most other countries, is extremely high, but that should not mislead us into believing that our system is beyond improvement.
  The Attorney-General: One matter in the right hon. and learned Member's speech particularly interests me, as always happens with his speeches. On the matter of written briefs, does he have in mind the sort of arguments that one commits to paper—the outlines of one's case—as in a case in the House of Lords? Is that what the right hon. and learned Gentleman has in mind?
  Mr. Archer: That is exactly the sort of analogy that had occurred to me—not the detailed briefs that American jurisdictions are used to, but the kind of thing that happens here in the House of Lords.
  Among those who have directed their minds to the problem of judicial time in the Court of Appeal is a distinguished former lord justice, who presided over one division for many years, Sir John Megaw. In another place, my noble Friend Lord Elwyn-Jones mentioned the results of his analysis. He seemed to say, in essence—I had an opportunity to discuss the matter with him—that there are three ways of reducing the burden and speeding the hearing of appeal: we may reduce the rights of appeal;

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  we may increase the numbers of lords justices; or we may reduce the amount of judicial time spent on each appeal. None of those methods is particularly attractive, as Sir John Megaw readily recognised, and no one would recommend a drastic or dramatic attack on the problem at any of those points.
  I accept that the second solution is not likely in any event in the present financial climate, apart from the danger of diluting the standard of appointments or of denuding the present High Court bench and the legal profession. However, there is room for imagination in the other two respects. There are ways of reducing the amount of judicial time spent on appeals. One is to channel the interlocutory work, or much of the interlocutory work, elsewhere. As the Attorney-General reminded us, Lord Scarman's report included a recommendation for the appointment of a registrar of civil appeals. I echo what the Attorney-General said. It is incredible that at present the Court of Appeal has no staff other than the clerks to the judges. The Bill provides for a registrar. I hope that that will relieve the lords justices of much of their present interlocutory work and ensure that cases are listed when, and only when, they are ready for hearing. Perhaps an analogy will be the kind of role played with such distinction and success on the criminal side by Master Thompson and his staff. So that provision will be welcomed by Labour Members.
  What puzzles us is why it was necessary to make such a secret of the provision, when one would expect the Government to blazon it abroad. To find the provision, it is necessary to turn to clause 88, then to find paragraph 9 of part II of schedule 2. There, unobtrusively, stands the simple description of an office "Registrar of civil appeals". It transpires that he must be a
  "barrister or solicitor of not less than 10 years' standing".
  So, clearly, he is to be a person of some calibre. However, as Lord Scarman said, the Bill does not say what his powers or duties will be, or whether he will be provided with a staff, and, if so, how many No guidance is given as to any changes in the rules that are likely to follow. If the Solicitor-General can give us some information on the matter, we shall be most grateful.
  One other provision relating to the amount of judicial time spent on hearing each appeal is contained in clause 54(4), which sets out the circumstances in which a hearing may be by a court of two judges. The other provisions in that subsection are what we expected to find. However, there a power will be invested in the Lord Chancellor, with the concurrence of the Master of the Rolls, to prescribe certain descriptions of appeal which may be heard by a court of two judges.
  One factor that has led to the building up of the confidence now enjoyed by the Court of Appeal is that, in the first instance, the decisions of one judge are then considered by a court of three judges. We know in practice how the quality of the argument and the judgments is enhanced by the interplay of three minds. We hope that inroads will not be made lightly into that standard. We accept that the pressures have to be met and savings in judicial time have to be made. I hope that we may hear subsequently from the Attorney-General about the circumstances the Lord Chancellor has in mind when he will avail himself of that power.
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  One other question, to which the Attorney-General helpfully supplied the answer, is what will happen if the two judges disagree. It is a relief to know that there will not be a danger that rules of law will be established at Court of Appeal level which rest simply on a disagreement between two judges. That will be achieved by a rehearing of the case concerned before three judges. Although that may not happen frequently, some of the time saved will be lost by a duplication of hearings. So much for reducing the amount of judicial time spent on each appeal.
  On the question of reducing the number of appeals, we note that clause 145 and schedule 3 provide for certain amendments to the County Courts Act, 1959, as set out in paragraph 10, which states:
  "The Lord Chancellor may by order prescribe classes of proceedings in which there is to be no right of appeal … without the leave either of the judge of the County Court or of the Court of Appeal."
  We accept that the limits have not kept pace with inflation.
  There was some discussion in another place, based on the anxieties of people such as Lord Elwyn-Jones, about what would be the relevant criteria in deciding which classes of proceedings should be prescribed. I imagine that the House will wish to discuss each specific proposal when it appears in the form of a draft order. It follows that the orders should be subject to an affirmative resolution. We know the difficulties of negative resolutions, with the best of good will of all concerned. Of course, hon. Members may set down a prayer, but whether time is found to debate it is a Government decision. We understand that sometimes the Government consider that other pressures must take priority.
  Sir Graham Page: The right hon. and learned Gentleman referred to a draft order. We shall not see that. It is simply an annulment procedure in the House.
  Mr. Archer: I am grateful to the right hon. Gentleman for correcting me. That is a further anxiety. Without wishing to prolong the length of my speech, while we are discussing the county court, I wish to seize the opportunity to tell the Government that some of us are profoundly disturbed by the proposal substantially to increase the jurisdiction of the county court across the board by reference to the amount claimed and without distinguishing the nature of the claim, and especially to increase substantially the limits to the costs sanction. I know that that proposal does not arise within the Bill, and if I embark upon a major discussion I shall be out of order. However, it forms part of the context of the Bill.
  As the Government know, there are those who are troubled about the proposal to extend the costs sanction to £3,000 in one jump in personal injury claims, especially industrial injuries. Issues are likely to arise in that class of case which are as difficult in a small claim as they are in a large claim—for example, the nature of the expert evidence, perhaps by an engineer, will be exactly the same. Therefore, the cost incurred would be the same. It is often easier for an engineer to attend the HighCourt—and cheaper for him to do so—than to go to a county court.
  I do not propose to embark upon a detailed discussion of that matter. The Attorney-General is no doubt aware of the anxieties of some trade unions and the correspondence between the Lord Chancellor's Department and Mr. Brian Thompson. He may be aware of the anxiety, for different reasons, of the Shrievalty Association about enforcement

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  procedures. We discussed that matter briefly during Question Time on 9 March. We are a little unhappy that those representations appear to have been totally ignored. There was no question of some compromise. The limit for the costs sanction increased from £1,200 to £3,000—an increase of 150 per cent. at one jump.
  I wish to raise two other topics. The Bill is similar to one which, in another context, the Lord Chancellor described as a collection of Committee points. During recent years the courts have developed a number of remedies to prevent dishonest defendants from avoiding their obligations. Two examples of that are the Mareva injunction and the Anton Piller order. For the benefit of our lay colleagues, the Mareva injunction prevents defendants against whom a claim for damages may be made from removing their assets from the jurisdiction so that, if a judgment is given against them, the successful plaintiff may find that there are no assets within the jurisdiction. That order can be served on a bank to ensure that money standing to a potential defendant's credit in a bank account will not be removed.
  That remedy is valuable. It shows the flexibility of our commercial jurisdiction because it developed without any assistance from legislation. In the process, certain problems arose. It might impose expense on people who were not parties to the proceedings and who were innocent of any offence. For example, the bank might have difficulty in identifying the bank account because the defendanct might have accounts at a number of different branches. That would entail expense. The solution was again developed by the courts themselves. It is exemplified in the decision of Mr. Justice Goff in the case of Searose Limited against Seatrade (United Kingdom) Limited. He made it a condition of the granting of a Mareva injunction that the plaintiff should undertake to meet consequential expenses. That demonstrates how such remedies are at an early stage of their development. They are essentially flexible, and illustrate the flexibility of the courts. They need further flexibility to tailor them exactly to the needs of litigants.
  In another place Lord Wilberforce expressed the anxiety that it may be premature to embody that procedure in a statute. However, we find it in clause 37. Admittedly, it is in wide terms, but it may transpire that, rather than assisting the courts, it will circumscribe their powers. But in this legislation we may need to deal with specific difficulties, where the courts have found a specific obstacle in their path. There is an example in the Anton Piller order. Once again, for the benefit of our lay colleagues, I shall explain that it is an order in proceedings for infringement of copyright authorising the search of defendants' premises before they have an opportunity to remove the evidence, and requiring them to answer questions. That order promised to prevent injustices in many cases, of a sort that are unhappily all too frequent in these days of the piracy of music, where it is difficult for the plaintiff to obtain evidence of piracy in any other way.
  In the recent case of the Rank Film Distributors Limited and Video Information Centre, another place held that that order offended against the right to protection against self-incrimination. That right is part of a body of law on which, historically, our freedoms are founded. Those freedoms are precious and we must ensure that they are protected as far as possible. Where they are abused, and perhaps even more especially where they are trivialised, they may bring
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  the rule itself into disrepute. I doubt whether they add to the total of the freedom of the community. Legislation to ensure that the rules are used for their intended purpose, and not as an unworthy bolthole for the dishonest, may benefit the cause of freedom.
  I accept that there are reasons in law for that decision, but the reasons are not binding on the legislature. We may wish to discuss possible amendments to the Bill in Committee to deal with that problem, bearing in mind the need to keep a proper balance of the interests involved.
  The Attorney-General: The decision of the House of Lords in Rank Film Distributors has been most earnestly and urgently considered by my noble Friend. I can assure the right hon. and learned Gentleman that it is under active consideration to ascertain whether an amendment to cover it should be dealt with in Committee. The issue has not been overlooked.
  Mr. Archer: I am most grateful for that indication that I might be pushing at an open door. I shall take up no more time of the House on that issue. I gather that the right hon. and learned Gentleman has issued an invitation to return to it in Committee.
  There is a matter that has become, perhaps, the subject of an unhappy dispute between the two branches of the legal profession. It may be that this is not the time for me to comment on it. My hon. and learned Friend the Member for Abertillery (Mr. Thomas) will have something to say about it at the end of the debate. We all accept that there are certain tasks that should be carried out by those who are qualified by the nature of their training and experience. For example, no one may practise as a general medical practitioner except after certain training and experience in hospital wards. No one would normally be a craftsman except after obtaining certain qualifications and serving an apprenticeship.
  That should not be made a pretext for introducing unnecessary restrictive practices. However, it would be unfortunate if, in our anxiety to avoid restrictive practices, we overlooked the qualifications and experience that are necessary for a particular job. I shall refrain from further comment, but we may have to discuss the issue at a later stage.
  The Opposition will not seek to delay the Bill unnecessarily. On the contrary, we welcome it. We do not wish to discourage the Government from introducing measures of law reform, but there are a number of matters on which opinions may differ and where the weight to be given to one consideration as against another is a matter of judgment. I doubt whether any lobby on these issues is likely to occasion a major problem for the police in Parliament Square, but it behoves us as lawyers to sharpen the tools of our trade in a workmanlike, if sometimes an undramatic way. It is not lawyers who benefit from law reform but their clients, the general public.
  7.52 pm
  Sir Graham Page: It is a disappointment to me that in declaring an interest I shall not have the advertisement of full Benches. I declare an interest as a solicitor. The Bill's short title is the Supreme Court Bill. In the opening paragraph of the explanatory and financial memorandum we are told what the Supreme Court is. It is the Court of Appeal, the High Court and the Crown

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  court. The Bill deals with amendments to the law relating to those courts and the county courts. In the long title we are told that it seeks to amend that jurisdiction.
  We have to get as far as clause 146 before we discover what the Bill does about the county courts, and then we are referred to a schedule. When talking about facilitating the dispatch of business in the Supreme Court, I have the suspicion that the intention is to move a great deal of the present delay in justice in the Supreme Court to the county court, where there is already considerable delay, understaffing and overwork. I hope that that is not the intention. Unless the Bill—or another measure—amends the procedures in the county courts, we shall merely transfer delays in justice from the High Court to the county court. Delay in justice is a denial of justice in many instances.
  It appears from a consultative document that the Lord Chancellor wishes the jurisdiction of the county court to be increased to £5,000. In 1974 it was £2,000. In my days of practising in the county courts it was £100. At that stage I was in the county courts almost every day, and £100 was quite a substantial sum. It was £500 for Chancery matters, which was very important. The schedule gives the Lord Chancellor the opportunity by order to transfer cases from the High Court to the county court or from the county court to the High Court. The Lord Chancellor's intentions have not been hidden, because we all know what is contained in the consultative document.
  It is no good saying that in future the county court shall deal with cases up to £5,000, unless there is a procedure in the county court of equal efficiency to that in the High Court. There is no procedure in the county court for judgment by default or the order 14 procedure. In the county courts the clerks prepare the applications, the summonses and the notices, whereas in the High Court the solicitor for the party prepares his own and they may be issued on the same day.
  There is sometimes as much as a week's delay in some of the county courts in issuing summonses. The procedure for enforcement of county court judgments by the bailiffs is in disrepute. For that very reason there are many solicitors who would advise their clients to take proceedings in the High Court when they could be taken in the county court and to succumb to the no-cost order—to lose the costs because it is so much more efficient to have a sheriff's officer enforce the judgment than to leave it to the bailiffs. The procedure in the county courts needs reform in the same way as we are trying to reform procedure in the Supreme Court. It is no good pushing the business over to the county court in the present situation.
  There will be considerable resistance to the increase in the jurisdiction of the county court. It will be seen as an attempt to transfer matters from the High Court to the county court and to transfer the burden of work now in the High Court to the county court. There are many defects in the county court procedure, one of which was mentioned in another place. Promises were made by the Lord Chancellor to introduce an amendment in this place. I refer to interest on county court judgments. If those judgments are to be increased to as much as £5,000, and if the successful litigant can get no order for interest on the
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  judgment, he will take his action in the High Court. If he loses his costs, he will gain by getting interest on his judgment.
  It is extraordinary that the interest on judgments in the High Court dates back to an Act of 1838. The county courts came into existence in 1846, so they missed the bus on interest. We must ensure that there is an amendment to the Bill to put that right, as was promised in another place. There are several defects in the county court procedure which oblige the litigant to take his action in the High Court.
  I fear that if the Lord Chancellor is to decide by order the line of demarcation of jurisdiction between the High Court and the county court, the matter is being taken out of the hands of Parliament. If we are to have such orders merely under the negative procedure, it is stretching interpretation when my right hon. and learned Friend the Attorney-General says that the matter will be kept within the hands of Parliament, as he said on the question of the order that the Lord Chancellor can make about appeals om the county court. That is a fundamental issue.
  Up to the present, Parliament has decided when appeals should be allowed from the county court to the High Court, to the Court of Appeal. It is true that the figures may be out of date, but I am not happy about them being put into an order that is just subject to annulment in the House. We know that a Back-Bench Member on the Government side has not a hope in hell of having a prayer debated. That is arranged through the usual channels. Unless the usual channels on both Front Benches want a prayer, no Back-Bench Member will be able to have it heard. Therefore, it is ludicrous to say that the matter will be kept in the hands of Parliament. The Bill goes too far in giving the Lord Chancellor those powers by order.
  I appreciate that many matters in the Bill are intended to facilitate the business of the courts. That is necessary now, even if it is only to facilitate the criminal business undertaken by the civil judges. The number of prisoners awaiting trial is becoming something of a scandal. We must improve the business of the criminal and civil courts so that the judges are used in the best possible way, or appoint more judges.
  I think that the right hon. and learned Member for Warley, West (Mr. Archer) mentioned the appointment of solicitors as judges. His argument that one must have certain skills to become a judge sounds more like an argument from the continental courts, where a judgeship is a career, and where one is trained to be a judge from one's earliest introduction to the law. One does not go through advocacy. Thank heaven that we do in this country. We go through the training of advocacy in the courts. I remind the right hon. and learned Gentleman that many solicitors in provincial towns spend their whole days in advocacy, either in the county court or in the police courts. They acquire the same skill in advocacy as does the ordinary counsel in court.
  Mr. Archer: I do not propose to engage in debate at this stage. One of the matters that was in my mind was that the Official Solicitor is probably better as a solicitor than as a barrister.
  Sir Graham Page: I agree. I would join the right hon. and learned Gentleman in putting down an amendment saying that a barrister or a solicitor should be qualified to become the Official Solicitor. I am not suggesting that the

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  Solicitor-General should be a solicitor. By statute, a solicitor is not allowed to be the Solicitor-General. The Official Solicitor carries out his work extremely efficiently and is always a solicitor. However, I see no reason why he should not be a barrister. I would give the alternatives throughout those qualifications for office that are set out in the Bill.
  Clause 10(3)(c) says that a puisne judge must be
  "a barrister of at least ten years standing."
  Since 1970 solicitors have been appointed recorders. As recorders, they are entitled to sit as circuit judges. My right hon. and learned Friend can correct me if my figures are wrong. I believe that there are now 19 solicitors acting as circuit judges. I have never heard any complaint about the fact that they are acting as judges. There is no reason why a solicitor, who must have had 10 years standing before he is appointed as a circuit judge, should not thereby qualify to be a puisne judge of the High Court.
  If we are to facilitate the business of the court, more judges will have to be appointed. Therefore, it is reasonable that we should widen the choice of the Lord Chancellor in appointing judges. That choice is not being widened far. We have proved that the person who is qualified as a solicitor, who has been appointed as a recorder and who has sat as a circuit judge, is sufficiently efficient at the job to qualify to become a High Court judge. The argument is difficult. There is a desire in some quarters to keep the two branches of the profession separate. However, when it comes to facilitating the business of the court and giving the Lord Chancellor a wider choice from which to draw judges, the House should assist in that way.
  There are many Committee points in the Bill. Most have been taken in another place, but we still have more to debate here. Apart from those Committee points, the principle of the Bill is right: that we must improve the business of the courts. I wish the measure well.
  8.8 pm
  Sir Walter Clegg: My right hon. Friend the Member for Crosby (Sir G. Page) has declared an interest and I shall declare a similar interest. He made my task easier by making more eloquently than I could have several points that I was going to make.
  There are one or two points of particular interest to my profession. One is to right an injustice to that profession. In a case in 1974 a solicitor who had costs ordered against him by a circuit judge in respect of an adjournment appealed to the Court of Appeal. The Court of Appeal found that the circuit judge had not listened to what the solicitor had to say and that the solicitor had no responsibility for the adjournment. The Court of Appeal said that the solicitor had not received natural justice because of the failure of the circuit judge to hear him Nevertheless, the Court of Appeal could not order the circuit judge to reverse his order and destroy the order for costs against the solicitor. That was manifestly unjust. I understand that in the other place it was considered that an amendment should be brought forward in this House to remedy that state of affairs. Will my right hon. and learned Friend the Attorney-General confirm that the necessary amendment will be forthcoming to prevent that injustice from happening again?
  Another problem affects many creditors who are seeking to enforce judgments. If the debtor has a deposit or current account with a bank, those accounts can be
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  garnisheed. However, if the accounts are with a building society or a trustee savings bank, no such procedure is available, or it is more difficult to obtain it. Since the last alterations in the law, the business of building societies and the trustee savings bank has changed greatly. They are now acting much more like High Street banks, and are used by the public as such. The trustee savings bank has, in effect, become a commercial bank. In the other place, the Lord Chancellor said that he would have discussions to bring forward an amendment to enable building society and trustee savings bank accounts to be garnisheed, which would help creditors seeking to recover judgment debts.
  My right hon. Friend the Member for Crosby made a valid point about interest on county court judgments. It would be unfair if no interest were paid, certainly on the increased amounts available in the High Court.
  Many litigants are vexed when a judge dies before he can deliver judgment and the case has to be reheard. Recently, a judge died before givng judgment, and the case was heard by another judge, who fell ill during the trial and later died. The litigants had to pay three sets of costs. The Lord Chancellor would not make a contribution from public funds to the litigants, who suffered through no fault of their own. It has been suggested that a suitors' fund be set up to deal with such eventualities, but the Lord Chancellor objects because that would increase public spending. However, the Law Society considers that the fund would be covered by a modest increase in the fees paid by all litigants, and perhaps in Committee we can reexamine the matter. People are enraged by having to pay lawyers' fees at any time, but it is a bit much if they have to pay two or three times through no fault of their own.
  Mr. Mellor: It is the habit in county courts to list two days' business in one on the basis that half the business will collapse. Lawyers attend court with brief fees and cannot be heard. As it is the court's fault that no forum is available, there should also be compensation for that.
  Sir Walter Clegg: I agree. There should be a fund to cover instances where the court is at fault. If courts realise that a financial penalty has to be paid from public funds, it may sharpen their administration.
  Many people inside and outside the legal profession are worried about the procedures in the coroner's court. The office of coroner is an ancient one, and his duty to inquire into deaths is a necessary safeguard, His powers are adequate in the vast majority of cases, but a certain range of cases casts grave doubts on whether the coroner's court is the correct tribunal to investigate the cause of death—for example, of people held in custody or where death occurs through a major accident or fire or where it is surrounded by great controversy. I do not believe that in such cases the coroner has the necessary powers for justice to be seen to be done. We have reports in the press of witnesses being hissed and booed or cheered, which brings the court into disrepute.
  At the discretion of the Attorney-General, certain categories of case should be taken away from the coroner's court and heard in the High Court. A High Court judge has not only greater powers but greater experience to investigate the circumstances surrounding death. Unles we establish a system that is universally respected—and the present system is not—the law will fall into disrepute. It would be a major undertaking to introduce such a reform in the Bill, but it would not be impossible under the long title.
  Sir Graham Page: If the coroner's court were made a court of record, so that the coroner had power to commit for contempt, that would help.
  Sir Walter Clegg: That is true, but I still believe that some cases require the skills of a High Court judge who is used to dealing with complicated matters that may last for weeks. It may also cut out the time spent on a further inquiry after the inquest. If the public were satisfied that there had been a thorough investigation by a High Court judge, there may be less demand for a further public inquiry.
  I hope that my hon. and learned Friend will consider the idea. If no immediate action can be taken on my suggestion, perhaps he will consider that of my right hon. Friend the Member for Crosby.
  I welcome the Bill, although I shall raise further points in Committee.
  8.17 pm
  Mr. J. Enoch Powell: I wish to raise a single point, of which I have given notice to the Solicitor-General. It relates to clause 36, which deals with the power of the High Court to issue a subpoena to run throughout the United Kingdom. Subsection (3)(b) provides for the service of such a subpoena in Northern Ireland. I should like to be assured that there is adequate reciprocity between the High Court with which the Bill deals and the High Court of Northern Ireland. It is a matter of much satisfaction to Ulster Unionists to know that the Attorney-General is also the Attorney-General of Northern Ireland. We appreciate the care and attention that he and his hon. and learned Friend give to matters in the Province.
  It will be obvious, as a matter of natural probability, that such a provision will be even more useful in the reverse direction, since, on balance, it is more likely that persons required in a court in Northern Ireland will be found in another part of the United Kingdom than vice-versa. I believe that I am correct in saying that inconvenience which would be met by this provision has, in fact, arisen in the High Court in Northern Ireland, particularly in matrimonial cases. I hope, therefore, that in his concluding remarks the learned Solicitor-General will be able to include an observation to confirm that there are reciprocal powers in this respect, or if not, to indicate that it is intended to provide them.
  8.20 pm
  Mr. Iain Mills: It is with some trepidation that I rise amid such distinguished and learned company as a mere humble industrialist. As the Attorney-General corrected his statement about judges, perhaps I should correct mine by saying that I am "merely a humble industrialist".
  I should inform the House that I advise the National Tyre Distributors Association, although I do not intend to reflect very much upon tyres.
  I draw to the attention of the House the opportunities—already mentioned by the right hon. and learned Member for Warley, West (Mr. Archer) who led for the Opposition, and responded to so ably by my right hon. and learned Friend the Attorney-General—offered by clause 37 to restore to British companies some of the rights that they appear to have lost as a result of the decison in another place on the Anton Pillar orders. I shall not detain the House long, but I wish to put on record some
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  of the most important points in this matter, which is the reason for an industrialist participating in a more learned debate than is his normal wont.
  It is perhaps inevitable, in a world in which international competition is increasing in scope, skill and complexity, that the counterfeiting of all types of product, packaging, trade marks and other assets should rapidly become a multi-million-pound industry. We believe that this concerns not only the obvious developing countries such as Taiwan, Korea and Hong Kong, but even some of our partners in the EEC, as evidenced by the recent action by Hoover against Italian manufacturers of counterfeit Hoover washing machine spares.
  The Minister for Trade in a speech not long ago gave great reassurance to me and to the many companies involved not only in automotive parts and retailing but in many other British product manufacturing and distribution companies, when he commented:
  "My Government is backing international action to outlaw the counterfeiters. We are pressing for the widest possible acceptance of a GATT agreement on counterfeiting which will come into operation this year, and which would allow for the seizure of goods. We are encouraging manufacturers to obtain patent and trademark protection and we are taking up specific cases bilaterally."
  The achievement of those measures will therefore give considerable protection.
  The basis for proof of such counterfeiting, however, has been greatly undermined by the House of Lords decision on the Anton Piller order. It was therefore my view and that of others with industrial interests that it was vital to communicate to the House in more detail the concern that we and large parts of industry, particularly the automotive industry and the automotive component industry, feel about that decision.
  I have been informed by the Society of Motor Manufacturers and Traders as well as by others that that decision will allow defendants to plead that disclosure would render them liable to prosecution for conspiracy to defraud and under the previous privilege against self-incrimination disclosure would not be granted. I am informed that as the defendants are then defined as criminals, suitable civil action cannot be taken. Such action would, of course, involve the seizure of documents and the request for disclosure of the suppliers in order to investigate an act through the distribution chain of supply.
  This is a serious matter. It has not so far taken either the media or the public by the throat as a matter of great and passionate concern, but to companies which have unusual assets in products and trademarks and the great names of British industry, it is a most serious matter.
  I quote a comment made to me by the Society of Motor Manufacturers and Traders, because I think that it brings home just how seriously such a body in industry—not a commercial concern which might have a particular row to hoe—regards this matter. The SMMT comments:
  "In the eyes of all those companies involved in the fight against counterfeiting, this case is an unmitigated disaster. The 'Anton Piller' order which has been developed recently as a form of civilian search warrant was the most useful weapon in our armoury against the pirates and one of the main reasons … why in the motor industry at least, penetration of counterfeits onto the home market has been limited. As soon as a case was discovered we could, in the past, seize documents and ask for disclosure of the suppliers and 'take out' the entire chain of supply.
  Now, because of this case, in every instance virtually, the defendants will be able to say that disclosure would render them liable to prosecution for conspiracy to defraud and so disclosure

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  will not be granted under the old privilege against self-incrimination. Thus, because they are criminals, we cannot touch them."
  The right hon. and learned Member for Warley, West put this very clearly. Although the decision ensured rights in law, it has the necessary consequence, as the noble Lords discussed in finding for the defendants, of creating enormous and widespread difficulties for British companies.
  For the sake of brevity I merely quote from The Times Law Reports the words of the noble Lord, Lord Russell, who said that
  "inasmuch as the application of the privilege in question could go a long way in the present and other analagous fields to deprive the owner of his just rights to the protection of his property his Lordship would welcome legislation somewhat on the lines of section 31 of the Theft Act".
  Prior to that, the noble Lord, Lord Fraser, said:
  "Anton Piller orders, which had tended gradually to increase in stringency, had been found effective and had been made in England, New Zealand, South Africa, Australia and elsewhere. Now, for the first time, the defendants had objected to making discovery and to answering the interrogatories on the ground that by so doing they might incriminate themselves. If the objection was well founded, the usefulness of the Anton Piller type of order would be much reduced if not practically destroyed."
  A number of hon. Members, including my hon. Friends the Members for Rochester and Chatham (Mrs. Fenner) and Chorley (Mr. Dover) and myself, tabled a series of questions, initially to the Secretary of State for Trade but which were transferred and answered most ably by my hon. and learned Friend the Solicitor-General, whose reply reassured us, as did his reply tonight, that the Government are cognisant of the seriousness of the situation and are considering what steps might be taken to correct it.
  I shall briefly suggest some possible steps that might be taken to restore the valuable nature of the Anton Piller order and to confirm that the matter is urgent. Consideration of legislation in a future parliamentary session would allow, in the intervening months or years, unacceptable losses to the British economy and to British companies. I therefore urge on behalf of myself and others that the Government take on board the need to give statutory force to the use of the Anton Piller type of order and to find some mechanism to grant a general exemption from self-incrimination in cases where such an order is granted.
  It has been suggested to me that this could be done in clause 37 by replacing all that lies after subsection (1) by a new provision. This would not substantially affect subsections (2), (3) and (4), which would be transferred later. I shall read this to the House, as I believe that it is important. I also put it to my right hon. and learned Friend that, if he feels that our suggestions go too far to be accepted as possible Committee amendments to the Bill, I would understand that the matter might need further discussion. But perhaps he will give an answer on the question of principle, on the need for urgency and on the use of the Bill as a vehicle to correct the problems created by the recent decisions.
  The suggestion is that clause 37 should be amended to include the following subsections:
  "(2) The High Court shall have the power at any stage in any proceedings to order the inspection, photographing, transcribing, recording preservation, custody, detention, taking of samples or carrying out of any experiment on or with any thing or process which is or may be the subject of such proceedings or which is or may be relevant to any issue arising or likely to arise in those proceedings or which includes or contains or may include or contain any such relevant thing.
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  (3) The High Court shall have the power at any stage in any proceedings to order any party to such proceedings to answer any question or interrogatory or to produce any document or other article which is or may be relevant to any issue arising or likely to arise in those proceedings.
  (4) A person shall not be excused, by reason that to do so may incriminate (that person or the wife or husband of that person) (any person) from complying with any order of the High Court but no statement or admission made by a person in compliance with any such order shall be admissible in evidence against that person or (unless they married after the making of the statement or admission) against the wife or husband of that person in any criminal proceedings [without the leave of the court which made that order].
  (5) For the avoidance of doubt proceedings for contempt of court or perjury shall not be treated as criminal proceedings for the purposes of subsection (4) above."
  Subsections (2), (3) and (4) would then become subsections (6), (7) and (8).
  I am no lawyer. I have not explored in sufficient detail the consequences of many of those suggestions. I shall fully understand if I am advised by my hon. and learned Friend that in some respects they do not meet the mechanisms that I have requested. I put those suggestions forward on that basis. However, they have been formulated by learned gentlemen in the motor industry, and, therefore, have that credibility and substance to them.
  This is an important matter for a number of British industries at a time when industries are beginning to turn up. Industrial resurgence will take place not only as a result of the activities undertaken by the Government but also through the ability of those industries to retain the intensely valuable nature of British product design, trade marks and names. The mere fact that our competitors in the developing countries see these as intensely valuable assets makes the point for me. I ask my hon. and learned Friend to act on that either in the Bill or as a matter of urgency hereafter.
  8.31 pm
  Mr. David Mellor: The Bill, which is of some importance in law reform, comes before a House comprised almost entirely of lawyers. I join those hon. Members who have said that it is unfortunate that a Bill that deals with one of the fundamental institutions of the State should be seen as fit only for those of us who at some point in our lives have practised the law.
  At best the Bill is a tidying up measure that brings up to date some of the language of the 1925 Act and its predecessor the 1873 Act. Some useful changes are also thrown in. In no sense is it what Lord Scarman said was necessary—a long look at the mechanics of our system of courts with a view to bringing the whole thing up to date. He suggested, and I agree, that we should take a fresh look at this question rather than base what we do now on what previously existed. I hope that the day is not too far away when either the Law Commission or a special commission looks at the mechanics of justice and produces a report that properly brings our judicial system up to date.
  I welcome a great deal in the Bill, particularly some of the new ideas which, although not necessarily revolutionary, will assist and commend themselves to most of us who practise in the courts. In particular, I commend what has been done to the Court of Appeal. I think that I am right in saying that ours is the only advanced legal system that has a centralised Court of Appeal. The penalty that we pay is an excessive work load on the judges and excessive delays in waiting for one's case to come before the courts.

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  Although the steps forward on the Bill are modest, they will be useful, particularly in relation to criminal appeals, which is an area that concerns many of us.
  I listened with great interest to what the right hon. and learned Member for Warley, West (Mr. Archer) said about the proposal that only two judges should sit on appeals against sentence. I accept his point that one does not want to water down the strength of the court that often has to deal with difficult issues. As the proposal is limited to appeals against sentence, I cannot see that that is an objection. I cannot understand why two judges cannot make as good a job as three judges of assessing the validity of a sentence.
  I do not know whether it is intended that the Court of Appeal—even when sitting with two members—should consist of a lord justice of appeal and a puisne judge instead of a lord justice of appeal and two puisne judges, as at present. There is no reason—particularly when an appeal is from a circuit judge—why we should not have two High Court judges sitting together as a two-member court. That would at least release a lord justice of appeal to do other work. I welcome that change.
  I also warmly welcome the decision to appoint a registrar of civil appeals, with the apparent implication that he will construct an office that is broadly similar to that run by the registrar of criminal appeals. For some years my wife has worked in the criminal appeals department so I know at first hand the work that it does. Judging from what has been said in the House and in the other place, I am glad to say that its work is appreciated. Trained lawyers can go through the papers and produce a brief or resumé of the relevant points in the files that have come up from the lower courts. They are of inestimable use to judges in enabling them to process the considerable volume of work that goes through the Court of Appeal criminal division day by day.
  It is extraordinary that for so long the Court of Appeal civil division has gone without such a system. The right hon. and learned Member for Warley, West raised a point about what is meant by appointing a registrar of civil appeals. Like him, I hope that it means that the registrar will be able to take on qualified lawyers who can work with the court and assist it in its tremendous task.
  One matter which is not covered by the Bill but has been canvassed is the qualifications for appointment as a High Court judge. There is a danger that the profession will become polarised on this issue. I run the risk of being a renegade from my profession when I say that I see no earthly reason why a solicitor, who has served with distinction on the circuit bench, should not go on to the High Court bench if his service is regarded as suitably distinguished.
  I read carefully the report of the debate in the other place, and I have listened with care to what has been said in this Chamber. It is argued that because a barrister practises in the High Court he is the only category of person suited to be a High Court judge. That argument is wide of the mark. It should be borne in mind that a circuit judge will soon be able to deal with matters that have a value of up to £5,000. If a circuit judge proves himself in that work and deals with the type of heavy criminal work with which such judges deal, there is no reason why he should be debarred from becoming a High Court judge. It would be cruel to tell an individual that he was an excellent
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  circuit judge and that if only he had been in practice as a barrister he would have been made a High Court judge. It would be cruel to say, "Unfortunately, you are for ever tarred with the brush of having been a solicitor, and therefore you must remain on the circuit bench." That cannot be right.
  The idea that somehow the distinction between the circuit bench and the High Court bench is one of the complexities of the issues involved does not bear a moment's examination. Sometimes it is purely a matter of chance whether the precise legal circumstances lead to a major or a small loss. If someone is outstanding on the circuit bench, there is no reason why he should not also be outstanding on the High Court bench.
  I profoundly disagree with one part of the Bill. I refer to clause 69 and the proposal for jury trials in civil cases. I invite my hon. and learned Friend the Solicitor-General to assist me on the precise extent of the discretion that is being left in the hands of a judge when he is asked to decide whether it is appropriate for a jury to be empanelled to hear a case, whether it involves libel or an allegation of fraud.
  It has been suggested by both Front Benches that it is a wide discretion, but that is not how I read the subsection, which says that
  "the action shall be tried with a jury, unless the court is of opinion … that the probable length of the trial makes the action one which cannot conveniently be tried with a jury".
  That does not give the judge an unfettered discretion to say that it is a matter of such importance that the case is one that a jury should try, or, for other reasons, that it is correct for a jury to try it. Convenience linked to time appears to be the only criterion. However, I do not think that that is a wide discretion as I understand judicial discretion. It is a fettered discretion.
  I am concerned about some of the things that were said in the other place when it was not realised that it would take the Moonies trial six months to wend its weary way to a conclusion. At that time four, six and eight weeks were mentioned, which is an altogether different kettle of fish. It is important that we should know what we are talking about when we speak about duration.
  It is significant that when the matter was debated in the other place the most senior and distinguished judges, not those sitting in the first instance, advocated the change. The only two practitioners who spoke were against it. The House of Commons—being more representative of practitioners than is the other place—might take a harder look at the change than did the other place.
  If someone is unlucky enough to be empanelled on a jury that takes a long time to try a case, that is unfortunate. There is a cast-iron case for saying that we should not put those people to inconvenience and trouble and not bother with a jury. However, I wonder whether we do any service to all the trouble and effort that it took to establish our democracy and our system of courts if we consider this further diminution in the role of the jury and public participation in our judicial process, merely in terms of convenience.
  Should we not take a rather more robust view? There are millions, probably tens of millions, of people round the globe who would be glad of the opportunity to serve on a jury in a free judicial system in a free country. Have we reached such a stage of apathy or of taking our privilege and rights so much for granted that we cannot put up with the inconvenience that may occur once in a lifetime, and

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  only to a few people, of having to sit on a jury for rather longer than was expected? Should we not recognise that that is one of the duties and obligations on citizens in a free society? I wonder whether we make a great mistake, if we allow ourselves to concentrate too much on small issues of convenience rather than on the overall significance of our system that involves ordinary people in the administration of justice.
  There are practical reasons why the change should be resisted. An allegation of fraud or a libel action deals with a serious accusation which reduces someone's alleged standing in the community. Who are the best people to judge whether certain words have the effect of reducing someone's standing in the community? As has been decided in criminal actions for centuries, the man and woman in the street, who are representative of the community as a whole, can decide in a way that, with the best will in the world, the High Court judge cannot. I wonder whether there are not a number of puisne judges who would rather avoid having to make decisions such as had to be made in the notorious Moonies' case.
  I have an interest in industrial relations law. It has often been said that judges should not be politicised and drawn into having to make decisions on contentious political matters. Some judges have said that. But what are we asking a judge to do if we put him firmly in the centre of the arena, as a judge of fact, in a libel case of any duration? He is being asked to make perhaps a political judgment of a sort that he may not relish.
  We have to ask ourselves the question that Lord Rawlinson posed with great eloquence in another place. Hard cases make bad law, and are we not being stampeded into making a change because of an isolated case? I hope that there will not be another case like that of the Moonies for some time. Indeed, one hopes that the case will have deterred such groups from taking action against the press when it is merely doing its duty in a free society.
  Is there such a major problem that we are justified in making a major change in the way that we have ordered things for a long time? In addition, should such a major change be made in such a piecemeal way?
  The Faulks committee reported five years ago on juries in such cases. It reached conclusions with which many of us did not agree and it took the view that, on the whole, juries should not be empanelled in such cases. It may be thought that that is the right approach, but should we not be considering such a change, if at all, in the context of a full-scale look at the way in which we deal with defamation jurisdiction, rather than attaching it at the last moment to a Bill that does not purport to deal with the whole range of issues that cause concern in defamation cases?
  I do not believe that we are proceeding in the right way. I am not satisfied that the debates in another place covered all the issues that concern us and I hope that the matter will be carefully considered in Committee. We should not trench any further on the jury system unless we are satisfied that it is overwhelmingly to the public benefit to do so. By public benefit I mean the benefit of society, in the context of the history of the development of our society and societies elsewhere, and not that someone may prefer to spend a few more weeks of his life in his normal job than to serve on a jury. I make no apology for repeating that that is one of the prices that one has to pay, and should be glad to pay, for living in a free society.
  8.47 pm
  Mr. Edward Lyons: The essence of the jury system is that a jury should be chosen at random, be representative of the community, provide a fair trial and ensure that defendants are not in the hands of a single judge who might be prejudiced.
  However, it is unfair to pretend that there are random juries, in the traditional sense, in long trials. The first thing that the judge does in a trial that is expected to last a long time is to ask which members of the jury will be inconvenienced by sitting on the jury for a long time.
  Before the oath is taken various jurors explain why they are not able easily to sit on the jury without loss or inconvenience or both. The result is that most of those who are accustomed to responsible jobs leave the jury because they cannot be spared from their executive positions for months—in some cases even weeks—on end.
  Therefore, the jury in long trials is not the random jury that sits in cases that are scheduled to last for only two or three days, but a jury from which every person capable of understanding, for example, complicated accounts in a fraud case has been removed. Sad to say, most of the people who have a high level of literacy may have departed. There is then the curious situation on average that the longer and the more complex the case the poorer is the quality of the jury. That is not satisfactory. I am a great supporter of the jury system.
  Mr. Jeffrey Thomas: Is the hon. and learned Gentleman advocating that what is proposed in the Bill for civil cases should apply also to criminal trials?
  Mr. Lyons: The hon. and learned Gentleman is precipitate. If I may develop my argument, first, we should maintain the jury system wherever possible but we should address ourselves to the problem of how to achieve for long and complicated cases a jury at least as competent as is achieved for shorter cases. It cannot be said that juries for long cases are satisfactory. I do not know what thought has gone into the question of how to induce people who are called for jury service and who find themselves on this sort of case to remain. The financial reward may have to be increased or a less sympathetic view may have to be taken and the person told that whatever the loss he has to do his public duty. Those may be ways of dealing with the problem.
  A third solution would be to dispense with the jury and not to leave it to a single judge but to provide assessors to sit with him. They might be paid and would have an appropriate level of expertise in a case involving accounts, for example. That is one alternative. I would be unwilling to see that happen in criminal cases but we are shutting our eyes to the reduction in quality of juries in long trials. I do not want to labour that further. No doubt we shall consider the proposal again in Committee.
  A different point concerns the age of retirement of High Court judges. In clause 11 the age of retirement is fixed at 75, as it has been for many years. I have never understood how one justifies a retirement age of 75 for a High Court judge, 72 for a circuit judge, although with an option to go on to 75, a maximum age of 72 for a recorder and lower ages for stipendiaries and the lower magistracy.
  There seems to be a curious assessment that when a barrister is picked from the throng and made a High Court judge his process of mental degeneration is somehow retarded so that he is fit to go on until 75, but the circuit

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  judge begins to lose his sway so that by the age of 72 he should surrender the seals of office. A recorder, who is in a lower position than either of the others, must become totally incompetent because he has no option to go on beyond 72. The irony is that the recorder is dealing with less serious cases than is the High Court judge. The more serious the case the older the judge may be. Should not we introduce an element of rationality into the question of the judicial retirement age?
  To make matters worse, the pension provisions for judges are so arranged as to penalise a judge who, because he feels tired or feels not as competent as he used to be, wishes to retire. If he has been a judge for less than 15 years and feels that he is below his best, although not seriously ill, he will lose his entire pension rights because he has not served for 15 years and his health is not so bad as to bring him within the provisions for ill-health and incapacity. Judges who feel that they should retire should have no impediment placed in their way.
  Is there not a case for bringing down the maximum age of the High Court judge to the age for the circuit judge, and providing the same option for additional service as is open to the circuit judge by which the Lord Chancellor has the discretion to raise that age to 75?
  Mr. Frank Dobson: Speaking as a non-lawyer I should like to ask the hon. and learned Member for Bradford, West (Mr. Lyons) whether he is talking about the Supreme Court Bill or the Judicial Pensions Bill, which we are to consider later.
  Mr. Lyons: I am talking about the Supreme Court Bill. The two are tied together in this respect.
  The Bill contains several useful provisions. Those who will have the duty and responsibility of dealing with those provisions in Committee will have the opportunity to make a useful contribution towards the body of our law.
  There has been a continual increase in the number of High Court judges. That is inevitable and it is appropriate because we do not want a diminution in standards. With the larger number of judges at all levels, it is important that there should be in the, principal positions persons who are able to keep up high judicial standards, and that serious cases should have the attention of High Court judges. Recently, because of the inadequacy of numbers, there has been a tendency gradually to transfer serious cases to Crown Court judges or recorders.
  Sad as it is to see the increased cost to the Treasury, it is right that extra judges should be appointed. That is only one part of an assault on the backlog of trials. The other part—in the Bill—is to enable two High Court judges to deal with appeals against sentence. That is an inevitable course nowadays, having regard to the pressure of work. The Lord Chief Justice, since taking office, has managed to make considerable inroads in the Divisional Court. I hope that the provisions in the Bill will enable that improvement to continue, as to delay justice is in itself a great injustice.
  8.58 pm
  Mr. Ivan Lawrence: Whenever I hear that there is to be a major Bill of court reform I reach for my civil liberties. There is a danger in this sophisticated and complex time that administrative convenience occasioned
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  by pressure of time, delays and volume of work will become the touchstone of the development of our system instead of the freedom of the individual.
  Judged by that test, the Bill comes as a great relief. Only in one sphere is danger of the kind I have mentioned hinted at, and that is the hint of a restriction of jury trials. The right to jury trial in civil proceedings is to be limited by clause 69 on occasions when the probable length of trial means that the action cannot conveniently be tried with a jury. The test of convenience must fill all hon. Members with horror. I hope that the reassurance given by my right hon. and learned Friend the Attorney-General will hold in practice.
  It is always stated that the problem with jury trials is their length. As the right hon. and learned Member for Warley, West (Mr. Archer) said, it is the wrong estimate of length that is the problem. The estimate is always wrong. This produces a reaction from the judiciary that something should be done as a matter of convenience to reform the whole system. That is the wrong approach to the matter. If convenience replaces what are the traditional safeguards of the liberty of the individual, the matter must be viewed with the greatest care by the House.
  One hears increasingly from judges, according to reports in the newspapers, the desire to restrict jury trials in fraud cases. I hope that the day will never come when jury trial is removed in fraud cases. That would be contrary to Magna Carta, of which hon. Members are the guardians. It is for this reason that our debates on these matters should include contributions from those who are not lawyers. When the lawyers reach high judicial office, they begin to talk about convenience. If too much reliance is placed on high-ranking lawyers, we shall lose some of the safeguards of our liberty.
  I have read repeatedly in the proceedings on the Bill in the other place such statements as that advanced by Lord Roskill when he said:
  "To my mind, the road to a solution lies along two routes. The first is to restrict the right of appeal in certain classes of case, however reluctant any appellate judge may be to see that happen."—[Official Report, House of Lords, 18 December 1980; Vol. 415, col. 1219.]
  The tendency to restrict rights for the sake of convenience has to be watched. I congratulate the Government on their resistance to the temptation to restrict appeals or even to restrict jury trials to a greater extent than that hinted at by the Bill.
  The Government have also successfully resisted the tendency to make bureaucratic the delicate development of our existing system of law. Enough has already been done in procedural ways to make criminal legal proceedings bureaucratic. I learn that it is now the habit of judges in the Court of Appeal criminal division to have the summaries of their cases compiled for them by civil servants and not, as was traditionally the case, prepared by practising members of the Bar who understood more accurately and sensitively the points that ought to be dealt with, and would be dealt with, in the appellate procedure.
  There has also been the attempt, fortunately resisted, to extend the right of solicitors to become High Court judges via the circuit bench. The claim, when solicitors became circuit judges, that this would be the thin end of the wedge, was denied.

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  The circuit bench does not provide the same disciplines as the Bar. That discipline enables banisters to become more effective judges in the Court of Appeal, in the Divisional Court and in the House of Lords.
  There are reasons why it is desirable under our system to maintain the separateness of the two professions. One has a close relationship with the lay client. The other has a more aloof relationship with the lay client and is less subject to the complaint of over-close association with clients. The solicitors' branch of the profession is honourable. Nothing should take away from the wonderful service that solicitors provide in our courts and as circuit judges. However, there is a strong argument for resisting the temptation to widen the wedge so that solicitors, who are closer to bureaucracy, become judges in the higher courts.
  Sir Graham Page: At least six judges started life as solicitors and switched comparatively recently to the Bar.
  Mr. Lawrence: That is the way that it should be done. There is a simple process by which solicitors can convert to the Bar and avail themselves of the wide experience of advocacy which will ensure that they become superb judges in the higher courts.
  Sir Graham Page: Surely a better way is that used by the 19 who have converted to judges already.
  Mr. Lawrence: Judgeship in the circuit courts does not guarantee the ability necessary for the wider role in the Divisional Court, the House of Lords or the Court of Appeal. I do not wish to be sidetracked, because I do not want to delay the Bill by discussing a proposal which was resisted by the Government. I commend the Government for not giving way to the temptation, however siren the voices.
  We must examine the scandal of delay, particularly in the criminal division of the Court of Appeal, and the scandal of the overwork of our judges. The solution is not to restrict appeal or to narrow jury trial. The solution is to have more appellate judges. Perhaps other action could be taken to speed up the process and to reduce the overwork.
  For example, perhaps the House of Lords should not shy away from deciding points of law which would more or less permanently decide the contentious issues which often arise and which, because they are not established by a House of Lords ruling, repeatedly are contended in the Court of Appeal. Perhaps if there were more authoritative rulings from the House of Lords fewer cases of appeal would go to the Court of Appeal. Perhaps if the single judge in the criminal division of the Court of Appeal gave reasons for refusing appeals that would reduce the number of appeals. There are many ways in which the heavy traffic could be restricted.
  Lest I am thought to be reactionary I repeat the radical change which I believe would do more than any other to reduce the delays in our courts. We should reform criminal trials by modifying the presumption of innocence which comes from silence and by introducing tape-recorded interviews. That would do more than anything to reduce the pressure on the criminal courts.
  Finally, may I ask, as this is a Supreme Court Bill, why on earth we keep calling the High Court the Supreme Court, when everyone knows that the House of Lords is the Supreme Court and that the nomenclature "Supreme Court" was given at a time when it was intended that the
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  appellate jurisdiction of the House of Lords would be abolished? I believe that it was Mr. Gladstone who stopped that happening. It was probably the last time that the Liberals did anything sensible in this place.
  As a member of the Joint Committee on Consolidation Bills, may I say how important the job of that Committee is, and how much a contribution consolidation makes to the common sense of our law in this Bill? With more useful, sensible and moderate Bills of this nature—save only in the one matter about which I have some hesitation—this place would yield a greater respect in the land than it may have won for some of the Bills that we have passed.
  9.12 pm
  Mr. Frank Dobson: I do not apologise for speaking in the debate, even if I am the only non-lawyer to do so. Just as war is too important a matter to be left to generals, so the law is far too important a matter to be left to lawyers. It is on that principle that I oppose the Bill.
  The Bill proposes a further erosion of the intervention of ordinary people in the judicial system by imposing a further restriction on the involvement of juries in our judicial system. In my view, lawyers are not to be trusted, nor have they ever been worthy of trust. Judges are not to be trusted with our judicial system, nor have they ever been worthy of being trusted with it entirely. They will do their job only if they are properly restrained by statute law and by the effectiveness of the jury's intervention in most forms of trial on important matters.
  In the circumstances, it is thoroughly reprehensible that anyone should propose, for reasons of administrative convenience only—that is what we are talking about—getting rid of juries in any forms of trial where they are used at present. That is the basis of my argument, and that it all that I want to say.
  I shall oppose the measure at every stage, just as I shall oppose at every stage any measure which proposes in any way to curtail the effectiveness of jury service. Jury service is more important to the preservation of individual liberty and-the preservation of our judicial system than all the scurvy race of lawyers put together.
  9.14 pm
  Mr. John Wells: I apologise for having missed much of the debate. I am not a lawyer, but there is a small point about which I have already written to my right hon. and learned Friend the Attorney-General. Because I am not a lawyer I may stumble on the intricacies of the Bill, and I hope that my colleagues will forgive me if I make a lawyer's hash of the simple thoughts that I wish to put to the House.
  I understand that solicitors in this country are called solicitors of the Supreme Court. This Bill is intituled the Supreme Court Bill. I shall therefore say a brief word about solicitors.
  I wish to bring to the attention of the House the habit of in-house solicitors who are employees of large companies, nationalised bodies or quangos, of serving summonses on members of the public. I understand that, under the court rules, if I am in arrears with my gas bill and the fellow who signs the summons to hale me off to court to pay the bill is a solicitor of the Supreme Court, the gas board is entitled to draw £12, because the chap who scribbled his name on the bottom of a piece of paper is a

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  qualified solicitor. However, if he were just a nice guy who was the deputy under sub-clerk of the gas board, and who scribbled his name on an identical piece of paper, the gas board would be entitled to £4. That may be a misrepresentation of the facts, and I apologise if that is the case.
  I name the gas board only as a notional body. It employs charming people who never send anyone summonses, and who would never do anything like that. But the villian and rascal about whom I am speaking tonight is the Southern water authority, which has treated my constituents and the constituents of every right hon. and hon. Member in the southern part of our island in the most disgraceful manner. It has sent out summonses to the old and the stupid, and even to those more stupid than I—and I am pretty stupid when it comes to paying bills. They have been served by a solicitor of the Supreme Court, and the Southern water authority receives £12 for that. It has not happened to me, however, because I paid my bill.
  I wrote to my right hon. and learned Friend the Attorney-General about the matter. I hope that my hon. and learned Friend the Solicitor-General, who lives not so far away from me and may also smart under the Southern water authority, will have listened sympathetically to my remarks. I hope that they will look into the matter.
  9.17 pm
  Mr. Jeffrey Thomas: This has been a short but highly interesting debate. I venture the hope that I shall be brief, but I cannot promise to be interesting. That does not mean that the Bill is not an interesting and important measure. Some of us would go further and say that it is a measure of great importance and is far from being what the Lord Chancellor described as a Bill without political interest or contentious issue.
  In some regards it is a measure of great contention. I shall come later to the contentious issues that have been touched on already by, among others, the hon. and learned Member for Burton (Mr. Lawrence)—I take this opportunity to congratulate him on his appointment—and the hon. Member for Putney (Mr. Mellor). I refer to the attempt in another place to restrict the right of both plaintiffs and defendants in civil cases to trial by jury. The Opposition consider that to be a matter of signal importance. The matter was touched upon also by my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson). His point was important.
  Apart from any constitutional issue, and apart from depriving citizens of their rights and liberties, the amendment that is now part of the Bill—although it came in by a side wind in Committee in the other place—deprives the public of the opportunity of participating in proceedings in which they should take part. They should be proud to take part in them as citizens, because they buttress the rights of others, and may buttress their rights at some time in the future.
  The right hon. Member for Down, South (Mr. Powell) referred to clause 36 and queried whether the same rules for subpoenas applied in Northern Ireland. The hon. Member for Meriden (Mr. Mills) referred in an interesting speech to the difficulties concerning Anton Piller orders, and we were reassured to hear what the Attorney-General had to say on the subject.
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  My hon. Friend the Member for Holborn and St. Pancras, South and the hon. Member for Meriden tended to apologise for being present in the chamber, as if they were intruding on the privacy of lawyers in venturing to make their speeches. I am profoundly sorry that there are not more non-lawyers present to discuss the Bill. Unhappily, Bills of this sort are so often referred to pejoratively as lawyers' Bills or practitioners' Bills. Lawyers' Bills, as in this instance, often deal with matters that go to the heart of human liberties and of the liberties of the subject. I regret that there are not more right hon. and hon. Members present.
  The hon. Member for Putney (Mr. Mellor) referred to solicitors who happen to have been appointed to the circuit bench becoming High Court judges. That was dealt with, too, by the right hon. Member for Crosby (Sir G. Page). I shall not say too much about the issue. It was canvassed at some length in another place. I have no doubt that it will be canvassed at length by hon. Members on both sides of the House, who will be briefed up to the hilt by the Law Society. It will be debated at length in Committee, and this is not the time for me to go into the issue in great detail.
  It is probable that all general practitioners of medicine would like to become consultant surgeons. The problem is one of experience. Experience of the lower courts, however great it may be, and however able the practitioner may be in the lower courts, is no real training for the High Court bench. It may be that a solicitor circuit judge, if I may use that clumsy phrase, is a first-class circuit judge. We all know solicitor circuit judges who are, with respect, first-class judges. However, the mere fact that one has been a first-class circuit judge is no proper experience for a High Court appointment. The solicitor concerned will have had no experience of the weighty case that is shared by members of the Bar who practise in the High Court. Whether we like it or not, we are a divided profession.
  Fusion was discussed quite recently and at great length by the Royal Commission under Lord Benson. It decided that, with all its faults and warts, the present system of separation of two great professions was in the public interest. The hon. and learned Member for Burton said that there was a simple way round the problem, if there is a problem. I suspect that it is not much of a problem. That way was for solicitors to become members of the Bar. In recent years, as a result of meetings between the Senate of the Bar and the Law Society, measures have been taken to facilitate the change from one profession to the other. It may be of interest to the House to know that in the last 12 months alone about 90 solicitors have taken advantage of that easy system. That is the way through.
  Mr. Mellor: The issue is not whether a solicitor in practice should be translated to the High Court bench, but whether someone who has proved himself on the circuit bench should be inhibited from going on to the High Court bench, when otherwise that would be an appropriate step, merely because in a previous incarnation he had been a solicitor. With the greatest respect, I am unconvinced by what the hon. and learned Gentleman says about the experience of a High Court judge who has been a barrister. For example, we know of the distinguished High Court judge who did well in the employment appeal tribunal and who had been a circuit judge sitting exclusively on criminal trials at the Old Bailey. We know of people who have had a Chancery practice, and have gone to the family division. We know of exclusively criminal practioners

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  who were expected to play their full part in the civil work of the Queen's Bench division. I do not want to speak at length, but I believe that the hon. and learned Gentleman understands what I mean. How is that any different from a man who has proven himself on the circuit bench?
  Mr. Thomas: I mean no disrespect to the circuit bench, but, in a sentence, it is the difference between Woolworths and Harrods.
  I hope that I can pass on from that contentious matter to consider the Bill not in detail, but generally. I promised to be brief, and I hope that I can keep that pledge. Our civil procedure has remained mainly unchanged since the days of Queen Victoria. There is no doubt that there is a compelling case for changes to be made. On the whole, the Bill meets those changes.
  However, one wonders whether there is now a case for an inquiry into the reorganisation of our civil court structure, which might explore, for example, the possible need for an integrated system comprising the High Court and the county court. One also wonders whether the Bill will do much to remedy some of the greatest mischiefs, such as the enormous and horrendous cost of litigation today and, equally important, the law's delays. Justice delayed is justice denied.
  Both sides of the House can agree about a serious flaw in the present system. I understand that a civil appeal now takes twice as long to come on as it did about 18 months ago. Therefore, the situation is serious.
  We very much welcome the appointment of a registrar of civil appeals. We hope that that will go at least some way towards remedying the present state of affairs. I join in the tributes that have been paid to Master Thompson. He and his colleagues in the Court of Appeal criminal division have done a magnificent job during the last few years. One only hopes that someone who is of equal calibre to Master Thompson will be found to fill that post. That is not to say that there is not a great deal of anxiety over delay in the criminal division. The Attorney-General told us that the average waiting time for appeals against sentence is 40 weeks and against conviction 20 weeks, which is unacceptable.
  Costs are equally important, and the Bill will not make a great deal of difference to the cost of litigation. We must always consider what a Bill does for the public. Will the Bill help litigants, or potential litigants, with costs? Will it deter people from pursuing proper litigation? Litigation is always difficult and uncertain, and the situation is aggravated by enormous costs. Even with the help of legal aid, ordinary people will soon be in jeopardy of not getting justice.
  We are concerned about the size of the judiciary, and we welcome the fact that the Lord Chancellor is increasing the number of puisne judges to cope with the enormous civil and criminal work load in the Court of Appeal. I regret that the amendment proposed in another place by Lord Foot concerning legal aid for appeals against refusal of bail by magistrates courts was not passed, and I hope that we can discuss the matter in Committee.
  I am troubled by what the Attorney-General said about the two judges in the Court of Appeal, criminal division. Perhaps the Solicitor-General will comment on the suggestion that, if there are to be only two judges, at least one should be a lord justice of appeal—preferably the Lord Chief Justice. It has been said that no two equals should sit together because it causes great difficulties. It would
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  be much more advisable when two High Court judges are dealing with appeals against sentence for at least one to be a lord justice of appeal, and that safeguard should he built into the Bill.
  Mr. Edward Lyons: As there will be only two judges, is it not more advisable for them normally to be equal. so that one is not overawed by the other?
  Mr. Thomas: They are dealing with the liberty of the subject. The men and women concerned may have been in custody for many months awaiting the determination of their appeal or application for leave to appeal against sentence. It would be a greater safeguard, and would save time in some instances, if we were to avoid the procedure of going to the full court of three, to have a lord justice of appeal sitting with a High Court judge.
  The crowning glory of our judicial system is the jury system, but we see the thin end of the wedge in the Bill. I would be horrified if our jury system, which has stood for centuries, were eroded in any way at all, and certainly if juries were to be withdrawn from fraud cases tried in criminal courts as opposed to the civil courts.
  When our liberties are taken away, the methods employed are neither instant nor dramatic. They are slowly eroded. It is done by stealth and by thieves in the night. I use that last expression in an objective manner. I profoundly believe that this is a great mistake. As I said earlier, men and women should welcome the opportunity to sit on juries. Although there are inconveniences from time to time, the Moonies case, which lasted a long time, was the exception that proves the rule. As has often been said in the past, hard cases make bad law. It would be wrong if any lesson were to be drawn from that case, but, as The Times pointed out on 2 April, the length of that case caused an amendment to be inserted in the Bill.
  The article went on to say:
  "It is argued that no jury should be required to sit for months on what was essentially (unlike a criminal trial) a private dispute. But there are good reasons why jury trials for libel should continue to be available when wanted.
  The very essence of a libel action is the issue of public repute. Has or has not the plaintiff's reputation been affected in the eyes of his fellow men and women? That is precisely the kind of question which should be answered by his peers. Who better than representatives of the public to decide whether his public esteem has been lowered? That argument is not affected by the length of the trial. The principle remains the same. In one respect, however, the functions of a libel jury should be changed. A jury is the right panel for deciding questions of public repute, but it is not a competent body to decide the damages to be awarded. That should be done by the judge, with the jury restricted to indicating how serious it considered the libel to be."
  I see the hon. Member for Putney nodding assent. The need to re-state the law in more coherent and modern language is necessary. To a large extent the Bill succeeds in doing so, and on the whole we welcome it. We would have preferred a measure that streamlined the system rather more, but, with the reservations that we have expressed, we wish it a fair wind.
  9.38 pm
  The Solicitor-General (Sir Ian Percival): I am grateful to those hon. Members who have contributed to the debate for the welcome that they have given the Bill and for the constructive approach which almost all of them adopted. I am grateful to the right hon. and learned Member for Warley, West (Mr. Archer) for setting the tone of the debate and for putting forward some useful

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  suggestions. He knows that they will receive the most careful consideration. I am grateful to the hon. and learned Member for Abertillery (Mr. Thomas) for winding up in the same tone.
  Many points of great interest have been raised, and it is my desire to cover as many as I can. However, hon. Members will realise that I shall not be able to cover them all. Therefore, I shall have to be slightly selective.
  There are two specific points on which I can give the assurances for which I have been asked.
  My right hon. Friend for Crosby (Sir G. Page) asked for an assurance on the question of interest in the county court. I can assure him that an amendment will be introduced. The right hon. Member for Down, South (Mr. Powell) asked me a specific question. I am happy to give him the assurance that he sought—that these arrangements are reciprocal. The relevant provisions that ensure reciprocity are found in section 67 of the Judicature (Northern Ireland) Act 1978. In addition, I thank him for his courtesy in writing to me and for his most courteous observations about my right hon. and learned Friend the Attorney-General and me. I hope that he, his colleagues and all in the Province know that we value our association with those in the Province. It is gratifying to know that the association is also valued by those in the Province.
  I echo what has been said by others and I am pleased that some laymen have taken part in the debate. Not enough laymen have taken part and they have not directed their remarks sufficiently to the substance of the matter. However, at least some took part. Indeed, one contribution was very much directed to an important point. It is clear that we shall have an interesting Committee stage, Four subjects have cropped up time and again. Because of their general interest, I shall say a word on each of them.
  Clause 69 introduces a new provision which gives a discretion to the court to dispense with a jury in certain circumstances. The right hon. and learned Member for Warley, West and my hon. Friend the Member for Putney (Mr. Mellor) and my hon. and learned Friend the Member for Burton (Mr. Lawrence)—I also congratulate him on his appointment and on becoming learned in this House—the hon. and learned Member for Bradford, West (Mr. Lyons), the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) and the hon. and learned Member for Abertillery made contributions on this point.
  The hon. Member for Holborn and St. Pancras, South was not the only one to refer to administrative convenience. I assure hon. Members that the word "convenience" has nothing to do with administrative convenience. We have in mind the convenience of jurors. It never crossed my mind that the measure was being introduced for the convenience of judges, administrators or anyone else. Those summoned for jury service can be greatly inconvenienced. Indeed, that is a mild description of what they suffer. Therefore, the provision has nothing to do with putting administrative convenience above the rights of the subject to have a jury.
  Several points were made on this provision and they will no doubt be dealt with in Committee. The right hon. and learned Member for Warley, West spoke of the difficulty of estimating the length of a trial. Of course it is difficult. However, as he knows, the courts are usually more practical in their approach to these problems than laymen give them credit for. The discretion will lie with
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  the judge until the start of the trial. It is not something that has to be decided at the summons for directions stage. It can be left until the last moment, when at least the best possible estimate can be made.
  I was asked whether we were thinking about four weeks or six weeks. I can only refer hon. Members to the wording. The only two elements that enter into the discretion are the probable length of time and the convenience, which I believe means the convenience of jurors. We have had great experience of four- and six-week trials, for which juries can be empanelled without great inconvenience to them. It would be surprising if it were argued that such a length of time automatically created inconvenience, so as to rule out jury trial. Those are points which we must explore in Committee.
  My hon. Friend the Member for Putney (Mr. Mellor) made a number of points about dispensing with a jury in certain cases. I remind him, and all others who spoke about inroads into one of our fundamental liberties, that we are talking of only a small number of cases—none the less important for that—in which the questions that will be introduced if the provision stands in the Bill can be considered with the greatest care by judge and counsel. These are High Court actions and everyone will have a chance to have his say before such an order is made. I do not belittle the importance of what we are doing but it is not anything dramatic about which we need to be alarmist although we need to be careful.
  The next subject referred to by many hon. Members relates to the burdens which rest on members of various divisions of the Court of Appeal. We are aware of those and I am sure that we shall discuss that further in Committee. We should remember that it is not only in the Bill that remedies are to be sought. For instance, the courts are constantly experimenting with ways of dispatching their business with greater speed and efficiency. Speed is not everything, however. One must not sacrifice the quality of justice for the sake of speed. One should do everything one can to speed up the business while maintaining its quality.
  Some hon. and learned Gentlemen will be aware that the Court of Appeal is experimenting on such matters as the reading day, to which my hon. and learned Friend referred in opening. The Master of the Rolls has agreed to mount an experiment for one term involving one division of the Court of Appeal sitting for only four days a week. That experiment will be closely monitored and, if successful, will be extended.
  In that context, I was asked a number of questions about the appointment and duties of the registrar. The idea is clear. It is to transfer to him all the duties that are carried out by the masters and registrars—where they exist. But there is no-one in the Court of Appeal. The duties will be defined by rules of court and the broad principle is as I have stated. However, the scope for experimenting within that framework is great.
  I am advised that, although the Bill does not require it, the appointment of a registrar of civil appeals, and the powers in clause 58 on incidental jurisdiction, would make the filing of written briefs possible, if that were generally desired. Once the enabling provisions are in force, the scope that that will give to those concerned for experimenting will be at our disposal for the first time. Nothing is permanent; there will be opportunities for

  233
  experimenting in all the ways to which right hon. and hon. and learned Gentlemen referred. That is why it is so important that those steps are taken.
  The next matter which attracted the attention of more than one speaker is the Anton Piller order. I am especially glad that my hon. Friend the Member for Meriden (Mr. Mills) contributed to that. He has acquired in a short time a good understanding of what an Anton Piller order is and does.
  It is important that courts should be able to assist those who are suffering wrongs, and unless they have the necessary instruments at hand they are apt to be brought into disrepute. The courts developed a practice that was given the name of the Anton Piller order, which enabled a person who had been severely wronged by pirating to protect himself.
  The court required a high degree of prima facie evidence that pirating was going on, because the powers of entry, search and so on given by the order are powers against which, on the whole, we set our face, for the same reason that we want to keep jurors. They are part of our protection of the rights and liberties of the subject, which, in the view of most of us, in the first object of the law.
  However, subject to certain safeguards and convincing proof that pirating was going on, the courts would use that means of assisting plaintiffs. It was proving effective, but it has come up against another principle that is as old as Magna Carta—that a person shall not be obliged to incriminate himself.
  A particularly unattractive aspect of the situation is that the more likely it is that a defendant is committing a serious offence the more likely it is that he will avail himself of that defence. In Rank Film Distributors Ltd. v Video Information Centre, it was held that, if answering a question disclosed certain minor infringements that would render a person liable, under the Act in question, to a penalty of £50, the principle would not be available to a person to enable him to refuse to answer questions. On the evidence in that case, conspiracy to defraud was being suggested and, unattractive as it is, that fact made it more likely that a person would avail himself of that defence.
  I hope that I have said enough to convince my hon. Friend the Member for Meriden that the importance and urgency of the matter are understood and I hope that he will appreciate that one cannot come to an answer as quickly as one can decide what one would like to do.
  Difficult considerations are involved and it would not be right for me to undertake that we shall be able to devise amendments in time for inclusion in the Bill. However, I assure my hon. Friend that the problem is well known within the machine and will be given urgent consideration. All those who wish to make representations should make them soon because the matter is being treated as one of urgency. However, that is the limit of the undertaking that I can give.
  The fourth subject that attracted attention from more than one hon. Member was the possibility of an amendment to make solicitors who had served as county court judges eligible for appointment to the High Court. We shall deal with that question if an amendment is tabled, but hon. Members who are solicitors know that I have never adopted the attitude that there are two halves of the profession and that we have our rights and will stick to them to grim death and that solicitors should stick to their rights.
  234
  Indeed, during proceedings on the Courts Bill I said that the time had come to reconsider the rights of audience, the rights of eligibility to be a recorder and so on. I start from that bus stop. I have never sought to hold to rigid lines. It is not a question of anybody being inhibited or being debarred from doing anything.
  The number of those who have been eligible to be appointed to the High Court bench has always been very small. The question now is whether it should be enlarged. Surely, therefore, we must have a close look at the qualifications. It is not just a question of skill as an advocate. We have to consider—I hope that all of us will consider it together in as helpful a spirit as we can—whether there is not something very special about High Court practice and about the relationship between bench and Bar or advocate and judge.
  Many who have had the experience of practising in the High Court would say that there is something special and important there for the administration of justice. These are the sort of things we must discuss if and when we have this amendment. I hope hon. Members will not take too rigid a position at this stage. Let us not allow it to develop into a polarised battle between the two halves of the profession. Far too many of us have been working too hard for years to try to get rid of that kind of difference to want to see any sort of niggle reversing all the good that has been done. I hope that we shall approach the matter in that spirit.
  There are many detailed matters about which I should have liked to say more. The right hon. and learned Member for Warley, West (Mr. Archer) asked about cost sanctions in the county court. We shall deal with that in Committee.
  My right hon. Friend the Member for Crosby (Sir G. Page) raised two important questions about delay. Delays in the county court happily are not long. I am told that eight to 10 weeks to bring a case to trial, if the parties are ready, is the availability of justice in the county court. Laymen do not realise that the reason why a case does riot come to trial in the county court for a year is often that the parties are not ready and are constantly asking for an adjournment.
  My right hon. Friend also referred to the enforcement of county court judgments. Here I have great sympathy. All of us are concerned that the process which leads up to the obtaining of a judgment must be complemented by an effective means of enforcing it otherwise it is a nonsense.
  I was asked about solicitors' costs by my hon. Friend the Member for North Fylde (Sir W. Clegg). The matter that he raised with me is currently under discussion between the Department of my noble Friend the Lord Chancellor and the Law Society. He also asked about extending garnishee proceedings to building society deposits. That too, is under active consideration and discussion with the bodies who would be affected by it.
  I regret that because of the shortage of time I have had rather to gabble through a large number of important points. I felt that at least something ought to be said on the points that I have dealt with. I look forward to developing all those points and any others that right hon. and learned and hon. and learned Members have in Committee. For the present I commend the Bill to the House and invite the House to give it a Second Reading.
  Question put and agreed to.
  Bill accordingly read a second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  Supreme Court Bill [Lords]

    SUPREME COURT [MONEY]
    Queen's Recommendation having been signified—
    Resolved,
    That for the purposes of any Act of the present Session to consolidate with amendments the Supreme Court of Judicature (Consolidation) Act 1925 and other enactments relating to the Supreme Court in England and Wales and the administration of
    236
    justice therein, and to amend Part VIII of the Mental Health Act 1959 and the law relating to county courts, it is expedient to authorise—

    (a) the payment out of the Consolidated Fund or out of money provided by Parliament of such salaries, remuneration and allowances as the Lord Chancellor may with the concurrence of the Minister for the Civil Service determine, being salaries, remuneration and allowances so payable under or in consequence of provisions of the said Act of the present Session;

    (b) any increase attributable to the provisions of the said Act of the present Session in the sums payable under any other Act out of that Fund or out of money so provided;

    (c) the payment of any sums into the Consolidated Fund. —[The Solicitor-General.]

    BUSINESS OF THE HOUSE
    Resolved,
    That, at this day's sitting the Judicial Pensions Bill [Lords] and the Statute Law (Repeals) Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Brooke.]

  Judicial Pensions Bill [Lords]
  Considered in Committee.
  [MR. BERNARD WEATHERILL in the Chair.]
  Clauses 1 to 37 ordered to stand part of the Bill. Schedule 1 agreed to.

  Judicial Pensions Bill [Lords]
    Schedule 2

      TRANSITORY PROVISIONS
      10.1 pm
      The Solicitor-General (Sir Ian Percival): I beg to move amendment No. 1, in page 32, line 10, leave out 'lst January 1957' and insert '16th July 1956'.
      The Chairman: It will be for the convenience of the Committee to take at the same time Government amendment No. 2.
      The Solicitor-General: Perhaps I may make this preliminary observation. I shall be happy to give any member of the Committee such explanation—short, medium or long—as he may wish on any of the amendments. But I shall wait to be asked. For the present, I content myself by saying that these two amendments correct a wrong date.
      Amendment agreed to.
      Amendment made: No. 2, in page 32, line 16, leave out '1st January 1957' and insert '16th July 1956'.—[Mr. Brooke.]
      The Solicitor-General: I beg to move amendment No.3, in page 34, line 17, leave out `14(1)(a)' and insert '10(4)(a)'.
      This amendment corrects a drafting error. I commend it to the Committee.
      Amendment agreed to.
      Schedule 2, as amended, agreed to.

    Schedule 3

      CONSEQUENTIAL AMENDMENTS
      The Solicitor-General: I beg to move amendment No. in page 37, line 44, after 'or', insert 'a pension'.
      I have to make a longer speech on this one. This amendment is addressed to pensions of chairmen and deputy chairmen of the Monopolies and Mergers Commission. It makes it clear that the Pensions (Increase) Act 1971 applies to those pensions. I commend it to the Committee.
      Amendment agreed to.
      Schedule 3, as amended, agreed to.
      Schedule 4 agreed to.
      Bill reported, with amendments; as amended, considered.
      Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
      Bill accordingly read the Third time and passed, with amendments.

  Statute Law (Repeals) Bill [Lords]
  Order for Second Reading read.
  10.5 pm
  The Solicitor General (Sir Ian Percival): I beg to move, That the Bill be now read a Second time.
  The Bill is so plainly worthy of being adopted by the House that, strictly speaking, it is unnecessary for me to say more, but I should be discourteous to the Law Commission if I did not say a word about it. We are very much indebted to the Law Commission for the work it does.
  The Bill is the latest instalment arising from the work of the Law Commission for England and Wales and the Scottish Law Commission to promote the repeal of obsolete and unnecessary enactments, thereby cutting out the dead wood from the statute book. It was annexed to the tenth report in the series of reports of the Law Commission in this task presented to Parliament in December last year. It proposes the repeal of 119 whole Acts and the removal of redundant provisions from 123 others. The nine previous reports have already resulted in the repeal of over 2,000 enactments, including 947 whole Acts. That represents a formidable volume of obsolete statutory material that has been removed from the record.
  Some of those present will know that this work is promoted by the Law Commissions. When they have drafted a Bill including all the provisions that they think should be repealed, the Bill goes to the Joint Committee on Consolidation Bills. I often have the opportunity to express the appreciation of the House of the work done by that Committee. It relieves us of the burden of that work and does us a great service which I am happy to acknowledge on behalf of the House.
  The Bill was considered by the Joint Committee on Consolidation Bills, which reported—
  "They are of the opinion that the enactments proposed for repeal in the Bill are obsolete, spent, unnecessary or superseded, or are no longer of practical utility. The Committee approve the repeal of those enactments and consider that there is no point to which the attention of Parliament should be drawn."
  I endorse those conclusions and accordingly commend the Bill to the House.
  10.4 pm
  Mr. Jeffrey Thomas: I endorse what the Solicitor-General said about the Law Commissioners. I am sure that my hon. Friends will wish to join him in thanking them for the extremely arduous tasks which they undertake.
  One of the 119 Acts which are being repealed by this measure is the infamous Unlawful Oaths Act under which the Tolpuddle martyrs were convicted. It is ironic that it falls to the Conservative Party to introduce legislation to do away with that disgraceful statute. After much suffering the Tolpuddle martyrs were granted a free pardon and brought home at public expense. That case played a memorable part in the history of the Labour Party, and we welcome the Bill on those grounds.
  10.10 pm
  Mr. J. Enoch Powell: It is a matter of satisfaction to hon. Members representing Northern Ireland that the work of the Law Commission for England and Wales and of the Joint Committee on Consolidation extends to the consideration of statutes affecting Northern Ireland. In that connection, I wish to make an observation
  240
  of which I have given notice to the hon. and learned Gentleman the Solicitor-General. It is not, I must confess, the first time that he has heard me make this or a similar observation. When a section of the citizens of this country feels that it labours under a grievance, the House must not be surprised if reference is made, sometimes with tiresome iteration, to the existence of that grievance.
  The grievance to which I refer is that this part of the kingdom is not legislated for, in all respects, as is the rest of the United Kingdom. Part of the legislation that affects it—both the revision of existing law and the making of new law—is made by the process of Order in Council under the 1974 Act. Governments have hitherto insisted on maintaining this form of legislation because it is contended that there is something inviolate about the Northern Ireland statute book, that is to say, the totality of the enactments made by the Parliament of Northern Ireland within the scope of subjects that were devolved to that Parliament under the Government of Ireland Act 1920. Of course, that Parliament was suspended in 1972 and ceased to exist in 1973.
  Nevertheless, the fiction has been carried on from that time that we are about to witness what not everyone in the Province or anywhere else would wish to see, namely, the resurrection of such an institution. Therefore, these volumes, as they stand upon the lawyers' shelves, together with the new volumes added in the form of relevant Orders in Council, should not be tampered with by any other sort of legislation. Whenever we want to do anything in the House that falls within the purview of the no-longer existent Parliament and Government of Northern Ireland, we should not do it by Act of Parliament, which is the proper way of making and changing the law within the United Kingdom; we should do it by Order in Council.
  When hon. Members representing Northern Ireland, especially Unionist members, find exceptions to that rule, they take some delight in drawing attention to them and pointing out that a certain element in the Northern Ireland Office is contradicted out of its own mouth. The Bill now placed before the House does the undoable, dares the undareable and attacks the inexpugnable by actually touching legislation on Northern Ireland made by the Parliament of Northern Ireland.
  I should like to draw attention to those statutes affecting Northern Ireland which are repealed by the Bill. The first is to be found on page 9. Curiously enough, by a happy mischance, it is the House of Commons Disqualification Act (Ireland). This is a subject that most hon. Members did not suppose would become so actual as it is at present. I would point out, however, that it is the House of Commons Disqualification Act (Ireland) 1793—an Act of Grattan's Parliament of 1782 to 1800, now being removed from the composite statute book in which the totality of the statute law affecting Northern Ireland must be sought.
  Excited by that discovery, one moves to page 17 to find that the Matrimonial Causes and Marriage Law (Ireland) Amendment Act 1870 is to some extent being repealed. That is an Act passed in respect of Northern Ireland by the Parliament of the Union during a happy period, legislatively, in which between 1800 and 1922 this House legislated on all matters in respect of Ireland, as it did in respect of all other parts of the United Kingdom. That too is within the purview of the exalted bodies to which we owe this legislation and the Bill.
  I come to the pièce-de-résistance. It is to be found on page 18. It is an Act of the Parliament of Northern Ireland.

  241
  What from the point of view of the Northern Ireland Office are sacrilegious hands are being laid upon an Act of the Parliament of Northern Ireland, regardless of the alleged necessity of keeping that legislation untampered with and of dealing with it only in series by Order in Council so that a solicitor in Northern Ireland may be sure that, whatever law he wants will be found only in the Northern Irelandstatute book. The Government have dared to propose that the Children and Young Persons Act (Northern Ireland) 1968, of the Northern Ireland Parliament, now defunct, should be amended by the removal of two sections.
  I hope that nobody supposes that I am making much of little for the sake of doing so. It is serious that any part of this kingdom—and the years lengthen during which this has taken place—should have its law made by different processes from those by which the law is made for the rest of the kingdom. Not only do practical inconveniences, of which the Patronage Secretary is well aware, follow from that practice, but it is a mark of separation, placed and maintained on that part of the kingdom which contributes in no wise to stability and confidence in a province to which all parts of the House wish to see stability and confidence restored.
  Therefore, I have taken the opportunity once again—and I hope that the Solicitor-General has not begrudged it—of drawing attention to the fact that the House is capable conveniently, and with no loss of convenience to those practising the law in Northern Ireland, to make and to amend the law applicable in Northern Ireland as it makes and amends the law which applies to the rest of the kingdom.
  10.17 pm
  Mr. Frank Dobson: The Bill is a regular ragbag of measures that the House has approved in the past which, rightly, we are doing away with. I can declare a personal interest in one measure—the proposed appeal of sections 35 and 36 of the 1806 Act which prohibits the standing or plying for hire of hackney carriages in the vicinity of Bloomsbury Square.
  As I live close to Bloomsbury Square and have, on occasions, hailed and got in and out of hackney carriages in Bloomsbury Square, perhaps I should declare that I am an accomplice or conspirator.
  The Parliamentary Secretary to the Treasury (Mr. Michael Jopling): Felon.
  Mr. Dobson: The Patronage Secretary should know since he moves among felons all the time.
  I understand that the legislation was introduced at the behest of the Bedford Estate, which did not want to lower the tone of the area by allowing hackney carriages to ply in the square. I suppose that because of the likes of me living in or near the square it is felt that the tone is already so low that stopping hackney carriages will make no difference. I am sure that my fellow residents welcome the measure as do the London cabbies who did not even know that the law existed.
  We cannot end the involvement of the House in the plight of the Dorset labourers without reference to what happened to them and to the disgrace that some measures that we are repealing brought upon the House, the establishment and the judicial system.
  The Patronage Secretary said that that is part of the Labour movement mythology. It is not. It is part of the
  242
  Labour movement historical fact. Although the Bill refers to the administration of justice, for the people who sought to combine to protect their interests in friendly societies and trade unions at the beginning of the nineteenth century, it was the administration of injustice and nothing less.
  We are being asked to repeal the Unlawful Oaths Act 1797. Apart from my general interest, in that I believe that the effects of that measure still affect the attitudes of the Labour movement, I have a special interest to declare—a constituency interest—in that the great campaign to get the Tolpuddle martyrs freed, pardoned and back from their seven years' transportation to Australia was mounted from Charlotte Street in my constituency.
  The six labourers whose names and problems featured in innumerable debates in the House—unfortunately, never resulting in a majority of that then unrepresentative House of Commons supporting those oppressed people—George Loveless, James Loveless, John Stanfield, Thomas Stanfield, James Hammett and James Brine, joined together, along with others, to try to establish a friendly society or trade union to raise their poverty level wages. As the result of an Act of Parliament, about which they knew nothing, the oppressive activities of Lord Melbourne and the then Government and what amounted to no more or less than a conspiracy between the Government and the justices in Dorsetshire—as it was then called—including a new judge who was trying to win his spurs, and a grand jury which included two relatives of Lord Melbourne, those poverty-stricken labourers were crushed by all the force of law, and lack of law, that could be obtained. Perhaps the Solicitor-General should check that the Cabinet still wants to remove these measures, which were intended to oppress trade unionism, from the statute book, in case they are needed again some time in the near future.
  Even if the Patronage Secretary describes the measure as mythology and even if we are getting rid of it, as I am glad we are, we should honour those six men and the people who fought to get them back from Australia and fought successfully to get them a free pardon. Perhaps we should dishonour the people who sent them there in an oppressive effort to keep themselves in privileged wealth at the expense of the poor.
  I can do no better than quote what George Loveless himself said to the court, when invited to speak by the judge before the sentence was pronounced:
  "My Lord, if we have violated any law, it was not done intentionally; we have injured no man's reputation, character, person or property; we were uniting together to preserve ourselves, our wives and our children, from utter degradation and starvation".
  Then they were found guilty, and possibly to quote the words of George Loveless is the most appropriate way to describe that sentence:
  "Not for anything we had done, or as he could prove, we intended to do, but as an example to others, he considered it his duty to pass sentence of seven years' transportation across His Majesty's high seas upon each and every one of us".
  All that arose because they swore that they would not disclose what they were doing in their friendly society. The right hon. Member for Down, South (Mr. Powell) referred to open government. That happened at a time when the Duke of Cumberland administered unlawful oaths as a member of the Orange Lodge. Then, as now, there was a law for the poor and a law for the rich.

  243
  There are other measures intended to oppress working people when they combine that we are asked to set about repealing tonight, including other Acts relating to unlawful oaths introduced to oppress Luddites and others involved in the Captain Swing machine breaking on the farms. At the risk of breaching normal parliamentary etiquette, I must record that the Luddites referred to the hammers with which they broke the machines as "Enoch".
  It is also noticeable, and a lesson that we might draw from, that in the case of two laws it has taken 184 years for one and 170 years for the other before it has been decided that they are redundant and useless and should be repealed. That is how long measures intended to oppress working people stayed on the statute book. I contrast that with the speed with which Acts of Parliament intended to prevent criminal activity in Rhodesia were set aside by this Parliament. Rich and powerful people, Ministers of the Crown, senior civil servants and senior executives of international oil companies breached the Rhodesian sanctions. As soon as a settlement was achieved there was no question of allowing those clear statutory duties to remain on the statute book or to pursue those who had committed crimes by breaching the sanctions. About 20,000 people in Rhodesia were killed in a war which was protracted because of sanction busting. There was no question of that legislation staying on the statute book for 184 or 170 years.
  An amnesty was slipped through. The Lord Privy Seal denied that there was an amnesty in the legislation. Nevertheless, the amnesty took place and the people who had committed the crimes were cleared. It was a peculiar amnesty because one did not have to declare that one had done wrong before one was entitled to be cleared. That is what happened. We have learned the lesson that penal law can be repealed quickly—I suspect that that applies only to penal laws that affect the rich and powerful, whereas penal laws affecting the poor will no doubt remain on the statute book for evermore.
  A final lesson could be learned by Ministers—those who have managed to be present tonight—namely, that it was the clear view of everyone in the Labour movement at the time of the Tolpuddle martyrs and the writers in the radical newspapers that the oppression of the Tolpuddle martyrs and the six innocent labourers was an absolute godsend to the trade union, Labour and radical movement. The natural response of ordinary working people throughout Britain was to say "If you are going to push our sort around, we will push back. Even if we do not have the vote"—and they did not have the vote at that time—"we will get the wrongs put right." There is a final lesson in that for the Government.
  If the Government set about the trade union movement and try to reduce the living standards of working people, the working people will fight back. If the Government are trying to cut the unions down to size, as they see it, their actions may prove to have the effect of the pruning knife. If they attempt to cut back the strength of the Labour and trade union movement in the coming years, they will find that it will grow stronger because of their efforts and not weaker.
  10.30 pm
  Mr. Edward Lyons: The Bill evokes echoes of our history. It repeals a series of turnpike Acts
  244
  which governed access to about 11,000 miles in Britain as late as the 1830s. Those travelling along Britain's roads 150 years ago found themselves paying tolls, allegedly for the maintenance of stretches of road, before Governments and local authorities took it upon themselves to maintain the highways to a decent standard. We are getting rid of that part of our history.
  We are dealing also with two Acts which were famous in their time. The first Act was introduced in 1797 because of a mutiny at Spithead. The Act that was used against the Tolpuddle martyrs was introduced for a different purpose. It was improperly used to introduce severe punishments for taking secret oaths and making secret promises to do certain things. It is encouraging that attitudes have changed considerably since that Act was made law. It has been dormant since 1834. Presumably the main purpose of repealing it is to save paper by making it unnecessary to print it in future and to save lawyers reading excess pages of statute that no longer serve a useful purpose.
  The other Act—the Unlawful Oaths Act of 1812—was never implemented. Its purpose and likely effect were much worse than the Act under which the Tolpuddle martyrs were charged. The 1812 Act was introduced in response to Luddism, the wrecking of industrial machinery, and featured the death penalty for taking an unlawful oath. If a person promised to damage property, he could be sentenced to death. Happily the Act was never implemented, and in 1837 the death penalty for taking an unlawful oath was abolished.
  I have not read Hansard for 1837, but I imagine that some hon. Members strongly urged the retention of the death penalty for making an unlawful oath and opposed the reform. When a reform is proposed, the instinct of many of us initially is to react and to say "This is against the status quo. This has always been so. Why should we change it?" Laws are made to mirror contemporary attitudes. Attitudes that seem so permanent at the time appear ludicrous, harsh and inhuman to succeeding generations.
  Therefore, tonight we are celebrating the passing of those parts of our history. Those Acts were oppressive to ordinary working people and were inhumane and cruel in their intention against anyone who might have been charged under them. Acts such as the Turnpike Acts were relevant to our social history and to the way in which we lived our lives 150 years ago.
  It is right that we should express our gratitude to the people involved including the Joint Committee on Consolidation of Statute Law, on which I served for many years, for doing the work that was necessary to bring such Bills before the House. The Solicitor-General was on the Consolidation Committee with me for a long time. That Committee never receives publicity. What is said there is never quoted in the press. No pressman ever attends it. The work is done by diligent Members year after year, in an unsung fashion. Nothing is more irritating to members of that Committee than to be asked what they are doing in the House of Commons, when they know that they are spending many hours on such work.
  Therefore, I thank those who were responsible for doing the necessary work and for bringing the Bill before the House.
  10.36 pm
  The Solicitor-General: I shall comment on one or two matters. I am glad that everyone has acknowledged the work done by the Royal Commissions and by the Joint Committee. It is such a help to us in our work here.
  I am also glad that the right hon. Member for Down, South (Mr. Powell) approves of what is being done and that he was good enough to say so. I was amused by some of the lighter parts of his observations. If it means what I think it means, I am happy to attack the inexpugnable, but I am not sure what is the right word to use to describe the result. Inevitably one begrudges his taking time on those parts of his speech which are of serious interest, but, by the same token, I do not believe that the right hon. Gentleman would expect me to comment upon them on this occasion.
  We have heard the new mythology according to the hon. Member for Holborn and St. Pancras, South (Mr. Dobson). It is interesting to sit still and listen to history being rewritten. I shall not venture in any detail into what the hon. Member said, but I remind him that the Government about whose actions he complained so bitterly were weak—they were a Liberal Government. If the Act was to suppress the working class, I regard it as a feather in the cap of the Conservative Government that it has taken a Conservative Government to repeal it.
  I am glad that we have removed the restrictions on the movements of hackney carriages in the Bloomsbury Square area. I hope that in order to enable the hon. Member for Holborn and St. Pancras, South to make early use of that change and to take a hackney carriage or some other sort of conveyance to Bloomsbury Square at an early moment, the House will give the Bill a Second Reading.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Goodlad.]
  Bill immediately considered in Committee; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed, without amendment.

  Health Visitors
  Motion made, and Question proposed, That this House do now adjourn. —Mr. Goddard.
  10.40 pm
  Mr. Barry Sheerman: Listening to earlier speeches, I was reminded how appropriate it is to bring to the attention of the House a specific injustice. Like the right hon. Member for Down, South (Mr. Powell), I hope that the House will not feel that I am making much of little for the sake of doing so.
  As was well said by my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson), the House is concerned with the administration of justice and with injustice. He mentioned the Tolpuddle martyrs and the injustice to poor people who did not have a vote and who had very few rights in the eighteenth century. The injustices in the late twentieth century are as real, but are of a different nature. I hope that the House will pay attention to the injustice clone to Mr. Edward Myer of Dalton in Huddersfield. The cause is the complex bureaucracies that we set up by statute to run our affairs.
  I believe that at the end of my passionate pleading, the Minister will say that the matter is outside his province and that he cannot help, although perhaps I am being pessimistic and he will take action. After trying every other avenue, such as the ombudsman—although no ombudsman can help in this matter, because it concerns personnel—an Englishman has a right to ask his Member of Parliament for help. We have seen an array of lawyers here this evening. Recourse to the courts is expensive, especially in my constituent's complex case. As was the case 200 years ago, much of our legal system is not available to people of only modest means. But I make no great case of that this evening.
  I shall first trace the particulars of the case. My constituent, Mr. Myer, qualified in 1963 as a psychiatric nurse in the National Health Service. In July 1966 he became a registered mental nurse. In July 1968 he became a registered general nurse. Then, from September 1968 to September 1969, he took a specialised course to qualify as a health visitor. My constituent was one of the first men to become a health visitor. The House will recall that this was just before the time when we moved very much to change the law regarding the kinds of work that men and women could do and be reimbursed for doing. The course was for men and therefore excluded obstetrics because a male health visitor was not expected to be active in the delivery of infants.
  After qualifying, my constituent proceeded to work for five years as a very good and efficient full-time health visiting officer. Being an intelligent young man and keen to extend his education, in 1974 he took a course at Manchester University and received a master's degree in education. Being even more industrious than many of us, at the same time as he was working as a health visitor he was taking Open University courses, and in December 1974 he obtained a first class degree from the Open University. As the House knows, that is a very difficult course as the study takes place in one's own time.

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  My constituent, having been awarded a Master of Education degree in philosophy at Manchester University in December 1975, went on to take a doctorate in the philosophy of health education.
  It will thus be seen that I am describing a young man of tremendous drive who became a health visitor and then went on to the more theoretical side of his profession. He therefore left the practical side of his profession for some five years. Indeed, as well as the qualifications that I have enumerated, in August 1976 my constituent was awarded a graduate certificate in education at the Huddersfield Polytechnic Holly Bank campus, which is a very fine institution of education training. It is therefore clear that this man has undertaken a great deal of academic and practical education.
  In February 1980 the young man returned to his original profession as a health visitor and proceeded for six months to pursue that profession. Then, to both his own and the Kirklees health authority's astonishment, he was given to understand that he was no longer qualified to do the job for which he originally trained. Between 1974 and 1976, because of measures affecting equality of employment and legislation passed by the House, the whole nature of the health visitor's job changed. Men and women health visitors are now on an equal footing, so that men may now receive obstetric training and do exactly the same job as a woman health visitor, including the delivery of infants.
  Here a complication arises. Over a two-year period, the governing body responsible for the training of health visitors—the Council for Education and Training of Health Visitors—did not buy time in the media or space in the Nursing Mirror or advertise in The Times. It merely put out a press release. It also informed senior nursing officers in all hospitals that if a male health visitor did not take the small extra top-up in obstetrics, he could not qualify—after the two-year period—as a health visitor. A qualification had been undertaken in good faith. The man had passed the examination. Nevertheless, it would not be recognised by an employing authority if that condition had not been observed.
  My constituent did not know of the moratorium. During that two years he was busy in the groves of academe in Manchester university. He was pursuing a theoretical course. When he returned he did not read the Nursing Mirror. He did not attempt to see old students. As a result, although he has a qualification, has every right to pursue it and is willing to take the extra top-up in obstetrics, the governing body of the Council for the Education and Training of Health Visitors will not allow him to do so.
  There is grave cause for concern. There has been injustice as a result of bureaucracy. That bureaucratic creature is a little distant from this House, but in some ways it is responsible to the Minister. Therefore, I urge the Minister to use all the powers at his disposal to put right the severe wrong that has been done to a constituent of mine in Huddersfield.
  11.51 pm
  The Under-Secretary of State for Health and Social Security(Sir George Young): The hon. Member for Huddersfield, East (Mr. Sheerman) has made a perceptive and well-researched case on behalf of his constituent, Mr. Myer, who comes through as a conscientious and energetic
  248
  individual, who has much to contribute to the National Health Service. The hon. Gentleman has been energetic in pressing his case on me and on my Department. I have a large file of correspondence on this subject.
  As the hon. Gentleman anticipated, I must tell him that no Ministers have at any stage beeen involved in the decisions regarding Mr. Myer's application to be registered as a health visitor; those decisions—as the hon. Gentleman knows—are assigned by statute to the Council for the Education and Training of Health Visitors. However, as the hon. Gentleman said, he has every right to ventilate his constituent's grievance in the House. I shall do my best to explain the position, as I understand it.
  Mr. Myer did a course in health visiting in 1968–69. I understand that he subsequently took up employment in the community nursing service, which at that time was still the responsibility of local authorities. It appears that he continued in that employment until August 1974. It is important to make it quite clear that Mr. Myer was not at that time employed as a health visitor. The hon. Gentleman said that Mr. Myer became a health visitor. Perhaps that was a slip of the tongue, because he did not. Furthermore, he could not become a health visitor, because he had not been admitted to the register of health visitors, which is an essential pre-condition for employment as a health visitor under the terms of the National Health Service (Qualifications of Health Visitors) Regulations 1972. Indeed, in the early 1970s, it was not possible for a man to become a health visitor, since no man could possess the part 1 midwifery qualification, which was then an essential requirement for registration. There have since then, been changes in this aspect. However, that was the position at that time.
  For the same reason, although Mr. Myer may, as a registered nurse, have been employed in the health visiting service, working alongside health visitors, he could not have undertaken the full range of health visitor responsibilities, which would be liable to include obstetric work, because he had not done the course in obstetrics. I emphasise that point. I do not question Mr. Myer's good faith, nor do I seek to belittle his efforts. However, I wish to make it clear that there is an important distinction between working as a registered nurse in the health visiting service and being employed as a fully-fledged health visitor.
  I understand that at the time in question a number of men had taken health visitor training courses but, like Mr. Myer, they could not become health visitors. Apparently some local authorities employed them in support of health visitors and gave them the job title of health visiting officer. I understand that that title did not have any formal status but was regarded as suitable for use in the circumstances.
  In 1972 the Council for the Education and Training of Health Visitors introduced a change to its training rules, which took effect from 1 January 1973. The purpose of that change was to enable men who had satisfactorily completed a health visitor training course to undertake a subsequent period of obstetric training to enable them to qualify for admission to the register as health visitors. That was a reversal of the normal pattern, which had always been, as it is today, that appropriate midwifery or obstetric experience was required before training as a health visitor. Until the early 1970s, it had not been possible for men to

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  gain the necessary obstetric experience, and it was for that reason that the council made a special provision to meet the needs of those men, such as Mr. Myer, who had already completed a health visitor course but who had not until then been able to qualify as health visitors.
  The rule change took effect from January 1973. I mention that because Mr. Myer was, apparently, at that time employed as a registered nurse in the health visiting service, where he continued for a further year and a half. It would have been open to him at any time during that period to seek to obtain the necessary obstetric training. I understand that that takes about 12 weeks. That would have entitled him to apply for registration as a health visitor. I mention this because I believe that Mr. Myer's failure at that time to take advantage of the opportunity that was then available to him—whatever may have been the reason for that failure—must have weighed strongly against him in his subsequent attempts to be admitted to the register.
  I referred to the 1973 change of training rules. I should mention that this is the one point at which there is ministerial involvement, as proposals by the council for rule changes require ministerial approval before they can become effective. But it is the council's responsibility to consider and propose the changes. The council proposes and the Minister disposes.
  In August 1974 Mr. Myer left his employment in the health visiting service to pursue his academic studies on a full-time basis. He clearly has pursued those studies with considerable dedication and commitment. One can only applaud the efforts that he has made in that direction.
  At the beginning of 1976 the council decided to terminate the special arrangement for men introduced by the 1973 rule change and to make a requirement that, with effect from the September 1977 intake for health visitor training, men as well as women should have obtained an acceptable prerequisite obstetric qualification prior to commencing health visitor training. At the same time, the council decided that those men who had undertaken health visitor training but who had not so far undertaken the necessary obstetric training must do so before the end of 1978 if they wished to make themselves eligible for the award of the health visitor's certificate. I understand from the CETHV that these decisions were widely publicised at the time in the nursing press.
  It was not simply that a press release was issued. The hon. Member queried that. I should refer to a letter that Dr. Turner, the principal administrative and finance officer of the Council for the Education and Training of Health Visitors wrote to Mr. Myer on 23 December 1980, in which he said:
  "Notice of these decisions was published widely in the nursing press at the time".
  Mr. Sheerman: We have asked many times for evidence that there had ever been that kind of advertisement. We have been given none. I have been combing the pages of the relevant press and I have been unable to uncover one advertisement.
  Sir George Young: That comment may be relevant to what I have to say later. I have it in black and white from the principal administrative and finance officer that notice of those decisions was published widely in the nursing press at the time. I should have thought that it was legitimate to ask Dr. Turner to produce copies of the relevant press releases.
  250
  By the time Mr. Myer became aware of the new position, which was in the latter part of 1980, it was too late for him to take advantage of the final opportunity in the transitional arrangements.
  No one could listen to the account that the hon. Gentleman has given without feeling considerable sympathy for Mr. Myer. The position is, however, that no matter how much sympathy I may feel—I am sympathetic—I do not have any powers in the matter. Since, following Parliament's enactment of the Health Visiting and Social Work (Training) Act 1962, the Council for the Education and Training of Health Visitors has been established, it is to that body that all responsibility for deciding questions of registration has been assigned.
  From the inquiries that I have made I understand that there is no formal right of appeal on registration questions from the decisions of the council. Anyone who felt aggrieved and wished to seek redress would have to do so through the courts. It would, however, be open to Mr. Myer to go back to the council and ask it to reconsider its decision in order to allow him to undertake currently the necessary period of obstetric training that would entitle him to apply for admission to the register of health visitors.
  I have no locus in that matter and would not wish to mislead the hon. Gentleman. I am not offering any hint regarding the possible outcome—it would be wrong for me to do so—but the case has had a substantial airing and I am sure that if Mr. Myer were to ask the council to review its decision it would take careful account of any representations that he might make. The hon. Gentleman might have a role to play in a request for a review by providing the council with a copy of the report of our debate.
  I have sought to explain as precisely as I can the reasons for Mr. Myer's problem. Before concluding, however, I should like to comment on the present position. Mr. Myer is not a health visitor, but he is a registered nurse. As a registered nurse, it is open to him to seek, and to obtain, employment with a National Health Service authority or elsewhere. Any authority employing him could quite properly, if it so wished, employ him in its health visiting service, not as a health visitor but as a registered nurse who has taken a health visitor training course, working in support of health visitors.
  The authority would pay him on a Whitley Council pay scale appropriate to the particular appointment. It could, if it chose, describe the post as a "health visiting officer" or could use some other appropriate designation. Any such designation would not have any formal status in Whitley Council terms, but that is not necessary. There are many job titles in use in the NHS nursing service which are not Whitley pay grade.
  I hope that I have made the present position clear. Mr. Myer can be employed as a nurse in the National Health Service and, indeed, in the health visiting service, Put not as a health visitor, since that is a formal professional designation which he does not hold and never has held.
  Mr. Sheerman: I thank the Under-Secretary for his comments. Is it not strange that the Council for the Education and Training of Health Visitors has no appeals procedure for a member of the profession? We are in a

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  dangerous position in many supplementary professions if we are developing a council that has no inbuilt appeals machinery.
  Question put and agreed to
  Adjourned accordingly at two minutes past Eleven o' clock.

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

The Lebanon and International Peace
Lord Gladwyn: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they propose to raise in the Security Council of the United Nations the apparently complete breakdown of governmental authority in the Lebanon as a threat to international peace and security necessitating the withdrawal of all extraneous armed forces from Lebanon territory.
The Parliamentary Under-Secretary of State, Department of Trade (Lord Trefgarne): No, my Lords. The Government of Lebanon are urgently seeking a political settlement of the present crisis. We believe the role of the international community should be to support them in these endeavours and to uphold the authority of the legitimate Government. The Lebanese Government have not asked for the Security Council's assistance.
Lord Gladwyn: My Lords, thanking the noble Lord for that reply, is it not evident that the Security Council, under the charter at any rate, is the place in which this very grave matter affecting international security should be considered? If the rumours are true—I do not know, but if they are—to the effect that the Americans and the Russians are discussing some kind of agreement on the Lebanon behind the scenes, is not that an additional reason for someone raising this matter in the Security Council? If it is not raised by somebody in the Security Council, surely the Security Council is failing in the prime duty ascribed to it under the charter.
Lord Trefgarne: My Lords, it is, of course, the case that the situation in the Lebanon has been discussed in the Security Council on a number of occasions. I am not sure that any useful purpose would be served at this moment by repeating some of the declarations that have been made in that forum. Having said that, I cannot hide from your Lordships the concern with which we view the present situation in that country.
Lord Goronwy-Roberts: My Lords, may I lend my support to the suggestion made in the noble Lord's Question? Would the Minister confirm that it is not necessary for the Government of a country to have recourse to application to the Security Council under Article 2? Indeed, very important and effective initiatives have in the past been taken by the Security Council without there being an application from the Government concerned to the Security Council.
Lord Trefgarne: My Lords, I am advised that the United Nations could only act in the situation in the Lebanon if the government of that country so wished. Certainly we stand ready to assist in any way we can, in the United Nations or elsewhere, but we believe that the need at the present time is for action by quiet diplomacy behind the scenes.
Lord Gore-Booth: My Lords, I realise that I do not have a present accurate knowledge of the legal requirements of this situation, but is this not a position in which countries like ourselves could at least find a way of making it clear, both publicly and to the Syrians, that we are worried about this situation and we look to them to restore at least a peaceful look to the situation so that we are not alarmed by one more crisis?
Lord Trefgarne: My Lords, I can assure the noble Lord that there is a considerable amount of diplomacy going on behind the scenes at the present time in connection with the situation in Lebanon, We have indeed remained in touch with the Government of Lebanon, as well as the others concerned, including Syria and Israel.

Trident: Cost Estimate
2.40 p.m.
Lord Gladwyn: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the recent statement of the Minister of Defence in another place that when he wants to change the estimate of the cost of Trident from £5 billion he will do so (Commons Hansard, 14th April, col. 144) means that any rise in this estimate depends on his personal judgment rather than on that of experts who are already predicting that the figure of £5 billion will be greatly exceeded.
The Minister of State, Ministry of Defence (Viscount Trenchard): My Lords, the Ministry of Defence—including all its experts—are responsible to the Secretary of State, who answers to Parliament for defence matters. He has given information on the cost estimates of Trident on several occasions, as I have also in this House.
Lord Gladwyn: My Lords, I thank the Minister for that reply. Can we assume that as soon as evidence of any likely increase in the cost of Trident is available it will be published by the Secretary of State? May I ask the noble Viscount another supplementary question? At what point in the likely, almost inevitable, escalation of the costs of Trident will the Government be prepared to abandon this unfortunate project?
Viscount Trenchard: My Lords, the noble Lord makes an assumption in the latter part of his question to which I do not intend to address myself. As my right honourable friend the Secretary of State made clear

133
in the column before the column quoted in the noble Lord's Question, the estimate of £5 billion remains at the present time the best estimate we can give.
Lord Peart: My Lords, on behalf of Her Majesty's Opposition, I strongly support the noble Lord who speaks for the Liberal Party. I think there is a degree of arrogance which ought to be counteracted. I am sorry to say that. I am asking the noble Viscount will he very soon give us an opportunity to question this poilcy?
Viscount Trenchard: My Lords, I am sorry if the noble Lord feels that there is a degree of arrogance in my answer, but it is not as though this question has not been discussed in debates in the other place and on Questions in this House, including one put down by the noble Lord for Written Answer: I have a list—but I will not weary the House—which numbers nine occasions this year when this subject has been discussed or answered on Questions. Hence my feeling that, for the time being and until some of the options which my right honourable friend has explained are being studied have been studied, to pursue this question is a little superfluous.
Lord Campbell of Croy: My Lords, can my noble friend for the benefit of the House indicate whether there is a misprint in the Question as it is printed on the Order Paper? Should not the figure be £5 billion rather than £5 million?—otherwise it seems that we are getting Trident on the cheap.
Viscount Trenchard: My Lords, my copy of the Question, which is a printed one, says "£5,000 million", which is of course £5 billion.
Lord Beswick: My Lords, would the noble Viscount agree that the number of questions probably reflects the importance of the issue? Secondly, is it not rather difficult to give an estimate of the cost before a decision has been made as to which mark of the Trident will be procured?
Viscount Trenchard: My Lords, to take the second question first, I point out that it has been made clear in the debates on this matter in this House and also by my right honourable friend on numerous occasions that the decision to date has been to buy Trident I. This was well discussed in the debate raised in this House by the noble Lord, Lord Chalfont, and followed by a special Question, although for the moment I cannot remember the name of the noble Lord who asked it. I think that the estimate that was made last year, and which has been updated to a small degree by my right honourable friend, refers to Trident I. That has been made entirely clear and the main areas of the options that we are still looking at have also been made clear.
Lord Orr-Ewing: My Lords, is my noble friend aware that the estimates made 20 years ago concerning the price, cost and upkeep of the Polaris missile system, and the submarines in which it is fitted, have held good throughout that period and in fact are less than
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the estimates made by the Minister at that time? Is that not an outstanding position and does it not give us confidence that at least every conceivable effort will be made to keep this project within the bounds already outlined by the Minister?
Viscount Trenchard: My Lords, I thank my noble friend for drawing our attention to that fact. Certainly other estimates have been completed in accordance with original estimates. So I know of no reason at this stage why this estimate, which is not an exact figure, should not be taken as the best estimate available at the present time.
Lord Paget of Northampton: My Lords, can the noble Viscount tell us what is the estimate on the Paper? Is it £5 million?
Viscount Trenchard: My Lords, the correct figure is £5 billion.
Lord Blyton: My Lords, is the Minister aware that I hope that the Minister of Defence does not take too much notice of naval experts? They have committed terrible errors in the past. They gave us the submarine with dummy funnels that was withdrawn after six months because we nearly suffocated. Then they gave us the submarine called the M1 with a 12-inch gun and a half-inch shell which went down off Portland Bill in 1921. Does he realise that I would hope that the Minister who is cutting social services right, left and centre, might cut here as well?
Viscount Trenchard: My Lords, again I cannot go into the details which the noble Lord with his experience knows in this particular field. But our shipbuilding design capability—and with that goes estimation capability—is, I think, efficient. I wish that one could say that the whole of our shipbuilding industry was thoroughly competitive, but internationally our design capability and our experts on shipbuilding are regarded as being certainly equal to any in the world and possibly superior and in the main it is they who have made this estimate because the main part of this cost is, of course, for the submarines to be built in British yards.
Lord Carver: My Lords, would the noble Viscount not agree that whatever the sum of money involved it would be better spent on conventional forces?
Viscount Trenchard: My Lords, as the noble and gallant Lord knows well, I would not.

Rabies: Customs Officers' Strikes
2.47 p.m.
Lord de Clifford: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what action has been taken, when customs officers go on strike, to ensure that no animal capable of being a carrier of rabies enters the country.
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, all reasonable measures within the resources available are taken by customs management to ensure compliance with the rules governing the importation of animals which are subject to rabies control. Customs checks are, of course, only one of the safeguards.
Lord de Clifford: My Lords, I thank the noble Earl for that reply, but it would be interesting to know what are the other safeguards because the customs men are withdrawing their labour. What are the other safeguards?—which is the basis of my Question.
The Earl of Mansfield: My Lords, they are basically threefold. In the first place, police, local authorities and local organisations have been asked to exercise special vigilance and, of course, customs officers and local government officials have the same powers of seizure as police officers. Secondly, there is luckily considerable public awareness in the reporting of suspicious cases. Thirdly, there are standard requirements that airlines and shipping companies do not accept animals without appropriate documentation.
Lord Strabolgi: My Lords, is the noble Earl aware that some months ago, according to press reports, a large sheepdog was brought through customs in a car and it was later spotted in London only through the initiative of a police officer because he saw it sitting in a car with a Continental number plate; and the people concerned were charged? What steps are being taken to prevent a recurrence?
The Earl of Mansfield: My Lords, I am not personally aware of the details of this shaggy dog story. I must say to the noble Lord that so far as the Customs and Excise are concerned not all officers are taking part in industrial action, but where they have done so Customs and Excise management have informed the police and other authorities of the situation so that they could react accordingly. Furthermore, much of the industrial action has consisted of working to rule, which in some respects can lead to enhanced rather than reduced checking.
Lord Cledwyn of Penrhos: My Lords, does what the Minister has said mean that he is absolutely satisfied that the same standard of vigilance is kept today as was kept before industrial action was taken? Is he satisfied that all the procedures which successive Governments have followed under the Rabies Act are being followed?—procedures which have been successful in keeping this dreadful disease from this country thus far. Further, is he able to give us any statistics as to the number of dogs in quarantine now and the number before? Would that lead us to have confidence that the right degree of vigilance is being maintained?
The Earl of Mansfield: No, my Lords; of course, no one can be absolutely satisfied when a very important arm of our defences as regards the importation of animals is in dispute. I do not have the statistics for animals in quarantine because they are outside the terms of this Question. But I have looked up the
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general figures relating to the seizures of dogs and other small animals in the first quarter of 1981 as opposed to the first quarter of 1980, and the figures are remarkably similar. Luckily, the high season, if I may so call it, for animal traffic has not yet arrived and the experience is that people bringing in domestic pets and so on are less likely to pose a risk of import control evasion than professional smugglers dealing in other items.
Lord Rochester: My Lords, can the noble Earl give us any more precise information about the customs officers who are not going on strike?—as many of us will regard this as very welcome information.
The Earl of Mansfield: My Lords, I am afraid that I cannot be more specific because the industrial action takes place on a highly localised basis from time to time, so that such information does not lend itself to figures.

New and Smaller Businesses
2.52 p.m.
Lord Spens Lord Spens rose to call attention to the need for further assistance to new businesses and for the stimulation of existing smaller businesses; and to move for Papers.
The noble Lord said: My Lords, I thought that I had been upstaged by no less a person than the Prime Minister when I saw her yesterday evening on the BBC television news talking about small businesses and the need very rapidly to encourage them. I understand that this was at a reception which was supposed to start a series of propaganda measures to enlighten the country about the Government's own actions. The papers do not seem to have reported her in any way as avidly as they have reported certain criminal nastinesses today, and so I think that the upstaging has not, in fact, occurred.
However, in the excerpt that I saw, she said that it would take time for new, large businesses to be created and that for the immediate future the need was to encourage small businesses as much as possible. That is entirely the reason that I put down this Motion, which I must claim to be very topical in the light of what happened yesterday.
Accepting what the Prime Minister said yesterday, I want to make only two more introductory remarks. First, to my mind two and a half million unemployed is completely unacceptable. It looks as though we shall have to live with a figure like that for the next two or three years unless something is done. I believe that it warrants emergency measures to try to get that figure reduced. I should also like to point out that I tabled this Motion some days after the Budget speech, so that I put it down in the full knowledge of what the Government propose to do in their Budget. I still do not think that that is anything like enough and I hope that our debate today will bring forward some more suggestions which the Government may find useful.
We are very fortunate in having a number of experts speaking today. The noble Lord, Lord Oram, who is an expert on co-operatives, will, I believe, talk about their role; the noble Lord, Lord Seebohm, who is chairman of ICFC, will talk about that and also about his new and very imaginative co-operative idea, which he has mentioned before in this House; the noble Lord, Lord Schon, who for 10 years has been chairman of the National Research Development Corporation, will talk about what that corporation can do. So I shall leave all that side of it to the experts.
Of the 2½ million unemployed there must be a very large number with experience of the varied skills that are needed to get new businesses started—not only engineering and technological skills, but skills or experience of selling, marketing and administration of businesses. The problem is to get those skills brought together. That is one of the themes which I want to pursue this afternoon. A great deal of very good work is already being done in this field. I hope that the noble Baroness, Lady Seear, who is chairman of our Select Committee on long-term remedies for unemployment, will be able to talk a little about her visits to Pilkingtons, ICI and one or two other places. I do not know whether she plans to do that, but perhaps she will.
I have visited two operations in the South-West: the Aid-to-Bristol Enterprises sponsored by the Imperial Tobacco Company and five or six other local firms, and a small industries group at Watchet, near Minehead, which has an organiser paid for, certainly to begin with, by the Manpower Services Commission. I saw not only those two operations working but also the very great amount of help that was being given to them by Somerset County Council and the various district councils. So I am quite certain that the local authorities have a strong part to play.
Then only last Friday I visited in my home town of Ashford in Kent a person who I think has a very imaginative idea. He is a property developer who has bought up a complex which consists of a series of factory buildings in the middle of which is an old warehouse which had too low a roof for its proper purpose as a warehouse. He has converted that warehouse into 20 or more very small areas, each one not being more than 600 square feet. These he has already put on offer at monthly rentals to anyone who wants to take them up. He told me that if someone came to him with a good idea and could not even afford the monthly rental, if necessary he would see what he could do to get that person started.
I asked him why he was doing this. He said that he felt he had a duty to help the employment problem, but he was confident that he was going to make profit out of it. That is an important aspect. These people who are helping are not doing it entirely for charity, or philanthropically. They believe that their help will enable future profits to be brought about. I want here to be a little unkind to the media. In the case of the Ashford project no one has written that up. On the other hand, the local press has carried banner headlines of various firms which are being closed down. The Ashford operation was reported but on an inside page, and with no enthusiasm. If we are to get anything off the ground we must have the help of the
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media for this.
I want to deal first with the need to stimulate existing businesses, because they are already operating and therefore can expand much more quickly than anyone else. However, many of them are just hanging on hoping for the economic climate to change, and they may collapse if no help is given to them immediately. They need first of all lower interest rates. Can this not be achieved by more of a two-tiered loan system, or even, for a short time, by a moratorium on the servicing of their present loans? Secondly, they need protection from the soaring increases in local rates. Thirdly, a reduction of the national insurance surcharge. One head of an old-established business in Ashford told me that if that surcharge could be reduced he could take on another two people immediately. Fourthly, alleviation from the burdens of the employment protection legislation. Fifthly, scrapping minimum wage rates for a short time.
I suggest that those five matters could be put into some form of emergency industry Act—I do not know what you would call it—and brought into operation for, perhaps, a period of three years. I choose three years because three years seems to be the Government's idea of what is necessary at the moment, as will come out in some of the things I have to say. There is a sixth point which ought to be happening already, and I am afraid in many cases is not happening, and that is some way to stop the nationalised industries, and even Government departments, from harming businesses in the private sector. That is still going on, and it can be absolutely devastating.
There does not appear to be any sense of urgency within the Government to tackle these problems. I want to give an example which came to my notice over the weekend concerning the local authorities and the Secretary of State for the Environment. The Association of District Councils told me that there had been set up a joint group of central and local government officials to look urgently at the role of local authorities in assisting industry and commerce, paying special attention to small firms. The group was set up in May and it sent in its report in July last year. I am told that that report was published this last week. What has happened to it? Who has been sitting on it? It asks for not very much in the way of additional legislation, but it asks for a little bit. They seem to think now that because it has been sat upon for so long they are unlikely to get this legislation even during the next Session. That is not the way to treat this emergency.
The Wilson Commission on financial institutions produced an interim report in July 1979 on the financing of small businesses. There were 15 recommendations in it, and not many of them have yet been put into effect. But there is one on which Sir Harold elaborated during the debate on the Second Reading of the Finance Bill just before Easter, in which he called for the establishment of some form of development commission which would be similar to CoSIRA—the Council of Small Industries in Rural Areas—which operates, as its name implies, in rural areas. He would like to establish a similar CoSIURBA to operate within the towns. He would like to see both CoSIRA and CoSIURBA given financial powers similar to the other development agencies which exist. That is

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something I support, and I would hope that theGovernment would see their way to setting about.
I understand that at last night's reception the Chancellor spoke about the new measures that he is introducing in the Budget. Last year he gave some welcome relief to some borrowers who, in turn, invest in small businesses, and 100 per cent. capital allowances for the construction of industrial building to last for three years. This time there is to be a Government backed loan scheme, the Government putting up 80 per cent. of the money, and also what they call a business starter scheme. I want to criticise this latter scheme for being far too restrictive. It takes up 14 clauses in the Finance Bill, most of them of course trying to stop people misusing the scheme. It is not that of which I am critical. I am critical about the fact that its scope is so limited. Its scope is limited to the first three years of the life of a business, and to cover only 30 per cent. of the equity of that business, and it is only for businesses which, among other limitations on their nature, may not deal in goods.
I think that the businesses which need this scheme are those which are already operating but which have come to the stage when they want to expand; they need additional finance, but they cannot afford to get that finance by further borrowing, and therefore they want some means of getting a part of their equity into other hands. Surely, if dealers in goods are excluded from the scheme, the Government are excluding those people who are essential to the new manufacturer, and who are going to market and sell his goods. They must be encouraged at the same time.
I come to the question of new small businesses. What does the small businessman want to help him start? First, he needs suitable premises, or be allowed to work from home, and that is something local authorities can arrange, as well as entrepreneurs like my friend in Ashford. Secondly, he needs information about local requirements and restrictions and whether there are any grants he might apply for. There is a lot of information going around but nobody to coordinate it locally, and therefore there is no one place where the new businessman can go for that information.
Thirdly, he needs finance. There are few with enough capital of their own to cover their initial expenses and provide working capital as well. They do not want to commit their homes as security nor to surrender control of their businesses, and the banks —at present the only people to whom they can turn—are not very good about helping in such ways. Fourthly, the new businessman wants advice, including for example about coping with all the forms, returns and other monstrosities with which a businessman must now deal. I do not know whether noble Lords saw yesterday's Daily Telegraph which contained a whole list of items which must be dealt with by someone employing only one employee. A new small businessman does not want to use most of his working capital paying people to do that, and therefore some form of centralised administration is probably necessary.
I have a suggestion to make which might help overcome some of those problems. First, however, I must point out that a large number of excellent projects are being started up all over the country. The trouble is that they are too haphazard and there
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is no co-ordination or encouragement on the part of large businesses to start them near their places of work. I should therefore like to see the establishment of catalysts in every local area. I do not know how many one could have, but certainly we need someone in each area able to pull together the various businesses which might be able to give help, somebody who could sort out the unemployed persons who might wish to set up together in business. People wishing to do that would have to be introduced and brought together and be confident that something constructive could be done.
Where shall we find those catalysts? I can tell the House of one syndicate—I will call it that—which has been formed, again in the West, which is doing exactly what I have described. Its director has set up a small company and he has approached various businessmen in his vicinity who might be prepared to put up a little risk capital for him to invest in new ventures. I believe that throughout the country there are enormous numbers of people who would be prepared to take a small risk with some of their capital but who do not know how to go about it and where to start. The man of whom I am speaking started up last year and has already persuaded his colleagues to invest in three different businesses, which are now off the ground, and he is now looking around for more. He believes his idea could be spread throughout the country.
In a way, it is like the syndicates at Lloyds, except that those contributing to these syndicates would be limited only to their contributions and not to anything above that. We should endeavour to inspire the creation of such syndicates throughout the country, and I would call them, "Friends of small businesses" or something of that sort. However, I come up against the law straight away, for I cannot advertise for people of that sort if I am going to ask them to contribute money because under the Prevention of Fraud Act and the Protection of Depositors Act it would be a criminal offence to do so. How can we get round that? Perhaps the Government could help us, and I hope in any event that they will examine my suggestion.
I should like to see my "Friends of small businesses" start, and the first question to consider is how to find the catalysts. Could the Manpower Services' Commission fund them and local authorities choose them? If so, it should be done not by local civil servants; they must be chosen from among businessmen with experience and enthusiasm, probably businessmen who would be prepared to work, at any rate to begin with, for a very low salary. I am certain we could get something of the sort going, provided there was sufficient enthusiasm, and I hope I have given noble Lords some food for thought. My Lords, I beg to move for Papers.
3.17 p.m.
Baroness Seear: My Lords, the House will be grateful to the noble Lord, Lord Spens, for putting forward a Motion on a subject which we agree is of the greatest importance. We also agree that small businesses are important, although that statement by itself does not get us far. This afternoon we need to discuss some of the problems that are involved in attempting to help small businesses to establish themselves satisfactorily and to remain in business.

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The need for more small businesses in this country goes without challenge; as we know well, we have a far smaller small business sector in the United Kingdom than exists in any of our major competitors. That is a real economic loss, as small businesses provide a breeding ground for new ideas and, later on, a breeding ground for big businesses, and therefore I would welcome more small, as well as big, businesses. However, there is a certain sentimentality at the present time about small businesses which does not seem to hold water in itself, although needless to say I am in favour of developing more small businesses in Britain.
I wish at the outset in following the noble Lord, Lord Spens, to say, on the basis of some of the work we have done in the Select Committee and of what we have seen, how much I agreed with the tribute he paid to large companies which are taking imaginative and constructive steps to establish small businesses. As the noble Lord remarked, we saw some of the work that has been done in the north-west by ICI and we visited Pilkingtons and other large companies which have studied the question in great detail and have taken a variety of steps to match the need for development in their areas. I can only say that I believe that few things would do more to speed up the satisfactory and successful development of small businesses than if still more of the larger enterprises were to take steps in that direction.
I say that partly because they are already in the field and they understand the problem, but also because they are able to provide something which is very greatly needed in the establishment of small businesses. A great deal of enthusiasm, a certain amount of romanticism, and considerable effort is devoted by a number of people towards getting small businesses going. But the fact of the matter is that, to be successful, a small business needs financial knowledge and management skills among other things and that these are in very short supply; far shorter supply than are good ideas about products which might be produced or the desire to set up in business. In my view it is only by linking the expertise that exists in the large companies to the people who want to set up the small enterprises that small enterprises which can survive are likely to be established on a large scale.
So the first point that I would make relates to thanks for, and encouragement of, greater effort by the large companies already working in this field. I wish also to say how glad many of us are—I am sure that the noble Lord, Lord Seebohm, will be saying more about this when he speaks; and he is of course in a far better position than I am to speak about it—to see that in many parts of the country the banks are now taking an increasingly constructive part in the establishment of small businesses.
However, what I suppose we are primarily concerned with this afternoon is to discuss what Government can do, and for my part what Government cannot do, in this field. What kind of help do small businesses want from Government in order to get going and to remain in being? Here I am afraid that first I must cross swords with the noble Lord, Lord Spens. He believes that some relaxation of protective legislation is necessary if small businesses are to flourish; and that in particular they should be let off some of the provisions of the Employment Protection Act beyond
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the relaxations which have already been granted. For my part I do not believe that this is a wise policy.
In the first place I think it becomes extremely difficult to draw the line between the company which is exempt from provisions of this kind and the company which is allowed to take advantage of them. This is a problem which arises whether special provision is made for industries and concerns operating in a particular geographical area or whether the concerns are of a particular size. I say that because there is always somebody who is just over the border—just over the border of size or just over the geographical border—who quite justifiably feels extremely hard done by if he sees a competitor quite close to him who has benefits which he cannot enjoy, as he would see it. This is an extremely important point, and a point which I should have thought would have been much borne in mind by people who are pressing, in my view rightly, for the stimulation and competition that comes from the establishment of small businesses. One really cannot talk about on the one hand the advantage of competition and on the other hand the giving of special concessions to people who are trying to compete.
I also believe that in so far as protective legislation is desirable—and most of it I believe to be desirable—I see no reason why employees employed in small concerns should not have the protection that is given to employees employed in larger concerns. I have in mind, for example, the maternity benefit provisions. I would draw your Lordships' attention to the fact that in so far as research into this matter has taken place, and in so far as we have evidence rather than hearsay for making up our minds about the effect of protective legislation, in fact it has not been an inhibiting factor for the development of the small firm.
I have said before in your Lordships' House, and no doubt I shall say again, that what I believe is needed is much better information to employers on how the legislation operates. The widespread belief that it is impossible to get rid of anybody in employment because of the unfair dismissal procedures is complete nonsense, in that far more employees when they go to the tribunals lose their cases than win them. That is a fact which people refuse to believe, and the provision of facts and figures about it seems to make no impression when the matter is being discussed. But it is in fact the case. So that information about how the legislation operates, rather than propaganda in order to try to get rid of it, seems to me to be what is required in this particular.
Having said what I for my part at any rate do not want the Government to do, I turn now to the question of what do we want the Government to do? I feel that in a sense I must apologise to your Lordships' House if I am sounding a little critical and negative. But what I believe is immensely important to realise in the development of the small business—and this is a theme to which I think we shall return again and again in discussing the measures necessary for improving the employment position—is that conditions in different parts of the country differ very greatly. The needs of one part of the country are not the same as the needs of another part of the country. In a great

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many cases a national detailed plan for assisting the development of small businesses will not fit in the particular areas in which it is desired to give help.
What I am really saying is that we need to operate the assistance for the development of small businesses as near the grass roots as possible, with the greatest amount of flexibility, and that any attempt at something which looks like an inspiring national plan that is to provide the same sort of provision for everybody will in the end suit nobody. I know that this view runs counter to some of the most deeply-held beliefs about Government in this country. In fact, it runs counter to control over public expenditure. But what we are talking about is development—development of new businesses under new conditions; and development money is by definition risk money. Unless Government are prepared to commit money for risk purposes, then they are not going to help small businesses. Therefore they must not tie down their money in a way which will make it increasingly difficult for the people who want to take advantage of it to do so.
I do not know, I cannot say, how exactly that can be worked out, but I am sure that what are needed are agencies, as near as possible to the start-up place geographically, which will have the maximum amount of discretion for helping in the provision that they give. If that provision differs somewhat in the North-West as compared with the North-East or the South-West, so be it, because the problems of the North-West, the North-East and the South-West are different one from the other. The advantages which they already have and the disadvantages under which they already suffer are different in each case. That being so, if there is a real equity in this matter, there must be a difference of treatment.
But that means that our friends in the Treasury must be prepared to see committed some moneys for which they will not get precise accountability according to rules and regulations laid down at the centre. They must trust that that money will be wisely handled by people out in the sticks, because that is what we need. I know that there is the feeling that all public money must be properly accounted for according to regulations. But if there is drawn up in detail a national scheme which does not work in a great many places, a great deal of public money is wasted. If there is a scheme which allows much more discretion locally and in some cases things go wrong, some money is also wasted. My contention is that either way money will be wasted, but one is much more likely to be effective if one gives the maximum amount of flexibility at local level and accepts that there will be some failures, that things will go wrong. But that is the price that one pays for getting really appropriate, constructive schemes at the place at which they need to be handled.
What the administrative mechanism is for doing that, I do not know. I can only say that as we from the unemployment committee have gone round we have found that in one part of the country premises are the trouble, while in another part of the country it is finance. The priorities of the difficulties and the obstacles are different in different parts of the country. I see no way out of that unless one is prepared both to see it as a development exercise and to put risk money
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into the development of the new business without strings being attached to anything like the normal extent.
In addition to this there are, of course, other things that the Government can and should do. The noble Lord, Lord Spens, referred to the problem of the startup, and there is no doubt that this is a major difficulty. Some enterprising people have solved the problem of the start-up in a way which may not be altogether commendable but which is very effective. They start up while they are still employed by an existing employer. They test out as a secondary job the state of the market by what is normally known as moonlighting, and they do this while they are still being paid by their employer. After all, some of them have a desk, they perhaps have a telephone and they have heating and lighting provided by their existing employer. Then, when they find that the enterprise is a viable one, they break off and set up on their own.
These are real entrepreneurs. They may be, from the employer's point of view, not totally admirable employees, but these are the sort of people from whom new business is coming. The message which comes from this is that they need something which is the real equivalent of equity capital for a long enough period to find out whether the business is going to be successful, and then to let it run to a point of success for some years to come. I do not believe that the provisions that the Government have so far brought forward provide this equity capital which is absolutely essential if the small business is ever to get under way. So the start-up period, in my view, requires a very great deal more attention. I know that attempts are being made in the present Finance Bill to do something along these lines, but I would agree with the noble Lord, Lord Spens, that so far not enough has been done to give the necessary boost or to enable the required effort to be sustained while a business is being set up in those first, very difficult three or four years.
I should also like to make the point that the establishment and the running of a small business requires skill and knowledge, which requires training. People do not just suddenly turn into successful entrepreneurs. So far as we have evidence about it, the people who are being successful are, on the whole, the skilled men who then start up on their own. Skilled men, or people in specialist activities, like the computer people who have found ways of setting up their own business, have already acquired a skill; they are trained people. They need to have skilled knowledge about something or other which they wish to market as a business.
They also need the kind of knowledge which is involved in running a business. We all know, I suppose, the number of failures there have been among small building contractors, and I understand that a lot of this is due to the fact that they lack adequate financial knowledge. There is a real training problem in getting people equipped to run small businesses successfully themselves. Surely special attention could be provided inside the training services that the Government make available, to enable people more effectively to run their own businesses, and, through training courses, imaginative schemes for helping people who are already embarked on the development of small business.
May I also say that I think the need to provide training for people who are going to set up on their own

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is a very good argument against the people (too many of them in government) who believe that you should provide training only where there is a specified job in paid employment likely to be waiting at the end of the training period. On the contrary, I would argue that if, in training—and I wish we could drop the phrase "speculative training", which has a prejudiced note about it before you start—you could think about training for stock, and could train beyond the obvious demand immediately at the end of the training programme, quite a few of the people who go successfully through training programmes of that kind would be the very people who use the skills that they have acquired in order to set up their own businesses. Because one thing that is absolutely certain is that the kind of person who attempts to set up his own business without any real knowledge or skill is a person who is doomed to disaster; and to build the training component into this is, I think, of the very first importance.
Having said this, clearly the establishment of more small businesses is a matter of very great importance, but we are seeing it, I think, not just because we believe we need more small businesses in this country but also as a contribution towards reducing the level of unemployment in the United Kingdom—a level of unemployment which is likely to be with us for far too long. I hope that the Government will recognise (as I am sure they do) that small businesses are only one way in which we can help to alleviate the problem of unemployment; and that, indeed we can get too optimistic about what can be done by the establishment of small businesses. When you go round and see a number of small businesses being set up, and imaginative schemes being put into effect, you can get very enthusiastic about it, as indeed we all do. But then you go another half mile and you see a larger enterprise which has just declared 1,000 people redundant, and you ask yourself, "How many successful small businesses is it going to take to use the people who have become redundant in this way?" It is going to be a very long time before the start up of small businesses in that particular area is in fact going to absorb the people who have become redundant. So it is a contribution, but it is only a relatively small contribution to the solution of the total problem.
Of course, one has to add (again to desentimentalise the argument) that, while it is not so difficult to set up a small business—though some people find it hard enough—it is all too easy for small businesses to die. We have heard a great deal from the United States about the number of new jobs created by the establishment of small businesses, but people often forget to add the other finding in that same report—the rate of death of small businesses, which is also very high. This is why I have been urging that in the work that the Government should be doing to help small businesses they must take every possible precaution to see that only those which have a really good chance of continuing life really come into being.
That being so, I want to ask the Minister this question quite specifically. There is nothing in the new enthusiasm of the Government—there is nothing new, that is unfair, but we understand that the Government are about to tell us something about more help for small businesses coming from the Government. May we have an absolutely categorical assurance from
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the Minister that this will in no way affect the money which is going to be put into community enterprise, another area which will do something towards reducing unemployment; that the promise given to us about (I think it was) £77 million for community enterprise, plus the £2 million programme for partnership schemes that the Secretary of State talked about in the autumn, stands completely, whatever else is being done for small businesses?
May I also ask the Minister what action is likely to be taken on a most interesting report about the initial capital community venture which is being studied and which has gone to the Manpower Services Commission, I understand? That is work which was done by Mr. Colin Ball, and which showed, from what I have learned about it, very great scope for the development of community enterprise, which needs to run in parallel with the work of setting up small businesses of a more traditional kind. Because, while supporting in every way the need for more small business, I must underline that it is only one contribution, one area in which we can deal with the problem of unemployment, and that we need approaches from a number of different areas, of which the community enterprise area is one. The noble Lord, Lord Seebohm, will no doubt be talking about job ownership development, and other noble Lords will be talking about cooperative development. It is a multi-pronged approach that we need, in which the small business plays a part, but only a limited part, in contributing to the reduction of unemployment.
3.40 p.m.
Baroness Sharpies: My Lords, I am truly grateful to the noble Lord, Lord Spens, for choosing to debate smaller businesses today, and I was extremely interested in what he had to tell us. Fifteen months ago we debated the problems facing small businesses, and many things that we talked about on that day are coming about. As the noble Lord mentioned, starting on 1st June is the Government-backed loan guarantee scheme, which in many ways is similar to that in America, under the Small Business Administration and the SBIC, the Small Business Investment Corporation—a genuine, over-the-counter market for obtaining equity capital from the public through the Stock Exchange. The noble Baroness stressed the importance of equity, and I entirely agree with her.
We asked that independent companies should be allowed to buy back their own shares, and there is now a promise by Her Majesty's Government of tax changes to do so. In America this has not been abused, and has attracted a great deal of private capital into their independent businesses. I noted that the noble Baroness also talked about the worries of the Treasury, perhaps, about tax-avoidance, but I think they are unduly worried. We have had a promise, too, that independent companies will receive a fuller and increasing share of national and local government contracts; and this, I feel, is extremely important.
Then there is the income tax relief on up to £10,000 investment of risk capital in new companies, already mentioned by the noble Lord. I feel that here again there is undue concern about possible abuse. In another area, the time taken to deal with appeals

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against adverse decisions by planning authorities in rural areas, which affects many small businesses wishing to set up, has been speeded up, and I am delighted to have been told so by Her Majesty's Government.
Her Majesty's Government have helped small businesses in many ways, but these small companies have many problems. Not least is the continuing practice by only a few large firms of not settling their accounts, in some cases for up to 90 days or even (and I have the evidence here) for much longer. Small businesses are combatting this either by charging interest on overdue accounts or by using recorded delivery to ensure that their invoices do not go astray, as claimed by some large firms, or by not releasing goods if they are dealing with a persistently slow payer. I appreciate that legislation in this area would not be appropriate, but I feel very strongly that unfair treatment such as this should be condemned.
The closed shop affects small businesses, which are usually not unionised, when union members in a customer's or supplier's business threaten to black their goods as they do not originate from a business which employs union labour. Then there is secondary action which is taken by workers in dispute, again against the goods of small firms whose employees are prepared to continue working. Surely this blackmail is morally unjustifiable, and I would ask my noble friend to say when he comes to reply whether he would not consider that legislation might be needed to right these wrongs.
At least eight organisations representing small firms have formed a loose-knit alliance to help them in their approach to government, and this can only prove helpful to all. I wish both sides success, and we know that the will is there. There are many experts who today will be speaking in detail on the financial problems which face small businesses, and I would not dare to trespass on their territory. I should merely like to finish my few remarks by repeating what I said in my speech in our debate last year, because I think it is very appropriate now; that is, that Her Majesty's Government should concentrate on promoting an equity-owning democracy.
3.45 p.m.
Lord Oram: My Lords, I, too, should like to thank the noble Lord, Lord Spens, for giving your Lordships a further opportunity to discuss the subject which the noble Baroness, Lady Sharples, introduced a year or so ago. I recall that during that debate, towards the end of the short speech that I contributed, I suggested that the small co-operative business was particularly worthy of attention and encouragement, and I should like to take this opportunity today to develop that theme rather more fully.
I am prompted to do so, my Lords, because during a more recent debate—during the Committee stage of the Companies (No. 2) Bill—we had a most interesting discussion, initiated by the noble Lord, Lord Seebohm, in which he described to your Lordships the great success of the industrial co-operatives in the town of Mondragon in Northern Spain. I recall that on that occasion, during that debate, there was a ready response to the noble Lord, Lord Seebohm,
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from all quarters of the House; and that to me, as a dedicated co-operator, was a very heartening experience.
But during my own speech on that occasion, on the Companies (No. 2) Bill, I made the point that though Mondragon had recently and quite rightly attracted a great deal of public attention, there were many other examples in other countries of Europe, particularly in France, in Italy and in Denmark, of successful enterprises owned and controlled on a democratic basis by those who worked in those enterprises. For example, if any of your Lordships should be flying into Orly Airport in Paris, and if you should be using the facilities of the Hilton Hotel at Orly Airport, you will be staying in a magnificent building which was built by a worker-owned co-operative in Paris; and many other important buildings, particularly in the Paris region and the Lyons region, are the achievements of worker-owned construction enterprises. It is the case that co-operative societies of this kind have not developed in this country to the same extent as in other countries. But it is not always sufficiently recognised that we do have worthwhile and long-standing experience in this country of successful small businesses which are owned and controlled by the workforce and which are organised and operated according to the principles of co-operation. Indeed, it is the theme that I should like to urge upon the House today that we have already in this country sufficient experience in these matters for it to be the basis on which many more businesses could be successfully formed.
I suggest that if we are looking for growth points in the economy, gleams of hope, as I would call them, in a picture of general decline, then the recent growth of small industrial co-operatives in this country deserves our close attention, because that is indeed a growth point. These societies are now being registered under the Industrial and Provident Societies Act at the rate of two a week, and there are now more than 400 societies engaged in providing a very wide range of goods and services. Perhaps I may give a few examples of those which have been registered in recent weeks, and these examples, I suggest, illustrate the wide variety of businesses which can take the co-operative form.
In recent weeks, for example, there have been registered as co-operatives two groups of architects, three building firms, three engineering businesses and three printing and publishing organisations; and the growth of this kind of small business has been particularly marked in the last 10 years or so. If one goes back beyond that point, one could find perhaps 50 such societies. Now, as I have said, there are 400. During that period, much experience has been gained and there are many encouraging stories to be told about them if one meets the people who have set them up and who have conducted them. These are stories of enterprise and initiative; stories of hard work, stories of persistence against adverse circumstances and, above all—and this is the essence of the co-operative principle—they are stories of teamwork in enterprise.
Although I said earlier that there has been too little recognition in this country of what is growing up within our country, I should also acknowledge that in recent years—recent months perhaps—there has been a distinct improvement in this respect. I would say that that increased recognition is to be found at the

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ministerial level. The Secretary of State for Industry, for example, has on several occasions paid tribute to the co-operative form of enterprise in the industrial sphere. Currently there is a very interesting series of television programmes at a rather inconvenient hour on Sunday mornings which I have been following and which are telling the co-operative story in a vivid, inspiring and practical way. There are still two or three in the series yet to come and I recommend that if you are up and about at 9 o'clock on a Sunday morning in the next two or three weeks it would be worthy of your Lordships' attention.
During one of these programmes—I think it was two weeks ago—the Secretary of State for Employment, Mr. James Prior, gave his warm support to workers' co-operatives particularly because he sees them as groups of workers creating their own jobs, providing themselves with employment—as indeed they are. He sees it as Minister of Employment and he sees it rightly as a job-creating mechanism. I was glad to learn also that one of Mr. Prior's ministerial colleagues at the Department of Employment, Mr. David Waddington, paid a visit to an old-established workers' co-operative in South London called Metropolitan Cabs. This co-operative society has for more than 50 years been successfully organising a sizeable fleet of taxicabs that serve the London area. I do not know whether Mr. Waddington had the chance when he paid the visit of meeting the society's most famous member, but the Brain of Britain, Mr. Housego, the taxi driver who won the Mastermind Competition on television, is a keen co-operator and is a taxi-driver member of the taxi co-operative, Metropolitan Cabs.
Since I have already—and this is an unusal experience for me—praised a number of Ministers, I suggest that it would be remiss of me not to mention the Chancellor of the Exchequer and the Minister of State at the Treasury, Mr. Peter Rees. In the Finance Bill now being considered in another place, the Chancellor is ensuring that industrial co-operative societies receive equal treatment with companies and with partnerships in respect of money borrowed by shareholders for investment in the enterprise. That of course to co-operators is a very welcome development. It also illustrates the general need for equal treatment between co-operatives and companies, and that historically has by no means always been the case. Since co-operatives are registered under a different legal code from companies and have a different financial structure compared with companies, vigilance is always needed when fiscal or administrative changes take place to ensure that perhaps quite inadvertently anomalies do not creep in because the two codes are not seen to be matching one with another. It is particularly important that this vigilance should be exercised at a time when, as we have heard already, many proposals are being put forward by the Government and by others for special treatment of small businesses.
I should like now to deal with a most important feature of co-operative businesses which should commend them to all those—and I hope this includes all your Lordships—who are concerned with areas of special economic and social deprivation such as the inner areas of large cities and the remoter rural areas in our country. That feature of co-operative societies to which I wish to call attention is that by their very
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nature they have close ties with the life and people of the communities in which they are situated. The people who establish them are local people. Those who work in them live in the locality. The control over the business decisions is exercised democratically by the workers, and those business decisions can therefore be expected to be made in the interests both of the members and of the community in general.
This is very clearly seen in the so-called "community co-operatives" which are beginning to bring new life to the Highlands and Islands of Scotland, to Western Ireland and to North Wales. There is a fascinating and most encouraging development in those areas. It is well known that such areas have been areas of special deprivation with specially high levels of unemployment and with an ageing and declining population because the young people move out to seek work elsewhere. These remote rural areas lack basic services and amenities such as roads or piped water, electricity; and very often these days they even lack shops and post offices. Housing is inadequate and they have very few recreational facilities.
The character and problems of these areas are well recognised. But it is less well known that community co-operatives are beginning to change these conditions. Public authorities like the Highlands and Islands Development Board in Scotland are encouraging the establishment of these societies and they serve a great variety of economic and social purposes. Because they have their roots in the community, and because in a variety of ways they harness the skills and resources of the local population, they are bringing hope to these islands and remote communities where before it was a situation of hopelessness. They are bringing production in the fields and in the workshops where before there was sterility. They are bringing welfare where before there was a situation of deprivation.
It may be thought—and I know there are some people who say this—that the kind of regeneration to which I have called attention by the co-operative method is suited only to the special rural communities. I do not share that view. Superficially, the problems facing people in the Outer Hebrides may seem very different from those in a blighted city area, but I suggest that many of the problems are fundamentally the same: it is the same lack of jobs, the same inadequate housing, the same ageing and declining population and the same neglect of human skills and resources. I believe, therefore, that what is required in an area of industrial blight in a major city is basically the same solution as is being proved in practice to be necessary and salutary, for example, in the Hebrides: that is to say, by co-operative methods, the mobilisation of local skills and resources, the creation and servicing of local markets, the partnership between workers needing jobs and representatives of the community which needs to have those jobs done. I see it as a sign of hope in the present industrial gloom that there are groups of people around the country—I know of some 20 or 30 such groups—who see things this way and who are devising co-operative schemes of considerable variety so that the needs of the deprived communities can be dealt with.
Having introduced this link between the enterprise and the community, may I give one example of how these two parts, the workers and the community,

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can help one another? I go to Skelmersdale. There, some four or five years ago, there had already been a serious unemployment problem. It was made worse by the closure, first, of Thorn's factory and then soon afterwards by the closure of Courtauld's factory. Some workers and some of the local leaders decided not just to bewail their fate but to do something about it, and a number of community leaders, including people from the established co-operative movement, together with a group of redundant workers, set about establishing several co-operative enterprises.
One was a furniture-making workshop; one was a light engineering works and a third was a training workshop under the Youth Opportunities Programme of the Manpower Services Commission. Each of these enterprises had its own separate co-operative identity, but the interesting thing is that they were linked together in a holding company, which was the means of bringing in the personalities from the community. Since they were established in this way the group has provided work for more than 120 people and has now a combined annual turnover of more than £1¼ million. The noble Baroness, Lady Sharpies, mentioned the need and the desirability in connection with all businesses that local authorities should give contracts. I thoroughly agree with her, and in the case I am now citing an important factor of community help which led to the success I have described was a bulk order from the Lancashire Council for school furniture. I am sure that is the kind of thing the noble Baroness had in mind. That is one example, but there are a number of other similar activities and plans for other areas in the country. For example, in Fife, there is something similar, and in Northern Ireland there is a longer-established success story that I could quote. In Hartlepool plans are being made along these lines and also in several London boroughs.
May I, in conclusion, try briefly to suggest why there is this increasing interest in co-operative development and why I am able to point to a promising growth of small co-operative enterprises all over the country? I believe it is because there are many people who want to establish their own business and thus provide themselves with jobs, but either do not want to or may not have a sufficient range of expertise to do it themselves as individuals, or perhaps have not the financial resources to do so as individuals. But in a team, in a co-operative, they find it practicable to get into business and they find the co-operative method of working to be more attractive.
There is plenty of evidence to this effect. I suggest that the co-operative method of business, because it pools the financial and human resources of its members, enables more people to become entrepreneurs than would otherwise be the case. You have, in any case, to have seven to register a co-operative society, so it brings in seven rather than perhaps two or three in a promising project. It is because there are many people around with this kind of outlook upon work and society that I think there is proof that the co-operative method works both in other countries and to a considerable degree in this country, and that such people and such methods deserve every possible encouragement by all concerned.
4.6 p.m.
Lord Seebohm: My Lords, I must make it clear to start with that I am no longer chairman of ICFC. I retired last year and handed over to the noble Viscount, Lord Caldecote, who is very sorry that he cannot be here. He has, however, authorised me to speak on the various figures—I hope not too many—regarding the present experience of ICFC.
I do not believe there has ever been a reliable definition of a small business. The Bolton Committee had a shot at it and I think they made a ruling that companies with less than 200 employees would be "a small business". But with the advance of modern technology a company with 200 employees can be a very large company indeed, with a turnover of millions. So I should like to concentrate on what I consider to be a meaningful description of an "owner-managed company". This is where I think we shall get the growth and where we really must try to reinforce success. I shall give some illustrations later, but recently the Government have made some useful changes and more are proposed in the Companies (No. 2) Bill and in the Finance Bill. Earlier concessions to such companies, or rather their proprietors, included quite major concessions on the incidence of CTT and CGT. These concerned on the whole existing businesses and helped the proprietors, but they are not really, I think, having a very great influence on starting up or encouraging new businesses to expand.
I wish to refer to the business start-up scheme in Clauses 50 to 63 of the Finance Bill, which makes investments in start-up situations tax-deductible up to £10,000. While welcoming the Government's initiative in this area, the legislation as at present drafted is unlikely to achieve the objective of attracting risk capital for new businesses. The proposals are at variance with commercial realities, failing that most basic of legislative requirements; certainty as to entitlement to the relief.
The success of a new venture can be better assured if, in addition to finance, a business has access to management expertise in the particular industry. One absurdity of the present proposals is that the very people who are best qualified to provide the management expertise—that is, the directors of companies engaged in a similar trade—are ineligible for relief under the scheme. The proposals also contain an unfortunate flavour of niggardliness in withdrawing or abating the relief on death or on the divorce of a husband or wife after a transfer of the shares. In seeking to prevent abuse, the scheme is so tightly drawn as to be of very limited value. To enact the provisions as at present drafted would be to miss an opportunity to inject both finance and management expertise into this vitally important sector of the economy.
As I read the Bill—and I stand to be corrected on this—if you make an initial investment of, say, £5,000, then at a later date you are prohibited from making any further investment which would attract tax relief. If that is so, it seems to be a great disadvantage, because one of the most difficult things I have experienced is working out an accurate cash flow for the first year of a new business. I see the noble Lord, Lord Bruce of Donington, with his chartered accountant knowledge,

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nodding very satisfactorily. If this is true, then it seems to me that a very simple amendment that could be made would be to allow anybody to continue putting in money up to the £10,000 limit, at least during the first year and possibly extended to two years. That would be a great advantage. I could be wrong on this, but this is how I interpret the Bill.
I would make a few comments on another clause, Clause 25, on limited partnerships. This is a very tricky area. It extends interest relief to money borrowed for investment in partnerships, even where the individual, though a partner, has not personally acted in the conduct of the trade carried on by the partnership. However, limited partners will be excluded from obtaining interest relief on their borrowings. This exclusion is surprising at a time when the Government are initiating a public debate, through their Green Paper on the subject, on the most appropriate form of incorporation for small firms. Presumably, it is not the Government's intention to discriminate against limited partnerships.
The tax rules for limited partners raising capital should be no less favourable than those applying to shareholders borrowing to invest in a close trading company. Since the Finance Act 1980, shareholders need not work for the company in which they invest to obtain relief for their borrowings. Limited partners, who are prevented from becoming involved in management on pain of losing their limited liability, should be similarly treated. That is my first moan against the Government, but I want to make it clear that, though I shall have another moan later, I do not in the least think it is the Government's responsibility solely to pull small businesses out of trouble. I believe that the main responsibility is, and always will remain, on the private sector and businesses themselves to produce their own solutions to the various problems. The private sector has still a long way to go to improve the situation, and the people in that sector are the only ones who can help.
I shall, therefore, now move on to the private sector, which presents a particularly interesting situation at the moment. Since the recession started, the number of small companies coming to the ICFC has increased very rapidly indeed. It really started with the increase in unemployment, which is rather surprising. At the moment, the ICFC has £370 million invested in 3,400 different investments. These firms employ around 300,000 people. I shall not go through any of the details of where this money is, but there is about £43 million in engineering and other manufacturing, which is quite a good start; agriculture has £11 million; distribution and services have £40 million and so on.
The actual numbers and amounts of investments are fascinating. In the year to 31st March 1978, we financed 518 new investments and put out about £50 million. In the following year, when the situation began to deteriorate, we financed no less than 733 new investments, with a total of £67·5 million put out. In 1980, it was 920 new companies with £104 million put out; and in the first eight months of this financial year, which ended on 31st March—and I do not have the latest figures—we had 973, compared with 920 in a full year before, and put out £100 million. This is quite an astonishing growth, and shows what a certain
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amount of ingenuity and encouragement can do in the private sector, alter 30 years of experience.
Your Lordships are probably more interested in start-ups, and here the record is rather interesting. A start-up, in our definition, is a company that does not have more than three years' track record. In 1978, we did only 88; in 1979, it was 112; in 1980, it was 309 and the estimate for this year is 400. Of the 1,000 start-ups that we have done since 1978, 406 are absolutely new, green field companies with no records at all. Another company with which I have been associated, Barclays Merchant Bank, has recently done over 100.
The other development in which I am sure your Lordships are very interested, and which I have mentioned before, is the growth of management buyouts. This is really almost in the co-operative field. This is where a company has got tired of its subsidiary and wants to get rid of it, needs the cash, or thinks that it is going to fail. Instead of just selling it to another company, we worked out in 1978 a system whereby we could really strongly support management who wanted to continue the business, had faith in it if it was under their own control, without going to a distant headquarters, and if they could take it over. This was not easy and was made particularly difficult by Section 54 of the Companies Act, which I have talked about previously in this House.
We did only 10 in 1978—that was a start—and our lawyers were pretty busy working on this matter. In 1979, it was 20, which was not an enormous increase. But in 1980 the figure jumped up to 49, and I estimate that this year, ending on 31st March, there will be about 70 new ones, which is roughly one and a half a week, on which around £15 million-plus will have gone out. We are now averaging about £250,000 per operation. In several cases, we have put up 90 per cent. of the money, and still left the equity control in the hands of the management, and 75 per cent. to 85 per cent. is fairly common.
This seems to me to be one of the areas which seriously needs looking at and encouraging, and this is where, if we had got away with giving statutory recognition to job ownership companies, it would have accelerated growth quite remarkably. I believe it was a tragedy that we missed that opportunity in the Committee stage to make this quite flexible suggestion, which I put forward and which would have given great help to what I call the new industrial structure. Similarly, Section 54 appears now as Clause 42 of the new Companies (No. 2) Bill and is doing more harm than good, but I think we have an assurance that the Government will produce a new amendment in another place. So far as Section 54 is concerned, I am sure that, in order to avoid abuse, innocent parties are being thoroughly penalised.
On the ICFC side, all I really want to do is to refer again to the question of the recession. As I said at the start, it is very interesting how our growth in the ICFC began when the recession began to be serious. It is too early to know to what extent small businesses will survive the recession. Often it is cash problems associated with the upturn that cause more trouble than in a decline. However, the ICFC's experience is that, because small firms are flexible and innovative and decision-making is fast, they tend to react quickly to

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economic changes and are adept at surviving. In our experience, failures have generally stemmed from weaknesses that we identified long ago and there are few instances now where good management has failed, even in the current climate.
Another interesting development, which could well be the pattern for many others, is the London Enterprise Agency which we call LEntA. This is a consortium formed under the initiative of Shell (UK), plus Barclays Bank, British Oxygen, BP, GEC, IBM (UK), ICFC and the Midland Bank. It is a pretty formidable consortium. This agency was launched in 1978, mainly to provide help with inner cities' problems, recognising that a gulf had arisen—this is absolutely true for the whole country—between the large firms and the community, including local government. It was actually set up as an independent offshoot of the London Chamber of Commerce and Industry. It is my hope that the other chambers of commerce throughout the country will take steps to follow this initiative and to re-organise themselves in order to become really effective in bringing together local industry and local authorities. Although there are some admirable exceptions, I must confess that I have been bitterly disappointed in the chambers of commerce who seem to be very poorly supported by local industry. This problem could be met by the points which have been made both by the noble Lord, Lord Spens, and the noble Baroness, Lady Seear. In so far as the London agency is concerned, in the period April 1979 to mid-March of this year, 2,400 inquiries have been received, 550 cases have been dealt with and 1,800 jobs created or saved. Plans are also in hand to build quite a lot of small workshops.
Help for small companies falls into four areas. The first is the counselling provided by the LEntA staff, which has also been referred to by previous speakers. The sectors covered by LEntA include marketing, finance, innovation and premises; secondly, a training and development programme to which the noble Baroness referred for start-ups run jointly with the GLC, consisting of one-day start-your-own-business conferences held every six to eight weeks in conjunction with different London boroughs and a four weekend intensive course over a period of three months; thirdly, a marriage bureau business link service to bring small firms together with private sources of finance and potential partners; and, fourthly, exhibitions and trade shows to help small firms get into new markets. This includes exhibitions for overseas buyers, joint ventures in United Kingdom and overseas trade fairs and joint shows with bodies like the Design Council. Efforts are being made to find better ways of linking purchasing officers of large companies with small firms. It is the view of the agency that public-private sector co-operation in this kind of way is only just beginning.
Finally, I believe that it is necessary to change the attitude—perhaps I am sticking my neck out here—of our educators towards commerce and industry, and there should be some restructuring of the education system itself. But this should probably be the subject of a separate debate. However, unless we can produce more craftsmen for industry, whether great or small, we shall not be able to expand. The apprentice system seems to be failing, but others will know more about
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that subject than I. What I know full well, however, is that there is a gradual disappearance of craftsmen in rural areas, despite the fact that they can have a prosperous, satisfying and very useful life. Perhaps it is this aspect of society that we should look at to cure the British disease.
4.24 p.m.
Lord Vaizey: My Lords, I should like to thank the noble Lord, Lord Spens, for initiating this debate which has already brought forth a number of contributions which are of interest and importance and which will be useful in the further deliberations on this important topic which will take place outside this House. I have a few observations to make, which I hope to do relatively briefly.
First, it is worth recalling that, as I understand it, Her Majesty's Government are as a matter of general principle committed to the idea that competiton is a relatively good thing in bringing about a greater degree of efficiency in the economy. That, generally speaking, as I understand it—though perhaps the noble Earl the Minister will correct me at the end if I am wrong—is one of their general philosophical tenets. As a matter of fact, in actuality in manufacturing industry in this country we have a middling condition: neither a monopoly nor competiton. It was christened by economists some 50 years ago as "oligopoly"; that is, a mixture both of competition and of monopoly. It will be generally agreed that this is a fairly accurate description of what most branches of British industry are actually like: not totally competitive, not totally monopolistic but somewhere midway between the two.
Over the years, legislation has been introduced, by the Attlee Government among others, to increase the degree of competition in those industries which were in private hands. I think it will be widely agreed among economists that the usual effects of an oligopoly are to make prices relatively higher than they ought to be and to lower productivity below what it would be if competition prevailed. There are exceptions to that generalisation but that would be widely accepted. In particular, an oligopolistic structure in industry has one great disadvantage. It actually breeds bigness. I personally think that we ought to look with great care at the virtues and vices of bigness not only in our industry but throughout society.
The noble Baroness, Lady Seear, said that we are in grave danger of sentimentality when we speak about the small business. We have to be very careful about worshipping bigness for itself. It is often inhuman, and very frequently it is deeply inefficient. I wonder, too, whether the structure of the economy that we have now, both public and private, is flexible enough to meet the extraordinarily difficult, internationally competitive situation which will become more difficult and not less difficult over the coming 20 years.
If, for example, we look at the banking structure of this country, we find that we have four big banks. As noble Lords know, in the United States it is illegal, I think, under federal law for banks to operate across state borders—at least, in many cases. There are many more banks in the United States than there are in the United Kingdom. I cannot help feeling that this is one of the main reasons why the United States has four times as many small businesses per head of

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the population as has the United Kingdom. Therefore I think we ought to look very carefully at the worship of bigness. I regret deeply that the Bank of Scotland is subject to this takeover bid to become yet another giant bank. Are we satisfied that our existing high street banks are the epitome of efficiency? I for one certainly am not.
I would also say that, leaving aside the virtues or otherwise of public ownership as such, the existing forms of public ownership, of large statutory corporations running hundreds of individual units, is extremely unwise. I think that it has outstripped the supply of managerial talent in the United Kingdom to administer very large organisations. As a Londoner, I ask myself this question. We know that in London Transport they find it difficult enough to run the buses. To add to that the task of running the Tubes as well seems to me to be asking a very great deal. Why on earth can we not have in London two public corporations, one for the Tubes and one for the buses? It is not a law of nature that anything which is public transport in the capital should be run by one organisation rather than by several. Therefore I think that there is a great deal of evidence, both anecdotal evidence and academic evidence, that bigness in itself may very well be one of the reasons why this country has relatively handicapped itself in the productivity race, compared with other nations. That is without respect to whether or not you happen to believe in public ownership, in community ownership or in co-operative ownership, as the noble Lord, Lord Oram, mentioned.
Against this, there is something else I want to say as my second point. I am not only doubtful of the benefits of bigness in itself. The trend of the economy—in manufacturing industry, anyway—is against bigness. If we look at the share of the national income generated by manufacturing industry, it is higher by a very long way in this country than it is in the United States. The share of manufacturing industry in all the advanced industrial nations is declining, and the share of big manufacturing industry in that share is in turn declining.
We are seeing a movement from mass manufacturing which employs thousands and thousands of people in individual industrial units. We are seeing, first, it being "robotised". That is to say, industries are being mechanised in such a way that they require many fewer hands on the production line than they did previously. Furthermore, this kind of business is drifting towards the third world countries like Brazil, Taiwan, Korea and the flourishing nations of South-East Asia. It is a reasonable prediction, I think, that the age of mass manufacture in North-West Europe is largely over, and that over the next 20 years we shall see a further decline, again irrespective of the political atmosphere which may prevail in this country, or in France, in Germany or in any other country.
If what I have been saying is so, we have handicapped ourselves in two ways: first, by the cult of bigness for the sake of bigness and, second, because we have had a very heavy investment in this country historically in the mass manufacturing industries, which unfortunately to a large degree are on their way out. I think many of us would feel that therefore the future of employment and the future of our country from the point of view of enterprise, depends to a very great degree upon the support and the effectiveness of
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small business. I do not think this is a matter of sentimentality; I think it is a matter of hard economic fact and a matter of the way the economy is going.
Even now, in what one hopes is the depth of the depression—although, heaven knows! worse may be coming—I understand that the small business sector is still growing. It is the mass manufacturing sector which has suffered the radical decline. As the noble Baroness, Lady Sharples, pointed out, I think with some force, the Government have already taken a great many steps in support of small businesses and I was also very struck—as I am sure all your Lordships were—by what the noble Lord, Lord Seebohm, said about what ICFC and other corporations are doing in the City. That is work which is wholly to be encouraged, but I share with the noble Lord, Lord Seebohm, astonishment at the way in which the Government's initiative has been sabotaged by the drafting of the Finance Bill. It seems to me to be quite astonishing that an idea that we should support small businesses should be agreed by the Cabinet and then a Bill should be presented to Parliament which quite clearly, in my opinion, is designed to be unworkable.
I support strongly the idea of the noble Lord, Lord Spells, of supporting Sir Harold Wilson's call for a CoSIURBA to support the development of small businesses in the urban areas, as the Development Commission does in the rural areas.
Therefore, towards the end of my speech, which is a short one, I want to come to what I take to be the essential question raised today by the noble Lord, Lord Spens. ft is the relative lack of small businesses in the United Kingdom compared with our major competitors, which the noble Baroness, Lady Seear, referred to as something which is now well known. It may be well known but it is still something which is not adequately explained, nor, which is far more important, is it something which has yet been remedied. I think that the Government, the ICFC and other organisations are doing a very great deal already. I profoundly agree with the noble Lord, Lord Seebohm, that we must look closely at the education system, and particularly at the further and higher education system, and ask ourselves what it is that is going wrong.
Here I will refer back to the question of bigness in the private sector. When a young man or woman graduates from a university and goes to look for a job, he or she can look for a job in the bureaucratic hierarchy of the public sector and, broadly speaking, know the satisfaction which comes from such a job: a carefully articulated career which brings substantial financial rewards and very great rewards in public esteem. I think the paradox there is that if one goes to any university appointments board one finds that there are the private bureaucratic structures. ICI, Unilever, the great commercial banks differ not one wit in the satisfactions they offer, in the career structures they offer, or in the public esteem which they eventually offer to those who clamber up the ladder to success.
A person who becomes a director or the managing director of one of the great private corporations is sure to have an income which is established by the top salary review board, much the same as that of a permanent secretary, give or take a few thousand pounds; he is fairly sure to get the same degree of recognition in the Honours List as the permanent

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secretary gets, and his career will be extraordinarily little different from that of someone in the public sector.
How very different is the career of the young man or woman who leaves the university, perhaps with a bad degree and a bad record, having played in the jazz band or something of that kind, and who sets up in his or her own business. Such a person might become a Tim Rice or an Andrew Lloyd Webber and "make it" that way, or might fail. We wholly support the people who want to make their way up the bureaucratic structures, but I do not think we support those who do not want to make that particular type of career their route but want to find their own way and found their own business. We lack not only the technical skills which the noble Lord, Lord Seebohm, referred to; we lack particularly something the noble Baroness, Lady Seear, referred to—financial and management skills.
There are many attacks in the press and publicly on the business studies faculties of our polytechnics, for example, and on sociology and all those things, and no doubt they are well merited, but the fact of the matter is that somebody who is trained in technical skills without acquiring also the skills of social manipulation, and of marketing and of accountancy is somebody who sets out quite incapable of earning his own living outside a bureacratic structure. Personally, I believe that the future of this country depends upon the people who are prepared to make a living outside the bureaucracy rather than within the bureaucracy, public or private. It is for that reason that I am so grateful to my noble friend Lord Spens for having raised this question in your Lordships' House today.
Lord Rochester: My Lords, before the noble Lord sits down, I wonder whether he would agree that perhaps some distinction can he drawn between some of our large basic industries, often in the form of state monopolies, and those large companies in the private sector which, precisely because of the point which the noble Lord has made, are concerned with this factor of size and in many cases are doing a great deal to make their component units smaller in the interests of better management and to improve their productivity by reducing over-manning. Does the noble Lord not also agree, on reflection, that it is very largely on some of great companies—as a former employee of one of them, I should perhaps acknowledge the fact—that the creation of our future wealth still so largely depends?
Lord Vaizey: My Lords, I think I shall have to give great thought to the question the noble Lord has raised, but I am sure it is a valuable and important contribution.
4.38 p.m.
Lord Schon: I should like to join those noble Lords who have thanked the noble Lord, Lord Spens, for introducing the subject which we are discussing—always of great importance but particularly at this time of economic difficulty. I will restrict my comments to a few general remarks about the stimulation of small businesses, but I should like to start with the effect of the rise in energy costs. The resulting increase in freight and distribution costs may make local business
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viable in areas which were previously covered by bigger suppliers from further afield. The saving in distribution costs may in some cases begin to outweigh the economies of scale.
When looking into the general subject of small firms there is a tendency to talk about them as though they are all the same. There are in fact several types of small companies and each has different problems and different needs. I will give your Lordships a few examples. A small company may be set up to own or manage a small piece of property or some investments. This is simply a financial or legal vehicle. Secondly, a businessman may set up a firm to run a garage, a few small shops or a laundry: this is a service business or a distributive trade. Thirdly, there are small firms like bakeries, engineering shops and small builders; in other words low technology, manufacturing and construction. Fourthly, a firm may be set up to develop and manufacture products incorporating new technology, for example, scientific instruments. That is what one would describe as a new technology-based firm, sometimes referred to at present as an NTBF, a new technology-based firm.
The problems and needs of these different types of company, and the factors affecting their success or failure, are different. They each have to be analysed individually. Because of my past experience in setting up my own company, in which development Lord Seebohm's firm, ICFC, has made a major contribution, and later as chairman of the National Research and Development Corporation, I have a particular interest in, and knowledge of, these new technology-based firms, so I should like to say a few words about them.
New technology-based firms are particularly important because they can play a leading role in industrial innovation. They have three particular features which deserve attention. Firstly, they involve technical risk. Ordinary businesses have general commercial and financial risks, but technology-based firms have technical risks in addition, and these necessarily increase the total level of risk for the entrepreneur and the investor. This additional risk factor is extremely important.
The second point is the long time-scale for development work, which in itself is difficult to forecast. If you have a non-technical product you can normally get it on to the market relatively quickly. If you have a high technology product you do not know whether the new technology is going to work, or when the development phase is going to be completed; there is normally a long period during which you cannot expect a positive cash flow, because the research and development period has to be added to the usual time it takes to launch a product onto the market.
The third important point is that technological innovation is an international activity. Consequently, someone who is trying to advance the state of the art will find himself necessarily competing with foreign companies from the beginning. At the same time it is also essential to protect the intellectual property which has been created. This again is quite different from a non-technology company—for example, a bakery or a garage—which is in geographical but not international competition. Moreover, some of our international competitors are more aggressive than we are.

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There is a lot of activity in this area now, and I am pleased to see the great increase in the awareness of, and sources of finance for, these new technology-based firms. In particular I would mention the efforts of the National Research and Development Corporation. Under the terms of the Development of Inventions Act, NRDC can invest only in the development and exploitation of new technology. NRDC is the only British organisation that has all the skills and resources under one roof: patent agents, lawyers, accountants, scientists, engineers and people with commercial experience. And I must add that in its 32-year history there has never been a case of indiscretion or breach of confidence of any kind on the part of the staff. In my opinion this unchallenged reputation is one of NRDC's greatest assets.
I retired from the chairmanship of the NRDC just over two years ago. Forgive me for saying so much about NRDC, but I had the privilege of serving the corporation for 12 years and being 10 years its chairman, an office which I very much enjoyed. I understand that the corporation has at present a portfolio of about 300 investments in industrial projects: 180 of these are with small firms; 60 are literally start-up situations, where a company has been set up by an individual or a group of individuals in order to exploit an invention or a new technology.
Six months ago NRDC set up the Small Company Innovation Fund, which they now refer to as SCIF. This is a new fund which has been set up to invest in small firms where the business as a whole is innovative. In its first six months SCIF has already authorised about a dozen new investments. The size of the individual investments is up to £60,000. I would add that about half of NRDC's investments are individually less than £30,000, and thus NRDC is really providing small sums of money for investment in small companies.
Let me conclude by saying that, from my experience in industry in this country and in NRDC, we can hold our own against anybody, provided we are pulling together. Without wanting to get into politics, being here on the Cross-Benches, the most important thing is for us to stop arguing with each other, get on with the job and get on with business.
4.46 p.m.
Lord Granville of Eye: My Lords, we are grateful to the noble Lord, Lord Spens, for having introduced this debate, and also to the noble Baroness, Lady Seear, for her considerable knowledge, and the noble Baroness, Lady Sharpies, who introduced the subject, I think, a year ago. I agree with Lord Vaizey that it is certainly a long way from the executive suite to running a small business of your own, and this is one of the problems that many find when they have the initiative to attempt to do this. There have been many speeches today extolling the virtues of small businesses, which we all support, which depend for their survival upon enterprise. My mind went back to a lunch at the Reform Club with Sir Will Beveridge the day after he introduced his great social scheme, when he said that he hoped it would not discourage the spirit of enterprise and make this country too security-minded. I wonder whether he was right about that.
The Prime Minister last night, the Government in
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another place, announced that they have proposals which they hope are going to help the small business. Many speakers in your Lordships' debate have referred to the problems involved with paperwork, certainly in the development areas, the delays in approaching the bank and the difficulty of getting support, referred to by Lord Seebohm, and the committees which you have to get by. I hope that the Government are going to take this into consideration and try and cut through that, to enable the small man, when he is launching an enterprise, to get support and help sooner than he can at the present time.
It is all very well to talk about starting a new business. Anyone who has tried to start a new business knows what the road is like. It is not always easy. You have to consider whether your product is going to sell. You have an idea, be it a carpet sweeper, something new, something different, something revolutionary; is it going to sell, does the market want it, do people want to buy it? Then, if you have small capital, you have very small machinery; can you produce competitively? If you are successful, will the big boys cut you out on the market if you have really produced a winner? That does happen. Also I hope the Government will bear in mind that many of these small enterprises when they come to the problem of engaging labour have this, probably unwarranted, fear of the overall problem of redundancy.
Then, as the noble Baroness, Lady Seear, said towards the end of her speech, there is a problem, although I would not word it in quite the way in which she worded it. Indeed, I think that the noble Earl who is to reply referred to this fact in a speech he made a long time ago. Can the service and consumer goods industries in this country really take the place of the great producing industries of the North and maintain a good standard for a population of 56 million and also deal with imports from the EEC? I should like to suggest to the noble Earl that serious consideration should be given to according some kind of priority to small businesses or to small enterprise products which are for the export market. So I repeat that the industries of the North are having a bad and difficult time. We hear of redundancies all over the place. Can we as a country live by taking in each other's washing and maintain our standard of living? We may be able to south of the Trent, but we are of course at present witnessing the watershed of inflation and over-manning.
We have had a little boom of small businesses. In 1975 there was a so-called wage explosion and there was money in the pockets and purses of those in the factories, works and so on. New shops were set up everywhere to deal with the sudden increase of purchasing power in 1975 and 1976. New shops and new businesses were springing up all over the place. There was the compulsive drip, day by day, of compulsive retail consumer goods advertising on "the box"; people were urged to buy this and to buy that and to have a fortnight abroad. One could have a car, a colour television and so on. Whether we recognise it or not, all of that was creating something of a retail boom at that time. The Americans call it chasing a fast buck or taking in each other's washing.
Of course, there is at the present time an outcry from the City to the small shops and small factories

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who were supplying the small boom. The people who were involved were told that it would go on, but now they are protesting because inflation-wise the balloon has burst. I ask myself: who were the guilty men who told them then that it would last and that they could invest their money and be sure of a ten-year turnover?
What about the large industries referred to by the noble Baroness, Lady Seear, in her very interesting speech today? What about the silicon chip? By all means let the Government give all the help they can and set up an organisation to help the little men and to steer them into the export market if possible and not just let them take in each other's washing. Each time I hear a speech on unemployment, or see a photograph in the media of a march against unemployment, I wonder what will happen when the chip considerably reduces manual labour. Who will be the first out then? Already our national overheads as a trading nation are too high. There are too many involved in the labour market—there are too many to carry. It seems to me that no one—including the Government—has a policy to deal with the tremendous problem that will arise when the silicon chip and its technology begins to displace manual labour.
What are we to do? Do we plan our future as a nation by taking in each other's washing, as an artisan state in the North Sea and because of our lower productivity have the lowest standard of life in Europe? Is that our future?. Maybe the policy which the Government are to announce—and some of it was put forward in the Budget—will help. But if we are on the verge of state capitalism, as many believe, with the great industries of the North—iron. steel, the motor-car industries and so on—we need a plan and above all we need a policy which should have begun in 1946 when we came out of the war. Then we failed to rebuild, to modernise and to reorganise some of our great basic industries in the North. Whatever we may think about the extension of small businesses—whether they are to take up the slack or to enable us to maintain our standard of living for a population of 56 million—we may have to resort again to the great national industries in the North.
4.56 p.m.
Viscount Hanworth: My Lords, most of my speech will be concerned with what I would term the "Hadfields" case. Hadfields are not a small company in the accepted sense, but they are when compared with British Steel. I think that some useful conclusions, which are relevant to this Motion, can be made.
Before considering this case I should like to emphasise the importance of the small business in the national economy. Most of the points which I wish to make have already been made, but I think that it is perhaps worth making them in a slightly different way and in my own words. The smaller companies are the seeds from which large trees often grow. They can provide an opportunity for exploiting new ideas and techniques which, at the start, are on a scale which does not interest the larger companies. They are not hide-bound by the rigidity of a larger organisation, nor by the dead hand of the Civil Service and
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the Treasury, or, hopefully, by the shifting sands of politics, as are nationalised companies. Moreover, at this size real worker participation is possible—a thing not easily realised when union shop stewards dominate the scene.
It could well be in aggregate that small businesses are one of the most important factors in providing employment certainly on a local scale, and in the future probably on a national scale, because as the giants decline in industry and grow old and produce what is no longer required or at a price which is uncompetitive, the smaller growth organisations can take over. As has been said already in this debate, it is significant that many other countries have a much higher proportion of small companies than we do. I think that West Germany is a case in point.
Returning now to the Hadfields case, the company had a profit forecast for 1976–77 of £5 million but was very badly affected by five strikes in other industries and the general recession. In fact, the company who acquired the business have injected a further £13 million of capital. During the steel strike early in 1980 representatives of the company saw the Minister because they were worried that the British Steel Corporation would start a price-cutting campaign to win back lost customers. They were assured that this would not happen as the Government would impose stringent cash limitations on the nationalised industries, and that the Government were adamant that a support sum of £450 million would not be exceeded. In fact, this figure has been increased to well over £1 billion and it is estimated that this gives a subsidy to British Steel products of at least £125 per tonne of steel, which has been used to undercut Hadfields prices.
Between July and November representatives of the company held several discussions and meetings with representatives from the Department of Industry and were told:

"(a) that the private steel-making sector would be rationalised and completed by not later than Christmas 1980;

(b) that no steel-maker—(public or private)—would be allowed to go into liquidation;

(c) that Government money would be available at the front end of the rationalisation, as once and for all payment to ensure a viable industry for the future, with the emphasis being on viability;

(d) that the ultimate shareholdings of the various parties to the rationalisation … would not necessarily be reflected by their current net assets injected into the business;

(e) that the Department of Industry would be making the decisions—not the British Steel Corporation".

In June last year the company asked British Steel either to put up selling prices or to take over the company, but both these propositions were rejected. In October last year Mr. MacGregor visited Hadfields and suggested a deal, but its terms were rejected by the Department of Industry. At a later meeting the company was told that British Steel wished to acquire Hadfields but on condition that they ceased steelmaking and steel processing, and made all employees redundant at the company's expense. During the last year the company has done everything suggested by the Govern-for survival, including reducing the labour force by over 50 per cent. and closing the die-forging activity.
What general conclusions should be drawn from this sorry story? First, I think that it is one long case

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of broken Government promises. Almost everything that has been done is against the avowed aim of the present Government, who are wedded to free enterprise. Surely it is time that we had in power a party which does not pretend to the electors that it has all the answers and then has to rat on most of them. I have given the Minister notice of this point, so I hope that he can briefly reply to the Hadfields case, even if he only says that it has all been force majeure.
Secondly, the state of British Steel is, to a very great extent, due to adversary politics—nationalise, denationalise, renationalise. In these circumstances what hope is there when a company meets a difficult situation? It is long past time that we got away from these politics, and that is why I now speak from these Benches.
If the Government sincerely believe in free enterprise, then they must help the growth of small businesses—not by large cash handouts, but simply by making life as easy as possible for them. A number of ways in which this can be done have been suggested today, and I think that this debate will serve an extremely useful purpose if these points are seriously considered. However, I am afraid that in at least some areas actions which could have been taken have not been taken. The Association of District Councils is anxious to help, but enabling legislation is needed, and still nothing has materialised.
Finally, I must make the point that nothing should be done for nationalised industries which will hurt the private sector. We now have companies of both types and we shall have them in the future, but I think it would be quite wrong to land ourselves in a situation where helping inefficient giants leads to destroying other small companies which may be doing extremely well.
5.5 p.m.
Lord Davies of Leek: My Lords, I have sat through the debate and it has been full of constructive ideas. The House is grateful to the noble Lord, Lord Spens, for his enthusiasm and to the noble Baroness, Lady Sharples, for her enthusiasm in getting together small groups of people who are interested in the problem of small businesses. Some of those groups I would want to make even smaller.
First, I should like to point out that the Investor's Chronicle was rather hard on the Government. I thought that that publication would be regarded as more authoritative than quoting, say, another newspaper, because it spoke of the Government "clobbering the private sector" and of all hopes of the success of the Budget being shattered. It then said that it was, "a body-blow to industry". I will tell noble Lords why I have quoted that phrase in a moment. The Investor's Chronicle says:
"The combination of high interest rates and an over-valued currency has dealt a body-blow to industry. By giving foreign companies a competitive advantage, the strong pound has prevented British companies from raising prices".
In fact, it has done more than that. This House and all political and non-political parties on both sides of the House and on the Cross-Benches are today urging, as they have urged before, that more encouragement should be given to small businesses. Indeed, small businesses have the greatest record of bankruptcies.
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When local government and the public sector in general is prosperous, despite much criticism (some of it very ill-informed), they supply for the small entrepreneurs tens of thousands of jobs throughout the country; for example, decorators, builders and small contractors, working particularly during the winter when small companies of plumbers and others are needed.
In local areas much of the initiative of local government or local authorities is reflected in the national figures. The biggest numbers of bankruptcies that we have had in the last two years have occurred among the small builders and small contractors who have been the essence of British enterprise over centuries. The Investor's Chronicle goes on to say:
"At the same time its policies have pushed what would have probably been a normal recession into the worst slump since the great depression of 1929–32".
A new adviser to the Prime Minister has suggested that the monetarism policy has been too tight—and I shall not make cheap remarks about it. Instead I shall ask the noble Earl, Lord Gowrie, a couple of questions and I know that as usual he will be capable of replying to them. The advice of Professor Walters to the Government was that the pressure on monetarism was too tight. The magazine, Crossbow, has a rather interesting article on this by Patrick Hanagan. I read it with interest because it is good for us to keep informed of intelligent Conservative opposition. The author considers that fears about our industrial decline are exaggerated. Nevertheless the article admits—and it puts it nicely—that we cannot arrest change. It even warns us about reinvesting in industry. That sounds paradoxical, but it is the Crossbowman Hanagan speaking. He says:
"The political response to the impact of these trends should he defined largely by the changing economic environment. Given a number of years in which to accommodate the trends, they should prove capable"—
it is a bit turgid—
"of being integrated into society. The alternative is to attempt to arrest change for we cannot reverse the process".
This is a serious point. We cannot reverse the process.
"In practice the means available for taking any action are inadequate and a political decision to arrest the trend could well have even more destabilizing consequences of a different nature".
Full stop, take your breath, and he says:
"It would mean sustaining and re-investing in industries which are generally suffering from over capacity and low productivity".
I know now that it has become popular, and it is quite jargon, to talk of the new technology and of the new elemental trends taking place. They are taking place so that never again, I believe, can we look at full employment in the same way that we have looked at it in the past. I have said in this House that I believe that on a three-day week colliers with modern mechanisation could cut all the coal we needed, and more. We should have a healthier nation. Therefore, we have to look at the entire economy. A new philosophy must be evolved to look at the economy of the very near future in relation to the silicon chip and in relation to new kinds of investment.
The Investor's Chronicle makes a point that was highlighted in a way by the noble Baroness, Lady Seear, and by the noble Lord, Lord Granville. I will read the little bit:
"Our other measures to help industry include £1bn spent on

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public sector investment (not, note, in subsidies…). The Government cut its fixed investment by 15 per cent. in 1979–80 and by another 19 per cent. this year. This is the worst type of economising. Vital investment in drainage, public transport and energy is being held up due to short-term PSBR considerations".
This has become a myth. This PSBR has stopped all enterprise. It continues:
"An additional £1bn on public sector investment will bring much needed help to private industry because almost all of it will be spent in Britain. So will the cut in the national insurance surcharge and the scrapping of heavy oil duty shown in our table".
I am glad to see that the derv protest in the other place was a success. That indeed is a help to small industry.
Now I think that to be true. I believe that the Government should change their line if they want to help small businesses. We could begin with local government activities. There we are allowing things to decline—like this building. According to a Written Answer it is going to cost £2 million to repair the roof of this House. To do the whole of the building is probably going to cost £8 million. It ought to have had continuous attention, instead of our making false economies at different times. Small contractors and big contractors ought to have been employed on this enterprise that is worthy of national and international attention.
De-industrialisation is really taking place. Many of the old industrial enterprises will never rise again. Labour, Tory, or any other Government must face this in the new kind of world which we are going to enter. The Crossbow article alleges that manufacturing industry has fallen from 37 per cent. of the gross national product in 1950 to 28 per cent. today. I have seen it at an even lower figure than that. This is the trend in which we are trying to build up small businesses, and it is a trend in which we could do so. But the noble Lord, Lord Vaizey, and the noble Lord, Lord Seebohm—and I agreed enthusiastically—said that we must reassess our spending on education, in order to get people with the know-how and knowledge to be able to enter into this new kind of world into which we are moving. Whatever politics we may have, we will be just daydreamers unless we have the talent brought up in our young to understand the mathematics—it sounds high-faluting—and know-how of the new kind of world into which we are quickly moving. This country ought to be ashamed of itself for the cuts in the educational opportunities, which are creating yobboes rather than talented individuals to meet the future.
Sir Geoffrey Howe, bless him, gave some opportunities. I am going to ask a couple of questions about that. I will get the answers. There is a new loan guarantee which has been mentioned by nearly every speaker in one way or the other, and we are grateful for this. In appropriate cases the Government will guarantee 80 per cent. of the loan. What industries and what services are eligible for this Government guarantee? Has anything been done, or is it too soon to be able to answer that question? What has happened with that? Does it look as though it is going to be successful? What limitations on eligibility are there?
I am pleased to see that there is some relief from income tax, and it is indicated where small business
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opportunities can get this relief. The Department of Industry is being developed in its offers of help, advice, and incentives to small businesses. Has the Department of Industry started this advice? Has it started this help? At what stage is this intention suggested in the Budget? The new enterprise programme is run by the Manpower Services Commission, which seems in some cases to pay allowances to attend crash courses. That was a point made by the noble Baroness, Lady Seear. They are to attend crash courses in business schools such as those in Manchester and London. I am quite sure that if we get the right selection that is not public money wasted.
Note the warning. There is a little dissension among small painters and decorators about the youth scheme of training, and going around willing to paint and decorate old ladies' houses. In introducing some of these new ideas with the young, we must try not to create a dissension among the legitimate trade union movement. Now redundancy money. In my day a pound was a lot of money. Unfortunately, people today seem to think that if they get £10,000 or £25,000 redundancy money it is going to last a long time. I am pleased to see that lump sums, through Sir Geoffrey's Budget, on top of a pension will be exempt from tax, and that between £10,000 and £15,000—the noble Earl will correct me if I am wrong—is exempt too. This is very worthwhile. I do not know whether it is set out, but for those people who are made redundant either the firms of the local areas should give first-class advice through the banks on how to manage the £10,000 or £25,000, in the hope of their moving into some enterprise.
Being a country bumpkin, I was delighted to see published this week the 30th annual report on smallholdings in Britain. The Minister of Agriculture, Fisheries and Food is required under the 1970 Act to present to Parliament an annual report summarising the situation facing the department and local authorities in relation to small holdings. I will not delay the House by listing statistics; suffice to say that the statutory small holdings are administered under Part III of that Act, and there are in Britain 7,655 smallholdings provided by local authorities showing a surplus worth £3,019,629. That sort of development should come into our consideration of small businesses.
As the noble Lord, Lord Vaizey, pointed out, some things these days are becoming too large, and certainly farming is big business. In the country areas, one of the few ways for a young man to get into farming up to now has been through a local authority smallholding. I hope the Government will take a fresh look at that aspect and encourage local authorities to go in for that sort of project. I need not trouble noble Lords with the statistics on the subject; they can read the report if they wish. When the Government are considering giving help to small businesses I hope they will think of smallholdings, many of which have been going for many years and have been supported by Governments of all complexions. Finally, I wish once again to thank the noble Lord, Lord Spens, for raising this important subject.
5.22 p.m.
Lord Gisborough: My Lords, I too wish to thank the noble Lord, Lord Spens, for bringing this matter

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to the attention of the House. I must apologise in advance to my noble friend Lord Gowrie in that I may have to leave before he has finished replying to the debate. The Budget provisions for small businesses provided a great step forward, but inevitably there remain, and always will, problems, and I wish to mention a few relating to my area of England. First, there is the problem of existing businesses which so often thrive only to die while so much more help is given to new starters. The provisions of the Budget did much, but mainly for new start-ups. Too much encouragement to small businesses to set up in an already overcrowded and fiercely competitive marketplace may jeopardise the existence of small struggling companies. Therefore help to set up new businesses must be balanced by help for the existing small businesses against whom they are going to compete.
Even though the problem is worldwide, high interest rates are still a major burden for small firms and in the last two years only 30 per cent. loans may be offered by such bodies as CoSIRA, so that 70 per cent. must come from the money market, and that is short-term and expensive. An extended low rate interest scheme could greatly help small firms. And as one job is created for every £5,000 lent by CoSIRA, financial help is soon repaid to the country in reduced unemployment benefits.
In relation to the north of Yorkshire, from where I come, the county structure plan, drawn up at the direction of the Department of the Environment, planned a Development Commission advance factory scheme which would have resulted in over 100 small factories in north Yorkshire by 1986. In 1979, with the structure plan virtually complete, the Department of Trade, almost overnight, downgraded considerable areas which had previously enjoyed full development area grant assistance status.
The problems of obtaining planning permission for light industry in rural areas have diminished as local authorities have become more sympathetic to the needs of widespread light industry, and Department of the Environment circular No. 22/80 will be of further help. But there is still reluctance to allow the conversion of disused farm barns, granaries, chapels and old schools into small workshops, and the main problem seems to be the fear of setting a planning precedent from which subsequent light industry planning applications could not be refused. Perhaps this is an area where the Government could help by allowing permission to be given subject specifically to no precedent being able to be claimed for that site.
With regard to the development of rural buildings sited a long distance from a village—again, for light industry or workshops—there is often a large cost involved in providing services and a subsidy is needed to help developers overcome those special costs. Further, it is the practice of the North Eastern Electricity Board to demand substantial sums of money from the proprietors of newly established businesses in advance of future supplies of electricity; the sums range from £50 to £1,250. Surely that is against the spirit of the Government's intention to help small businesses, and I am not aware of it being done by other boards.
Planning difficulties are also met through objections from the Department of Transport, through the
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surveyor's department, particularly when change of use is sought. Perhaps the Minister will look into this point. By that means a brake is being put on the development of rural buildings into workshops, perhaps by virtue of inadequate turning circles or suitable entrances, all to meet bureaucratic standards which surely could be reduced in the countryside.
Tax allowances have become realistic and helpful under the present Government, but they are available only for manufacturing industry. Why not for service industry, which is often far more labour intensive? There is the great problem of finding skilled labour for small businesses in rural areas. Their small size allows good training for apprentices, and fine craftsmen can and are trained by small firms. However, the intake of apprentices has dropped alarmingly owing to the high cost of employing young and initially unproductive labour in a very small labour force. If some form of assistance is not given, there will be a serious shortage of trained labour. Even a reduction of the 13½ per cent. national insurance contribution on young employees would be a help and encouragement. The MSC does a great job but tends to be inappropriate bureaucratically for many small firms.
Transport and housing in rural areas are large factors in employment. The Transport Act 1980 has been a great help, with car sharing and community schemes, though the existence of public transport—in North Yorkshire this particularly means the Middlesbrough/Whitby Railway—is a vital link for employment. And with two advance factories standing virtually on the line, the possibility of its closure is causing great concern.
As for housing, while the right to buy council houses must be good, careful watch must be kept in the national park areas to ensure that young people are not priced out of those areas in such a way that they cannot work there. The noble Baroness, Lady Seear, said that employment protection should be extended to small firms. I do not think that is on because, whether or not we like it, the small employer does not and never will understand employment protection and, anyway, he is not prepared to risk it. If he wants to get rid of somebody, he does not have time to prepare a case, attend the tribunal—win or lose—because he must get on with his job, and in any event he does not have the cash to employ a lawyer. The one-man business—the builder or farmer—is loth to employ a man if he is likely to have to face the hassle of having to get rid of him.
I have been as brief as possible and skipped a number of details I would otherwise have given. The present Government have done more to help small business than probably any previous Government. However, investment in successful new ventures and the nurturing of existing ones will be the key to the long-term solution of unemployment.
5.30 p.m.
Lord Sandford: My Lords, I wish to apologise to the House straight away for intervening in the debate —though I shall be very brief—to make only one point, without having put down my name to speak. I have been attending a council meeting of the Association of District Councils, which was fixed a long time ago,

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and originally I thought that I would not be able to attend any part of this debate. The district councils are intensely concerned in this whole field and are anxious to play a full part, and to have the necessary powers to play a fuller and more effective part.
The particular point that I should like my noble friend to answer, if he can, concerns the prospect of local authorities being given the additional powers that they are seeking. As my noble friend will know, the matter of what powers they have and what powers they needed was reviewed by Sir Wilfred Burns, the deputy Secretary of the Department of the Environment, as long ago as last July; and that fact might already have been mentioned in today's debate. If it has not already been reported, the noble Earl will, I know, be able to say that at last, after nine months, that report has been published. But what we want to know is what action is to be taken upon it? If I may give your Lordships just one example, you will see how urgent and necessary is that question.
The leader of Bristol City Council was talking to me this very afternoon. Bristol is the last authority among our membership to have decided that to get these powers it must promote a Private Bill. Promoting a Private Bill is expensive and therefore is unpopular with the ratepayers. If the Private Bill contains powers which the Government have already indicated they intend themselves to introduce in public legislation, then it is also unpopular with your Lordships' House, because it is expensive in terms of our time, too. If, on the other hand, the Government, having said that they are to introduce legislation, do not in fact do so, and take nine months to publish the report on which the legislation is to be based, then the City of Bristol, and a number of other local authorities similarly affected, are placed in a very considerable quandary as to what action to take. They share our general concern in wanting to help to promote and support industry. They have not the powers needed for that. Sir Wilfred Burns' report has identified what is lacking. What we do not know is when the Government are proposing to legislate. I hope that my noble friend will be able, in this debate, to give an answer which will make decisions by cities, which find themselves in this situation, easier to take than they are at the moment.
5.33 p.m.
Lord Mottistone: My Lords, I should like to make a brief intervention at this stage in the debate. I apologise deeply to your Lordships for being too late to speak earlier in the debate. I had hoped that the earlier speakers would speak a little longer. In any event, I must apologise also to the earlier speakers for not being present at the beginning of the debate. I want to make only two points on this general subject.
First, I applaud the various moves that the present Government have endeavoured to take to ease the position of small businesses. I am sure that the details of that have been touched on by earlier speakers, and I shall not delay your Lordships in that regard. However, I am still deeply concerned about the point that Mr. Bolton made very clear in his report, of which your Lordships will be well aware. Paragraph 8.18 of the report stated:
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"Our rejection of positive discrimination in favour of small firms as being at this stage unjustifiable and impractical does not imply that we are content with their present situation. On the contrary, we believe that they suffer from a number of inequitable and unnecessary disabilities, mostly imposed by Government, which amount to discrimination against them. The fact that this is unintentional is irrelevant".
Notwithstanding all the trouble that the present Government are taking to ease this burden, I wonder whether your Lordships recently saw a particular article in the Sunday Times. The article is requoted in the Reader's Digest, for May, and I came upon it last weekend. A person wrote:
"Responding to the nation's call for small businessmen to reduce the number of unemployed, I recently decided to take on my first employee. I notified the Inland Revenue and they sent me the following forms and pamphlets concerning income tax for my forthcoming employee:

One P24

Two P11

One P24N

One P7

One P34

One NP18

One P7X

One CF427A

One P47

One CF391

One P46

One P8

Two P45

One Table 'A' One Tables 'B' to 'D'.

"My heart sank like a stone as I realised that life might be more difficult with an employee rather than easier, and that some of the time he would save me by sharing my current workload would in fact be spent administering his welfare rather than increasing productivity.
"Until someone really gets to grips with reducing and simplifying bureaucracy at a day-to-day level, the unemployed are going to remain unemployed and small businesses small".
That article was perhaps included in the Reader's Digest to encourage people to laugh, but I think that that kind of situation is a root cause of our problem. The question is, what is a small firm? Mr. Bolton had his views, and I shall not burden your Lordships with what they were. There is obviously a limit by which that extraordinary batch of papers, which I imagine required two postmen to carry it, is relevant and important, but whether that is so, below, say, a firm with 100 employees I would question. Basically—this is Mr. Bolton's point—the system that is evolved by central Government to apply to companies the taxation that is necessary for us all, (as in this case), is designed around a bigger company, because a bigger company employs more people. I believe that about 75 per cent. of the total number of employees are employed in companies with 100 or more employees. The forms are devised for such companies, and those responsible never stop to think that if they send the kind of bumph to which I have referred to a small businessman, he will receive the same amount of material, regardless of whether he employs one person (such as the case I mentioned from the Reader's Digest) or 1,000. Now something is wrong there.
The particular case which I have quoted involved the Inland Revenue, but there are other forms sent out by other Government departments and indeed by local authorities, and in all such cases there is the same basic failing that those responsible do not look at the problem from the point of view of the small businessman. They do not make allowance for him to be treated in a way which enables him to get on with the job (as the quotation mentioned) and to ensure productivity rather than form-filling.
5.39 p.m.
Lord Bruce of Donington: My Lords, the whole House will be indebted, as indeed are we on this side, to the noble Lord, Lord Spens, for having raised this particular subject this afternoon. Although much of the debate has centred around the extremely important question of new businesses, it is necessary for us to bear in mind that the terms of the Motion include existing businesses. We are concerned here today not only with new small businesses, but also with existing small businesses. Of small businesses it must be said that they are vital not only from the point of view of the economy, but also in terms of the larger battle faced by all peoples, in all countries, over the preservation of personal freedom.
Personal freedom needs an economic base and therefore all democratic governments (including our own) of a variety of parties must always seek to ensure that small and independent businesses are encouraged, as far as possible, to operate in all those fields of economic activity where consumer choice has any significance. As the noble Lord, Lord Vaizey, reminded us, the existence of small businesses, particularly on the Continent, ensured that there was a greater degree of competitiveness in industry, in particular in Germany and also in the USA; and he said that the larger corporations were themselves in part responsible for the higher prices that the Community have had to pay for a variety of the products of industry. I think it is of a little significance that in Germany, in addition to the USA which was mentioned by the noble Lord, Lord Vaizey, there are roughly two and a half times the number of small businesses as in this country. It is also important to remember that this is part of the reason why the German rate of inflation has been significantly less than our own, because there is a greater degree of competitiveness.
When we are talking of small businesses, therefore, we ought to remember that the term itself covers a very wide field. The noble Lord, Lord Seebohm, was good enough to define it in rather better terms than it has been defined hitherto (that is, a firm of any number of employees under 200) when he said that it was a business that was owner-controlled. That is a far better way, I think, of defining what we mean by a small business. The term "small business" includes the overriding term, "self-employed people", in a variety of fields, including services. It includes small shopkeepers; small holders, particularly those in horticulture; it includes small building contractors, small wholesalers and small manufacturers. These latter can be classified in two ways: the way in which the noble Lord, Lord Schon, touched on when he sharply differentiated those that were engaged in the new technology. There are small manufacturing firms which do not involve any particular technological skill or technological development and, if I may say so without disrespect, there are those that produce the broad, general run of commodities. Even those can be divided again into sub-contractors to large companies, sub-contractors to sub-contractors of large companies and public boards; and those who supply directly to merchants or, in some cases, directly to the public.
This small business area covers a very wide field,
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indeed. I would submit that it would be shortsighted of us to discuss it out of context, if we discussed it as though the whole phenomenon and activities of small business was conducted as a completely separate and distinct activity within the economy of the United Kingdom as a whole. In fact, as I shall seek to demonstrate, small business is enmeshed at every point with the whole economic activity of the country. When some parts of the economy suffer or some parts of the economy are restricted, inevitably that has its effect, too, on the small businesses, as such. They cannot be separated away from the unfortunate but very real economic plight of the country at the moment.
What we, therefore, must also consider is the relevance of the steps that have been taken in direct aid to small businesses by a variety of bodies, the relevance of that in terms of real economic effect, the relevance to the way in which the whole of the economy of the country is operating at the present time. As no doubt the noble Earl, Lord Gowrie, will inform us, the Government have taken a number of steps, and these have been referred to by many speakers this afternoon. There is the loan guarantee system which has been worked out in collaboration with the banks by virtue of which some £250 million, I understand, will be made available for loaning to small businesses. There is the business start-up scheme announced by the Chancellor and referred to last night and which is incorporated in Clauses 50 to 63 of the Finance Bill at present in front of another place.
There have been, in the course of one or two Bills which have passed through this House, in the Local Government Bill and in the Companies Bill, certain administrative concessions that have been made to the managers of small businesses in simplifying their administrative tasks as far as their contract either with local government or central Government is concerned. There have been certain extra training facilities made available by the Manpower Services Commission and also, as has been previously announced from the Government Benches, there has been the recommendation by the Government to the local authorities and public bodies that, wherever possible, endeavour should be made to buy British.
All these things are of some significance and have some impact on the fortunes of small business. Then there are the other outside bodies that have been giving aid to small businesses. The ICFC, as the noble Lord, Lord Seebohm, said, has played a considerable role and my noble friend Lord Oram also referred to the activities of the co-operatives, together with the National Research and Development Corporation, the activities of which were emphasised by the noble Lord, Lord Schon. I think that he could have added the National Enterprise Board which also has given certain assistance to small business.
All this is well and good, but how much does it really amount to? I do not want to introduce a jaundiced note in this debate, particularly as the noble Earl, Lord Gowrie, who is to reply, always presents his arguments to the House with a degree of temperateness which I think commends itself to us all. But must offer for our consideration the view—not my own but I want to offer it—which has been put forward on behalf of the National Federation of Self-employed and Small Businesses. Mr. Tony Miller, the chairman

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of the Federation's taxation committee, is reported in The Times of 29th April, 1981, as saying:
"The so-called small business measures are merely cosmetics and overall do not contribute an iota to the continuation in business of the existing two million small firms and self-employed people. More advice, more borrowing and more cost is not the answer to our ills. Once again, the Chancellor has diagnosed our ills correctly but has gone on to prescribe the wrong medicine".
There is a view that does not come from a strictly political-party source and which shows considerable disquiet. Therefore, let us examine the steps that so far have been taken in slightly greater detail to see their impact. On the question of the £250 million—worth of loan to be made available, we must remember that the interest rate charged, including an extra 1 per cent. for insurance, will be of the order of 14 per cent.; 14 per cent. is not a very advantageous rate of interest and does lend some credence to the suggestion that, I think, was made by the noble Lord, Lord Gisborough, that some kind of businesses ought to be entitled to preferential interest rates, as is the case in one of our EEC partners, France. At the moment, there is a considerable volume of evidence to show—and I can produce it if challenged—or to suggest that there is much borrowing going on at the present time within British industry, not merely to repay previous borrowings but also to repay previous interest that has still not been discharged. The burden of the interest charged at 14 per cent. is very high indeed.
So much for the £250 million loan facility that is being made available for lending out to small businesses. Now I pass to the new business start scheme as incorporated in Clauses 50 to 63 of the Finance Bill. I hope that the Government will take another look at this. The clauses are so technical and are so abstruse that anybody who contemplates taking advantage of the particular scheme offered will have to engage the services of professional accountants and, probably, lawyers before they have their position absolutely clear.
I wonder why it is necessary to exclude relatives from the scheme. Why? Is it because, presumably, they think that relatives are more likely to devise, or be assisted in devising, some tax-avoiding scheme? That need not necessarily be so. When a person is starting out a new business the first persons to whom he will normally have recourse would be members of his own family, perhaps his father, perhaps father-in-law or possibly mother-in-law if she is sufficiently well-endowed financially. Why should they be excluded? If vast sums of money were involved in this particular scheme, I could understand the necessity for having very strict tax-avoidance provisions incorporated into the Finance Bill; but we are talking of £10,000 in individual cases, which is equivalent roughly to slightly under £8,000 as at two years ago. We are not talking of vast sums of money.
Indeed, it is very doubtful whether the addition of this extra money for investment purposes would do more than create one extra outlet of employment, very doubtful. The EEC have had some experience in this in their various job-promotion schemes. They have found that it takes a very considerable sum of money invested to provide a new employment outlet. On the assumption that some 10,000 firms took up this
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particular scheme, it would create on that estimate some 2,500 additional jobs; and the borrowing of £250 million under the loan guarantee scheme would probably create only another 2,500 jobs. Even on the assumption that I am being too optimistic on that or even a little pessimistic (shall I say?) that it needed 5,000 to create a new job the success of the two schemes combined, to the limit of £250,000 in terms of loan money in one case and in tax reliefs on the other, would still only create some 10,000 new jobs; or if one put it as low as to say it needed only £2,5000 to create a new job, the amount of additional employment will be something of the order of 20,000.
Unemployment is increasing per month at a greater rate than 20,000; so it is necessary to say this not because we wish to criticise the noble Lord on the nature of the measures themselves—a little is better than nothing at all. Indeed, in response to what I said earlier about the tax difficulties I am glad to learn from this morning's The Times that the Government are considering the points on which I ventured to touch with a view to simplifying if from the tax standpoint. I am not trying to belittle or to run down the steps that the Government propose to take; they are valuable; but they are very small and small in relation to the problem.
Here we have a paradox. We have, in terms of the tax reliefs given by the Chancellor of the Exchequer, a direct addition to the public sector borrowing requirement. And all the time the PBSR is increasing month by month because of the growth of unemployment in this country. It is quite clear that the really selective steps that the Government ought to be taking are those concerning the health of the economy as a whole within which small business must function. Therefore they must first of all reduce interest rates.
Here I note that the philosophy of the Government's new adviser, Professor Walters, is in sharp contrast with the remainder of Her Majesty's Government's advisers. When he was interviewed in New York—and I have a cutting with me—he said, contrary to popular belief, that increased interest rates in fact increased inflation; they did not bring it down. I shudder to think what would have happened to the noble Lord, Lord Cockfield, who unfortunately is not here this evening, had he been appraised of that at the time.
Small businesses—like all other businesses—depend fundamentally on there being a demand for what they produce. Unfortunately, if we judge by the latest report from the renowned firm of stockbrokers, Capels, consumer demand is likely to fall by 2 per cent. during the current year. This is not very encouraging to small businesses. Whatever good the small measures that the Government are taking do to individual firms, they are doing nothing to alter and reverse the climate within which these companies must work. This is particularly significant in the case of small building contractors. Small building contractors depend for 50 per cent. of their turnover—and I have the data here and I can authenticate it—on the expenditure of local authorities. The cuts in local authority expenditure have produced very considerable unemployment, as is well known among small building contractors.
Let us go to the shopkeepers, too. They have suffered not only from increased rents over the past

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10 years—and their share of property in the national income has grown significantly over the past 7 years —but also because of increased rates. Before I hear too many cries of "Hear, hear" about that—doubtless with certain local Labour authorities in mind—may I remind your Lordships that in the Conservative Borough of Kensington and Chelsea the rate burden has gone up by 53 per cent. and the local greengrocer will have to pay an extra £2 a day in rates. All this really adds up to is this—
Lord Gisborough: My Lords, would the noble Lord agree that the reason for that rate rise is the excessive spending of the ILEA?
Lord Bruce of Donington: My Lords, the requirements of the ILEA vary considerably from authority to authority. Doubtless when Her Majesty's Government reply to the Question that has been put down by the noble Lord, Lord Boyd-Carpenter, for the 21st of this month (which is now on the Order Paper) they will be able to enlarge upon that point.
The fact of the matter is that the Government have got it entirely wrong. I invite the noble Earl to ask himself urgently whether it is conceivably possible that the Government might have got the whole thing wrong. I invite him just to consider that possibility—nothing more than that because that would he a breakthrough.
We have been so accustomed in this House to economic arrogance from some of the noble Lords opposite who address us on economic affairs—and I do not include the noble Earl, Lord Gowrie, in that number—that it would be a good thing if the possibility of mistake, the feasibility of error, could even be considered by the Government. The evidence is there to see for all those who want to see it. It is the fact that cuts in public expenditure on the lines that have been undertaken have had a disastrous result upon the economy as a whole. The complete confusion that exists in the Government's mind is reflected in the conflicting speeches of their Ministers in another place. The conflicting concept of the significance of the public sector borrowing requirement is another indication of uncertainty. The initial reliance on the control of the money supply which was put forward so proudly has now completely disappeared into thin air because they now know that they cannot possibly control it.
What the Government should do if they really want to help small businesses is to create the economic climate within which they can flourish. All they are really doing at the moment is to turn on a little trickle tap into the bucket for the benefit of small businesses while the whole vitals of the nation's economy are being drained through a 42 drain right out of the economy as a whole to the detriment of the country as a whole.
May I say once again that I support all the endeavours that the Government have made so far to help small businesses, with the reservations of course that I have made on these particular clauses of the Finance Bill which is now before another place. If they really want to help, they should examine their own policies again and come back clean to us. The House is always very willing to warm to those who admit that they have made mistakes, particularly when those mistakes
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are so obvious and so glaring that all but the purblind refuse to acknowledge that they exist.
6.7 p.m.
The Minister of State, Department of Employment (The Earl of Gowrie): My Lords, I will admit to mistakes, and one mistake that the Government should admit to is that our cuts in public spending were not fiercer and earlier. However, we can come back to that at a later stage. In response to what the noble Lord, Lord Bruce, said about economic arrogance—and I must be careful because I confess to a weakness for macroeconomic debate, a weakness that is shared by about 90 per cent. of the citizenry of this country at the moment—the trouble with life is not so much economic arrogance as the arrogance of the laws of arithmetic. Those are what drive various administrations, Ministers and indeed citizens to drink.
But I have come to learn rather than to teach. If I may say so, even allowing for the conventions of self-congratulation to which in this House we are perhaps too prone, this debate has shown the House of Lords at its best and the noble Lord, Lord Spens, should be very pleased. The entire Hansard—anyhow up until this moment—should provide a short textbook of some of the problems, challenges and possibilities in this field of small business and wealth generation. I shall see that it is widely distributed—and I shall see that it goes immediately to my honourable friend (in both the technical and literal sense of the word) Mr. John MacGregor, the Minister with special responsibility in this field. He is a very new Minister and a very good Minister, with whom I worked closely when he was the Department of the Employment's Whip. Of course we at the Department of the Employment are glad that he is so aware—as so many speakers today have been aware—of the employment possibilities of wealth generation in this field.
Also, the timing of the debate is excellent because yesterday saw the launching by my right honourable friend the Chancellor of the business opportunities programme. We have in the Government done much to encourage the small business sector and to enhance both incentives and rewards for those who show the drive and determination to run a business. The main purposes of the programme are twofold: to encourage the creation of new business and to create greater public awareness of the importance to the economy of small firms and the extent of the changes, tax and otherwise, made to help them. To use American jargon, it is really a question of "raising consciousness" about the role of small businesses in society. In a communicating, mass-media democracy like ours, if you only make people aware of certain activities in the economy very often they then plunge into them and take them on.
There will be therefore an increased programme of ministerial speeches and discussions of various kinds with groups of existing and potential small businessmen, their advisers and their representatives in all parts of the country. But of course this is a two-way programme. The Government are trying to take the lead but others have to respond if the programme is to succeed. We never cease to repeat that governments of any complexion can only set a framework and a climate within which human beings undertake their

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own activities. New job opportunities and new ideas, industrial diversity and spurs to competition generally are the prizes to be won in fostering a small and thriving business sector. We are altogether committed to try to win those prizes and to encourage the enterprise and growth of small businesses. There should be no mistake about that. Our commitment is founded on the bedrock of a range of powerful fiscal initiatives introduced not just during this last Budget—as many speakers, including friendly ones, seemed to imply—but all through the last two years. They culminated in a series of measures comprising the "enterprise package" announced by the Chancellor in the Budget statement.
I shall come to the measures in just a minute but before that I must say that I altogether agreed with the noble Lord, Lord Bruce of Donington, when he said that what small business really needs is a generally good economic climate in which to work. That is why we have felt we cannot flinch from the main task of squeezing inflation out of the economy—the inflation which has been rampaging through it for over 10 years under successive Governments—so that the conditions of financial stability and confidence, on which all business in the end depends may once more return. Our policy to reduce inflation is bearing fruit and interest rates have been lowered.
Of course it is easy for the noble Lord, Lord Davies of Leek, in a very temperate and interesting speech, to say that the Government have nailed themselves to the myth of PSBR. Even if you discount, as I personally do not, the direct money supply effect of PSBR, you are again left with the arrogance of arithmetic, which tells you that if you increase your borrowing you also have to go on to the money markets to get the money and, as you are a very large borrower, you squeeze out small operators and drive up rates of interest. That is the logic which no Government, however detached their philosophy from one or other form of "ism", have been able to avoid.
Lord Davies of Leek: I hate to interrupt—but may I?
Lord Sandys: My Lords, if the noble Lord wishes to intervene he should address the House from a standing position.
Lord Davies of Leek: My Lords, I was doing the Minister the courtesy of seeing whether I had got permission. I shall make the point very quickly: I do not want to develop it, although I could. I think the noble Earl is quite right in that analysis. It does push up, but the resulting economic activity in employment would pay for the extra increase even in interest in the transition period, because we would not have all the unemployment benefits and so on to pay. I will leave it as brief as that.
The Earl of Gowrie: My Lords, one of the difficulties we have in my department is that it is very hard to predict which sectors of activity generate employment at a given moment. For instance, we might all applaud some splendid public scheme, especially if we could finance it from outside the PSBR, such as the Channel
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Tunnel, but there is no evidence that existing unemployment would be helped or that unemployed people would be taken on for that scheme. It would be very difficult, costly and bureaucratic, if you like, to guarantee that only unemployed people would take up such activity. So I think we are in agreement that the important thing is to improve the general climate.
On interest rates generally, I would also say to the noble Lord, Lord Bruce of Donington, that in the real world—I do not think this is economically arrogant, but it is again the arrogance of arithmetic—you have to discount the level of inflation at any given point when you calculate the levels of interest rates. In fact there is a credible historical argument which says that interest rates all through history have varied at around 3 per cent. to 5 per cent. in real terms. What they turn out to be in gross terms depends on what level of inflation is being run in the economy. So all this is really to say that we consider reducing inflation to be the prime issue for creating a more stable financial climate in which business and industry can invest. As the noble Lord, Lord Lever, who was the small business Minister in the previous Government, reminded your Lordships in his interesting maiden speech here, there is no shortage of money for investment in this economy. We live on the edge of one of the greatest capital markets in the world. That capital is now social and corporate and represents the savings and pensions of millions of ordinary people. But there is no shortage of investment capital. What there is is the lack of a stable financial climate in which it can be invested in things other than trying to heat inflation—property and the rest—a shortage of profitable activities which it may go into. And, I would say to the noble Lord, Lord Bruce, that we do calculate the net effects. When we think about our borrowing, we do think of the net effects, for instance, in the special programmes that my department runs for the unemployed. We think of the net effects in terms of our borrowing, the amount of people taken off the register, and all the rest.
Leaving aside all these macro-economic considerations, although conditions are still difficult, we are encouraged by the rate and speed at which inflation has come down. We are now determined to encourage in that improved climate, although there is still a long way to go, new and small firms so that they are ready and equipped to take advantage of any recovery, and so that we do not lose out to our international competitors.
I want to say how much I agree with the remarks of the noble Baroness, Lady Seear, on training, and also indeed with the remarks of the noble Lord, Lord Seebohm, and my noble friend Lord Vaizey on education matters. A lot of my work in the department, and with the MSC is concerned with the new training initiative document which is at present being considered by the Government. I am sure we shall be debating it in this House in due course.
This brings me back to the measures in the Budget which were announced despite the general constraints on the Chancellor imposed by his need to reduce the level of public borrowing in order to help bring down inflation, release resources for industry and indeed for small business, and help to lower interest rates. Two of the measures, as many of your Lordships have

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said, are entirely new. They are both designed to increase the rate of business start-ups and expansions by attracting firms back to small enterprises and, frankly, acting as propaganda as to what can be achieved by small firms, and to concentrate the attention of people on the possibilities opened up by small firms.
Various noble Lords have dealt with the measures. The first new measure is the loan guarantee scheme. This is designed to help where bank managers are reluctant to lend although the business proposal appears viable, because the potential businessmen in question have no track records, or where maybe there is insufficient security. Thus the scheme will support additional lending to small firms, and that is a very important point. Finance in the circumstances that I have described has often been referred to in this House and elsewhere as a significant problem for small business, standing, so to speak, as a road block in the way of new ideas and the entrepreneurial spirit. Now the Government will offer guarantees on the major part of certain loans made to small businesses. That will be achieved with as little bureaucracy as possible. I would say to the noble Lord, Lord Davies, that it is a little early for me to be able to report on it but I will bear him in mind and we can keep in touch with him as the scheme progresses. Since the Budget we have, in fact, been finalising the details of the scheme with the participating financial institutions. I should like to take this chance to pay a most grateful tribute to the banks for their co-operation—and it is at a time when we have just hit them on the nose with additional taxation—in jointing with us in the new scheme.
My right honourable friend the Chancellor announced yesterday that the loan guarantee scheme will be launched on 1st June. I should say that this is, of course, a trial scheme introduced so that we may assess just what the demand is. In these circumstances, we have felt it right to limit participation to institutions with a proven track record of lending to small firms. Cheap money is not being made available under the scheme and borrowers will have to pay the full commercial rate, together with a premium for the guarantee. That I hope answers the point of my noble friend Lord Gisborough that it is important that we should not be unfair to existing small businesses which would not benefit under the scheme.
The second new measure is the business start-up scheme. Taking advantage of this, outside investors in certain new trading ventures will be able to get full income tax relief on the capital which they put in at the start of the business. I am glad that tributes have been paid to that on the other side, as well as on my own side of the House. The business start-up scheme gives new opportunities for tax relief at the investors' full marginal rate and is geared to attracting funds directly into productive investment at the start-up stage, where there may be particular difficulties in raising finance and when the creation of a proper capital loan is most desirable.
I never thought the noble Lord, Lord Bruce of Donington, particularly innocent before, much as I admire him. I thought he was, perhaps, a little innocent here, in that it seems to me that there would be a number of gift horses—not in terms of tax evasion, in any way, but, say, in tax reduction—for wealthy
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people in this scheme if we made it too open to relatives, particularly as relatives already have existing deductions for handing over capital sums to their dependants. If you limited the scheme to outfits which generated employment and had to monitor the employment all the time, that indeed would be bureaucratic and expensive. Nevertheless, the noble Lord was most constructive in that part of his speech and I shall see that his criticisms are looked at.
I am pleased to say that this is an imaginative new measure—new to this country, but also unique among our main trading competitors. I know that many of your Lordships are impatient for us to go further and faster, but in any tax area we should proceed with some caution and see how things work out. It would be a great pity if a scheme were made so open to leakage and abuse that it proved unworkable and this potential source of help to the small business sector would then have to be lost. But, again, I shall attend to the criticisms made by the noble Lord, Lord Seebohm, and by my noble friend Lord Vaizey.
These two new schemes have attracted most attention, but we should not forget the other measures in the Budget which will be important to small business. The limit up to which the lower rate of corporation tax—40 per cent. as opposed to 52 per cent.—is payable was increased to £80,000. The VAT registration limit was increased to £15,000, and noble Lords will know that we are under some constraints from the European Community's rules in this matter. The Venture Capital Scheme, which was introduced in the previous Budget, was extended to include investment companies as well as individuals, and we have also announced our intention to make it possible for companies to buy back their own shares.
We should not forget, again, that the previous Budget also contained enterprise measures to help small firms. The lower rate of corporation tax was reduced from 42 per cent. to 40 per cent.; the Venture Capital Scheme was introduced; there were special 100 per cent. capital allowances in the first year to encourage the construction of small workshops and the apportionment rules on the trading income of close companies were ended.
A number of noble Lords, including the noble Lord, Lord Spens, have suggested that, with the increasing number of people receiving substantial sums of redundancy moneys, some way should be found to encourage the positive use of such payments. This is a very delicate matter and one must be careful about encouraging those who are still feeling the effects of being made redundant from risking their capital prematurely in a business venture. Consideration and guidance is called for and the Department of Industry's Small Firms Service is always available to give such help. The noble Lord, Lord Bruce, was anxious lest some of the tax regulations were too hard to understand, but, in point of fact, an individual need not struggle; he can refer to the Department of Industry's Small Firms Service for help. We are expanding that service.
We have made an important change in respect of redundancy. Redundancy payments and other payments made on the termination of employment were taxable if they exceeded £10,000. The Chancellor raised this threshold to £25,000 from 6th April, and the rules for the operation of this element of tax are

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being simplified. The Chancellor has also announced that the rules governing social security payments are being examined, because fears have been expressed—and I have to say that I rather share them—that they can act as a disincentive to entrepreneurial spirit.
The noble Lord, Lord Spens, said in a debate in 1979 that the employment protection legislation was too restrictive. I seem to remember agreeing with him at the time, as indeed I still do. So the Government introduced a number of important relaxations to ease the administrative burden on small firms and to encourage them to grow and take on more labour. I share the caveats which were expressed by the noble Baroness, Lady Seear, to the noble Lord. I feel that the Employment Act has probably got it about right. We amended the existing Act to increase the qualifying period of unfair dismissal complaints from 26 weeks to 52 weeks and to reduce the period of notification for small redundancies from 60 to 30 days. There were also a number of other special provisions for the small business; for instance, industrial tribunals are now required to take account of the size and administrative resources of a business in deciding on the fairness or otherwise of a dismissal. It is a myth that if you employ somebody you cannot sack him or her. Indeed, the present levels of unemployment are unfortunately a fair indication that sackings can take place.
The costs and the administrative burden for new and small companies in maintaining and disclosing company information was another problem area which was cited by the noble Lord, Lord Spens. Under the Companies (Accounts) Regulations 1979, the particulars of turnover are no longer required to be included where annual turnover is less than £1 million. The Companies Bill, which we have recently considered, will, when enacted, implement the EEC Fourth Directive on Company Accounts and further reduce the amount of detailed financial information which small and medium-sized firms must file with the Registrar of Companies.
On the subject of files, we have as an Administration reduced the number of files by over 1 million, but there is still a long way to go. The case given in evidence by my noble friend Lord Mottistone sounds like an outrage and I am certainly prepared to investigate it if given details. As a previously self-employed business man, I am personally very much aware that the self-employed are unhappy with the national insurance contributions which they are required to pay and with the benefits which they receive. It was, of course, a commitment in our manifesto that we would review the NIS position of the self-employed, and the Secretary of State for Social Services issued a discussion document. The closing date for submissions to him was 31st March 1981 and consideration of the comments received is proceeding.
The noble Lord, Lord Spens, also mentioned the burden of rates. On this evening, of all evenings, I hope that the economy as a whole will take this to heart. It is important that business men, large and small, make absolutely clear the contribution that high rates in their communities can make to levels of unemployment.
The noble Lord, Lord Spens, and the noble Lord,
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Lord Seebohm, mentioned local enterprise agencies. As part of our general initiative, the Department of the Environment and the Department of Industry are encouraging firms, located in a particular area, who may decide to pool their resources to help stimulate the economic development of the area. This is done in a variety of ways, including the provision of advice to small firms and matching potential investors with firms in need of capital. So far, local enterprise agencies have been set up in London, Leeds, Birmingham, Bristol and St. Helens.
The noble Baroness, Lady Seear, asked me about the community enterprise programme. I should make it clear that this is primarily a special programme for the long-term unemployed, and also for ensuring that work done by the unemployed can visibly be seen to be of benefit to the community. There are possibilities for some partnerships with local businesses, including small businesses, but it would be an illusion to think that it was primarily directed at small business, rather than as a special measure for the unemployed generally. I have had meetings myself with Mr. Colin Ball. I understand that the Community Business Ventures Unit under his direction has been examining the feasibility of setting up new community businesses. His work has been funded by the Government through the Manpower Services Commission and the Gulbenkian Foundation of the private sector. That period of initial funding has now ended and the final report is awaited.
I should like to congratulate the noble Lord, Lord Oram, upon an immensely constructive speech. My old friend, in a non-political sense, Mr. J. Grimond is of course very keen on this area of activity, on co-operatives. I have been down to see the work of Mr. Robert Lakshott in Bristol. Provided that they are not subsidised, the Government are enormously in favour of co-operatives as a valid expression of private enterprise, and are keen to see the producer sector flourish. I thought that the noble Lord, Lord Oram, made a very positive and constructive speech. He was so full of "silver linings" that for a moment I thought he might almost be a Tory. We are grateful to him. We are also grateful for the praise that he extended to my right honourable friend the Secretary of State for Employment, Mr. Prior, and also to my colleague the Parliamentary Under-Secretary, Mr. David Waddington. In fact, I felt a bit jealous, as I seemed to be the only person in the Department of Employment who at that point was not receiving a bouquet from the noble Lord. We recognise the problems of inner cities and the solutions which could be found in greater entrepreneurial activities there. In my work concerned with special programmes, I find that even with a difficult clientèle—with ethnic minorities in deprived inner city areas, for instance—we get a very positive response from suggestions regarding training for self-employment. This show's that the entrepreneurial spirit is pervasive throughout our economy.
The noble Lord, Lord Seebohm, gave us a textbook lesson on how a larger enterprise can lend a hand to a newer enterprise. The noble Lord, Lord Schon, then made it clear that he had benefited from this. This could not be a better reference. My noble friend Lord Vaizey pointed out that competition would probably get fiercer in the next 20 years and that we needed new

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and smaller banks. He drew our attention to the fact that a considerable structural change was going on in this economy. It might not be too fanciful to say that an element of the march from the North-East to London about unemployment is that it is in a way a march of the old or traditional manufacturing sector of the economy, outraged at the relative ease of the new service side.
We have to educate people, or point out to people the changes that are coming and prepare them for them. I think that the noble Lord, Lord Granville of Eye, dealt with that point. He asked me about the effect of the chip on the labour market. My department has produced a document which shows considerable evidence of new business and small business generation through new technology. I should be happy to send that document to him if he would like me to do so. The noble Viscount, Lord Hanworth, kindly gave me notice that he would raise the Hadfields point. I think it is a little wide of the debate, because even in its reduced state Hadfields is a very large business indeed. I will write to the noble Viscount about the points which he raised.
Viscount Hanworth: My Lords, I thank the noble Earl.
The Earl of Gowrie: The noble Lord, Lord Davies of Leek, mentioned the problems we are having with our roof. I do not think we could quite envisage the roof of your Lordships' House acting as a kind of gigantic job creation programme. However, I will pass on the noble Lord's suggestion to the authorities concerned.
My last point is this: It seems to me that the best thing about the debate and, indeed, about the measures we are trying to promote is that our aim is to change the whole psychological climate for business in general. The best thing for entrepreneurs is surely a stable financial climate which is not at the same time hostile to wealth creation; where success is not only rewarded but applauded; where the tendency is perhaps towards greater rather than lesser differentials in wealth in individual cases. In an open society men will always seek wealth. The interests of society as a whole demand that they seek it in a way which is productive and beneficial to others as well as to themselves.
For what my views are worth, I feel that for too long in this country the sources of new wealth have derived either from dealings in real property or in varieties of asset stripping. Inflation has had a lot to do with this tendency, but so has the philosophy of egalitarianism, because making money in these fields of endeavour is a lot less conspicuous than building up the kinds of activity which spin off into greater wealth for other people and create greater employment.
In this respect we are a curious people. We are not socially envious of those who acquire wealth by gambling or as a result of athletic or even, occasionally, of artistic ability. We are not even particularly hostile to those who inherit wealth, as some, though not all, of your Lordships well know. But we can be fiercely resentful of those who through their skill, effort and good fortune go out and make the stuff.
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The greatest single contribution which the Government have so far made, in my view, to small business is the reduction of the top rate of income tax on earned income to 60 per cent. When we improve the capital taxation position comparably, we really shall be getting somewhere. We have made a beginning in this respect as well as through the other measures which I have mentioned and through our attempts, by reducing inflation, to create a stable financial climate. And we mean to go on and do better.
6.38 p.m.
Lord Spens: My Lords, I do not propose to keep your Lordships for very long because I am sure that the noble Baroness is feeling a little frustrated that her Unstarred Question is taking so long to start. I can say to the noble Earl, Lord Gowrie, that indeed I am gratified. It has been an excellent debate which has spread over a very wide field. I do not propose to refer to what every speaker has said, but one or two points have come out of the debate. First, most of us feel that the Government could do a little more. We have suggested various ways. We have asked the Government to look again carefully at the clauses in the Finance Bill which deal with the new business start-up scheme. I agree so very much with what was said on that matter by the Opposition spokesman. I do not understand it, and I am an accountant. I wonder whether the noble Earl does. I omitted one point from my opening speech and I should like to refer to it now. The people who are going to contribute, whether to the start-up scheme or to my friends of small businesses scheme, or whatever, have got to turn it into cash in order to make a contribution. At the moment capital gains tax may be charged. May I ask whether there is any possibility that raising money for this purpose could be freed from the charge to capital gains tax? I should like the Minister to think about this point.
I now want to make one of the speakers blush. We have among us (and I think we realise it) somebody whom I would call an entrepreneur extraordinary. About 40 years ago the noble Lord, Lord Schon, came to this country as a refugee with no money. He started up in a new technology, very small business. He has told us how that business was supported at times by the ICFC. Finally, he spent 10 years as chairman of the National Research Development Corporation. He has made his million and he is now sitting in this House to give us the benefit of his advice. It is a marvellous achievement and we should remember it.
Finally, we must remember what was said by the noble Baroness, Lady Seear: that unemployment is not only about small businesses. The small businesses only play quite a minor part in the problem of total unemployment. The large businesses have to be brought back somehow, even if they are not the ones that we know at present. New ones have to be created. It will take time and that is why we have concentrated today on possibly getting something moving for small businesses. I thank all the speakers for having spoken so interestingly today and I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

Disabled Persons (No. 2) Bill
  Indecent Displays (Control) Bill
    Industrial Diseases (Notification) Bill
    Brought from the Commons; read la, and to be printed.

Hydrographer of the Navy: 1979 Report
6.42 p.m.
Baroness Vickers Baroness Vickers rose to ask Her Majesty's Government whether they have had their attention drawn to the report of the Hydrographer of the Navy 1979 on their one-hundredth anniversary.
The noble Baroness said: My Lords, I beg to ask Her Majesty's Government the Question standing in my name on the Order Paper. First, may I thank the members of the hydrographic profession, and particularly Admiral Haslam, who has done such a magnificent job over many years, and also his staff, both overseas and at Taunton. Having visited them on several occasions I have always found them hard at work and enthusiastic and I wish them every success in the future.
The first formal annual report published by the Hydrographer of the Navy consisted of five pages and gave details of the surveying and charting activities in 1879. In addition to information concerning the hydrographic surveys carried out in many parts of the world it reported the following:
"The Hydrographic Department during the past year has issued 205 notices to mariners, an increase indicative of much activity in the interests of commerce all over the globe".
Also that:
"Sixty-two new plates of charts and plans have been published; many of these represent original work, and all may be considered of immediate interest to seamen. One hundred and ninety-two thousand and sixty charts have been printed during the financial year for Her Majesty's Service and for the use of the general public".
That, my Lords, was 100 years ago.
The year 1979 marks the centenary of the first official Report on Admiralty Surveys by the Hydrographer of the Navy. The first Hydrographer of the Navy was appointed on the 12th August 1795 and from the mid-1800s the Royal Geographical Society's Journal published information similar to that contained in
"The report by Captain F. J. 0. Evans, who was then the Hydrographer of the Navy, of the work performed under the direction of the Lords Commissioners of the Admiralty during the year 1879, in the examination and charting of the seaboard in various parts of the globe",
which was published for the first time as a Parliamentary Paper.
It is interesting to note the state of activity by the Hydrographic Department 100 years ago. Seventy—two officers and 600 crew were employed afloat in 12 ships, compared with 41 surveying officers and 726 officers and crew in 13 ships in 1979. In 1879 there were few other countries capable of conducting hydrographic surveys and Captain Evans gives special
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mention to the work of HMS "Fawn" in the Sea of Marmara and of HMS "Sylvia", in her sixth consecutive year surveying the coast of Japan; of HMS "Magpie" off the coast of China and of HMS "Alert" in the Magellan Straits. Other units were stationed—and this is a long time ago, my Lords—in the West Indies, off Newfoundland, in Fiji, New Guinea and New Britain, Queensland and South Australia, while at that time only two were employed in home waters. In 1979, following the withdrawal of four ships from the contract surveys of the Gulf of Oman in February, all but one of the 13 units were employed in home waters.
During 1879, 62 new chart plates were produced and 2,040 chart plates were amended; 205 notes to mariners were issued and 5 new volumes of sailing directions were published as well as "the usual tide tables and light lists", while 192,060 charts were printed for issue to Her Majesty's ships and for sale to the public. This year's report will, I think, show that the excellent service already being provided to Her Majesty's Fleet and to the international mercantile marine in 1879 is still being maintained. Nevertheless, industrial unrest, among other reasons, made 1979 a difficult and sometimes frustrating year for the whole Hydrographic Department, afloat and ashore.
As a result of the special measures approved last year there were 90 hydrographic officers borne on 1st January 1980 against an allowed bearing of 92. It will take some time for the 13 general list and supplementary list seamen officers recruited during the year to gain the experience needed to be fully effective. However, there has also been a welcome improvement in the recruitment of all types of officers and the ships are benefiting from the presence on board of a wide variety of officers borne for sea experience who, together with the trainees, will require some diversion of effort to the supervision of their training but can also take some of the non-surveying administrative load off the shoulders of the experienced hydrographic officers.
Sales of charts and nautical publications increased by 4 per cent. and 6 per cent. respectively over the disappointing levels of 1978, as I have just mentioned. However, the number of charts sold was seriously affected by an industrial dispute at the department in Taunton during the summer. Civil servants were instructed by their executive to withdraw their labour, with the result that, although the rest of the work continued almost normally, no charts could be reprinted either as replenishment of stock or as modernised replacement charts. Fortunately, the issue of notices to mariners and transport of both incoming material and despatched supplies from stock continued normally, and I think we must congratulate those members of the institution at Taunton for carrying on with that work in very difficult circumstances.
Production rose to a peak of 317 chart-runs in the week ending 9th September and less than 200 charts were not available by mid-September. Early in October there was a resumption of normal four-colour printing and the replacement of the 773 temporary two-colour charts. Completely normal services were due to be available by the end of February 1980. Efforts made during the year to increase the availability

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of products throughout the world have been very successful. They have resulted in the establishment of 30 new chart agencies in this country and 12 new ones overseas, to bring the total number of outlets to 198 agents in 44 countries. Only the major, "A" class, agents are required to hand-correct their stocks of charts, but the "BP" class agents usually have a quick turn-round from the "A" class agents.
In a debate in December 1975 the noble Lord, Lord Shackleton, drew attention to the recently published Hydrographic Study Group and the need to devote more resources to the surveys of the United Kingdom continental shelf and similar areas overseas for which the United Kingdom is responsible. Despite the agreement by all parties in both Houses of the need, interdepartmental wrangling over who should pay has not only not yet produced any extra effort but has led to a diminution of effort available, which I think is very regrettable.
Whereas in 1975 there were four ocean survey ships, four coastal survey vessels and five inshore survey craft, there are now only three ISC as two have been paid off recently. Although additional civilian staff were recruited in the years 1975 to 1979, there has been a restriction on recruitment of staff to replace those retiring from Taunton and numbers are now back to the levels of several years ago. I think this point is very important. This is despite the fact, which I wish to emphasise, that the products of Taunton (charts and books) provide an income more than adequate to pay for the civilian staff required.
Although the last Administration announced in 1979 their intention to seek tenders for three new CSVs and to place some work out to commercial contract while these three new ships were being built, the present Administration has only agreed to go ahead with ordering one. There is still no decision about further vessels and no work has yet been put in hand. I hope the noble Earl is going to give me some good reply. Perhaps I should mention here that Spain is already building one of these ships, as is Italy.
Study of Plate A in the 1979 Report shows how many important areas have still not been surveyed, such as the traffic separation routes off Casquets (where new routes are now being proposed), Lyme Bay, Bristol Channel, Scillies, Pentland Firth, Minches, et cetera. Although, I am glad to say, no accidents have yet been directly attributed to the bad state of surveys, the risk increases with the passage of time. Each year new shoals are reported, for example, Whale Rock between St. Kilda and the Outer Hebrides. This was reported in 1979. New wrecks are being reported each month but there are still more to be looked for. The number they are looking for is 14,000 wrecks.
It is necessary to remember the overseas areas for which the United Kingdom is responsible, and to ensure that British goods can both leave and reach port at both ends of their journey. The surveying flotilla and British commercial survey companies are capable of leading the world but they need to be given the chance to expand. New and automated equipment is needed, both ashore and afloat, to speed up the work. We are not in a position, as I quite understand, to squander money, but I do plead that we spend a little
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more on the things which this organisation is doing, which it can do well, and which will benefit so many facets of life.
The HSG Report put the total capital cost of providing four new CSVs and three new ISCs as £24·5 million over the seven years 1975–76 to 1981–82. No money has been spent yet on any new ships and the recommended programme is many years behind. Costs of providing new ships have really increased dramatically, and of course we must realise that the longer the programme is delayed the more the costs increase. Yet the British shipbuilders need work and there will be a great demand for such ships worldwide for exploration of offshore areas.
In the 1979 report at page 2 the Hydrographer stated:
"During 1980 it is hoped to conduct trials with a 27 metre hovermarine solid side-wall cushion craft".
By May 1981 not only have these trials not taken place but it appears that the comparatively small sum required (reported to be £50,000) is unlikely to be made available yet awhile. At a time when the Prime Minister is urging greater exports of ships and other vehicles, this is an incomprehensible delay. Offshore oil surveys are taking place abroad at an ever increasing pace and deeper draught ships are navigating in harbour approaches. A craft of the hovermarine type has the great advantage of high speed transit to survey grounds, about three times that of conventional—hulled vessels. At present, of the numerous orders for survey craft from at least 10 countries, not one has come to Britain.
Unless remedial action is taken at a very early date, action which includes the resolution of the interdepartmental wrangling over financial responsibility, the ordering of suitable ships and craft as well as adequate provision for civilian staff at Taunton, troubled times will be near at hand. A single disaster such as the "Amoco Cadiz" affair could wipe out a large proportion of the notional savings made by deferring decisions.
Finally, I should like to give the number of ships. In 1939 ocean survey ships numbered 11, and in 1981 4, and it was recommended there should be another 4 by 1975. With regard to coastal survey vessels, in 1939 there were none, 4 in 1981; inshore survey craft, none in 1939 and 3 in 1981. The total recommended is four survey ships, eight coastal ships and eight inshore craft. The other point I should like to make is that in 1939 the average draught was 32 feet and in 1981 it is 65 feet, and the safe diving depths of submarines in 1939 was only 300 feet and now it is 1,500 feet.
So I do think it is necessary to take a very good look at this report, particularly when I mention that at the present time the Russians have 127 survey ships and they are not only doing a very good job but also probably taking away some of our profits from the charts, et cetera, that we sell. I hope that the noble Earl who is going to reply will be able to give me some really good facts which will help the people at Taunton and give them further incentive to carry on their excellent work.
6.58 p.m.
Lord Ritchie-Calder: My Lords, we have to thank the noble Baroness, Lady Vickers, for this naval

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occasion and for giving us the opportunity to discuss the critical and indeed crucially and vitally important role of our hydrographic service. As she has pointed out in drawing our attention to the report, it marks the centenary of the first report of the Hydrographer. As we know, the hydrographic service in this country dates back to 1795, and was set up to cope with the enormous accumulation of material which Captain Cook brought back and to turn it to account. Also in the year '79 we had seen the great adventurous voyage of the "Challenger" and what it discovered, and the problems which it has created for us today in terms of the exploitation of the seabed. In fact we have for 200 years led the entire world in hydrography and prestigiously still do so. We want to keep it that way, not vaingloriously, but as a continuing contribution to the international safeguards of the sea. Those safeguards, as the report shows, are now at grave—indeed very grave—risk. The Advisory Committee on Oil Pollution of the Sea (ACOPS) of which I am Chairman, is desperately aware of the need not only for proficiently maintaining the Hydrographic Service but for enhancing and expanding its capabilities. Two of my predecessors as chairmen—the noble Lord, Lord Kennet, and my noble friend Lord Shackleton—are taking part and my other major predecessor was my noble friend Lady White. We are all here as an eloquent proof of our awareness and concern about the limiting of this essential service.
As the noble Baroness, Lady Vickers, has pointed out, the report is a most impressive document—a testimonial to the hardihood and efficiency of the men of the sea-going survey ships and to the expertise of the shore-based services. The detailed accounts, including the humanitarian rescue of hundreds of civilians in the Iranian upheavals, belong in the heroic category of courage and endurance. But it is also a very disquieting report. The service is at hazard and consequently the ships of the world are at hazard. The reproaches—or perhaps I should say the reminders —that we have to offer to the Minister who is to reply are not reserved for this Government. We have repeatedly badgered past Governments to accept the responsibilities imposed by our historic role, but also to be aware of the present dangers to our ships and to our shores.
We, the British, charted the seas of the world to protect our naval and mercantile navies. Our empire contracted, but surely not our commitments. Our navy contracted and so, in across the board economies, did our hydrographic service. It was simply treated—and quite wrongly treated—as an item in the general account of the Navy when it was peculiarly and very particularly important in its own right. It has contracted its size, as the noble Baroness has pointed out, and it suffers from the lack of proper refitment and replacement. There is a manifest need for modern equipment and technological refinements.
The Minister of Defence is responsible for the service but as many of us have argued, in Government housekeeping the civilian Departments of Trade and Industry and the Environment have now as big—and I think a bigger—a stake as defence. And, I would add so do our overseas departments, because as the noble Baroness pointed out we were not only in the
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general sense but in the particular sense, in our colonial days, responsible for the hydrographic services of those countries and we now find that our ex-dependencies in the third world—and we must bear in mind that they are responsible for the 200-mile economic zone and everything concerned with it—must take over those responsibilities and they are ill-equipped to do so. We are, in those terms, the trustees for a vast and very important service.
The reproach is a general one. Whenever we ask for support for and extension of the Hydrographic Service, individual Ministries say, "We are not responsible" or the Minister of Defence says, "We cannot afford it in terms of our naval commitment". Surely it is not beyond the wit of Government to provide a modus vivendi. It is perfectly clear to most of us that the Department of Trade ought to accept the enormous responsibility because it is now practically the "Marine Department".
As I have said, the report is disturbing. Not only is our fleet of survey vessels inadequate—and, as the noble Baroness has pointed out, it is shrinking—but in modern terms it needs replacement. World events like the political problems of the Gulf, but also economics, have restricted the essential range of activities. That includes, as I have said, the charting of the world at large. Our inshore survey craft need replacement. For modern purposes, as the noble Baroness has pointed out, hovercraft and helicopters are now essential. Can the Minister tell us, for example, what has happened to the coastal survey ship which we were confidently expecting two years ago and which was essential then and is paramountly essential now? And, in passing, perhaps I might ask what has been the input to the Ministry of Defence of the Hydrographic Study Group set up in 1975, of which great things were expected? I do not want to anticipate the noble Lord's answer, but I am pretty sure that it has been ignored.
We know that we are expected to reduce everything to business terms. I point out, as the noble Baroness has done, that the Hydrographic Service has a considerable commercial enterprise in selling charts; but surely far beyond the "stationery"—if I may put it that way—and with our great prestige and reputation for proficiency and our pre-eminent role in this whole field, our expanded hydrographic services which are needed would be in big demand for undertaking the surveys which are indispensable for the big marine enterprises now under way. I am postulating its role in the civil sense as well as in the naval or military sense. Without updated hydrographic services we can expect nothing but recurring disasters—disasters affecting these islands.
ACOPS—the advisory committee—lives with the menace of oil spills of collisions and wrecks and polluted seas and shores. I looked at the hydrographic map of the Admiralty surveys published in the report which we are discussing. It shows the seas around our British coasts which have been fully surveyed to modern standards; areas which have been bathymetrically surveyed but with incomplete investigation of wrecks; areas surveyed by echo-soundings but not on a scale suitable for modern conditions; and lastly areas surveyed by lead line only and lacking definition. That is a very startling map to look at and

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when one bears in mind the amount of giant tankers and congested shipping traffic then it is a ghastly picture. Where it has been done it has been done very thoroughly. Areas which were recently, in general terms, relatively safe for the kind of craft which might use them, are now being used by very large supertankers with draughts much greater than even the Grand Fleet battleships of a generation ago. I am thinking of the northern approaches to the Shetlands. The noble Baroness has quoted one case which I want to illustrate. I shall quote from the report which says:
"One new danger was found which was so large that sonar was not needed to detect it. This was named 'Whale Rock' by HMS "Hydra" which confirmed its existence about midway between St. Kilda and the Outer Hebrides. It consists of an extensive patch of rocky outcrops with a least depth of 5·2 metres and general depths of over 50 metres. Although the chart had shown a reported shoal of 8·2 metres and although the whole area was charted clearly as 'unsurveyed', HMS "Hydra" reported seeing several large tankers proceeding through the area".
Or again:
"In 1978 the ships and tonnage lost were the highest ever recorded in peace time. The number of vessels of 100 tons, gross and over lost was 475 compared with 336 in 1977 and the gross tonnage lost was 1,710,813 tons, an increase of some 59 per cent."
I would remind your Lordships that it is the job of the Hydrographic Service to locate and determine the wrecks, which of course themselves become dangerous to shipping. This is a very important matter which we neglect at our peril. While priding ourselves on the historic achievements of the Hydrographic Service and admiring the hardihood and competence of those who serve in it today, let us ensure that at least the Hydrographer gets the resources to do his job properly.
7.12 p.m.
Lord Kennet: My Lords, I believe that the annual, or nearly annual, debate on the Hydrographer has now reached the point where one has to declare that a state of scandal exists. Let me briefly run through the reasons why. The noble Lord, Lord Ritchie-Calder, has just reminded us of the mounting losses. You would think, would you not, that in an age of rapidly advancing technology the seas would become safer for mariners and for coastwise people whose beaches might be polluted? Not a bit of it. It is more dangerous. Year by year, there are greater losses, with the highest losses tonnage—wise, being in 1979; I am not sure whether the figures for 1980 have yet been computed. Does this not suggest that something is wrong?
The size of ships is increasing; that is a truism, for now it is the highest ever. We have already heard the average depth, although I think that the noble Baroness, Lady Vickers, probably meant the normal maximum depth of the biggest ships; that was 35 feet just before the war, but now it is 62 feet or 65 feet. Obviously, if we wish the increasing depth and increasing size of ships not to result in increasing losses of ships at sea, we must resurvey the sea's bottom to the new maximum depth. That is not done. Year after year, we have given both Houses of Parliament the figures for the proportion of our own seaways round these islands which are not yet surveyed to
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modern standards. They are appallingly high. I shall not insult the House by giving them again. How long can one go on before tackling the root of the matter?
Let us look at the symptoms of what is happening now. Of course, the House is in the debt of the noble Baroness, Lady Vickers, for raising the matter. Why is it that she has had to call attention to the 1979 Report of the Hydrographer? Why is she not in a position to call attention to the 1980 Report? We should be glad if the Government could tell us when the 1980 Report can be expected, and why it is late.
Why have the recommendations of the 1975 Hydro-graphic Study Group not been put into effect? These were recommendations about the size and composition of the hydrographic fleet and recommendations about who should pay for it. They have not been put into effect. One may say, "Very well, why should they be put into effect? It was only a study group; it was not a Cabinet decision." If they have not been put into effect in six years, why is it that they have not been put into effect? Do the Government have a reason for ignoring the manifest common sense contained in this 1975 report? If they have a reason, why do they not declare it to Parliament? Why do they conceal the superior grounds, the raison d'etat, the overriding considerations which lead them year after year to neglect this 1975 report about what ought to be done?
The noble Lord, Lord Ritchie-Calder, has just reminded us of the rock between the Hebrides and St. Kilda reported in the 1979 annual report. Since then, the hydrographic ships have discovered a bank outside the Outer Hebrides with a minimum depth of four fathoms in a part where the chart said that the minimum depth was 40 fathoms. Of course, the Government know as well as anyone else—indeed, better than anyone else—that that route round the North-West of Scotland, outside the islands, is increasingly used by very large bulk carriers, the 60-foot draught ships. It is a miracle that more of them have not run on that rock and that bank before now. If they do, it will be the Government's fault for not ensuring that the seas round these islands are surveyed as well as the seas round other countries in the world.
I started my remarks by saying that this was a scandal; I think that it also comes in the category of being a national disgrace. In 1975 the Hydrographic Study Group—in the same paper as I have just mentioned—made certain recommendations about how many ships there ought to be. Since then, it has been announced that one new ship has been ordered, and no doubt the Minister will tell us about that order this evening. But please will he also tell us why it is that, six years after that, two ships have been laid up without replacement, and why the Hydrographer's total fleet is thus, at this moment, smaller by two ships than it was in 1975? Why are the Government running down this vital service?
I do not think that the answer can lie in anything except a swift and rapid programme of shipbuilding or, indeed, ship purchase. I do not believe that the answer lies in the transfer of ships from other marine scientific work to the hydrographic survey. If ships are already employed by the National Environment Research Council or, indeed, the oceanographic research bodies, or anyone else, it would be quite wrong simply to

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pinch them for the Hydrographer. Marine science is marine science; it is one whole, and it is the duty of the Government to conduct and fund it in all fields. The only thing to do is to get new ships for the Hydrographer himself in order to do that work.
I believe that we are facing a classic picture of decay: of nervelessness, thoughtlessness, laziness and decay, on the part of the Government of a modern state. It is exemplified by the composition of the House at this moment. The Government Benches—and I make no apology for repeating this (I said it only a couple of weeks ago in another debate)—are peopled by three noble Lords and one noble Baroness. The Opposition Benches are peopled by a great many more than that, and among them I am glad to note the present Leader of the Labour Opposition, two past Leaders of the Labour Opposition and three former chairmen of the Advisory Committee on Oil Pollution of the Sea, and until a moment ago it was four. I think that that in itself is symptomatic.
When we have a service of scientific and economic activity, such as that of the Hydrographer, which really is of interest to a nation like ours—because it is lifesaving, because it is commerce-promoting, because it is high technology and because it gives skilled employment to many good people who need it—and when we get a service about which we can do something, what happens?—the Government vanish. Why do they vanish? No doubt they will tell us. But I guess that they vanish because to do the right thing would involve an increase, or a decrease in the decrease, of Government expenditure. They say, "If it costs money, do not look at it again; down the drain with it! If it goes down to the Exchequer on the bill, then it must be bad. Whether it produces work or knowledge, whether it saves lives or whether it promotes commerce, if it is public money, it is bad." Therefore, we do not pay any attention to it.
Both speakers so far have mentioned the administrative crux of this matter, and that is who pays for the hydrographers. Traditionally it is the Secretary of State for Defence, and he continues to pay for what the Navy needs. But the Navy does not have very big ships any more. The Navy does not have any 60-foot draught VLCCs. The Navy has ships which draw 20 or 30 feet, and that is all right for those surveys, which were very largely correctly done before the Second World War. Therefore, according to the niggling accounting of public money which goes on at the moment, the Navy has no interest in getting accurate surveys lowered. So who has?
Lord Shackleton: My Lords, may I interrupt the noble Lord? He is aware that the Navy has submarines.
Lord Kennet: My Lords, I am sorry, I am aware of it but I had completely forgotten it. If I call the noble Lord my noble friend it means that we belong to the same party. I am grateful to my friend for reminding me of this fact. They do have indeed submarines. Therefore, it seems that somebody else has to pay for the bit which is of primary interest to civilian ships; the merchant ships; the big ones. Who is that? It is the Department of Trade.
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I want to repeat, which I always do in these nearly annual debates, a bit of the history of the structure of Government on this matter. During the last Labour Government a bold and forward-looking decision was taken. That was to appoint the Leader of this House, who was also Minister of the Civil Service—my noble ex-friend and still my personal friend Lord Peart—to be the overlord of all maritime policy. Unfortunately, in the time that he held that position he did not get round to doing a whole lot of things which no doubt he would have got round to if he had had longer, including rationalising the financing of the Hydrographer.
What happened when this Government came in? They demolished even that first step towards the co-ordination of Government policy on maritime affairs. They wiped it out as if it had never happened. They said, "Everybody will be equal. All the departments in Whitehall will be equal on this matter, except that the Department of Trade will be a little more equal than others, and the Secretary of State for Trade will have the responsibility of the 'lead department' on all maritime affairs." But nevertheless the Secretary of State for Trade has not been given a co-ordinating function, as the Leader of this House was under the last Government. Still less has he been given any statutory powers which have not belonged to the Secretary of State for Trade over the decades. He is still only primes inter pares. In fact, we all know that the noble Lord, Lord Trefgarne, is the Junior Minister at the Board of Trade. responsible for maritime policy and for exercising from day to day that responsibility of the Department of Trade.
I hope that noble Lords opposite will take what I am going to say now as being absolutely non-personal. I think that all of them are doing the best they can with the present structure, but I believe the present structure to be grossly and indeed disastrously defective in this matter. First of all, there is nobody responsible for the whole of maritime policy. We should compare ourselves in this with France, where maritime policy as a whole is among the four great aims of the nation. Of course we do not think in that way, and for a nation to have great aims is a quaintly French idea, is it not? Nevertheless, in so far as any nation gives itself aims, France has given itself that aim among its top four. Not us. Nobody co-ordinates this. It is left to one department which is responsible for one part of maritime economic activity—namely, shipping—but not for others. This department has been given the lead. This in a certain sense tucks everybody else under the interest mantle of shipping.
Thirdly, beyond that, the matter has been delegated by the Secretary of State for Trade to one of his Parliamentary Secretaries—remember, I am not personal in this—Lord Trefgarne, who has an extremely full plate. He has to look after the Foreign Office on a day-to-day basis in this House, as well as the Department of Trade. Fourthly, even the noble Lord, Lord Trefgarne, is not with us tonight. Still nonpersonal—and I am sure that the noble Earl, Lord Avon, will do as much as any man could from his own position—the debate tonight is to be answered by the noble Earl, Lord Avon; a Lord in Waiting who is responsible for the affairs of many Government

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departments, among which is not even the Department of Trade.
So for the occasion of this parliamentary debate it has been pushed down to the level of a Lord in Waiting whose responsibilities do not include those of the department responsible for Government policy in the matter. It would be unrealistic of the House to expect any shift in the Government position this evening. The Government have shown what they think of the importance of this matter. The issue will remain. Ships will be wrecked; shores will be polluted; commerce will suffer; the name of Britain and the contribution of Britain in and to the world will continue to go down until someone in the Government takes a grip of the matter and stops drifting.
7.26 p.m.
Lord Greenway: My Lords, it is always rather difficult to follow the noble Lord, Lord Kennet, on this, one of his pet subjects. We have just heard a typically hard-hitting example of his expertise and knowledge on this subject. In a way it makes me feel as though I am again making my maiden speech, which I did on this subject five years ago. I should like to join with the noble Baroness, Lady Vickers, in congratulating the Hydrographic Office on their centenary report, and indeed on their enormous contribution over the last 100 years to the safety of navigation; a task which they have performed with great dedication and enthusiasm, often with very meagre resources.
The chart is fundamental to good navigation, and we have always prided ourselves in our charts in this country. A well-trained seaman with good charts should theoretically be able to navigate anywhere, provided of course he obeys the rules of the road. Unfortunately, recently standards of seamanship have been declining. This is in part due to the enormous increase of emergent nations' ships on the waters of the world. Recently, indeed, checks by English and French authorities on ships visiting their ports revealed a sad lack of up-to-date charts, and this is quite disgraceful.
This, however, is no fault of the Hydrographic Office, who have completed in the last few years an enormous extra burden of work in bringing up to date our charts to include the introduction of the new IALA system standard buoyage, and also the general metrification introduction in general chart work. This work still continues. Although the United Kingdom section of it has been completed the rest of the world is still following, but slowly. Yet more revision will be occasioned, possibly next year when a proposed new routing scheme is introduced in the English Channel. This new scheme is really rounding off the rough edges of the hurried schemes introduced by the French following the "Amoco Cadiz" disaster. It is understandable on their part, but nevertheless introduced perhaps too hurriedly and without too much thought.
This new scheme proposes a logical recommended direction of traffic flow between the existing mandatory separation schemes in the Dover Strait off the Casquets, and off Ushant. These routes would be marked by regularly placed high focal plane buoys, with a new light vessel to be positioned in the western
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channel, which would go some way towards attracting ships to come up the middle of the channel.
If these proposals are implemented—and there is every indication that they will be—it will put an extra burden once again on our very stretched Hydrographic Service, both in the surveying for and production of new charts. I would introduce here a word of warning regarding any possible cutback in Government expenditure on charts because it might open the door to one or two British commercial chart-producing firms whose information is nothing like as detailed as that of the Hydrography Office and might lead to substandard and secondhand charts being produced, and that would be most undesirable.
One of the illogicalities that has come to light in the 1972 Collision Regulations is that Rule 10, which refers specifically to the conduct of ships within the special separation lanes, makes it virtually impossible for a survey craft to operate legally within the separation lanes; namely, in the places where surveys are most needed. I have even heard unconfirmed reports of Dutch survey craft, which perhaps turn a slightly Nelsonian eye to the regulations, carrying out surveys illegally in the separation lanes, and the information is passed on to our Hydrography Department. This is a ludicrous situation and I sincerely hope the Government can confirm that this anomaly is to be altered in the first up-date of the IMCO Collision Regulations, which I believe is due sometime later this year.
Other noble Lords have already referred to the fleet of survey ships at present in the Hydrographic Service. There are 13 ships, the same number as when I made my maiden speech five years ago, and the last ship, the "Herald", was commissioned in 1974. This is not good enough and I beg the Government urgently to consider the requests from all sides for new survey ships. I appreciate that the first call on these ships is for naval requirements, but I cannot emphasise strongly enough the increasingly urgent need to cover civil hydrographic requirements.
I welcome in the report the introduction of new equipment, especially the side scanning sonar which has greatly facilitated the plotting of wrecks. But this method is expensive in ship time due to the slow speed, of six or seven knots, necessary for it, and I believe that a new type of forward-looking sector scanning sonar is being considered. This will considerably speed up the process of surveying, and perhaps the Minister when he replies would confirm that this new forward-looking sonar is being considered. While the noble Baroness, Lady Vickers, said there were 14,000 wrecks in this part of the world, my information is that there are 20,000 wrecks in north-west Europe, a considerable number when one considers the number of ships which are sailing around over those wrecks all the time. A somewhat alarming aspect which is not generally recognised is that when a wreck is discovered and blown up, instead of having one solid object immovable in one place, one is then confronted with perhaps up to 20 smaller objects which can be moved by the action of tide or current and are therefore much more difficult to locate. As a yachtsman and shipmate of the son of a distinguished former hydrographer, who I am happy to say is listening to the debate, I especially welcome the new quarterly edition of Notice to Mariners for the use

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of small craft between the Elbe and Gironde limits, as in my maiden speech I urged the Hydrography Office to consider the special needs of yachtsmen.
The noble Lord, Lord Ritchie-Calder, as always, mentioned super tankers. Perhaps here there is a ray of hope on the horizon because the ULCC's, or ultra large crude carriers, which were creating such a stir two years ago, are now beginning to find their way to the scrap yards. That has been brought about by changing commercial requirements and perhaps a hopeful pointer for the future is that the new ships coming along will be smaller, very much beamier with consequently greatly reduced draught.
The "Droggy" Department, as they are affectionately known in the Navy, go along way towards making up for the shortfall in their equipment by their enthusiasm and justifiable pride in their task in helping to maintain the safety of navigation. I hope it is not too much to ask the Government, even in these times of financial stringency, to find the comparatively small amount needed to assist and expand a service which is doing a job which we, as an island nation dependent on seaborne trade, should regard as vital.
7.37 p.m.
Lord Mottistone: My Lords, I too congratulate my noble friend Lady Vickers on tabling a Question relating to this extremely important service. I also congratulate the Hydrographer and all his people not only for the work they do but for the excellent report they have made. I am deeply concerned about the future, not just of the Hydrographic Department but of all things maritime in relation to this country. We depend greatly on the sea, even now, for all sorts of things, and I am delighted to see that the noble Lord, Lord Peart, will be speaking from the Opposition Front Bench. He may remember that we had a debate on fish not long ago in which I was advancing the same thought; namely, that people are forgetting that the roots of this country rest in the sea. That applies not only to what I might call the defence aspect in the Royal Navy; it applies to all sorts of other activities.
There is, I fear, a reason why your Lordships' House is so empty tonight. While he said certain things with which I did not agree, I agreed with the noble Lord, Lord Kennet, when he said it was rather shocking that the House was so sparse, with no Liberals being present. This is a fact of life and I am not criticising it in any way. The reason is that people travel by air these days when they wish to leave these islands. Fifty years ago, if one wanted to go to France, it was the rule rather than the exception to go by sea. If one happened, therefore, to be the Secretary of State for Trade (or President of the Board of Trade, as it was in those days) one automatically knew about the sea, even if one was not a yachtsman, like some of us happily are. Indeed, one was reminded of it whenever one went abroad, for whatever reason. If this debate had taken place 50 years ago, relatively more noble Lords would have been in attendance; there might have been the same number, but the House was not as big in those days. Relatively more Members would have been in attendance because the kind of people who serve in your Lordships' House are the
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very people who travel, and in those days they knew about the sea and took it for granted that the sea was vital to us.
I detect that this true understanding and love of the sea is not as strong as it used to be in the circles in which decisions are taken, both in Parliament and outside, because people are not constantly accustomed to using the sea and having its vagaries, troubles and difficulties forced upon them. After all, if one went out of Dover Harbour and the captain made a slight error and the vessel went near to the beach, one might think it a jolly good thing that he had a chart; and that kind of thing would have been in one's blood. So I feel that we have a real problem here, and it is on this kind of theme that I agree in considerable degree with the tenor of what the noble Lord, Lord Kennet, was saying, though I hope he will forgive me if I say that I do not agree with the way in which he said it. If you want to make friends, you do not strike daggers into them.
The point is that the Government as a whole—and I am not concerned here only with the political end, or with the administrators who advise them—not only do not comprehend the sea problem in the widest possible sense, but have no incentive so to do. We can make our speeches if we feel that we understand what are the basic needs of the country. That takes us so far, but how to go that step further I find almost baffling.
With that kind of start we must look at the fact that the Hydrographic Service provides a service not only to the Royal Navy. I hope that that will always be its main task, and that it will always be naval manned, for the reason that some of its functions have to be performed by officers who have to deal with matters which are not disclosed worldwide and which need to be handled in a defence sense. As well as looking after the Royal Navy, the service deals with the merchant shipping of the country. Whereas all the people now travel by air (which they did not do 50 years ago) the vast bulk of goods, although not all of them, come by sea. So, while the people do not think about the service, the goods, which are vital to this country's survival, need the kind of cosseting which people used to think they got for themselves—if that is not too complicated a way of putting it.
Therefore, we must say to ourselves that the service is being rendered to everybody and we must make a much greater effort than has been made hitherto. I know that noble Lords opposite when they were in Government took an initiative, whether through the Department of Trade or some other body, towards getting the merchant service angle fed into the costs of maintaining the Hydrographic Service as it stands, and indeed of expanding and modernising it, which is clearly necessary. How we do this, I do not know. But this is a challenge to my noble friends on the Front Bench, and I hope that my noble friend Lord Avon will be able to say something about how the Government see the machinery for doing this.
We provide other services, to other people. I suppose we can say that we sell them charts and sailing directions, and that is our recompense. But of course the cost of producing that kind of product bears no relation to an ordinary commercial transaction, and it does not seem right that when people come into our

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waters part of their harbour dues should not be fed back into the Hydrographic Services. They have got there because we have produced good charts for them.
There is another angle which I believe could be exploited and expanded. This involves appointing a marketing man. I have previously tried this suggestion on the House; I think it was when I was sitting on the other Benches. I consider that the Hydrographer requires a marketing man, a real one—not a naval officer or a civil servant turned into one. Such a marketing man could examine where in the world hydrography is required. Many countries operate from their own resources—some of these countries are quite small—but there are many that do not, and we could sell our services to those countries, as we sold them to Iran until the débâcle brought that to a close. I should have thought that there was room for a proper marketing man to focus his eye on the opportunities in the world and then to go out and sell our services.
Probably it sounds terrible to some people—I do not think I see any naval officers in the Chamber—to use an arm of the Royal Navy as though it were a product to be sold. But perhaps I have been out of the Navy long enough to see that in a sense that is just what is needed. Here I direct my remarks at the entire Government, who sadly are somewhat lacking in sea-minded persons. The Government need to look for the sea point of view when they work out this matter. I agree with the noble Lord, Lord Kennet, that probably this can be done only by having a senior Cabinet Minister to encompass the whole. I think that the noble Lord's point is admirable and really needs resuscitating. Perhaps the noble Lord, Lord Peart, will tell us exactly what was the experience of doing that. I cannot now quite see salt in his hair, but perhaps there was some there previously.
Above everything, we must not forget that in this seafaring field we have an expertise which we have built up over centuries and we remain in the forefront in practically every seafaring activity. If we are not careful, we shall squander this skill and tremendous resource of people and, perhaps decaying, material. Before it is too late, we must stop, we must size up. We need the sea because we survive by goods being imported. We need the sea because this is how we keep in touch with the outside world in a practical sense all the time. As a result, we are expert at our seafaring activities. Nothing is worse than losing a carefully nurtured expertise just because it is not seen to suit the modern times in a clear-cut major way, rather as the Hydrographic Service served the Navy that operated worldwide as a matter of course instead of as a special operation. That gave a purpose to keeping the service in existence and the commercial aspect was a byproduct. Now the situation is reversed, and we must not waste the expertise simply because some people cannot comprehend the new picture and the way in which it should be handled.
7.48 p.m.
Lord Shackleton: My Lords, when the noble Baroness completed her speech after introducing the Question, I thought that there was nothing more to be said. She deployed the case very fully. However, as an ex-Leader of the House one has the habit of tending
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to start summing up a debate, whereas I know that my noble friend Lord Peart is here to do that, but I must say that I think that this has been an interesting debate. As the noble Lord, Lord Ritchie-Calder, pointed out, it is particularly interesting that at the moment there are present no less than four chairmen of ACOPS. I speak not as a sailor, but as an honorary elder brother of Trinity House, which does a superb job and is deeply concerned with this matter. If the noble Lord who has just spoken is worried about the possibility of the Navy becoming commercial, I would point out that when I was Air Force Minister it took all my time to stop people selling off the front line of the Air Force to Saudi Arabia and other countries in order to get a bit of foreign exchange.
When I introduced the debate, to which the noble Lord, Lord Greenway, made such a notable contribution, in 1975, the only answer of any kind I then received from the Government through my noble friend Lord Winterbottom was that no decision had been taken on the future of HMS "Endurance". Since, 10 days later, I went south in HMS "Endurance" and HMS "Endurance" is still going backwards and forwards, the possibility of avoiding any decision seems to be almost infinite. But the fact is that the ships are going to wear out; and I am bound to say that what was said by my noble friend Lord Kennett—I do not know whether he is "my noble friend", but he is certainly my friend—was, I think, entirely true. It is a fact that there is no possibility, in my opinion, of getting any sort of action in this area at all from the Government—neither a Labour Government (although they tried) nor, certainly, the present Government, with their slightly anti-science bias.
It is really a defect of system—and I am not trying to make party points. I apologise for the political party point that I did make, but I happened to hear the Royal Society talking on that point recently. But it is a fact that our Government system is not geared to do this; and although the great strength of the House of Lords is that we can raise matters of importance which lack sex appeal, and therefore do not get raised in the Commons—political sex appeal, that is—I do not expect that we shall get anything to our comfort from the noble Earl, Lord Avon. This is no reflection on him. I know that Lords-in-Waiting always get briefs, but I think he would do much better to tear up his brief and say, "We will report this and we will try to think seriously about it".
It is a scandal that a couple of million tons of shipping gets lost in a year. I do not know whether anyone mentioned the 500 feet ship that went aground in the West Indies. All they had was a map (I do not know whether the noble Lord mentioned this) of the North Atlantic on which Bermuda, where they went ashore, or maybe the Bahamas, was just a small blob. It is quite incredible. Until there is a consistent approach by government to the maritime problem, I do not expect any progress at all, and I am sorry to say that I do not expect progress tonight. Whether the noble Earl, Lord Avon, can do better than my noble friend Lord Winterbottom, I do not know, but it is unfair to expect it of him. I think perhaps it is a pity we did not have, as I think one noble Lord said, a defence Minister to take part in this debate, but it is all good training for Lords-in-Waiting. It is not entirely good fun,

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but none the less I am sure the noble Earl will cope with a very difficult situation.
Noble Lords have referred to the huge Whole Shoal. I think my noble friend Lord Kennet referred to ships with 60 feet of draught. Of course, there are ships now with 90 feet draught. The fact is that the seas are getting more and more dangerous; and whether the Hydrographer of the Navy will be fined like the Swedish hydrographer (and I think that in fact that £1 million suit by a Russian ship did stick) I do not know; but it was a feast of litigation, with liability everywhere. This could become quite an expensive process.
I should like to ask, can the Minister tell us what is going to happen about the inshore survey craft? The same old argument gets trotted out. We got it in the 1979 report of the Hydrographer, and you get it in practically the same words in the 1981 Defence White Paper, except that that sounds as if it is even further away, because they say:
"The three remaining inshore survey craft are to be replaced over the next few years".
Really, when the noble Lord, Lord Kennet, talks about it as a scandal, it is a scandal and it is a tragedy. The Hydrography Service of the Navy is one of the glories of this country, and when one looks at our naval history and those early maps of New Zealand by people like Captain Cook, one sees the beauty of the work. It is artistic work, it is high-calibre work; and yet it is left to drift away.
My Lords, I will not go into the few points that I had intended to make. I think we are all anxious to congratulate the Hydrographic Service, both the civilian service and those who go to sea. I hope they will not be too discouraged by this debate. I hope also that we will continue to press on with this matter. It may be that if we had an Unstarred Question like this about once a month—and perhaps the noble Baroness could manage that—we might get a different answer from that which I fear we may get from the noble Earl, and we might make some progress. But I beg of him to convey to his noble friends the Ministers the real seriousness that is felt. I think the arguments have been brought out strongly and that it is apparent that, irrespective of party, there is a serious problem.
It is not fair to expect the Navy to bear the whole cost of this on their defence budget; but the efforts that my noble friend Lord Peart and others made in an attempt to spread the costs around are really not leading to anything any more, and, again, it is a fault of our system of government. So I hope that the noble Earl, if he cannot say anything to our comfort, will in due course report the strength of feeling in this House.
7.56 p.m.
Lord Peart: My Lords, I think we have had an excellent debate, and I want to congratulate the noble Baroness, Lady Vickers, on her speech. She has always had a great affection for the Navy. She represented a seat which is famous, and I know that a lot of people were very sorry that they lost her at that time, because she was unique. But she has always kept a love for the service in the defence of our country, and I know that we will keep what she said in mind.
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I should like to add to the tribute which she paid to the men in the service that we are discussing. After all, it is not an easy life in many cases.
I went right through this document, which was sent to us rather late. That was unfortunate; but I have read rather quickly today the report by the Hydrographer. We forget that it is the 100th anniversary of the first annual report by the Hydrographer of the Navy. Really, those who have a love of the sea should be here to pay tribute to these people, who try to give a service, to chart the sea and protect the shipping, not only of our own country but of other countries as well.
I found this document wonderful reading, and I will treasure it, really, this first 100th anniversary production. I think more people should read it; and I am so glad at the tone of the speeches on all sides. I know Lord Shackleton very well. He has pleaded, quite rightly, for the Minister to convey to other people in the department the importance, not only of the service itself but of the future, and he stressed that. I think in many ways that was the theme of Lord Ritchie-Calder, who gave us a much more detailed speech than perhaps I could ever do, with his knowledge of science, although I am a B.Sc. (Geology)—but that is another matter. But he is, I think, an expert on this matter.
I should also like to pay tribute to Lord Kennet. He is also a tremendous expert on this matter; I know that. I would not mind being kicked from behind and chased by him if I was on the other side. I think I tried, with him, to make our Government aware of the importance of the service. I do not want to go on and on like this, but I believe the big thing now is to say to the Government, "Look here; there is a strong surge of opinion that demands action on this, and it comes not only from the Benches here but from the opposite Benches as well".
So I hope that the noble Earl will convey to his ministerial colleagues the feeling of the House on this, because I am pretty certain that if nothing is done then, somehow, we shall have to have another debate, and another debate would probably be a longer affair and would embarrass the Government more so. I respect the noble Earl very much. He is an Army man and I was an Army man; but I believe he is a good junior Minister. He has done well so far, and I hope that he will convey the feelings of this House to his ministerial colleagues.
8 p.m.
The Earl of Avon: My Lords, I, too, am grateful to my noble friend Lady Vickers for drawing the attention of this House to the work of the Hyrdographic Service. This is the first occasion for several years that we have had the opportunity to examine in depth the contribution that the service makes both to the nation and to the international community. The last occasion was as the noble Lord, Lord Shackleton, reminded us, in December, 1975. As my noble friend's Question implies, this is a particularly fitting time to consider these matters as the publication of the 1979 report marks the 100th anniversary of reports by the Hydrographer of the Navy. My noble friend may be assured that Her Majesty's Government have studied the report. The noble Lord, Lord Kennet, asked about the current

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report. When I got my report, I looked at the date of this one: it was produced in December, 1980, so it is only five months old. I am told the new report is on the way. In her speech, my noble friend referred to the work of both the Hydrographic Department and the survey flotilla. I was pleased to hear that her recent visit to the Department at Taunton was a success and that she was able to catch up with news of two ships of the flotilla, HMS "Fox" and HMS "Fawn" with which she previously had a close constituency interest. I note, incidentally, that "Fawn" bears the name of one of the ships of the 1879 flottilla.
In reply to her speech, I intend to touch on recent developments and the Government plans for the future. In so doing, I shall try to cover some of my noble friend's main points although I hope that she will not expect me to deal with every one of them in detail. I should like to begin by saying a little about the importance of the Hydrographic Service, first, through its contribution to the defence of the realm and secondly to the safety of merchant shipping. It is self-evident that the Royal Navy must have accurate charts if it is to make the best use of the sea and ensure the safety of Her Majesty's ships. It is perhaps less obvious that the collection and recording of information about the seabed and water column above it are vital for the effective operation of our submarines and the detection of enemy submarines. The Navy has to take full account of the Soviet Union's maritime threat which, as I think my noble friend and others mentioned, includes over 300 submarines (excluding those in reserve) and they are backed-up by a very substantial hydrographic fleet of some 100 vessels.
Just as an Army commander needs to know the shape of the land surface through which he will be fighting to make best use of dead ground and observation points, so a submarine commander must know as much about the floor of the oceans whether he is attacking or wishes to remain undetected. As the effectiveness and range of submarine detection equipment is enhanced, so the importance of a detailed knowledge of ocean geography increases. The introduction to the Royal Navy of weapon systems such as the Polaris submarine and, in due course, Trident, with an increased range of operation, and an overwhelming requirement to remain undetected, places demands on the survey flotilla which must be satisfied if the effectiveness of the deterrent is not to be impaired. Ships of the flotilla also have important military roles in time of war.
To turn to my second point, developments in trade also make new demands on the Hydrographic Service. The draughts of the largest ships are now more than twice as great as those of the largest warships. To cope with the growth in oil traffic, new routes and new ports must be surveyed in areas which are not necessarily of the highest defence priority. I am grateful to the noble Lord, Lord Ritchie-Calder, for reminding us that safety at sea is not, of course, assured by improved charts alone, but also we must take into account tanker increases and the volume of oil carried. To minimise the risks of an accident many countries have introduced traffic separation schemes in waters near their coasts to reduce the risk of collision and subsequent pollution. In this context it was disappointing to read in the Hydrographer's report that spot-checks in the summer
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of 1979 on merchant ships entering British and French ports showed that a significant number of charts of traffic separation schemes off Northern France did not take account of amendments introduced in January of that year. In some cases, ships were using charts which would have led them the wrong way down the appropriate traffic lane. However, I understand that in May 1980 the Safety of Life at Sea Convention came into force. Consequently, it has now become a requirement for all ships subject to the Convention to carry adequate and up-to-date charts and all other nautical publications necessary for the intended voyage. I hope that will satisfy one of Lord Shackleton's points. Arrangements to improve the enforcement of the Convention are under consideration.
Turning from the requirement for surveying to the resources available to carry it out, the Royal Navy's Survey Flotilla now consists of four ocean survey ships, four coastal survey vessels and three inshore survey craft. In addition, the ice patrol ship, HMS "Endurance" has a hydrographic survey team embarked. In the course of last year, inshore survey craft continued routine surveys in the outer Thames Estuary, off the Goodwin Sands and off the East Anglian coast primarily for the benefit of the merchant marine. Major surveys were carried out in the Irish Sea. In this context, my noble friend will no doubt be aware that HM Ships "Fox" and "Fawn" have been surveying the deep draught tanker routes into Milford Haven and off Anglesey. A start was made on the major surveys for merchant shipping off the West and North Coasts of Scotland; these areas lie astride the routes that are increasingly used by tankers on passage to and from the huge oil terminal at Sullom Voe. Important surveys were also carried out in the Channel and off the coast of Yorkshire where several wrecks were located for the first time.
The debate in this House six years ago was about the work of a Hydrographic Study Group which was set up to assess the future civil hydrographic requirement. Since then, further studies of the civil requirement have been carried out. Then as now, the analysis was carried out against a background of public expenditure restraint. I shall return to that later. The problem of meeting requirements with limited resources remains but I can report that Her Majesty's Government have made considerable progress. As a result of the most recent studies into the civil hydrographic requirement, action is being taken to do more to meet the needs of merchant shipping round our coasts. The Government, as announced a year ago, intend to order a new coastal survey vessel to help meet these needs. Progress is now well in hand. A feasibility study has been carried out. I would expect that firms will be invited to submit tenders shortly and the vessel to enter service in 1984.
Lord Mottistone: My Lords, would my noble friend allow me? Does he not think that, at the beginning of this century, that craft would have been built by now instead of going out to tender?
The Earl of Avon: My Lords, perhaps in those days the Governments had more money. In these days it is wiser to go out to tender. The Defence White Paper states that the three inshore survey craft, all now 20

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years old, are now to be replaced over the next few years by three new and more suitable vessels. These are a 15-metre launch, an improved coastal survey vessel and a surface effect craft, commonly known as a hovercraft. The last of these is for use in shallow waters. In response to one of Lord Greenway's points, the sector planning sonar has completed trials and the first set is in operational use in HMS "Bulldog". Further sets of this equipment are being considered for new construction coastal survey vessels. In addition, the Government have decided that the Royal Navy should deploy surveying effort equivalent to a total of three coastal survey vessels. The actual ships involved are expected to be drawn from one ocean survey ship, a coastal survey vessels and the three inshore survey craft. These ships will be tasked to carry out a programme drawn-up in consultation with the Department of Trade and will be covering the routes through areas of the highest priority for merchant vessels: the Minches, West of the Hebrides and in the deep water routes in the Southern North Sea.
Lord Shackleton: My Lords, will some of those costs fall on the Department of Trade or will the Ministry of Defence carry it all?
The Earl of Avon: My Lords, at the moment the Ministry of Defence carries this particular one. I will come to another point in a moment about another department. I have said something about the requirement for hydrographic surveying and the resources available to the Ministry of Defence to meet it. There is also a need to analyse the data which the Surveying Flotilla obtains and to record it on charts. This is primarily the job of the Hydrographic Department, a thousand or so strong, at Taunton. To give some indication of the growth and scale of the department's operations, a comparison between 1879 and 1979 might be instructive. A 100 or so years ago, for example, about 200 Notices to Mariners were issued and close to 200,000 charts printed. In 1979 the figures were nearly 3,500 Notices to Mariners and over 3,500,000 charts. In this case, more does not mean worse. Improvements in surveying equipment and techniques and greater use of automation have resulted in the production of charts of far greater accuracy and detail than it was possible to produce a 100 years ago.
The noble Lord, Lord Kennet, took the Government to task or, if I may say so, he took both Governments to task, because, as the last debate was in 1975, I think it is three years to the Opposition and two years to the Government. I hope that I have stressed that we have been doing quite a lot in the two years that we have been in office. The noble Lord also raised the point that my noble friend Lord Trefgarne might be
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answering tonight. Happy as we always are to have my noble friend speaking, in this case it falls to the lot of the Ministry of Defence. In looking at the 1975 Hansard, I was interested to see that the noble Lord, Lord Winterbottom, was speaking in this debate on that occasion and at that time I think that he would have been a Lord in Waiting. So we are not trying to avoid getting somebody more important but it has been to some extent the custom. May I pay tribute here to my noble friend Lord Strathcona who, had he been in office, I am sure would have been answering as a naval man? I must finally add on that particular point that as a Lord in Waiting one speaks for the Government rather than for an actual department.
The warm appreciation of the speakers this evening of the work of the Hydrographer of the Navy and his team, afloat and ashore, will be most welcome, and the Government fully endorse this. I should like to confirm that the various points and suggestions that we have had made tonight covering many fields, ranging over departments and control, pollution and dangers, separation schemes from the noble Lord, Lord Greenway, harbour dues and marketing men from my noble friend Lord Mottistone, will be studied—I had "in depth" in my notes but the better word is "closely"—and taken into account before any new decisions are made.
To sum up, the Royal Navy's hydrographic contribution to defence and to the needs of merchant shipping is being maintained and I hope that what I have said will endorse this. Of course, we could do more if we had the resources. I should add that the Hydro-graphic Department, as with all other parts of the Defence Department, is under pressure to make savings. The study group recommendations have to some extent been implemented; some of the 1974 recommendations were overtaken by events but others have been dealt with. To take the first three recommendations, the two ocean survey ships and one inshore survey craft which were to have been paid off following a defence review were spared; secondly, the recommendation that the efforts of the surveying flotilla should be concentrated on high priority tasks in the home waters has been carried out; thirdly, the size of the hydrographic office at Taunton has been augmented as in point of fact the report says. The noble Lord, Lord Shackleton, asked me about the Department of Trade. There is co-operation going on at the moment with the Department of Industry, which is co-operating with the MOD over the new CSV. The Government are doing all that they reasonably can and are confident that the next report will record further progress and provide a sound basis for the next 100 years.
House adjourned at fourteen minutes past eight o'clock.