Sitting of 24 November 1981

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

    HUMBERSIDE BILL [Lords]
    Order for consideration, as amended, read.
    To be considered upon Thursday.

    DERBYSHIRE BILL [Lords]
    Read a Second time and committed.
Oral Answers to Questions
  SOCIAL SERVICES

    Long-term Unemployed Persons
    Mr. Robert Hughesasked the Secretary of State for Social Services what proposals he has to improve the position of the long-term unemployed in relation to their entitlement to benefit.
    The Minister for Social Security (Mr. Hugh Rossi): With effect from yesterday, unemployed men of 60 or over who have been receiving supplementary benefit for a year or more and decide not to register for work have become eligible for the higher long-term rate of benefit. Of course, we have every sympathy with the problems faced by those who have been unemployed for a long time, but, as the cost of extending entitlement to all long-term unemployed people would be well in excess of £100 million, this cannot be done in the present economic circumstances.
    Mr. Hughes: Does the Minister realise that that answer is humbug? Does he accept that the under-60s must be facing problems as great as those of the over-60s, and that for a married man under 60 to lose as much as £10 a week is discrimination against the unemployed? Will he for once put his sympathy in the right place, do things properly, and extend the rate for people under 60?
    Mr. Rossi: It ill becomes Labour Members to speak of humbug. During the whole of the Labour Administration they spoke of a high priority for extending long-term benefits, but did nothing. We at least have extended it to one class of people and reduced the waiting period from two years to one year. We have done something. They did nothing.
    Mr. Paul Dean: I welcome my hon. Friend's original answer, but will he give special consideration to the long-term unemployed who have children, and particularly bear in mind the fact that they are not eligible for the long-term rate of supplementary benefit, however long their period of unemployment?
    Mr. Rossi: I note what my hon. Friend said. We shall, of course, consider the matter carefully.
    Mr. Mike Thomas: On unemployment benefit as a whole, will the Minister give a pledge that the Government do not intend—it would be the first time in 50 years that any Government did this—to reduce the real value of unemployment benefit?
    Mr. Rossi: I cannot speak of these matters today. Public expenditure is under review, and a statement will be made in due course.
    Mr. Buchan: The Minister should be a little more honest when he answers questions. The Government have already cut these benefits, and I wish that he would admit that. Does the Minister realise that we are in a new situation? There has been a 70 per cent. increase in the long-term unemployed as a result of the Government's actions during the past 12 months. He is condemning men in their early forties and fifties to a permanent short-term supplementary benefit rate. The cost of putting them on a long-term rate is as nothing compared with the slow consequences of the Government's actions.
    Mr. Rossi: I accept that last year there was a 5 per cent. abatement on unemployment benefit, but that was a preliminary to bringing unemployment benefit into taxation, which will take place later this Session.

    Community Health Councils
    Mr. Joseph Deanasked the Secretary of State for Social Services whether he will ensure that community health councils in England and Wales are provided with an opportunity for adequate consultation with his Department and with regional and district health authorities, in those cases where policies or other factors affecting the availability of a comprehensive health service in their districts are at issue.
    Mr. Cunliffeasked the Secretary of State for Social Services if he will make a statement on the role he believes community health councils should play in relation to queries or complaints about the National Health Service; and whether he has any plans to enlarge this role in the future.
    The Minister for Health (Dr. Gerard Vaughan): The community health councils represent the public interest in the National Health Service locally, and not regionally or nationally. Therefore, community health councils will be linked with the new, more local district health authorities in future. We have no plans to alter their role on complaints.
    Mr. Dean: I thank the Minister for his reply. When he reconstitutes the community health councils, I hope that he will hold the fullest consultations. Has the Minister yet called for any nominations? Will he give an undertaking that a substantial percentage of the places on the community health councils will he made available to local authority representatives?
    Dr. Vaughan: We have had extensive consultations, and a circular will be issued to community health councils soon which will set out more clearly their role and membership. I shall place a copy of the circular in the Vote Office so that hon. Members may see it.
    Mr. Michael McNair-Wilson: As community health councils represent consumers in the National Health Service, is my hon. Friend satisfied that the Department is giving them sufficient publicity to enable those using the NHS to recognise them for what they are?
    Dr. Vaughan: I understand my hon. Friend's question. Community health councils have a valuable role, but it is a local role. It is for the local health authority and the local community health council to make their presence known.
    Mrs. Dunwoody: If that is so, why has the Minister suggested that he will send out a circular defining the role of community health councils? Community health councils help people who have problems with the NHS and represent them when they need assistance. Why does the Minister suggest that some redefinition is needed? Community health councils need more support for the role that they play.
    Mr. Speaker: Order. Hon. Members have repeatedly made statements instead of asking questions.
    Dr. Vaughan: When we reorganised the National Health Service and removed the area health authority layer there was some doubt about the future of the community health councils. Therefore, we consulted and thought it advisable to issue a circular on our views on the consultations and the future role of the community health councils.

    Supplementary Benefit Payments
    Mr. Winnickasked the Secretary of State for Social Services whether it is intended to revise the £2,000 ceiling in regard to supplementary benefit payments.
    The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker): The Supplementary Benefit Policy Inspectorate is reviewing the application of the supplementary benefit capital rule, including the effect of the level of the disregard. Its report will be received shortly by Ministers.
    Mr. Winnick: Is the Minister aware of the deep and understandable sense of grievance that is felt by many men in their fifties who, having been made redundant, cannot claim a penny of supplementary benefit because they have saved £2,000 or more during their working lives? In many cases redundancy money has been included in the £2,000. When will the Government drop this penal measure against ordinary people?
    Mrs. Chalker: I am aware of the concern expressed by many hon. Members about not only redundancy pay, but other forms of saving. We have asked the inspectorate to take a special look at all those difficult problems. It would be wrong for me to anticipate the report that will shortly be given to Ministers.
    Mr. Cormack: How long has it been Government policy to penalise thrift?
    Mrs. Chalker: It is not Government policy to penalise thrift. We cannot ignore the fact that some people have
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    amassed considerable amounts of capital. People save for a rainy day and when that day arrives the Government have a right to take some of that capital into account. The £2,000 allowance has been considered to be fair in the majority of applications. People fall outside that limit, and I can go no further than to say that we are well aware of that.
    Mr. Andrew F. Bennett: Does the Minister accept that not only the principle is wrong, but the scale was set 12 months ago? As inflation stands at about 12 per cent., surely the Government should increase the uprating by £200 or £300.
    Mrs. Chalker: I am aware of the concern felt by the hon. Gentleman and other hon. Members. However, this matter should remain part of the review. It would be wrong to ask for a special inspectorate report to be undertaken on the whole issue and then to prejudge its answers.
    Mr. McCrindle: I accept that there probably is a case for maintaining a level of capital above which benefits are affected, but does my hon. Friend accept that, in all conscience, £2,000 is not much in 1981? Will she give an assurance that that figure will be kept constantly under review and that, as soon as it is possible to take account of the changing value of money, some increase in the figure will be forthcoming?
    Mrs. Chalker: My hon. Friend and some hon. Members seem to have forgotten that we raised the limit from £1,250 to £2,000. As a result, 44,000 people gained from being allowed to retain more of their savings. We are aware of the problems, but as there was a large increase in November last year, I think that we are right to await the result of the inspectorate's review.
    Mr. Rooker: Will the Minister confirm that the £1,250 was not a cut-off limit, equal to the present £2,000 limit, and that it was part of a sliding scale? Will she also confirm that her answer was grossly misleading to the House as well as to those outside? As the House wrote the regulations, why could not the House and the Government take a decision on redundancy payments, savings and life insurance policies? Why should it be left to civil servants in the inspectorate to take such decisions?
    Mrs. Chalker: I should state at the outset that I had no intention of misleading the House. Of course the £1,250 was part of a sliding scale, but that does not alter the fact that 44,000 people gained as a result of last November's change. Although 9,000 people initially lost entitlement, some have regained it. The hon. Gentleman mentioned the issues that have been referred to the Supplementary Benefit Policy Inspectorate. The inspectorate will make recommendations and, when those are received, Ministers will consider them and take the decisions.

    Craft Apprenticeships
    Mr. Marksasked the Secretary of State for Social Services what was the number of craft apprenticeships in the National Health Service started each year since 1978.
    The Under-Secretary of State for Health and Social Security (Mr. Geoffrey Finsberg): Information in the form requested is not collected centrally and could not be obtained without undue cost; but the available statistics show that 401 building and engineering craft apprentices were employed in the National Health Service in England at 30 September 1978 and 460 at 30 September 1979.
    Mr. Marks: Is it not astonishing that the Department cannot find out from health authorities how many craft apprentices began this year? Will the same thing happen in the NHS as happened when the Under-Secretary of State was in charge of the Property Services Agency? Will there be a 70 per cent. cut in apprenticeships?
    Mr. Finsberg: The hon. Gentleman has forgotten that the running down of the PSA was part of a policy that was begun under the Labour Government.

    Anti-smoking Campaign
    Mrs. Faithasked the Secretary of State for Social Services if, in view of the finding contained in the report of the Health Education Council that 5 per cent. of patients stopped smoking when advised by their own doctor to do so, he will place greater emphasis on the role of the family doctor in his anti-smoking campaign.
    The Secretary of State for Social Services (Mr. Norman Fowler): General practitioners are well placed to advise their patients on the dangers of smoking and have an important part to play in helping people to stop. The Health Education Council and Action on Smoking and Health recently sent every general practitioner a special kit designed to help them to advise their patients on giving up smoking, and I very much welcome that action.
    Mrs. Faith: I thank my right hon. Friend for that reply. Given that the death rate from lung cancer and heart disease is higher in Britain than in other countries, will he give every encouragement to doctors to distribute these information kits to their patients? We must recognise the report's finding that if each doctor persuaded 25 people a year to give up this pernicious habit, 500,000 people would stop smoking in one year.
    Mr. Fowler: I agree with my hon. Friend. Smoking is a danger to health, and my aim is to reduce the toll of disease and death that is brought about by smoking.
    Mr. Ashley: Do the Government intend to give in to various pressures and to back-track on their commitment to impose statutory controls on advertising if voluntary efforts fail? Is it not time that we banned the advertising of cigarettes, inch, ding televised sponsorship of smoking, because of the ill-health and cost involved?
    Mr. Fowler: There has been absolutely no change in the Government's policy on smoking. Successive Governments have preferred voluntary agreements. We are currently looking at those agreements, but no decision has yet been taken.
    Mr. Beaumont-Dark: Will my right hon. Friend reject some of the advice that has been given him today? Does he agree that if we point out the dangers of smoking it is no part of the Government's job to continue to be "grannies" on every issue? For once, let us leave the issue alone. There are enough warnings already for intelligent people to take note of.
    Mr. Fowler: There is a responsibility on Ministers to give advice on the dangers of smoking. There can be no question about the dangers to health of smoking, and I shall continue to give that advice.
    Mr. Terry Davis: Does the Secretary of State agree with his predecessor that the current agreement with the tobacco industry is unsatisfactory?
    Mr. Fowler: As I said, we are currently looking at the voluntary agreements—not only the agreement with the tobacco industry generally, but the agreement on sports sponsorship. No decisions have yet been taken.

    Nuclear Attack (Medical Emergencies)
    Mrs. Renée Shortasked the Secretary of State for Social Services what representations he has received from the medical profession about medical emergencies arising from a nuclear attack; and what plans he has to protect the population.
    Mr. Geoffrey Finsberg: None, Sir. However, I am aware that the British Medical Association has set up an inquiry into the medical effects of nuclear war. The National Health Service has been given guidance on how health care services should be organised in the event of such a war.
    Mrs. Short: Does the Minister consider that the medical profession should give information to the public about how restricted it would be in preventing terrible suffering and a massive number of deaths in the event of a nuclear attack? Does he believe that he should encourage it to do that? Does he agree that the best way of preventing the appalling calamities that could happen to this population would be to do away with all nuclear weapons and make sure that they were never used?
    Mr. Finsberg: Whatever else my responsibilities are, they are not in foreign affairs and defence. The British Medical Association is a free organisation, quite able, if it wishes, to put forward its own views.
    Mr. Stokes: Is my hon. Friend aware that the local authorities already have a responsibility for civil defence, which all hon. Members should support, and not try to cause alarm and despondency?
    Mr. Finsberg: If my hon. Friend was saying that the question was causing alarm and despondency, I agree with him.
    Mr. Cryer: Is it not a scandal that the Secretary of State is prepared to spend £500,000 on creating ludicrous defence organisational posts in the area health authorities? Is not the reality that in 1978–79—apparently the last year for which figures are available—there was a shortage of 900 doctors and consultants in the National Health Service? Should not money be spent on providing those posts rather than ludicrous defence organisational posts, because the Minister knows full well that there is no defence against nuclear warfare?
    Mr. Finsberg: That is the subject of a later question.

    Nurses
    Mr. Ennalsasked the Secretary of State for Social Services how many nurses are now registered as unemployed; how this figure compares by numbers with three, six, nine and 12 months ago; and what percentage increase these figures represent over the same periods of time.
    Mr. Fowler: The Department of Employment provides quarterly returns on the number of nurses and midwives registered as unemployed. On the basis of those returns the information requested is as follows: at 30 September 1981, 5,311 qualified nurses and midwives were registered as

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    unemployed in England; at 30 June 1981, 4,644; at 31 March 1981, 4,499; at 31 December 1980, 4,351; at 30 September 1980, 3,932. These figures represent corresponding percentage increases of 14·4, 3·2, 3·4 and 10·7.
    I am glad to tell the House that, since the Government took office, the number of qualified nurses and midwives employed in the National Health Service has increased by about 11 per cent.
    Mr. Ennals: Is the Secretary of State aware that the Department of Employment's figures show that there are now more than 14,000 nurses unemployed—43 per cent. above the position 12 months ago, and three times as many as when the Government came to power? In the light of the pressure that is now being put on the National Health Service, is not that disgraceful?
    Mr. Fowler: The best thing that I can do is to compare the figures for the period when the right hon. Gentleman was Secretary of State with the position now. In March 1979 the number of qualified nursing and midwifery staff employed was 192,000. The number now is 213,000—an increase of about 21,000 in this Government's period of office.
    Mr. Jessel: Is my right hon. Friend aware that thousands of trained nurses cannot be employed because they have injured their backs lifting patients? Is he further aware that 750,000 working days are lost each year because of that? If I write to him, will he see what can be done to step up preventive measures?
    Mr. Fowler: I shall do that even if my hon. Friend does not write to me. We are aware of the problem and have commissioned a research project at Surrey university, which we are financing.
    Mr. Pavitt: Is the Secretary of State aware that the cuts over the last two years mean that area health authorities have put cash limits on the employment of nurses and that that is having a diabolical effect on specialties? Nurses are working overtime at weekends merely because there is not sufficient cash to employ those who are available and could be employed.
    Mr. Fowler: I do not think that the hon. Gentleman could have been listening to what I said. There are now more, not fewer, nurses employed. I am not sure what the hon. Gentleman was talking about when he mentioned the cuts. Over the last two and a half years we have protected and increased spending on the National Health Service in real terms by 5 per cent.
    Mrs. Dunwoody: Why does the Secretary of State persist in saying that, when he knows that by applying rigid cash limits he has made certain that, with rising inflation, which is not included in his calculations, there will be a cut in resources?
    Mr. Fowler: As usual, the hon. Gentleman is talking nonsense. [HON. MEMBERS: "Withdraw."] Withdraw that? Not on your life!
    Hon. Members: Withdraw.
    Mr. Speaker: Order. Hon. Members must give the Minister a chance. Then we shall see how we get on.
    Mr. Fowler: I called the hon. Lady an hon. Gentleman. I undoubtedly and unreservedly withdraw that. But the hon. Lady is still talking nonsense. Why does
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    she not recognise—surely it is a matter of agreement between both sides of the House—that the Government should be congratulated on the fact that there are now more, not fewer, nurses working in the NHS?
    Mr. Hal Millerasked the Secretary of State for Social Services if he is satisfied that the nurses rules provide a sufficiently impartial and equitable base for the hearing of disciplinary complaints against nurses.
    Dr. Vaughan: Yes, Sir. The rules provide for a full, impartial hearing of disciplinary complaints against nurses under the rules of evidence.
    Mr. Miller: Does my hon. Friend accept that my constituent, Mrs. Wilshire, has a keen sense of injustice following her hearing before the committee on a number of charges that were the responsibility of others who have not been similarly proceeded against? Is he aware that she was physically incapable of committing one of the charges? Is he further aware that the proceedings were conducted in the nature of a prosecution by the medical profession? Should there not be an independent element?
    Dr. Vaughan: If my hon. Friend feels that there was a miscarriage of justice in that case, I should be pleased if he would contact me again. We are most concerned that these hearings should be not only just, but seen to be just by the persons involved.
    Mr. Christopher Price: Has the Minister read the recent report from Social Audit about what happens to various nurses in psychiatric hospitals who make complaints about the conditions in those hospitals? They are frequently victimised for bringing to light scandals that should properly be brought to light. Does he remember the recent case at Broadmoor, where two nurses were victimised for bringing to light the fact that electro-convulsive therapy was being used in an unmodified way that was frowned upon by the Royal College of Psychiatrists, and still remain victimised by his Department as well as by others?
    Dr. Vaughan: I cannot accept that there has been general victimisation in any way, as the hon. Gentleman implied. If there are individual cases where he feels that complaints have not been properly looked into, my right hon. Friend and I will be glad to hear about them. There is a well laid down procedure, which should be followed. If the hon. Gentleman believes that it is not followed, I should be glad if he would let me know.

    Death Grant
    Mr. Andrew Bowdenasked the Secretary of State for Social Services if he is now in a position to make a statement on the future of the death grant.
    Mr. Dempseyasked the Secretary of State for Social Services if he will make a statement following his consultation on the level of the death grant.
    Mr. Rossi: Our considerations are not quite complete, but we expect to make a statement before the end of the year.
    Mr. Bowden: Is my hon. Friend aware that we have been waiting a long time for such a statement? Does he recognise that the Dignity in Death Alliance, which is supported by 40 national organisations, is deeply concerned about the derisory level of the death grant,

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    which has not been increased for nearly 14 years? Will he please ensure that there is a statement before Christmas and that there is no question of any means test at the time of bereavement?
    Mr. Rossi: I agree that we have been waiting a long time for something to be done about the death grant. We have been waiting for 14 years. I promise that there will be a statement before Christmas. I assure my hon. Friend that we are most reluctant to impose a means test upon anyone at a time of bereavement.
    Mr. Dempsey: Does the Minister realise that when the death grant was increased in 1967 it represented 76 per cent. of the cost of a modest funeral, whereas today it represents only 9 per cent? In view of the high cost of dying—incidentally, elderly persons are prevented from insuring against it—will the hon. Gentleman give an undertaking that we shall receive more than a statement and that there will be intimation of an urgent and substantial increase when he comes to the Dispatch Box to make a statement?
    Mr. Rossi: If we were to increase the death grant to represent its 1967 value, the grant would stand at £145 and the total cost of paying that to everybody, irrespective of whether they needed it, would be £98 million.
    Sir Albert Costain: Does my hon. Friend realise that if the grant is paid to those who do not need it it will be recovered by estate duty and the Government will not lose?
    Mr. Rossi: These are matters that we have to take into account in considering this complex issue. I ask my hon. Friends to be patient. We shall produce a statement before Christmas.
    Mr. Rooker: I understand the difficulty and complexity of this issue, and I do not wish to make a party point, but, bearing in mind what the hon. Gentleman has said about the Government's great reluctance to impose a means test, will he be prepared to go one step further and give a commitment that there will be no means test involved in payment of the death grant?
    Mr. Rossi: We are considering ways of being able to make an increase in the benefit by passporting means. These methods are still under consideration and no final conclusion has been reached. I cannot make any commitment in advance of a statement.

    British Steel Corporation (Retirement Provisions)
    Mr. Barry Jonesasked the Secretary of State for Social Services if he will take action on the Equal Opportunities Commission formal investigation report on the British Steel Corporation concerning the effects of the statutory pension ages for men and women on the various redundancy provisions applied at the Shotton works of the corporation; and if he will make a statement.
    Mrs. Chalker: Extra-statutory redundancy provisions at Shotton are a matter for the British Steel Corporation to determine through the normal process of collective bargaining. Equalisation of State pension age, which is a principal recommendation of the Equal Opportunities Commission report, is already a long-term objective of the Government. However, as the recent White Paper "Growing Older" makes clear, cost and other considerations preclude any early change.
    Mr. Jones: Is the Minister aware of the tremendous campaign that has been waged by Mr. J. G. Jones and other redundant workers from Shotton? Does she agree that the men of Shotton who were made redundant have achieved a moral victory? Can the Minister speed up the implementation of the objective that she has stated?
    Mrs. Chalker: I am aware of the campaign that the hon. Gentleman has cited. I understand the impatience about moving towards a common pension age. The hon. Gentleman will be aware that the all-party Select Committee on Social Services is undertaking a study of earlier retirement, or the equalisation of retirement ages, and flexible retirement ages. We must await its report and the conclusion of the many other discussions that are taking place. A common pension age will perhaps have a greater effect on the occupational pensions industry than on the State pension sector.

    Benefits (Inflation)
    Mr. Newensasked the Secretary of State for Social Services what steps he proposes to take to make good any shortfall in the value of the increases in pensions and other benefits payable from 23 November due to any underestimate made in the likely rate of inflation.
    Mr. Foulkesasked the Secretary of State for Social Services whether he is satisfied that the increase in pensions and other benefits payable from 23 November is sufficient to compensate for the increase in prices since the last uprating in 1980.
    Mr. Carmichaelasked the Secretary of State for Social Services whether he will ensure that the increase in pensions and other benefits payable from 23 November is sufficient to compensate for the increase in prices since the last upating in 1980.
    Mr. Fowler: The extent of any shortfall this year will not be known until next month. But, as I made clear on 6 November, the Government have given a commitment that we will fully compensate pensioners for price increases over the lifetime of this Parliament. Therefore, any shortfall in this month's uprating of retirement pensions will be made good at the next uprating.
    Mr. Newens: Last year the Government hurried to introduce legislation that had the effect of preventing pensioners from receiving increases in excess of the cost of living increase. Against that background, would it not be shameful, if pensioners were left for the whole of the year until their next increase without any steps being taken to provide for a supplementary increase? That would be especially shameful, as they will be 3 per cent. worse off this year as matters stand.
    Mr. Fowler: I understand the hon. Gentleman's argument. However, successive Governments have considered that annual upratings provide the only practical way of dealing with 8 million or 9 million pensioners. I cannot promise any change in that procedure.
    Mr. Foulkes: Will the right hon. Gentleman confirm that yesterday's increase cheated pensioners out of 3 per cent. of the increase that was due to them? Does he agree that next November will be far too late for the many pensioners who will have died by then? Will he make a prompt announcement about an early increase to make good the shortfall?
    Mr. Fowler: I entirely reject the hon. Gentleman's approach. We have made it clear throughout—I shall continue to repeat the Government's pledge—that we shall retain the value of the pensioners' pensions. That continues to be our policy. Pensioners have been protected against price increases, and since November 1978 pensions have risen by nearly 52 per cent.
    Mr. Buchan: Does the right hon. Gentleman accept that the other key link is the relationship to earnings? Last year the Government introduced a Bill to claw back from pensioners a miserable 1p in the pound. Why cannot they restore the position? Each married pensioner is losing £1·20 from his uprating because of the Government's action. The Government could introduce an interim measure. They could attach the increase to the Christmas bonus, for example, to ensure that pensioners get back the 3 per cent. for the rest of the year. Methods are available to the Government and one was found, for example, in 1975. Is that not right?
    Mr. Fowler: The hon. Gentleman must know that items such as the Christmas bonus were settled months ago. The extent of the shortfall will not be known until next month. We shall have to continue with the annual uprating, which I think is the fairest and most reasonable way of proceeding.
    Mr. Buchan: This is the most serious shortfall that we have had, against the background of a specific cut that was made last year. That was done despite the Prime Minister's commitment that she would act in the lifetime of this Parliament. However, old people will still be deprived of their rights for the remaining 12 months. If the Government need a fresh Bill——
    Mr. Speaker: Order. It is not fair to argue a case now. It is Question Time.
    Mr. Fowler: I repeat that the Government will continue to protect pensioners. I cannot and will not give the sort of commitment that the hon. Gentleman wants. If he were in my position, I do not believe that he would be able to do so either.

    One-parent Benefit
    Mr. Knoxasked the Secretary of State for Social Services what percentage of those entitled to receive one-parent benefit are receiving it.
    Mrs. Chalker: Our latest estimate is that one-parent benefit is being paid to about 66 per cent. of the lone parents who stand to gain by claiming the benefit.
    Mr. Knox: While this represents an improvement compared with the position 12 months ago, does my hon. Friend agree that it is still rather a disappointing percentage? Does she propose to take any further steps to initiate an improvement?
    Mrs. Chalker: There has been an improvement of 6 per cent. since a year ago, but the action that we are taking is as follows. We have already changed the name from "child benefit increase" to "one-parent benefit", which is more expressive and encourages more single-parent families to make applications. This month a note advertising one-parent benefit to all new child benefit recipients will be sent with their books. From January, over a period of 10 weeks, a letter will be sent to 300,000
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    people who are single payees on the child benefit order book. There will be a television filler film for both BBC and ITV and cassettes for local and national radio stations. In March 1982 we shall update the note advertising one-parent benefit with a special note in the child benefit order books advertising pictorially one-parent benefit on one side and family income supplement on the other side.
    Mr. Carter-Jones: Does the Minister agree that one-parent families are probably the poorest families in the country? Is she satisfied about the attitude of inspectors in the Department regarding the harassment of such one-parent families? Will she undertake to investigate such harassment and report back to the House?
    Mrs. Chalker: As the hon. Gentleman knows, there are already a large number of disadvantaged two-parent families as well as single-parent families. With regard to his second point, there is no excuse and no reason for any claimants to be harassed. The instructions on the investigators' guide are clear. We are following up any cases of potential harassment reported to us.
    Mr. Robert Hughes: As the Minister shows such great sympathy for one-parent and two-parent families facing difficulties, may I ask whether she saw the programme on television last night in which it was alleged that people being investigated by the special squads were taken into a room and locked inside until they could provide answers? Will she make a statement and arrange for a full investigation, and make sure that if someone is to be investigated he is allowed to take a friend with him or at least is not locked in while the investigation is taking place?
    Mrs. Chalker: I saw the programme to which the hon. Gentleman refers. With all my experience, I found it to be an unbalanced programme, for a number of reasons. One is that it is often for the privacy and security of the person concerned that he is in a room with the door locked. On frequent occasions, in the public waiting areas of our local offices, people burst in through doors, which destroys privacy——
    Mr. Hughes: These doors were locked on the outside.
    Mrs. Chalker: I assure the hon. Gentleman that I am looking closely at all the allegations that were made in the film, but they were vastly exaggerated and unbalanced in their presentation. I shall certainly look into the matter a good deal further.

    Proposed Legislation (Departmental Responsibility)
    Mr. Canavanasked the Secretary of State for Social Services for what measures in the Gracious Speech he will have departmental responsibility; and if he will make a statement.
    Mr. Fowler: The Gracious Speech said that there would be a Bill to introduce a statutory sick pay scheme and a housing benefit scheme, and another to make reforms in the law on mental health in England and Wales. My Department has responsibility for those Bills, both of which are now before Parliament.
    Mr. Canavan: Will the Secretary of State give us an assurance that the reference in the Queen's Speech to further reductions in wage settlements does not mean that his Department will try to force a 4 per cent. wage

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    settlement on the nurses? Does he realise that it would be sheer exploitation of one of the most dedicated professions to try to force on it such a settlement, which would be a wage reduction in real terms because of the high rate of inflation created by the failed policies of this discredited Tory Government?
    Mr. Fowler: I share the admiration of the House for the nursing profession. Under this Government the wages and salaries of nurses have increased substantially. I expect to see representatives of the nursing profession shortly to talk about those matters.
    Mr. Mike Thomas: Will the right hon. Gentleman give an undertaking, with regard to his Department's responsibility for implementing the economic aspects of the Queen's Speech, that he is not considering a real cut in the value of supplementary benefit payments, on which the 2 million poorest families in this country depend?
    Mr. Fowler: The decisions will be announced in due course. I ask the hon. Gentleman to wait for them.
    Mr. McCrindle: As there are growing signs that the problem of those who leave employment to go to another private firm and who lose their occupational pension rights is becoming acute, does my right hon. Friend see any reason to add to the commendable list of Bills for which he is responsible, a Bill dealing with this matter?
    Mr. Fowler: As my right hon. Friend the Leader of the House is here, I can tell my hon. Friend that I cannot promise to introduce legislation this year on that subject, but I am aware of the problem, as are the Government. I shall certainly consider it.

    Age Concern (Report)
    Mr. Raceasked the Secretary of State for Social Services whether he has received a copy of the report from Age Concern "Services for Old Age: A Growing Crisis in London"; and whether he will make a statement on the response which Her Majesty's Government will make to the report.
    Mr. Geoffrey Finsberg: The Department received a copy earlier this month. I see it as a useful contribution to the continuing debate about how limited resources can best be allocated.
    Mr. Race: Is the Minister aware that his Government's policy of reducing the numbers of acute beds in London's health service, coupled with the actions of the Secretary of State for the Environment in cutting the rate support grant, is placing services for old people in London under serious attack? Will he make strong representations—after reading that report carefully—to the Secretary of State for the Environment, calling for no further cuts in the rate support grant in London with regard to old people?
    Mr. Finsberg: The hon. Gentleman will know that one of the things that we are trying to do is to get patients, including geriatrics, out of hospitals when possible and into the community. In personal social services, as my right hon. Friend has said, there have not been the cuts to which the hon. Gentleman refers.

  PRIME MINISTER

    Engagements
    Mr. Ioan Evansasked the Prime Minister if she will list her official engagements for 24 November.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including the President of the European Commission. In addition to my duties in the House I shall be having further meetings later today, including one with the Speaker of the Indonesian Parliament. This evening I shall attend the annual diplomatic reception given by Her Majesty the Queen.
    Mr. Evans: Does the Prime Minister remember the poster that was used in the last election, produced by Saatchi and Saatchi, portraying an imaginary unemployment queue and with the words "Labour Is Not Working"? Does she believe that Conservatism is working, as unemployment is still hovering on the 3 million mark? If YOPs and other schemes are not taken into account, it is nearer 4 million. What message will she send to the young unemployed coming on the "Jobs Express" from Scotland, England and Wales, when they arrive in London? What hope does she have for the electors of Crosby?
    The Prime Minister: Unemployment is rising in Germany, France, Belgium and all the other OECD countries, with the exception of Japan and Denmark, because of the world recession. That is still causing great trouble with the unemployment figures in all countries. As the hon. Gentleman will have seen from the figures today, there is a reduction in the numbers registered as unemployed, and in particular there is a reduction in the number of school leavers. It is small, but welcome.
    Sir John Biggs-Davison: Will my right hon. Friend today seek to expedite the meeting between the Attorney-General and the Irish Attorney-General so that when she meets Dr. Garret FitzGerald at the EEC she can put to him firm proposals either for extradition or for some efficacious alternative?
    The Prime Minister: What my hon. Friend asks is not possible, but in any event I am not likely to discuss those matters with Dr. Garret FitzGerald at the meeting of the European Council.
    Mr. Foot: The right hon. Lady has talked of an improvement in the unemployment figures, but does she not acknowledge that it is only in comparison with the terrible and unprecendented figures achieved by her Administration? Is it not a fact that the underlying trend is, tragically, still going up? Have not the figures increased by a total of 200,000 since she was saying that we had passed the bottom of the trough of the recession a few days ago?
    The Prime Minister: With regard to the trough of the recession, as the right hon. Gentleman will be aware it always takes longer for the unemployment figures to fall after an increase in production than for any of the other indicators to start to go the right way. That is a well-known but tragic fact, because there is still spare capacity in a number of industries. Therefore, there could be an increase in production before a substantial reduction in unemployment. Nevertheless, the small reduction today of about 35,000 is welcome. There is still an underlying

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    increase, but it is less than it has been. Of course, we still have to face the January figures, which, historically, tend to show an increase.
    Mr. Foot: As the right hon. Lady claims that she studies the figures so carefully and that improvements are taking place, will she tell us when we may expect a reversal in the figures? There has been an increase of 200,000 since the middle of this year. The increase still continues and the underlying trend is still getting worse. When will the figures turn the other way?
    The Prime Minister: I always take the advice given by the right hon. Gentleman himself in answering questions on unemployment from the Dispatch Box. He did not give precise forecasts. I point out again that unemployment is rising in Germany and in France, although they have the draft whereas we do not. Unemployment is rising throughout the OECD, with the exception of Japan and Denmark. Tragically, I believe that it will indeed take a very long time before we can begin to get back to the much lower figures to which we have been accustomed.
    Mr. Maxwell-Hyslop: As the Brazilian Foreign Minister is about to visit Britain, will my right hon. Friend today make effective plans to build upon the more than £600 million worth of orders that this country has already received from Brazil this year?
    The Prime Minister: My hon. Friend is correct. We have indeed received very good export orders from Brazil. I shall not be going there myself, but I am delighted that those orders have been obtained.
    Mr. Wellbeloved: When the Prime Minister attends the diplomatic reception this evening, will she seek out the ambassador from the Philippines and express the abhorrence of the British people at the barbaric cruelty practised in connection with the preparation of dogs for slaughter for human consumption?
    The Prime Minister: I cannot say whom I shall see this evening. I, too, saw the horrible photograph in one of the Sunday papers and I felt the same repugnance as the hon. Gentleman and, I am sure, all hon. Members feel. I understand that the matter has been brought to the attention of the Philippine authorities.
    Mr. Alan Clarkasked the Prime Minister if she will list her official engagements for Tuesday 24 November.
    The Prime Minister: I refer my hon. Friend to the reply that I have just given.
    Mr. Clark: Has my right hon. Friend had time today to read a report in the Morning Star—not a paper usually noted for its support of the Government—to the effect that redundancy payments are being used to set up new businesses on an unprecedented scale? Will she comment on the report that more than 100,000 such businesses are being set up in Britain this year?
    The Prime Minister: I am not a regular reader of the Morning Star. I have, however, read the Daily Star, which had a double-page presentation—entitled, I think, "Adventure"—giving details of people who have used their redundancy payments very successfully to set up businesses. They are to be congratulated on that. I believe that that, together with the figures that I have showing that
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    some 120,000 new businesses are being set up annually, demonstrates that the spirit of enterprise is still very much alive.
    Mr. Home Robertson: In view of the widespread speculation about opinion in the Prime Minister's household concerning tobacco advertising, will the Prime Minister give her own views on that matter?
    The Prime Minister: I do not smoke, and I do not answer for opinion in my household on any matter. I answer only for this Government's policies.
    Mr. Marlow: During their present trials, will my right hon. Friend offer kindness to the people of Northern Ireland by saying that not only will they remain part of the United Kingdom for so long as they wish to do so, but that she wishes that they should always remain part of the United Kingdom and that her policies will be generated in such a way that they will always wish so to remain?
    The Prime Minister: Northern Ireland is a part of the United Kingdom and of Her Majesty's Dominions. It is the Government's policy to maintain the Union of Great Britain and Northern Ireland in accordance with the wish of the majority of the people of the Province. That will continue to be our policy.
    Mr. Robert Hughes: Will the Prime Minister today take the opportunity to condemn the South African Government for the latest of their repeated invasions of Angola? Will she make it clear to them that the action that they have undertaken is designed primarily to prevent a peaceful solution to the problem of Namibian independence and that if they do not cease their invasions she will take action in the Security Council to impose sanctions?
    The Prime Minister: If one country has invaded the territory of another, we should be the first to ask it to withdraw. I make it clear that, as a member of the contact group on Namibia, we are anxious to secure independence for Namibia. For that purpose, we are taking part in the negotiations between the contact group and the front-line States at present.

    Retirement Pensions and Christmas Bonus
    Mr. Andrew F. Bennettasked the Prime Minister whether, in view of current inflation rates, she is satisfied with the current level of retirement pensions and Christmas bonus.
    The Prime Minister: The Government are committed to compensate the national insurance retirement pensions fully for price increases over the lifetime of this Parliament, and I have made it clear that the Government will make good any shortfall from one uprating at the next uprating. The £10 Christmas bonus is, as the name makes clear, an extra payment for pensioners and is the most that we can afford within the limits of available resources.
    Mr. Bennett: Does the Prime Minister accept that the Government's estimate of the November inflation rate is wrong and that pensioners have not had a sufficient increase this year to compensate for inflation? Does she therefore agree that the Government should not wait until next November to put this right, but that it should be put right immediately, either by increasing this year's Christmas bonus or at least by introducing an Easter bonus to make good the shortfall?
    The Prime Minister: The shortfall will be made good at the next uprating, which will take place next November. The hon. Gentleman will recall that there was a shortfall in the November 1978 uprating. That was made good by the Conservative Government in November 1979.
    Mr. Ennals: Does the Prime Minister accept that never before have a Government consciously reduced the amount payable to pensioners below even the Government's own expectations and that now, for a whole year, the figure will be roughly 3 per cent. less than the actual rate of inflation? Does she agree that that is a deplorable situation for elderly people?
    The Prime Minister: I do not accept the figure of 3 per cent. I think that 2 per cent. is more accurate. I should point out that the uprating effective from November 1978 was based upon an underestimate of 1·9 per cent.

    Engagements
    Mr. Chapmanasked the Prime Minister if she will list her official engagements for Tuesday 24 November.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Chapman: Will my right hon. Friend take a little more time today to consider the increasing unfairness of the rating system, notwithstanding supplementary rates? Will she recognise that there is increasing impatience on the Conservative Benches for the consultation paper on alternatives to the domestic rating system? May I tempt her to be a little more forthcoming and to agree that that consultation paper should be a short, quick step towards radically reforming the rating system by a Bill in this Parliament?
    The Prime Minister: I know of my hon. Friend's very particular interest in this subject, and he knows that I share his views, as do the Government, about the unfairness of the rating system. The Green Paper to which he refers should be available next month. We shall then enter a period of consultation. The speed of that will determine whether we can bring forward a Bill, as I believe would be advisable if it is possible, during the present Parliament.
    Mr. Race: Will the Prime Minister confirm or deny the stories in the national newspapers earlier this week that the Government are to cut the real value of unemployment benefit? Given that the Government have already made a 5 per cent. cut in the recent past, does she agree that a further reduction in the real purchasing power of the unemployed is totally unjustifiable?
    The Prime Minister: I neither confirm nor deny any such stories as are prevalent in the newspapers at the moment. A full statement will be made in due course.
    Mr. Farr: May I assure my right hon. Friend that if she wants to make an announcement that domestic rates will be abolished in the lifetime of this Parliament, it will be received throughout the country with great and overwhelming support?
    The Prime Minister: I hope that my hon. Friend is correct. I would have to make clear that the revenue that comes from the rating system, both domestic rates and industrial and commercial rates, would have to be replaced by revenue from elsewhere. [Interruption.] One cannot have expenditure not covered by taxation. Only an Opposition of the irresponsibility of the present one would suggest that one could. The difficulty is deciding what taxation should be levied to cover the loss of income from the rating system.

Multi-fibre Arrangement
3.30 pm
The Minister for Trade (Mr. Peter Rees): With permission, I should like to make a statement on negotiations for the renewal of the multi-fibre arrangement. My right hon. Friend the Lord Privy Seal reported to the House on 18 November on the Foreign Affairs Council on 16 and 17 November, including a parallel session, which he chaired, on the Community's negotiating position for the final round of talks in Geneva on the renewal of the multi-fibre arrangement.
In view of the importance of this subject for many United Kingdom interests, and, in particular, the United Kingdom textile and clothing industries, I will, Mr. Speaker, with permission, supplement what my right hon. Friend told the House and, particularly, report on subsequent events in the GATT textiles committee in Geneva.
On 17 November, the Council decided that it would be necessary to give further consideration to the question of overall import ceilings for sensitive products particularly. This embraces the all-important question of imports of low-cost textiles and clothing from the preferential countries. The House will be aware that the Government place the greatest importance on acceptance by the Community of such an overall approach.
The Council had in mind, however, that the final round of negotiations on the renewal of the MFA was to start in Geneva on 18 November. The Council wished the Commission to be able to participate in these negotiations from the beginning and to be in a position to state the broad Community position clearly, especially since other participants, notably the United States and the developing countries, had put forward formal proposals. On this basis the Commission made a full statement in Geneva on 20 November. I have placed a copy of this statement in the Library. Within the next day or two, I expect the Commission to table a full draft protocol of extension for the MFA in Geneva, essentially a formal expression of the Community's requirements in a renewed MFA.
I should like to summarise for the House the main points of the Commission's statement. The first is the depressed state of the Community's market and the very low rate of growth forecast over the next years. The House will know that this has been estimated at about 1 per cent. on average. Secondly, import penetration in clothing and textiles is much higher in the Community than in any other major importing country. Accordingly, the Community would agree only to small overall growth rates.
Third is the Community's intention to seek a surge mechanism which would guard against a threat presented by under-utilised quotas. I can tell the House that the United Kingdom was instrumental in introducing this concept into the Community position.
Fourthly, difficulties caused to the Community industry in the past as a result of reductions in demand during periods of recession when supplying countries' quotas continued to grow. The House will be glad to know that the Community has decided that special provisions should be negotiated with supplying countries to try to mitigate such problems in the future. The House will recall that this is something that the Government have been seeking for
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some time, and I believe the mechanism now agreed will go some way towards meeting the industry's concerns in this area.
Fifthly, the Community's statement made clear that we shall be looking very closely at our trade with a few dominant suppliers, including Hong Kong. In particular, the Community will seek "adjustments"—I am afraid that I cannot be more specific on this point—in these suppliers' quotas, possibly with existing access being replaced in part by an element of outward processing quotas. I emphasise that what can finally be achieved in this field, is clearly a matter of negotiation.
Furthermore, and sixthly, the ability of the dominant suppliers to use the flexibility provisions to augment their quotas in particular years will also be reduced. These flexibility provisions enable supplying countries, within specific limits, to anticipate a following year's quota, carry over from a previous year's quota, or transfer quota from one product to another. We expect to negotiate substantial reductions in the ability of the dominant suppliers to use these provisions.
I have given a short summary of the Community's position on important areas of the renegotiation. In general, the Government are content with the position agreed by the Community. I would not wish to pretend, that the United Kingdom has obtained satisfaction on every single point which we have raised, but I believe that no essential British interests have been compromised.
As I have already said, certain essential elements still have to be reconciled—in particular the overall approach to low-cost imports which is a subject upon which I know hon. Members have strong views. The actual quotas for individual MFA countries will have to be hammered out in detail in the course of bilateral negotiations during next year. I believe that the groundwork has now been laid for a new arrangement which will be tough, indeed, in many respects, tougher than the current MFA, and which will provide the United Kingdom industry with the trading climate it needs to plan for the future, while taking account of all the interests represented in the House.
Mr. John Smith: I thank the Minister for making the statement; it has been requested on a number of occasions in the House. When is the statement to be placed in the Library? It was not available when I inquired a short time ago. Has not the Minister rather delicately obscured the fact that no agreement has been reached in the EEC on the single most important part of these negotiations—the agreement that there should be an overall limit, a global limit, on imports admitted to the EEC? Does not the delicate phrasing conceal the fact that no agreement has yet been reached? Can the Minister say when agreement will be reached? Will he report back to the House on the matter?
I notice that a statement has been made in Geneva which will be followed by a protocol. Will the agreement—or lack of agreement—on this subject be ready before the protocol is submitted?
On quotas, the Minister referred to an anti-surge mechanism. Does not this confirm that growth will be on the basis of existing quotas and not on existing levels of imports which, in some cases, are much lower than existing quotas? If this were not the case, there would be no need for an anti-surge provision to be introduced into the structure of the agreement.

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The Minister will be aware of the very great importance that was placed on the recession clause by hon. Members on both sides of the House during the debate before the Summer Recess. The hon. and learned Gentleman says in his statement that "special provisions should be negotiated … to try to mitigate such problems in future" and goes on to call this a "mechanism". Will he say what the mechanism is? There is a suspicion that all that has been agreed is talks about talks if there is a downturn in demand. The House asked on a pretty well unanimous basis for some automatic linking of demand in the EEC to the level of imports.
We note what the Minister says about dominant suppliers. Will he bear in mind the need to reduce imports from dominant suppliers so that some of the poorer countries can gain access to this market which is, in many ways, dominated by Hong Kong, South Korea and Taiwan? Will he bear in mind in the negotiations that some of these countries excluding Hong Kong, have high tariff barriers against British exports?
On the most important question of the overall limit, the Minister confirmed that projected growth was likely to be about 1 per cent. in demand. Will the Minister confirm what is rumoured—that the Commissioners agreed to a 1·2 per cent. increase on the eight sensitive products, which implies a greater increase for other products and, perhaps, no limit on Mediterranean associates and other preferential suppliers? Is it the case that the likely increase to be permitted under this is nearer 5 per cent. than 1 per cent. and that this cannot be represented as a victory even in the Community before we get to Geneva?
Mr. Rees: I apologise if I misled the House by saying that the statement of the Commission representative was in the Library. I am now told that it is in the Vote Office. I hope, however, that it is equally available to the House.
I am flattered that the right hon. Gentleman said that I had skated delicately, rather than with heavy feet, on the question of global ceilings. The principles by which the global ceilings can, in the end, be determined were very largely resolved in the last ministerial Council, but it will be necessary, I think, to try to reduce those to figures. That is one of the principal reasons why it is not possible for me to give global ceilings here this afternoon. Furthermore, we felt it most important that the global ceilings should also relate to the other bilateral arrangements that have to be negotiated this year with the preferential or Mediterranean suppliers.
On the question of the anti-surge mechanism, it is much more important, rather than to get into almost a theological discussion about quotas which have been very largely under-utilised, to Focus instead on the level of imports. It is by reference to or linked to that that the anti-surge mechanism will finally be devised. Again, I do not want to go into too much detail because, as I am sure the House will readily appreciate, it will hamper the efforts of the Commission, which is engaged in very delicate negotiations, if its entire hand is spread face upwards on the table from the start of the negotiations. The whole House, and certainly the right hon. Member for Lanarkshire, North (Mr. Smith), will recognise that the Commission would be negotiating from a position of weakness.
On the question of anti-recession provision, a perfectly practical arrangement can be evolved from the principles laid down, but again I prefer not to go into the detail of
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that because I think that it would prejudice the negotiations which are being undertaken on behalf of this country and the other countries of the Community in Geneva
The right hon. Gentleman is, perhaps understandably, robust on the position of dominant suppliers. Certainly the United Kingdom and the Community subscribe to the principle of differentiation in favour of the less developed, poorer countries. I believe that we should recognise the fact that Hong Kong, by contrast with all the other dominant suppliers, is a particularly open market, and this country has, for that and other reasons, a case for being especially tender of the interests of Hong Kong. However, the interests of all the dominant suppliers will have to be resolved in bilateral negotiations with them.
Coming back to the question of the overall limit and the question of growth, I cannot confirm any particular figure, for that, again, has finally to be resolved. But there was certainly agreement in the Community that the growth figure should approximate much more to the expected rise in consumption, and that will involve a much lower figure of growth, I believe, than the figure of growth under the existing MFA.
Sir Paul Bryan: My hon. and learned Friend has conceded that Hong Kong, with its open market, without protection of any sort, should be better treated than Taiwan and Korea, with their highly protected markets. I am not clear how Hong Kong is to be favoured in contrast with those other two countries.
Mr. Rees: My hon. Friend is quite right to draw attention to the point on which I laid emphasis not only today but also in the ministerial Council—that I think that Hong Kong is in a slightly different position. I cannot say at this precise moment in what way Hong Kong is to be favoured, because the position of all the dominant suppliers, including Hong Kong, will have to be resolved in bilateral negotiations subsequent to the conclusion of the MFA.
Mr. Richard Wainwright: I should like to question the Minister about the Commission's stance on enforcement and policing procedures in the new arrangement. The Minister is aware that under the present arrangement as it operates some gaps have been revealed in enforcement. Can he give any assurance that the Commission intends to press for more complete enforcement arrangements under the new scheme?
Mr. Rees: It is not just a question of laying down provisions for enforcement; there is also the practical question of ensuring that those provisions are enforced on the ground. The responsibility for that will lie very much with the customs officers of the individual countries. However, the United Kingdom customs has over the past 12 months recruited extra personnel precisely for this purpose.
Mr. K. J. Woolmer: Does the Minister recognise that the anti-surge mechanism's details are extremely important to the textile and clothing industries? If the permitted increase of this mechanism were to be, for example, 10 per cent. a year, does he not accept that that would still be capable of wreaking considerable devastation upon the textile and clothing industries over the lifetime of this agreement? Will there be an automatic trigger under the mechanism to ensure that any increase gets cut off and does not go well over the permitted level before any action is taken?
Mr. Rees: I recognise the anxieties about this matter. They have been particularly ably expounded to me, not only on this occasion, by the hon. Gentleman and by other hon. Members. The essence of this mechanism—for reasons that I have explained I do not want to go into too much detail—is that the imports in any particular year may be curbed by reference to the position in the previous year. In other words, account will be taken of the actual position and not of the theoretical or notional quotas.
I take note of what the hon. Gentleman says. It is our intention that, so far as possible, the mechanism should be triggered in certain fairly precisely defined circumstances.
Mr. Nicholas Winterton: I pay considerable tribute to the amazing grasp of the problems of the textile and clothing industries that has been attained by my hon. and learned Friend in the two months during which he has held his present office.
Is my hon. and learned Friend aware that over 100,000 people in these two industries lost their jobs in 1980? Will he appreciate, therefore, that the quota base levels upon which the MFA is to be established and the growth of quotas established are of paramount importance? Is it correct, as has been leaked to many newspapers, that the quota base levels are likely to be the 1982 levels? That would be unacceptable to the industry, because undoubtedly importers will inevitably pile in their imports to Britain to ensure that these quotas are established at a very high level, and this could be damaging to an industry which could, at present, employ at least 300,000 extra people if it were faced with fair competition.
Mr. Rees: I am very grateful to my hon. Friend for his kind opening words. I am deeply conscious of the loss of jobs in the textile industry. Indeed, I have, not once but twice, and even three times, I think, stressed to the Council of Ministers—going a little further than my hon. Friend—the fact that 150,000 jobs have been shed in the industry over the past 18 months, which I think goes beyond anything suffered in France or Italy, which consider, perhaps rightly, that they have slightly comparable problems.
I appreciate the anxiety about the level from which the new quotas, year by year, will start. I cannot conceal from the House that they will start from the 1982 quota level. I recognise at once that this will be a matter of disappointment. I did not conceal that fact at any point. But what is more important, and what I ask the House to focus on, is not the theoretical or notional quotas—any hon. Gentleman who has studied this subject will know that there is considerable under-utilisation—but to relate imports in any year to the imports in the previous year and to make certain, if there has been under-utilisation, that there cannot be a sudden take-up which would result in a surge.
It is precisely to counter that and to limit imports to actualities rather than to notional quotas that the surge mechanism—the United Kingdom can take some credit for having initiated this idea—has been launched, not on an astonished world but on an astonished Council of Ministers. It has been taken up and it will be the basis of the negotiating position of the Community in Geneva.
Mr. Barry Jones: What is the Minister doing to help the man-made fibre section of the textile industry? Does he know that already this year in my constituency 600 redundancies have been announced?
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What is he doing to counteract American subsidised imports into Britain? As well as his amazing grasp of the matter, may we have urgent action?
Mr. Rees: I fully recognise the difficulties that are encountered in the hon. Gentleman's constituency and others. With his knowledge of the problems, he will realise that the multi-fibre arrangement is primarily designed to restrict imports from low-cost producers. The hon. Gentleman will be the first to recognise that the United States of America does not fall into the category of low-cost producers.
Mr. Anthony Grant: Is my hon. and learned Friend aware that in the negotiations he has taken a much tougher stance than was ever taken by the Labour Administration, which will be welcomed by the domestic industry because it will enjoy a degree of protection much greater than it had under the Labour Government?
Mr. Rees: I am grateful to my hon. Friend for having perceived an essential point. I do not wish to make unfavourable or unflattering comparisons with the Labour Administration. However, the negotiating stance of the Commission on behalf of the countries of the European Community is much tougher on this occasion than on the previous one. Provided that the negotiations are carried through to a sensible conclusion—I have no reason to doubt that they will be—there will be a greater measure of protection which will enable the United Kingdom textile industry to carry on the process of adjustment.
Mr. Joel Barnett: Is the hon. and learned Gentleman aware that the fact that he referred to the 1982 quota levels only in response to a question rather than in his original statement will cause great anxiety in an industry that is already worried not only about the Minister and the Government but about what happened in the past? Now that we and they know that the Commission is negotiating on our behalf the anti-surge mechanism becomes important. Although I recognise the importance of that and how much the Minister has done in trying to achieve it, the matter that will be of importance to the industry—perhaps the hon. and learned Gentleman will tell us about it—is how much flexibility the Commission has in negotiating the anti-surge mechanism given that it is starting from 1982 quota levels.
Mr. Rees: I know that the right hon. Gentleman has a deep constituency concern about those problems. There is no question of the starting point for the new quotas having been dragged out of me. The right hon. Gentleman knows—it may almost have been appropriate for me to anticipate the full statement and there was some indication from my right hon. Friend the Lord Privy Seal—that two days ago I received a delegation of councillors from the North-West, accompanied by the right hon. Gentleman, to which I gave a frank exposé of the position. The present Administration have never concealed the negotiating position. My hon. Friend the Member for Macclesfield (Mr. Winterton) can confirm that, because he was on the same delegation.
I recognise the sensitivity of the House, and of those right hon. and hon. Members who represent textile interests, about the operation of the anti-surge mechanism. It will be designed to limit surges. It would be more important for right hon. and hon. Members, and textile

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interests outside, to concentrate on the real level of imports rather than on theoretical quotas that in many cases are not fully taken up.
Sir Hector Monro: I add my tribute to my hon. and learned Friend for his work on the problem during recent months. Will the agreement cover both coated and uncoated industrial gloves? Does my hon. and learned Friend envisage a reduction in the import of gloves and cloth from the Far East in the near future?
Mr. Rees: The answer to the first question is "Yes". I am tempted to say, I hope not frivolously, in answer to his second question "We must wait and see".
Dr. Shirley Summerskill: I hope that the hon. and learned Gentleman is not under the impression that the negotiations have ended satisfactorily. On the contrary, he has failed to deal with the serious problem of low-cost import. Until that problem is resolved, there will be little hope for the survival of the textile industry in West Yorkshire, which has passed through the worst year in its history, with mills closing and jobs lost. The problem must receive urgent consideration if there is to be any industry to save at all.
Mr. Rees: I am under no illusion that I can win the plaudits of the whole, or even a substantial part, of the House as a consequence of anything that I may or may not have done in Brussels. If I may put it in colloquial terms, this is a "no w in" situation for a negotiator. We must reconcile the interests of not only the textile industry but British exporters to the developing world, consumers and the Third world, I would need an adroitness far beyond that to which I lay claim to be able to balance those interests.
However, the negotiations have not been concluded. All that we have endeavoured to do in Brussels is to establish a common position from which the Commission can negotiate on behalf of the European Community at Geneva. Although there are some important points of detail that must still be resolved, we have given the Commission a tough but credible posture from which to negotiate at Geneva.
I am in no doubt about the importance of low-cost imports. I would not have spent so many days, not to say nights, in Brussels, Luxembourg and elsewhere discussing the subject if I were not profoundly convinced that it is necessary to moderate the flow of low-cost imports into Britain to give the textile industry a further opportunity to adjust.
Mr. Robert Atkins: During his discussions about the multi-fibre arrangement, has my hon. and learned Friend had the opportunity to consider the threat that is being posed to the weaving industry of Lancashire and elsewhere by the rumoured EEC penalisation of cheap but high quality yarn from Turkey upon which many British weavers, with their newer looms, rely?
Mr. Rees: I am aware of the position. My hon. Friend knows that Turkey is classed as a Mediterranean or preferential supplier. Negotiations outside those of the multi-fibre arrangement, but in parallel with them, will be conducted by the Commission with those suppliers during this year. I am sure that the point so cogently made by my hon. Friend will be dealt with by the Commission during those negotiations.
Mr. James Lamond: Has the Minister studied the reports of the debate in another place on 19 November about outward processing? Does he realise that outward processing represents a potential loophole in any agreement that could become important in the future?
Mr. Rees: I have studied what was said in the debate and I am aware of the importance of outward processing. The intention is that outward processing will be included within the global ceilings that we hope to set before the Commission.
Mr. John Farr: Will my hon. and learned Friend bear in mind that the EEC is already the largest importer of textiles and clothing from the developing world? Will he ensure during the negotiations that the fact is continually stressed that the EEC imports about three times the level of imports allowed into the United States of America?
Mr. Rees: My hon. Friend is right to stress that, absolutely and relatively, the countries of the European Community are the largest importers of low—cost textiles in the world. Therefore, some recognition of that should colour the negotiations in Geneva.
Mr. Bob Cryer: Does the Minister accept that the industry will have strong anxieties and reservations about 1982 imports being used as the basis for quota levels in the future? Can he confirm that the social clause, whereby International Labour Office conventions are applied, has not been abandoned by the EEC in its negotiations? Also, can he confirm that the EEC mechanism and operation of the multi-fibre arrangement will be more efficient and more rigorous than has hitherto been the case?
Mr. Rees: It is appropriate for me to confirm that the social clause will have some place in the draft protocol which the Commission hopes soon to issue. However, I must stress that if the social provisions were too rigorously drawn that would, more effectively than any quota, exclude imports from the low-cost countries. It may be that that is the hon. Gentleman's intention. I mention the matter because I believe that we must view it in perspective. I shall take on board the hon. Gentleman's point about the effectiveness or automaticity of the mechanism to which he referred.
Sir Anthony Meyer: Will my hon. and learned Friend welcome the recognition on both sides of the House that the EEC provides the most effective method of protecting our legitimate interests? Will he also note that Labour Members who are loudest in demanding further restrictions on imports from low-cost producers simultaneously accuse the Government of meanness in helping the interests of the poorest countries in the Third world?
Mr. Rees: It is true that the United Kingdom's interests are likely to be best protected if it is part of the Community. The Commission will have a greater negotiating strength by representing all the countries of the Community than any United Kingdom representative alone, however gifted or powerful. I too have sometimes detected a certain inconsistency between the positions adopted on separate occasions by certain hon. Members.
Mr. Greville Janner: In view of the catastrophic state of decline in the textile and clothing

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industries in Leicestershire and other areas that have always depended greatly upon those industries, when does the hon. and learned Gentleman expect these proposals to take effect? Is he aware of the enormous urgency in this matter? Unless steps are taken swiftly there will be nothing left by the time low-cost imports are restricted, as his proposals hopefully suggest they will be.
Mr. Rees: The MFA expires on 31 December this year, but the bilaterals, which are perhaps of more practical importance, run out at the end of next year. On the other hand, the agreements with the Mediterranean preferential countries expire at the end of this year. That is why there is a certain urgency in the Commission's approach to those negotiations. I very much hope that the conclusions of negotiations, both on a bilateral basis with the various participants in the MFA negotiations and with the Mediterranean countries, will provide safeguards for the textile interests which the hon. and learned Gentleman represents and which I am sure he and the whole House are anxious to achieve.
Mr. Roger Sims: Further to his reply to my hon. Friend the Member for Howden (Sir P. Bryan), does my hon. and learned Friend accept that the present agreement has worked very much to the disadvantage of Hong Kong, which is an important export market and a colony for which we have special responsibility? Is there a case for applying some sort of recession clause to Hong Kong as a supplying country?
Mr. Rees: I recognise the special factors to which both my hon. Friends have drawn attention. Indeed, I have made that point on more than one occasion in the Councils. I believe that the United Kingdom should be particularly sensitive to the interests of Hong Kong. However, I emphasise that at the end of the day we must achieve a Community position, and the Commission will be negotiating with the dominant suppliers, including Hong Kong. I doubt very much whether it will be possible to negotiate some kind of recession mechanism in advance.
Mr. James Tinn: I take up the hon. and learned Gentleman's reply about the man-made fibres industry. Does he recognise that the problem of competition runs throughout that industry? The impact is felt not least at the raw material producing end, where firms such as ICI, in my constituency, are disadvantaged by subsidised oil enjoyed by their international competitors. Is that not particularly absurd, bearing in mind that at least we are self-sufficient? Will the hon. and learned Gentleman do his best to impress this point more effectively on his Government colleagues?
Mr. Rees: I certainly recognise the problem. This is not the first time that it has been brought to my attention. As the hon. Gentleman was graceful enough to intimate, this is not my direct responsibility. It is more the responsibility of my right hon. and learned Friend the Chancellor of the Exchequer and my right hon. Friend the Secretary of State for Energy. I shall ensure that the hon. Gentleman's pungent comments are brought to their attention.
Mr. Geoffrey Dickens: As the hon. Member for Halifax (Dr. Summerskill) said, the textile industry is particularly concerned about low-cost sources importing at particular levels. The whole industry is deeply concerned at the figure agreed for market growth throughout Europe. We think that will also reflect on the level that will be attached to low-cost source imports. Therefore, it does not matter how many days my hon. and learned Friend spends out there, he must come back with the right figures for the industry, otherwise there will not be a textile industry.
Mr. Rees: I reassure my hon. Friend, not for the first and probably not for the last time, that I am conscious of the importance of achieving the right growth figures. I and other Community Ministers have made that point in our deliberations. It is our intention that the new growth figures should relate more exactly to the anticipated growth in consumption in the European Community market.
Mr. John Smith: As the 1982 levels seem to have been conceded, will the hon. and learned Gentleman explain how any attempt will be made to stop countries from getting high levels for 1982 so that they can use them for future advantage? If anti-surge provisions are to be the effective protection for British industry, as the Minister seems to imply, does he appreciate that the percentages permitted will be absolutely crucial? The mechanism itself is not a sufficient protection; the percentages will be the test.
Mr. Rees: I am aware of the right hon. Gentleman's first point. We appreciate the importance of the basis from which the Commission will start. I do not want to go into detail about that, because it is a matter of some sensitivity and it will have to be explored in negotiation at Geneva. However, the point has not escaped our attention. Equally, I recognise the absolute importance of the figure thresholds and any anti-surge mechanism. I assure the right hon. Gentleman and the House that that point has been well taken on board.

Multi-fibre Arrangement

  Statutory Instruments, &c.
  Mr. Speaker: By leave of the House, I shall put together the Questions on the six motions relating to statutory instruments.
  Ordered,
  That the draft Double Taxation Relief (Taxes on Income) (Zambia) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft Double Taxation Relief (Taxes on Income) (Yugoslavia) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft Double Taxation Relief (Taxes on Income) (Morocco) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft Double Taxation Relief (Air Transport Profits) (Algeria) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft International Natural Rubber Organization (Immunities and Privileges) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.
  That the draft Common Fund for Commodities (Immunities and Privileges) Order 1981 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Budgen.]

Orders of the Day

  Transport (Finance) Bill
  Order for Second Reading read
  4.8 pm
  The Secretary of State for Transport (Mr. David Howell): I beg to move, That the Bill be now read a Second time.
  The Bill deals with borrowing limits and other financial provisions for some of the transport industries. It is a short Bill, but it is none the less important, because it gives Parliament an opportunity to consider the finances of these industries, which play a major part in serving the needs of industry and the community.
  Its provisions are in large part technical in nature. Clause 1 increases the British Railways Board's borrowing limit. The present limits which the clause will amend were set in 1974. The figure then was £600 million, and that was increased by order in 1979 to £900 million. The Bill increases the limit by £200 million to £1,100 million and provides for a further extension of £200 million by order.
  Clause 2 is designed to enable the Government to continue to compensate the British Railways Board for the costs that it incurs in fulfilling the public service obligation imposed upon it by a direction under powers in the Railways Act 1974. Parliament set a limit on the exercise of those power; by placing a ceiling on the amount of compensation that could be paid. This limit was subsequently increased to £3,000 million in the Transport Act 1978. It applies to the cumulative level of grant paid from 1 January 1979. The Bill increases the limit to £6,000 million and provides for a further increase to £10,000 million by order. I shall say a little more about finance for the railways and other aspects in a moment.
  Clause 3 gives the Treasury powers to guarantee the British Railways Board's liabilities if it becomes a member of EUROFIMA—the European Company for the Financing of Railroad Rolling Stock. EUROFIMA is a consortium of railway companies formed to finance the purchase of rolling stock. It also promotes collaboration on design, development and standards of stock. It is owned by 16 European railway administrations. British Railways are the only major company which is not a member.
  A treasury guarantee of BR's liabilities would be a condition of membership. Because of these guarantees EUROFIMA is able to borrow on international money markets at keen rates of interest. I should emphasise however, that the Bill only provides an enabling power. Government approval would be required for the board to join and we would want to be assured that there was sufficient national advantage to make it worth while.
  Clause 4 increases the National Bus Company's borrowing limit. This was fixed at £130 million in 1968 and subsequently raised to £200 million in 1975. The proposed increase to £250 million does not, of course, in any way keep pace with the rate of inflation since 1975 and reflects the view of the company that its level of borrowing is likely to diminish in the coming years.
  Earlier this year my predecessor set the company a tough financial target and that will remain the real determinant of the company's financial arrangements.
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  That target is for the company to achieve by 1985 a current cost operating profit that is, before interests of £18·5 million at 1980 prices.
  Clause 5 increases the limit on financial assistance to the Port of London Authority and the Mersey Docks and Harbour Company. I shall be returning to the clause in a moment.
  First, however, I should like to say something about British Railways. The increase in their borrowing limit does not reflect any change in policy. Parliament sets a limit on the total amount of borrowing outstanding at any one time and inflation inevitably means that the limit is bound to be reached. But we should not take inflation for granted. When a borrowing limit is reached we should not just increase it in line with inflation, but look carefully at what we are paying for and what we can afford In fact, the overall borrowing of the board and its subsidiaries has, if anything, been falling in real terms. The increase in the money value of its borrowing reflects the increase in the money value of its investments. Nevertheless, the need to increase the borrowing limit from time to time gives Parliament the opportunity to review the position. We have only recently had a useful debate on railway investment.
  However, the House will now expect me to report on developments. The trading position has, if anything, worsened beyond what was foreseen in the summer. The losses of passenger revenue are now such that the Government have concluded that they are beyond the measures which the board could take to recoup them within the year. I accordingly announced earlier today that the ceiling on the passenger grant for 1981 is being raised to a level £110 million above the level of the claim accepted at the start of the year.
  That is a very large increase. It is a measure of the problems that the board has to face. So the position now is not merely that the Government have fully maintained the level of grant support to the passenger business. This year, as an exceptional measure, we have found it necessary to make a substantial increase, which carries the level of support well beyond anything previously paid.
  Let there be no criticism that the Government are in any sense failing in their commitments to the railways. The Government will keep the position and the prospects under urgent review with the board. At the same time, the figures can leave no doubt in anybody's mind that the need for the management and unions to press ahead with changes to improve the financial position is very urgent indeed.
  Mr. Donald Anderson: Does the Secretary of State not concede that that is no more than a short-term response to an immediate problem and is irrelevant to long-term investment matters—welcome though it is?
  Mr. Howell: I am grateful to the hon. Member for his afterthought. Dealing with the short term, there are obviously a number of long-term implications, which I shall deal with during the debate, and about which my hon. and learned Friend the Under-Secretary will have something to say.
  Returning to the short term, I pay tribute to what has been done this year in reducing manning levels on the railways. The situation demands the strictest economies in administration, the promptest adjustment of levels of

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  services, the most rigorous steps to control unit costs, and the earliest agreements on necessary changes in working practices. That is the immediate situation.
  However, the great difficulties of this year must not prevent us from trying to look ahead. I do not think that the picture is as black as many claim and suggest in the House and, sometimes, outside.
  In June my predecessor called on the board to produce a new plan for the inter-city business to achieve a fully commercial performance by 1985, and a start on the necessary changes immediately. I hope that the board will soon be able to put its plans to me.
  I applaud the substantial progress during this year in the reduction of posts and manpower numbers on the railway—on this front the board is well ahead with its plans. The traffic losses are bound to require a continuation of these changes, and the completion of the detailed agreements to which there was commitment in this year's pay agreement is certainly urgent, but I pay full and unreserved tribute to what has already been achieved. The unions for their part must recognise the exceptional help that the Government have been prepared to give as evidenced by today's announcement.
  I should like to say a word about the non-commercial railway. Here, too, we must have clear objectives. I am firmly resolved that by the beginning of 1983 we shall have a clearly separated grant for the London and South-East commuter services, so that all can see clearly the support for their services, and commuters can see clearly what they are paying for in their fares. It is a pity that we cannot do this more quickly, but it depends upon the board's ability to analyse its costs.
  Meanwhile, I have taken the important step of opening for public discussion the objectives to which the board should work on those services. I have said that the board should not plan on ever-increasing real fares for commuters—fares above the rate of inflation. I think that all the evidence shows that the commuter does not want to go on paying higher fares for promises of a better service, and British Rail's own market research confirms that.
  We must look for steady improvements in the commuters' top priorities, of reliability, punctuality and cleanliness. When I visited the Southern Region last Friday the general manager was able to report higher levels of reliability and punctuality than have been achieved for 10 years and cleaner trains as well. I inspected some refurbished coaches and saw that considerable improvement can be achieved at modest expense. At the other end of the scale, I saw the London Bridge signalling box—which itself improved punctuality by 10 per cent. when it came into operation—and this will be followed by the major changes that are going on in the large resignalling schemes at Victoria, on the Brighton line, and on the St Pancras line. No one can wave a wand—that is not being suggested—and produce dramatic changes overnight.
  The reality is that there is certainly scope for improvement at current levels of investment. There is a way —as we can see from what is going on now—for the capable and dedicated management of the railway to produce steady improvement in what matters to the customer without making ever-rising demands on the traveller or the taxpayer.
  Mr. Terence Higgins: My right hon. Friend referred to cleanliness. I fully acknowledge the improvements made in the other two areas to which he referred, but if he would care to visit the Coastway service from Brighton along the South Coast he would find that the standard of cleanliness leaves much to be desired. Ancient rolling stock is used and the standard of cleanliness in terms of day-to-day maintenance is lamentably low.
  Mr. Howell: I should like to make as many visits as possible throughout the railway system. I am the first to concede that there is constantly room for improvement, but I thought it right to report that there has been some improvement. However, my right hon. Friend is right to remind me, the House and those outside that higher standards must constantly be sought and that there is room for them.
  I hope that in replying to my consultation document all those concerned—and many are intimately concerned—will address themselves realistically to what can be done with the large resources available and to the improvements that are within reach and are, in part, already being gained. It is important to refer to the positive side of the picture, because, inevitably, one hears only the negative side and the weaknesses and difficulties. The considerable gains that are being scored, some of which I have reported to the House, are overlooked.
  Clause 5 increases by £200 million the limit on Government financial assistance to the Port of London Authority and the Mersey Docks and Harbour Company. The House will recall that the Ports (Financial Assistance) Act 1981 provided for financial assistance not exceeding £160 million to be made available to the two ports. That figure included £70 million provided for in the Port of London (Financial Assistance) Act 1980 and a £3 million overdraft guarantee to the Mersey Docks and Harbour Company which my predecessor agreed to in December 1980.
  To set the scene it may be helpful if I remind the House why the Government decided to provide financial assistance for the PLA and the MDHC to help them deal with their surplus manpower problems, and to enable them to continue operating while the manpower rundown and other measures were in progress. As my predecessor explained on Second Reading of the Ports (Financial Assistance) Act 1981 earlier this year, the position that the Government faced then was that these two major ports of national importance had suffered dramatic losses of traffic and were substantially overmanned.
  Without assistance from the Government there was no way in which they could have carried on trading, yet it was unthinkable that the ports of London and Liverpool should simply have been left to go to the wall. The National Association of Port Employers recognised the special nature of the problems in London and Liverpool and, while it expressed reservations about limiting Government assistance to these two ports, hoped that the manpower reductions needed in them would be achieved. It was recognised that it would have helped no one if the Government had declined to provide the necessary assistance for London and Liverpool and the two ports had then closed.
  I believe that the ports industry generally accepts that it was in the national interest, and in the interests of all other ports, to remove the threat of closure that was

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  hanging over our two biggest ports, to deal swiftly and effectively with the immediate manpower surpluses, and to work as rapidly as possible towards the restoration of their longer-term financial health.
  Mr. Sydney Bidwell: In relation to the introduction of the new dock labour scheme, does the Secretary of State agree that no fault attaches to the trade unions, which have been anxious to enter into new agreements for a long time?
  Mr. Howell: The new dock labour scheme is a matter for my right hon. Friend the Secretary of State for Employment. We are dealing with the fact of surplus manpower in the two ports. That cannot be escaped.
  Our overriding aim throughout has been to bring to an end as quickly as possible the dependence of the two ports on public funds to keep them afloat. That remains my aim and, as I shall explain, I have given both authorities clear financial objectives to work towards in the coming year.
  Hon. Members may ask again why we are not providing similar assistance to other ports. The answer is that there was an immediate crisis of unique size and scale in these two ports and that in no other port was it the case that the only way of tackling those problems was by means of Government funding. That is still the case. It may seem unfair to other ports that have been tackling their problems without Government help, but I do not think that it would be fair to the taxpayer for the Government to propose an extension of the arrangements. It would certainly not be fair to underpin or give support to schemes for nationalising all ports, or whatever is the official policy of the Opposition.
  The Ports (Financial Assistance) Act 1981 was recognised by the House to be an emergency and interim measure—and was criticised on those grounds. It provided sufficient money only to pay for the immediate manpower reductions and to enable the two ports to continue operating, pending the detailed plans for returning to profitability which they were preparing. We received the corporate plans in August. I have now considered them and the comments from the two firms of accountants advising me—Price Waterhouse in the case of the PLA and Peat, Marwick, Mitchell in the case of MDHC.
  The corporate plans are, not surprisingly complex documents, which contain a much detailed analysis of the commercial prospects for the two port authorities. They set out the measures that the PLA and MDHC see as necessary for a return to viability. Their main message is that further rationalisation and reductions in manpower are needed over the next few years. The Government therefore accept that further financial assistance is now justified only against that background of enabling both ports to put their affairs in order and cease burdening the taxpayer.
  Much has already been achieved in both ports. About half of the assistance provided so far has been designed to help with the rundown of surplus manpower. Earlier this year the Government helped to finance a special supplementary severance scheme in both ports. The scheme was a considerable success, with more than 1,000 applications in each port. In addition, the PLA has successfully carried through a major rationalisation by closing the Royal group of docks, and the MDHC has negotiated significant improvements in its working practices. Such major changes would not be easy to carry
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  through at the best of times. In the present economic climate they reflect great credit on management and work forces in both ports.
  Although much has already been achieved, both ports continue to need substantial help for severances and capital investment over the next few years, and to meet operating losses in 1982, but there must be a clear end in sight to the need for operating subsidies. I have therefore told the chairmen of both port authorities that it is my intention that grants for meeting deficits should not be available after the end of 1982. I have asked them to submit to me very quickly detailed action plans for meeting the Government's financial remit and breaking even in 1983. Only when we receive those plans can we specify the exact measures that will be needed next year in each port, or how the package of financial support in each port will be made up.
  The figure of £200 million in clause 5 is my best estimate of the maximum amount of money that may be needed by the two port authorities over the next three to four years to enable them to become viable once more. I must emphasise, however, that there is no commitment to make that sum available. As with the earlier legislation, no part of the money is earmarked for either port, or any particular purpose.
  It is important that the two port authorities should be subject to the commercial discipline of loan finance in their consideration of capital spending. I have therefore assumed that in future essential investments will be financed by loans, instead of grants as at present. The ports' financial circumstances, however, preclude the provision of loans under the Harbours Act from the national loans fund. I therefore intend making loans available under the powers in the Bill from voted funds, and I have made an allowance for this in arriving at the figure of £200 million. I must make it clear that there is a risk that these loans might not be repaid if the ports' finances do not improve.
  Mr. Roger Moate: My right hon. Friend will appreciate that we shall need to study his last statement to understand clearly what he means. Will he explain exactly what he is saying about major capital expenditure by the Port of London Authority, if I may single out that authority, during the next few years? Is he saying that such capital expenditure will come out of the £200 million provision in the Bill?
  Mr. Howell: That is correct. It will come by way of loan. The Port of London Authority cannot raise money under the harbours legislation, because its financial position precludes it from doing so. It will come out of the total sum of £200 million.
  Mr. Eric Ogden: The Secretary of State will no doubt confirm that under the Ports (Financial Assistance) Act 1981 the money borrowed by the PLA or the Mersey Docks and Harbour Company was to be used solely and exclusively for redundancy and severance payments. That was the understanding at the time, and we asked many questions about it. The Secretary of State now says that large sums of money are needed for redundancy payments and for investment. Is that different from the Act of 1981, in that it can and will be used for investment, and not just for redundancy payments?
  Mr. Howell: I do not want to mislead the hon. Member but I do not believe that there is a great difference. The

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  amount available under the March legislation was to cover severance costs, but it was also to cover any operating losses and essential investment requirements. I have already confirmed, in answer to the intervention of my hon. Friend the Member for Faversham (Mr. Moate), that the sum here is my estimate of the maximum amount that will be required to meet the needs and objectives that I have put to the chairmen of the two authorities, both in respect of their essential investment requirements and severances in relation to manpower reductions, and to meet the condition and objective that I have set, which is that there should be no deficits—in other words, a breaking even—by the end of 1982. In my estimate, £200 million is the maximum figure within which the pattern of action plans for the two authorities must be achieved.
  Both chairmen had requested—as the House will know—a write-off of their capital debt to the Government. I have looked at these requests sympathetically, but I have told them that the Government cannot agree to this at this stage while there is no clear view of their future profitability. I am sure that the first task for both ports is to concentrate on those measures necessary to achieve a profitable port business. I have also promised to consider providing help with re-financing some short-term debt, though I cannot take a view on this until I see their action plans.
  I know that I am asking the House to agree to make available very large sums of public money for two ports. Funds will be provided only to the extent that I am satisfied that they will assist the ports' return to profitability in line with agreed action plans. My Department will continue to carry out regular monitoring of the ports' progress and of their financial performance.
  The Government remain committed to the policy that all our ports should compete freely with one another on the basis of price and service. Detailed control and central direction are not the ways to deal with the changes demanded by technological innovation and movements in the pattern of trade. Nor should the Government, in our view, seek to provide assistance where ports themselves are in a better position to find solutions to their problems. But we must recognise that London and Liverpool face particular problems on a scale not matched by any of our other ports.
  Both are ports of national importance. Both are having to adjust quickly to a fast-changing environment, as are others, but neither can meet the costs of change from its own resources. The management and work force of the two ports have already achieved much in a short space of time. I believe that both ports can return to profitability given the continued commitment of management and work forces. Much now depends on the determination of the PLA and the MDHC to meet the objectives set by the Government. I think that it is in the nation's interest that they achieve these objectives, that any support from public funds should be designed to assist them to that end, and that where that support is for deficits it should have a clear termination date.
  I have given in some detail the Government's purposes and thinking behind some of the key clauses in the Bill. I commend the Bill for Second Reading.
  4.36 pm
  Mr. Albert Booth: In my view and in that of my right hon. and hon. Friends, the Government are placing the publicly owned transport industries in a straitjacket that is so tight that they will be forced to make savage reductions in services, particularly in their less profitable services, almost irrespective of the social hardship that they may cause and almost irrespective of British industry's need to have an efficient and modern transport system. To that extent, our welcome to the Bill in limited. We welcome it, mainly because it provides an opportunity to debate the Government's policy—or the Government's lack of policy; certainly, the Government's changing position—on transport finance, as they stagger from one crisis to another in various sections of the transport industry.
  As the Secretary of State fairly said, the Bill puts financial limits on Government borrowing, to which certain public transport industries will have access, and on certain grants which might be made to major elements of the public transport industry.
  Clauses 1 and 2, which deal with British Rail's borrowing and grants, have to be judged against a background of the massive decline that has taken place in British Rail, amounting to almost total collapse of certain important sectors. In that sense, British Rail can be said to be the foremost victim of the Tory Government's financial doctrine, which requires it to sell its assets, particularly any of its profitable activities, leaving it with the loss-making activities. I want to concentrate on the extent to which those borrowing limits will impinge on British Rail's investment programme.
  The Government control British Rail's investments in at least three different ways. First, they set its investment ceilings. Secondly, they require the British Railways Board to submit to the Secretary of State any significant investment proposal for individual approval. Thirdly, the Government include British Rail's borrowing within the external financing limits that are set for it. That immediately poses the question of the extent to which the Secretary of State proposes to raise British Rail's external financing limits in the face of the increase in the public service obligation which he announced this afternoon. The PSO is part of the external financing limit, and if it is raised without raising the EFL, it merely means that British Rail's borrowing powers will have been chopped even further, at a time when they are disastrously inadequate to meet its investment requirements.
  The inadequacy of the external financing limits is one of the greatest problems facing British Rail in its attempt to plan investment. Goodness knows, it faces enough problems in that area. In 1980—but using 1981 prices—British Rail's investment ceiling was £392 million. However, British Rail was able to spend only £371 million in investment. Of the external financing limit of £790 million, £699 million was taken up in public service obligation payments, section 20 grants and level crossing grants, and that left British Rail with only £121 million of borrowing to go towards its total investment expenditure. With the increase in the public service obligation that has been announced today, British Rail will have hardly any borrowing for investment left, unless there is a major adjustment of the external financing limit.
  In 1981, the investment ceiling was set at £398 million. However, British Rail was able to spend only £308

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  million. In other words, it fell £90 million short of its investment ceiling because of the limits placed on British Rail's expenditure by the external financing limit. Even with those strict limits on British Rail's investment expenditure, the Government are still reducing dramatically British Rail's investment ceiling. At 1981 prices, British Rail's total investment ceiling in 1977, 1978 and 1979 ranged between £484 million and £487 million. In 1981, total investment spending has fallen to £400 million. That includes the continuous welded rail programme, which falls outside rail investment.
  Two years ago, investment spending was 19 per cent. higher than it is today, although British Rail now needs to engage in a round of major investment, particularly in the electrification programme. Between 1979 and 1981, the ceiling was lowered from £484 million to £398 million. That is a cut of £86 million in British Rail's investment ceiling and it has been carried out by a Government who, in their 1979 election manifesto, said:
  "We want to see those industries that remain nationalised running more successfully and we will therefore interfere less with their management and set them a clearer financial discipline in which to work."
  Mr. David Howell: I should not like the figures that the right hon. Gentleman has given for investment ceilings to stand uncorrected on the record. If I heard the right hon. Gentleman correctly, the figures that he gave were wrong. The investment ceiling stands at £325 million, which is the same level, in real terms, as that set by the Labour Govenment. Therefore, I do not understand how the right hon. Gentleman has reached his calculations.
  Mr. Booth: I made it clear that I was citing prices that had been adjusted to the 1981 level. At actual prices, the board's investment ceiling for 1981—one of the controls applied by the Government—is £398 million. That includes expenditure on rail and expenditure on British Rail's subsidiary activities. Therefore, I was using prices that had been adjusted to the 1981 level. Between 1979 and 1981 the ceiling has been lowered in the way that I have described. I have taken account of the continuous welded rail programme, which does not come within the investment limits, but which must be included when making a fair comparison of total rail spending. If I had excluded that, the drop would have been even more dramatic than it is. I assure the Secretary of State that I have checked the figures carefully with the board and I shall be happy to make my figures available to him. Total spending has dropped dramatically.
  Mr. Stanley Cohen: I hope that my right hon. Friend will press the Government to be clearer than they were in the statement about investment in electrification. Little has been said about that, although the issue is vital to the railway and transport industry and to consumers. The Government have been vague and they should clarify the situation.
  Mr. Booth: I take that point and I shall turn to it shortly. I should make it clear that our complaint is not only that major impediments have been placed in the way of electrification investment, but that overall investment limits have been effectively cut, by making the external financing limit so tight that even the limited investment ceilings set for British rail cannot be reached. The amount of borrowing left within the ceiling prevents British Rail
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  from reaching that investment ceiling. British Rail cannot finance the whole of its investment programme for the 1980s from money that it generates from its activities.
  British Rail's estimate, which has been fairly set out in the document on rail policy that has been submitted to the Secretary of State, suggests that the ratio of money generated to money borrowed to finance the rail programme, is about 2:1. In other words, one third is borrowed money and two thirds is internally generated money. I hope that it will not be argued that British Rail does not need to have access to borrowing in order to carry through its major investment programme. That programme is necessary not to improve the railways, but to save them. Many of the items that are classed as investment are replacements for essential elements in the system.
  I shall quote from a speech that the Secretary of State made in a recent debate on British Rail investment. He said:
  "We need a highly efficient railway as an integral part of our national transport network."
  A little later—although I hope that he will agree that these words are not out of context—he said:
  "it depends on mobilising new investment funds to keep modernising the system."—[Official Report, 26 October 1981; Vol. 10, c. 614.]
  I entirely agree with the Secretary of State and we are as one on that point. We need a highly efficient railway system as an integral part of our transport network. We shall not achieve that unless British Rail can mobilise the necessary investment.
  However, the Secretary of State and his predecessor have torpedoed a major part of the investment programme. I refer to electrification. They have done so by rejecting the joint study made by the Department and British Rail on the major electrification options for the main line network. They have refused to approve any of the five options and have told British Rail to go away and start again. The Government have said that they will set different criteria in order to examine electrification on a line-by-line basis. Therefore, the Government have rejected the major electrification options. Two years' detailed work has been wasted.
  In addition, the Secretary of State and his predecessor have not reached a decision on the East Anglian electrification project. That project was submitted to the previous Secretary of State in November 1980. It has been tested and questioned in every way by the Department of Transport. No more questions can be asked. However, a decision is still awaited from the Secretary of State. That project stands on its own and was to be considered outwith the main line electrification programme.
  There is no excuse for the Secretary of State's failure to make a decision. It would have been wrong, at any time, to hold up such a scheme. However, when that decision may determine whether we can sustain an expert team capable of carrying on our rail electrification programme, the refusal to decide is a major blow to an industry on which the future development of electrification depends. It also reflects the Secretary of State's failure to respond to the desperate proposition put to him by the chairman of British Rail. He approved the modest extension of electrification from Hitchin to Huntingdon. At least that was part of an electrification project that could have held together the team of specialists that was capable of sustaining the electrification programme.

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  The Balfour-Beatty Power Construction company has been told by British Rail that it has no more work for it. Notices have been issued to members of the team, and the team will be wound up. It will take a year to put that construction team together again. Not only is that a loss to our railway system; it is a loss to the power construction industry. Without a home base, it is doubtful whether it will be capable of obtaining any part of the £750 million worth of international contracts for which companies will be tendering in the next few years. That is a tragic waste of the expertise that exists in British Rail to research and develop modern railway systems.
  If the Government had the foresight to see the extent to which, by investing in British Rail, we could build up many other parts of our economy, certainly in related industries, by selling British Rail expertise around the world, they could make a significant contribution towards solving some of the major problems of the present recession.
  The Secretary of State properly spoke about the cooperation of the unions in manpower cuts by British Rail. I agree that there has been enormous co-operation during a tremendous rundown in manpower. But the Secretary of State is not likely to receive very much more such cooperation unless there is agreement on a future investment programme. It is all give by the unions and all take by the Government in this arrangement. The Secretary of State may soon face opposition from the railway unions. If he wants more manpower cuts, he must approve an investment scheme so that the cuts can be made intelligently. The scope for further productivity depends very much on the extent to which further investment in the system will be authorised. Clearly, if there are to be major savings in manpower, there must be investment in electronic signalling, and so on. If the Secretary of State tells British Rail to make manpower savings and operate outdated collapsing stock with even less manpower, he will finally get the answer that that is not on.
  I noted with interest the Secretary of State's attitude to the financing of the public service obligation part of the operation. He reminded the House that commuters in the South-East do not want to continue to pay higher fares. I say to him "Welcome aboard". For some time, we have been preaching that the use of the system is sensitive to fare policy. We might even convince him about the low fares policy that is being pursued by the GLC. The scheme in South Yorkshire also has merit.
  The Secretary of State spoke of having separate accounts and I can understand why that is attractive to him. However, we must not be misled into believing that, by having separate accounting for the degree of public support for South-East commuters or other rural services, we can treat them as though they were in a different world. They are not. The main line railway network depends to a considerable degree on the feeder system of the other parts of the total railway system. If we cut off the branch lines and parts of South-East commuter land, that will impinge upon the main line business.
  The Bill deals with other aspects of publicly owned transport, in particular with the National Bus Company, which is being attacked on three points of the compass. It is being hit by the recession and it is suffering from the reductions in public transport support, and from the effects of the Transport Act 1980. The Secretary of State has set
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  it a financial target of achieving a profit of £18·5 million by 1985. That will require massive service cuts. In its submission to the Select Committee, the National Bus Company reported that it envisaged cuts of about 60 million service miles having to be made.
  Mr. Anderson: There is a fourth point of the compass. There is a real danger that in their further privatisation measures the Government will insist that NBC's express and profitable routes should become private, depriving the NBC of its major revenue earners.
  Mr. Booth: I should not wish to enter into an argument with my hon. Friend on how many points there are on the compass. I take an amateur interest in navigation and I admit that there are many more points than three. However, I take my hon. Friend's point that the National Bus Company will have to reorganise its services in such a way as to make a considerable reduction in its profits on express routes.
  The point that the House must appreciate is that those cuts of 60 million service miles will not be made in the express services. The NBC is expanding in that area. The cuts will all be made in the rural areas or, to a limited extent, in off-peak urban services. The cuts will attack those parts of the country that can least afford, in social terms, to sustain a cutback in their transport provision.
  The National Bus Company is to be required to service its entire commencing capital debt each year, which it has had to do from the outset. But the interest payments on that debt have risen in actual prices from £4·8 million in 1969 to £17·2 million in 1980. In operating terms, just to pay interest, it will have to earn £1,065 a year on every bus that it runs, as opposed to £233—at a time when the Secretary of State is realising that people do not want to pay higher fares.
  I suggest that the study that he has made of South-East commuter land could be carried out on a wider basis with some advantage to the NBC. Not only will it have to find the greater interest payment, but it will have to do so with less transport supplementary grant support. That grant has been cut by 10 per cent. for 1981–82. If the Secretary of State hopes that the National Bus Company will get anywhere near the financial target that he has set, it will be necessary to raise transport supplementary grant in order to reach some agreement with those counties that have applied for so little towards revenue support services. Unless there is a major change in the transport supplementary grant revenue support regime, he will soon be faced with a financial restructuring requirement for the NBC.
  The Bill refers to the Mersey Docks and Harbour Company and the Port of London Authority. The company has an outstanding debt of £63 million on which it pays interest of about £5·5 million a year. It will have to attempt to pay back interest from what by any measurement is a much contracted base of operation. Last year it had a loss of £6·25 million. It can be argued that that loss was the result of special circumstances. However, its trading position has worsened considerably since January. If there were ways of dealing with the problems that it faced last year, they are not necessarily available this year against the financial prospects that the Secretary of State holds out.
  I shall refer to some of the changes that have taken place since January. The Manchester Liners' container service,

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  which was acquired by the Tung Group, has been transferred to Felixstowe. The Johnson Scanstar container service operation has been centralised in Felixstowe. That is at the expense of both the company and the Port of London Authority. The shipping companies that form the United Kingdom-East African Conference have decided to put their general cargo into a container service which will operate from the East Coast. That will lead to a withdrawal from Merseyside.
  Following the closure of the refinery at Ellesmere Port, the Burmah Oil Company has stopped importing oil into Merseyside. Tate and Lyle, having closed its sugar refinery in Liverpool, no longer imports raw sugar and no longer exports refined sugar. Last but by no means least, there is now the prospect that P & O will no longer operate the Liverpool-Belfast ferry service. These are all changes that are detrimental to Merseyside trade and they have all taken place since 1 January. A short-term subsidy of the trading loss for this year will not put the company in a position in which it is able to meet the Secretary of State's financial targets.
  Unless the right hon. Gentleman reconsiders his predecessor's decision, he will continue to try to operate without a national ports policy and without a national ports council. In doing so he will fail to tackle the root problems of the ports.
  The position of the Port of London Authority is, in some respects, even more grave.
  Mr. Moate: Perhaps the right hon. Gentleman will explain how he would have prevented from taking place the transfers of trade by commercial operators that he has described if he had had a national ports policy?
  Mr. Booth: If we had a national ports authority or a national ports council that had the power over port operations that the Secretary of State has over British Rail operations in approving or rejecting investment, a policy could be operated of allowing investment in port developments that would make sense. The investments that have taken place recently in port developments have not made sense. They have created flourishing ports in places where there have been shortages of other facilities, but they have deprived other places, including Merseyside and London, of port activities. They have created industrial and social havoc in those areas.
  I know that the hon. Member for Faversham (Mr. Moate) takes a continuing and serious interest in transport matters. However, the Government's refusal to operate a mechanism that would be a proper role for a national port authority does not absolve them from having to take decisions on port finance. On the contrary, the Bill makes it clear that they still have to provide port finance. They will have to do so at a time when they are picking up the pieces and trying to deal with the damage that has been done by the free market approach to transport.
  If there is an argument for financial restructuring for the Mersey Docks and Harbour Company, there is an overwhelming case for the restructuring of the Port of London Authority.
  Mr. Higgins: Under the right hon. Gentleman's national scheme, what would he envisage happening to the size of the Liverpool labour force, given the change in the pattern of trade to which he has referred?
  Mr. Booth: A national scheme would have had to cope with the most massive rundown in the labour force.
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  Intelligent investment in the container system in the PLA, in Liverpool or in any other area will greatly reduce manpower requirements at the jettyside. I faced that problem as the Secretary of State for Employment. I laid before the House a new dock labour scheme. I recognise the relationship between the two problems. It is necessary to proceed by way of a national dock labour scheme as well as by making provision for port investment.
  Mr. Robert Parry: Does my right hon. Friend accept that since the beginning of 1979 the labour force in the Liverpool docks has been cut by nearly half?
  Mr. Booth: I accept readily that there have been substantial cuts in the Liverpool and London labour forces. There have been cuts in almost every port labour force other than at Southampton over the past 10 years. Some of the cuts have been drastic. The cuts in London have resulted in a dramatic contraction of the base of activity over the past few years. Since the Government took office we have had the closure of the India, Millwall and Royal docks. The Port of London Authority operation is now confined to Tilbury. It has gone down river to Tilbury and there is nowhere else that it can go. It has arrived at the place where it must make its last stand as an authority.
  The Secretary of State says that there will be no grants to cover deficits incurred by the PLA beyond the end of 1982. He should examine his predecessor's record. He said at first that the PLA did not need further financial assistance. Later he said that the only assistance that was required was that of funding the London redundancies. He listened to objections expressed by hon. Members on both sides of the House who tried to tell him that that approach would not work. He was told that it was not realistic and that he would have soon to provide aid for Liverpool as well. In due course that had to be done, but the aid covered redundancies only.
  The present Secretary of State is now saying that additional aid must be made available for London and Liverpool. Redundancy terms have spread to other ports. The Government are being pushed stage by stage from their previous stance. When will they take an overall view of the industry and recognise the dramatic changes that it has undergone? Those changes have applied to technology and trading patterns. The Government cannot continue their ad hoc policy.
  I do not think that the PLA can become commercially viable by the end of 1982, especially while it is carrying the cost of servicing a debt of £110 million, much of which represents what are now dead assets. It will have to reorganise in Tilbury. It will have to face the massive problem of financing the huge amount of redundancy that has taken place. There has been a huge change in the ratio of retirement pension pay to the size of the work force. It is not possible for the authority to face those problems and at the same time to achieve viability by 1982.
  The container revolution is going ahead. That has not been stopped by the recession. There is still traffic moving from general cargo to the container system. It is moving at a greater speed than most of us foresaw. It is proceeding with such thoroughness that it is now conceivable that the number of men required on the jetty in future container operations as compared with the old general cargo operations may be about 10 per cent. of historic labour forces. That is such a dramatic change that it cannot be

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  encompassed within the normal financing arrangements which would be made for redundancies. It is a greater cutback than any of our manufacturing industries have faced, even with the great capital intensive developments in manufacturing. That problem is not peculiar to London.
  Mr. James Hill: The right hon. Gentleman has said that the Government should have a complete rethink on the port industry in general. Does he not agree that one of the greatest obstacles to harmony in the ports, particularly in my constituency, is that it is time that the Government in the person of the Secretary of State looked again at the national dock labour scheme and brought it up to date?
  Mr. Booth: I agree entirely, but the hon. Gentleman is pushing at an open door. I proposed that to the House when I was a Minister and I still believe that the national dock labour scheme is outdated and will not meet modern terms. I left a power for the Secretary of State on the statute book. It is his statutory duty to lay a new scheme before the House. He has not carried out his duty. I hope that he will do so.
  I should like the Secretary of State to consider my final point about the PLA. As he is the Secretary of State for Transport, I urge him to consider and at some time let the House have his views on the role of the PLA in relation to the development of the economy of the South-East of England. He is giving priority in his road programme to the completion of the M25, which will form a natural link with Tilbury. Given that and the proportion of freight to ports that is now carried by heavy lorries, the success or failure of Tilbury will be a matter of concern not only to the dockers but to all those who want to see a regeneration of the South-East region. I say that as one who represents a Northern region constituency which has had some experience of a loss of port activity. When the British Transport Docks Board terminated the commercial activities in Barrow docks, I and others in that area saw the effect on industrial development. Therefore, we are talking about the problems not only for dockers and shippers—they can go to other places—but for those who develop industries and depend upon having access to ports. They are vitally interested in that question.
  We shall deal with many more detailed issues in Committee. However, we are starting from a difficult situation. What is clearly needed is a far-sighted, courageous policy to ensure that we have a modern and efficient transport system. The Government stagger from crisis to crisis with temporary stop-gap measures that are unco-ordinated, while the life is being strangled from public sector transport by monetarist policies. In Committee we shall put forward what we believe to be sound Labour policies. We shall campaign for realism in the financing of public transport.
  5.14 pm
  Mr. Roger Moate: I agreed with the right hon. Member for Barrow-in-Furness (Mr. Booth) when he described the Bill as a temporary stop-gap measure. Some of my criticisms will follow that line. However, I disagreed with almost everything else that he said, particularly his ritual genuflection in the direction of a
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  national ports policy. Even that lacked conviction because he conceded clearly the reality of life and the improvements of trade and traffic in the ports industry.
  I should have thought that the right hon. Gentleman could be a little more generous about British Rail and the Secretary of State's policies. He should have welcomed the additional support given by the Government to the passenger operations this year. An increase of £110 million in the public service obligation is a significant contribution. It will be warmly welcomed by all commuters and passengers. I asked the right hon. Gentleman to consider what would have happened if that grant had not been given. Substantial fare increases would have been needed. They have been avoided. I thank my right hon. Friend for that.
  I also thank my right hon. Friend for having made it clear that the Government believe that commuter fares should not increase in real terms. We cannot avoid the inflationary increases, but I welcomed that clear statement of Government policy.
  The right hon. Member for Barrow-in-Furness described Government policy as a straitjacket. That was a strange word to use. When one considers the Bill and the amount of money that it provides for the nationalised transport industries, one realises that it reflects a rather large nightshirt in which there could be an orgy rather than a straitjacket. The money involved is considerable. In addition to the £110 million, there is an extra £200 million for Merseyside and the PLA. Clause 2 provides for a sum not exceeding £10,000 million, representing the total compensation that may be paid by the Government. That is a cumulative figure but it reflects the enormous public support given to the railways.
  Mr. Ogden: The hon. Member for Faversham (Mr. Moate) is usually careful to say exactly what he means and to mean exactly what he says. Will he look at the Bill again and show me one dot or comma that shows that by the Bill the Government are committed to spend one brass farthing? From beginning to end the Bill is dotted and indented with "ifs" and "and" and "may" and "perhaps". It is an enabling Bill. Not one penny of hard cash is committed to any of the enterprises in it. It mentions only measures that are to follow later at the discretion of the Government.
  Mr. Moate: The hon. Gentleman may be technically right, but politically he is hopelessly and completely wrong, and he knows it. Whenever did a Bill prescribe a ceiling of expenditure which was not reached or exceeded? I wish that the hon. Gentleman were right and that the money would not be spent. However, he and my right hon. Friend the Secretary of State know that it will be spent. That is why I regret it when it is said that the £200 million is available but need not be spent. It will be spent.
  I shall make a few remarks about the railways. I shall try to be brief as I know that many hon. Members wish to speak. We have recently had a debate on rail investment. I regret certain recent developments. I share to a certain extent the views of the right hon. Gentleman on rail electrification. It is absolutely right for the Government to maintain strict control over the programme and to lay down strict conditions. However I feel that my right hon. Friend and the Government are losing control if the breakup of the electrification team is allowed to proceed.
  That investment programme must ultimately reflect profitability and show a proper return. However, is it

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  reasonable, on the one hand, to say that passenger revenue is so bad that we must put in an extra £110 million as an emergency measure and, on the other, to say that British Rail must produce evidence of profitability to justify electrification? I do not believe that my right hon. Friend can honestly expect to have any modernisation programme on the railways if we apply such tight conditions in the present economic circumstances. If we are to proceed with better productivity deals and if we receive a response from the railway unions and the management, we have to show willing and take a positive initiative to ensure that the electrification programme proceeds.
  Mr. David Howell: I have listened very carefully to my hon. Friend and I agree with a great deal of what he says about the programme. The Government have asked that there should be plans for profitability in the main part of the railway business by 1985. The Government have committed themselves in principle to the 10-year rolling programme for electrification. The Government have asked for the electrification schemes to be brought forward. I am awaiting those schemes, but they have not yet been put before us.
  Mr. Moate: My right hon. Friend will know of the newspaper report which stated:
  "'Every time we answer a question, we get 10 more back,' claimed a senior BR executive this weekend."
  I understand why my right hon. Friend insists upon a viable long-term programme, but he will not have any type of programme if the teams necessary to carry it out are broken up in the meantime. I have great faith in Sir Peter Parker's business common sense in this matter. It surely makes sense to allow British Rail to proceed with a modest programme in order to keep the teams in being. I emphasise that point.
  During the last debate on railway investment I suggested that the Government should pay greater heed to the idea of allowing private finance to be introduced in the form of leasing finance. I suggested that the new locomotive programme should be financed by leasing arrangements, as was done during the early 1970s. By that means British Rail could expand its investment programme considerably without necessarily affecting the public sector borrowing requirement. I believe that the same can be done on railway electrification.
  I recall the powerful speech of my hon. Friend the Member for Hereford (Mr. Shepherd) who I understand was describing the plans submitted by the companies concerned which suggested that much of the electrification work could be carried out by using private finance. If that option is open to us, I urge the Government to seize it because if we do not have investment of this type we shall close all the options for a modern railway system. I become extremely worried that we shall lose the initiative which has been built up in recent years. I am not saying that the railway industry is happy—it has not received all the money it wanted—but, broadly speaking, I believe that we have been going in the right direction.
  I turn briefly to the matter of the ports and docks. I am very disappointed that again there is a Bill of this type before the House I suspect that my right hon. Friend takes no pleasure in that, but I feel that at this stage we could have expected a more complete and positive package. We are entitled to look back over the past two years and express some disappointment. In two years we have had three Bills on this subject.
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  In 1980 we had the first port of London Bill. I do not need to quote the remarks of my right hon. Friend the Secretary of State. He made it clear in 1980 that he expected the port of London to operate within these cash limits, which then amounted to £70 million. A year later we had another Bill calling for a further £90 million. We heard the same stern injunctions and fairly optimistic statements that that would be enough to carry it through. Many Conservative hon. Members defended what were, in some ways, indefensible measures because we believed that there was an emergency and that this would be the last word.
  The Bill before the House today—the third in two years—seeks a further £200 million. I shall refer later to that figure, because my right hon. Friend must give more facts to the House about it. It is clear that this will not be the last word. My right hon. Friend has said that he is not prepared to accept financial reconstruction at this stage. It is therefore clear that before long we can expect further legislation.
  That is a most unsatisfactory way for Parliament to proceed. It is also a most unsatisfactory way for the management and the workers in the ports to proceed. Of course, the ports have faced decline and depression. It has been a very difficult time. Many of us believed, however—here I restrict my remarks to the port of London—that having reached this stage we should be able to look forward to a brighter, more optimistic future. The port of London has a great future. Tilbury has a great future. The riverside wharves have a great future. The port of London is still our greatest port. Those who work in it should by now have a clear future mapped out before them.
  All that we have is yet another transfusion—it is becoming almost like a drug—provided by the Government, without any clear sense of direction. The first measure, in an emergency, was perhaps fair enough. A second measure, in another emergency, is perhaps also fair enough. But three in two years begins to look like a habit—and a bad one at that. I am most disappointed. I believe that the way in which the £200 million is being provided is wrong for both London and Merseyside and discouraging for the rest of the ports industry. In this connection, I wish to put a number of points to my right hon. Friend.
  I presume that the £200 million, with the emphasis upon provision for severance, means that London and Liverpool are to receive special help in the severance of their dock workers. My right hon. Friend should even be able to give figures. He must have some idea of how many employees, registered and unregistered, are involved at the two ports. Clearly there is to be special treatment for those ports. Although we defended differential treatment on the last occasion, I do not believe that we can again defend the introduction of differential severance rates for London and Liverpool but not for other ports. We defended it last time, but by the summer the industry had been forced to introduce a further scheme at its own expense, not at Government expense, to close the gap because one could not have redundancy payments of £16,000 in London and £10,500 in Bristol.
  Yet the Government are doing the same thing again. How can we expect port employers throughout the country to secure demanning and reductions in the numbers of jobs when the employees believe that they will again be able to secure higher redundancy terms if they wait a little

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  longer? This is a most untidy, unhealthy and unhappy situation and I do not believe that it will work. Indeed, I suspect that as our debates continue, in Committee and on Report and with the industry outside, it will become clear that it simply cannot work.
  It is unfair that other ports should have to bear the full cost of redundancies through the levy when for London it will be fully financed. At what level will the figure be set? The scheme in London produced about 6,000 voluntary severances at a figure of £16,000. Will that be the figure in future or will it be higher? Again, we are entitled to know what figures my right hon. Friend has in mind.
  My right hon. Friend touched upon the subject of capital expenditure. I am concerned that the port of London should be viable and should survive as a flourishing port, but it must be on a fair basis. One cannot expect other ports to accept that the PLA should be subsidised. Yet I gathered from my right hon. Friend that the £200 million will in effect provide further capital subsidies in terms of new investment over the coming years, whereas other ports will have to finance this in the traditional manner.
  That is a significant change from what we were told in our previous debates. Frankly, I dispute whether my right hon. Friend is correct in his interpretation of his powers. The Ports (Financial Assistance) Act 1981, upon which this provision is based, does not appear to me to provide powers for major capital spending. It refers to
  "measures taken by them to reduce the number of persons employed."
  That is quite clear. It goes on to state that it provides
  "for the carrying on of their undertakings while such measures are being taken."
  I suggest that the phrase
  "the carrying on of their undertakings"
  does not provide, within the normal meaning of the English language, for major capital investment. I hope that it does not. I am sure that both London and Merseyside will need new capital investment. However, it must not be achieved by the sort of blank cheque that my right hon. Friend is securing from Parliament. The sum of £200 million is colossal even in relation to the needs of the two ports. This is not the proper way to proceed.
  I emphasise my great disappointment that we are not in a position now to map a clear path for the future for the port of London. We could have done it; we should have done it. This would have involved capital restructuring. It is unrealistic to expect London to continue to carry debts of £110 million and also achieve viability at the end of next year. The whole package lacks credibility and conviction. It causes confusion in other parts of the port industry. At the same time, £200 million of the taxpayers' money is taken without any clear justification. That is a very large figure.
  I understand the need at this stage to provide further financial support for the ports. I am, however, disappointed about the way it has been done. I hope that during the progress of the Bill my right hon. Friend will be able to break down the figure and explain it more clearly to Parliament and to the people. In that way he will perhaps make some of us happier than we are at present.
  5.31 pm
  Mr. Robert Parry: I welcome the financial assistance that the Bill means to the
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  ports of London and Liverpool. I declare my interest. I am a sponsored member of the Transport and General Workers Union, and the Liverpool docks, or what remains of them, are situated in my constituency. Many of my constituents are employed on the docks.
  We would like to ensure that other United Kingdom scheme ports which need financial help are included in the Bill's provisions. The effects of the continuing recession on dock labour scheme ports, aggravated by the expansion of non-scheme undertakings, are putting the future of many ports in jeopardy. The refusal by the Secretary of State for Employment to take the necessary legislative action, which would permit progress to be made towards the introduction of a new dock labour scheme, as required under the 1976 Act, has given licence to the non-scheme undertakings to take cargoes away from the traditional ports. The loss of traffic has created an increased surplus of registered dock workers in ports throughout the country. This is having a serious adverse effect on the operational viability of the ports. The provision of financial assistance should not therefore be restricted to certain ports, as the Bill proposes.
  The Secretary of State for Transport has stated that the provisions to increase the limit of money available to London and Liverpool will enable the two ports to carry out capital expenditure programmes and cover running losses and severance payments. The latter item is no doubt included because the provision of financial aid is tied to further substantial reductions in manpower at the two ports. If severance payments are again introduced, as happened in March and April this year—payments that are more beneficial than those that apply in the rest of the scheme ports nationally—and without consultation or reference to the national joint council for the port transport industry, there will no doubt be a reaction by dock workers and port employers similar to that which occurred under the Ports (Financial Assistance) Act 1981.
  The important issues of jobs and future employment cannot be dealt with unless there is full consultation and the involvement of both sides of the dock industry. There is no doubt that the ports of London and Liverpool need financial help. By the same token, so do many other ports. Their problems are similar. Provision must be made for all ports that are suffering the effects of the present unsatisfactory situation in the port industry, brought about by the failure to introduce a new dock labour scheme and aggravated by the trade recession.
  I wish to deal with a couple of points concerning Liverpool and the Mersey Docks and Harbour Company. At the beginning of 1979, there were 6,007 registered dock workers. Of these, 3,772 were employed by the Mersey Docks and Harbour Company. The latest figures given to me recently are 3,414 registered dock workers employed in the port, of whom 2,262 are employed by the company. As my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) pointed out, there have been tremendous losses this year alone. The Tate and Lyle closure will mean an annual loss of £1·2 million to the revenues of the Mersey Docks and Harbour Company. If the Liverpool to Belfast ferry is not reopened, that will mean a further £1 million loss of income, bringing the total to nearly £2¼ million in less than one year.
  The Secretary of State's recent statement makes clear that the granting of this financial assistance to the port means substantial reductions in labour. I understand that a figure of about 500 has been mentioned in respect of

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  Liverpool. I must warn the Secretary of State that if any gun is held at the heads of Liverpool dockers, this will be resisted by the workers. The right hon. Gentleman will appreciate that Merseyside has nearly 20 per cent. unemployment, with 130,000 people out of work. The carrot or bait of severance pay, used many years ago for dockers in Liverpool, will not be taken so lightly now.
  5.37 pm
  Mr. Geoffrey Dickens: I should like to start by referring to matters that affect the public most. We are discussing high finance, but the public are interested in three elements. One is reliability. Most people, when they go to catch a train at a certain time, expect it to arrive at that time or thereabouts. Some passengers are anxious about punctuality. When they catch a train, they want to reach their destination on time. The train often links with a departure from an airport. They also have to arrive at work at a certain time. Most people also expect clean carriages.
  Over the last few years I have seen tremendous improvements in British Rail. The greatest improvement has occurred in inter-city links. The carriages, service and punctuality seem to be very good. The stations also seem to be operated efficiently. A considerable sum has gone into British Rail. The £10 billion ceiling set for public money is a king's ransom, but it is money well spent. It is a service to the nation, which has been kept in line with inflation.
  Our policy has not changed, but we are still making provision for the same amount of development and procurement for rolling stock and wage levels. This has been necessary to keep in step with inflation. It is a matter not of finding more money, but of finding enough and making a commitment to keep British Rail up to and progressing at the standards achieved over the last few years. If that continues, we should be well pleased.
  This is a small island. There is nothing complicated about the spread of our cities. An island such as this ought to have a first-class rail system. I mourn the passing of the days of the GWR and LNER. But I must not dwell in the past, I must go forward. There was competition in the past between the railway companies. Nevertheless, the railways are progressing and the money has to be found.
  The Government's commitment to the future of the railways amounts not only to money for investment. Any commitment to the future of the railways must include improvements in productivity. The Government, since they came into office, have made tremendous strides. When we negotiated the 1980 pay award, for instance, we set targets to shed about 38,000 posts by 1985. We have already achieved about 14,000 job losses. Many of those were from the loss-making areas, such as the carriage of parcels, and so on.
  We are now in the middle of negotiations for the 1981 pay settlement. The unions are working closely with management in seeking to achieve greater productivity. That is common sense, because their future depends on the success of British Rail. Their success is our success, and vice versa. The relationship between trade unions and management is vital. It is nice to see the nation thinking in that way. A few years ago, the argument was across the table; now we seem to sit round the table to negotiate. That is much better and more sensible. We shall all be the winners in the end. Confrontation between trade unions and management is of no use to anyone.
  784
  Things are moving nicely. There are one or two matters on which the trade unions have agreed and are making progress. For example, on open terminals—unmanned ticket barriers—two pilot schemes will start later this year, with the agreement of the trade unions—one in Scotland and one in the West Country. I hope that they will be a success.
  Another subject is flexible working hours. Employees of British Rail used to work many hours of overtime on some days, and on other days of the week, because of the overlap on their schedules, they worked less than their required eight-hour day. That was uneconomic. It cost a lot of money. British Rail is now working towards more flexible working hours with a much steadier use of manpower without excessive overtime payments. That seems common sense to me.
  We are talking about doing without guards on trains on some local lines—perhaps on goods trains as well. There may be pilot schemes for that. If such a scheme worked, it would save a tremendous sum.
  Bearing in mind unemployment, we have to remember that taxpayers' money is involved and that British Rail must run profitably, just as any private company must do.
  Mr. Ogden: I am fascinated by the hon. Gentleman's use of the terms "we" and "they". Who does he mean by "we"? Earlier, the Secretary of State for Transport said that the management of British Rail was capable and dedicated. The Secretary of State and the hon. Member for Huddersfield, West (Mr. Dickens) were elected on a ticket of less intervention in management. Now the hon. Gentleman is saying "We have provided all this money; we have obtained all those redundancies; and we are organising this, and they are doing that." Will the hon. Gentleman explain the dichotomy between "we" and "they"?
  Mr. Dickens: When I use the expression "we", I am talking about taxpayers—us and the people sitting in the Strangers Gallery. I say that we have provided all this money, because we have.
  Mr. Ogden: And the negotiations?
  Mr. Dickens: The negotiations are between the management and the trade unions. They are also contemplating combining certain driver grades to make better use of drivers. They are also negotiating about the requirement for two men in the cab—in other words, single manning. Trade unions and management are working together for greater productivity.
  As a Government, we are continuing our commitment to BR by applying taxpayers' money to the job. In so doing I hope that we shall continue to give a good and gradually improving service to the public. At the same time, the three elements of reliability, punctuality and cleanliness must be the key words for BR.
  The National Bus Company has been mentioned in the context of cutting uneconomical routes, and so on. As one who regularly motors on the M1 from Yorkshire to Westminster, I see many National Bus Company coaches half-empty—sometimes only a fraction fully occupied—travelling along the motorway. But there are many more areas for saving, including the procurement department which purchases the buses. If the coaches had an engine capable of a longer life, with greater periods

  785
  between services, and if the chassis design were better as regards access to the engine for the engineers working on it, we could save millions of pounds.
  Two brothers in my constituency have come up with a particularly good design.
  Mr. Ogden: Ah!
  Mr. Dickens: I do not mind mentioning it. The Government are giving them modest support through a small business scheme. The design may not get off the ground, because these men lack a track record of running a successful and profitable company. However, they have the design and they have plenty of orders. They have one order from the National Bus Company and some orders from Scotland. The design is good.
  I believe that the policy of the National Bus Company is to put a coach on the road for about two years to test the life of the engine and the chassis. I do not think that we can improve on the coach bodies, which are normally made by one of two specialised companies. But we ought to be looking at purchasing policies within the nationalised industries, particularly British Rail and the National Bus Company.
  I am pleased that we have matched the progressive investment in BR. The Government have given BR a commitment. We have backed the workers of BR, and it seems that the workers are responding by seeking to improve productivity. If they maintain cleaner carriages and come up with the improvements that I have mentioned, the nation will be more than pleased with the BR service.
  5.48 pm
  Mr. Eric Ogden: The hon. Member for Huddersfield, West (Mr. Dickens) made a lively speech. If he is to be a member of the Standing Committee, it will be a most interesting and, probably, an infuriating Committee for the Minister to attend. There was much in what the hon. Member had to say. He has no need to apologise for trumpeting the merits of one of the small businesses in his constituency. All hon. Members should do that from time to time. If the particular idea takes off, that would be excellent. I support some of the hon. Member's suggestions.
  Not only should BR clean up the carriages, but perhaps the passengers should be more careful not to provide so much mess for British Rail.
  I hope that the Secretary of State will at least note some of the comments made from the SDP Bench on this occasion.
  The Bill is part of the inheritance that the Secretary of State for Transport received from his predecessor. How much of the Bill is the direct responsibility of the Under-Secretary of State is a matter for him. Some parts of the Bill may be a continuing inheritance for those Department of Transport officials, whom we cannot officially see but who from year to year serve successive Secretaries of State in the same way that they serve successive Governments.
  As I am in an ecumenical mood, I commend the contribution made by my right hon. Friend—I appreciate that that is not technically correct—the Member for Barrow-in-Furness (Mr. Booth). Somewhere between the Back Benches and the Front Benches there must be more agreement on this Bill than there is on some other Bills,
  786
  though the Secretary of State did not introduce this Bill with the flair and energy with which he has introduced measures on previous occasions.
  The Bill is a rather strange mixture of Treasury and Department of Transport control. It is an attempt to combine in one Bill the allied but diverse interests of rail, road and the two major ports. A few weeks ago the Leader of the House told us that this Session of Parliament will be comparatively easier than the previous Session. He said that there would not be the same intense pressure to get legislation through that there was in the previous Session. If that be true, why is it necessary to try to combine rail and road financial interests with the financial aid and support for the two major ports, although there may be some similarity between them?
  The hon. Member for Faversham (Mr. Moate), the right hon. Member for Barrow-in-Furness mentioned and the House has not forgotten that only a few months ago Government financial aid for the port of London was made available by a Department of Transport Bill carried through mainly on the broad shoulders of the Under-Secretary of State. The financial support that was later made available for the Mersey Docks and Harbour Company was again a Department of Transport Bill presented and carried through by Transport Ministers.
  I am concerned—as I believe all hon. Members should be—that Treasury control and influence is coming more and more into the operations of transport and ports. Having said that, I would be churlish if I did not welcome the provisions of the Bill, although they may be only crumbs. Although not presented in a way that I would wish to see, the possibility of finance is provided. The provisions have arrived in a mixed package of road, rail and ports when I would have preferred a clear separation of Treasury and Department of Transport influence and control, and the finances of the ports of London and Liverpool to be considered in a separate Department of Transport measure, which could be called "Ports (Financial Assistance) (No. 3) Bill". Such a Bill should include more than the ports of London and the Mersey, because other ports require assistance. However, the provisions show that the Government can—although very belatedly and perhaps in the wrong way—try to do something to aid some industries.
  I ask some specific questions. I may not get answers from the Under-Secretary of State tonight, but they are questions that should be asked on Second Reading rather than waiting for Committee proceedings.
  In his introduction the Secretary of State gave some reasons for the financial provisions, but he did not explain why, for example, the present financial limits of the British Railways Board of £600 million to £900 million are to be increased, in clause 1 to £1,100 million at the lower end of the scale and £1,300 million at the higher end. The lower limit has been increased by £500 million and the upper limit by only £400 million. This is not a broad band. The money needed at the end of the term, however long that term is estimated to be, would purchase less than that needed at the beginning. It would have been more sensible to have an increase on a broad band rather than a limited one.
  The Under-Secretary of State for Transport (Mr. Kenneth Clarke): I may not have time to return to the matter when I reply to the debate. The apparent division is only a technical matter. The lower figure is that to which

  787
  the limits would be taken automatically by the Bill. The higher figure will require the approval of the House by an affirmative order. Therefore, the significance of the second and higher figure is that before it reaches that level the House has a further opportunity to review matters and to consider an increase in borrowing limits. The fact that there are two figures is a procedural device to oblige the Government to come back to Parliament if they wish to go above the lower ceiling. No timetable is envisaged. A limit can be raised by order of the House. Therefore, it is a technical point and there is no hidden significance in the way in which the bands have moved.
  Mr. Ogden: I am grateful to the Under-Secretary of State for that explanation, as far as it goes. However, a technical disadvantage of £100 million cannot be allowed to go through without some comment.
  I turn now to clause 2. The present financial limit of £3,000 million is to be increased to £6,000 million, with the possibility of an increase to £10,000 million by a later Order in Council. I claim that the Bill provides a possibility. The hon. Member for Faversham said that it is almost certain that that amount of money will be spent. If either of us is right, perhaps the Under-Secretary of State can provide more information, especially as to what proportion of increases will cover prudent estimates of inflation, what proportion will cover new Community regulations, what proportion will cover new British Rail ventures under old or new Community regulations or anticipated new directions from the Secretary of State for Transport, because they will be directly under his control.
  Clause 3 is the Treasury guarantee. Technically, there is a Treasury Minister on the Front Bench although I would be surprised if he were to intervene to support the Treasury clause. Clause 3 begins with the word "If', a word seldom used in legislation. The clause reads:
  "If the British Railways Board becomes a member of the European Company for the Financing of Railroad Rolling Stock".
  Are we correct to assume that the British Railways Board has every intention of becoming a member of the European Company for the Financing of Railroad Rolling Stock? If so, would not the words "should" or "when" have been more appropriate? Perhaps the Under-Secretary of State can tell us the extent of the proposed involvement.
  I turn now to the second part of subsection (1) of clause 3, which says that
  "the Treasury may guarantee the discharge of the Board's liabilities".
  Will the Under-Secretary of State tell us anything about the criteria on which he or the British Railways Board envisage guarantees being either sought or withheld? All hon. Members will welcome the intention of subsection (2) of clause 3, that Parliament will be informed by statements laid before each House from time to time about the terms, conditions and arrangements made under guarantee, even if the House will be informed only after those detailed financial arrangements have been made.
  I object to the detailed wording of subsection (4) of clause 3. It says:
  "If any sums are issued in fulfilment of the guarantee, the Board shall make to the Treasury, at such times and in such manner as the Treasury may from time to time direct, payments of such amounts as the Treasury may so direct in or towards repayment of the sums so issued, and payments of interest at such rate as the Treasury may so direct".
  The word "if' is less welcome than it was previously.
  788
  Many hon. Members will assume that that means a degree of intervention by the Treasury—not Transport Ministers—that has not occurred before. If so, this does not support what the Secretary of State said about the capability and dedication of the British Railways Board, because this degree of intervention in the day-to-day direction and control of the British Railways Board has not occurred previously. The Committee should therefore consider whether such control should be looser than presently envisaged.
  We can argue in Committee about the sums required to be paid in or out of the Consolidated Fund. However, I should like to say something about the National Bus Company, which seems to be the Bill's poor relation. Financial support for the NBC may be provided by clause 4 to increase the borrowing limits from £200 million to £250 million
  "or such greater sum not exceeding £275 million as the Secretary of State may specify by order."
  The Secretary of State almost overlooked the NBC in his speech. His intentions seem to be "We shall treat them mean and keep them keen. Therefore, we are reducing what they might otherwise expect". In addition, if there is to be an increase from £250 million to £275 million, this must be done by affirmative resolution.
  Any Government Minister should be prudent. Like housekeeping, the running of any Government Department, public or private company or other organisation ought to be proper and prudent. However, the Government should consider in Committee whether it is necessary or desirable to increase the limit from £250 million to £275 million by affirmative order. In view of the experience of the Department of Transport during the last three of four years, the Committee should take the view "Let us increase the limit to £275 million" and leave it at that.
  We should note the different ways in which this extra money is to be provided. The provisions of clauses 2 and 3, and the borrowing powers under clauses 1, 4 and 5 are subject to the control of Parliament. But clause 1 states:
  "as the Secretary of State may by order specify".
  Clause 2 contains the phrase:
  "as may be specified by Order in Council".
  Clause 3 refers to
  "Any sums required by the Treasury"
  but only provides for a report to Parliament. The provisions of clause 4 will come into force when the Bill is enacted, and perhaps by affirmative order by the Secretary of State. Clause 5 will be enacted by Parliament through the Bill. In other words, the Bill contains four different ways of providing sums of money. Is that necessary?
  Mr. Dickens: Perhaps I can be helpful to the hon. Gentleman. The help in clause 3 includes that to 16 European railway systems. It is therefore common sense for that to be a Treasury decision. I suppose there are special reasons why the sums are provided in this way, and what I have said is only one example.
  Mr. Ogden: The hon. Gentleman was trying to help, and I am grateful to him. However, I doubt whether any of this money will help any other railway transport system in Europe. I leave that to the Minister to sort out, but I doubt whether the money will help or support any European system, be it on this side of the lion Curtain or the other side.
  Mr. Kenneth Clarke: The hon. Gentleman has again been led into a tangle by my hon. Friend's offer of help. He is right to say that there is no question of our providing support for the purchase of rolling stock by any other European railway. EUROFIMA is a Swiss-based company to which British Rail may wish to belong. It finances the purchase of rolling stock by its member railways, and it may enable British Rail to purchase rolling stock by the equivalent of hire purchase on favourable terms, which EUROFIMA can arrange. Any borrowing by British Rail, or any purchase of that kind, will require a Treasury guarantee from Britain. That is one of the rules of EUROFIMA. I hope that short explanation explains why procedurally it looks on the face of it as if the Bill is different from the ordinary method of increasing the borrowing limits of nationalised industries or, indeed, the public service obligation of the railways.
  Mr. Ogden: I am grateful to the hon. and learned Gentleman. I suspect that the hon. Member for Huddersfield, West will be equally grateful that the Minister has clarified some of the differences. I doubt whether this will be the last time the question will arise, bearing in mind the complicated provisions in the Bill.
  As the hon. Member for Faversham said, large sums of money are referred to. Clause 2 refers to sums that the Secretary of State "may"—only "may"—have to provide in compensation. Clause 3 refers to guarantees that the Secretary of State "may" have to honour should British Rail fail in any of its obligations. Clauses 1, 4 and 5 refer to sums of money that British Rail, the National Bus Company, the Port of London Authority and the Mersey Docks and Harbour Company "may" borrow—not receive—from the Government, although there is a doubtful possibility that they may be able to get grants or loans from the Secretary of State.
  In fact, in hard terms the Bill does not commit Government expenditure of even a brass farthing. This is an enabling measure. I hope that the Minister will confirm that
  The "ifs", "ands" and "buts" are explicit in relation to the Port of London Authority and the Mersey Docks and Harbour Company. My former hon. Friend, the Member for Liverpool, Scotland Exchange (Mr. Parry)—I hope that he is still my friend—has explained the situation in the ports of the Mersey. However, clause 5 begs certain questions. Of the £160 million to be available under the Ports (Financial Assistance) Act 1981, how much has already been committed? We have heard stories about £60 million for the Port of London and the covering of the £3 million overdraft for the port of the Mersey. How much has been committed to London and how much to Merseyside? What grants, loans and guarantees, if any, have been made? I hope that between now and nine o'clock the Minister will check the claim made by the Secretary of State that some of the money to be provided can be used for purposes other than severance and redundancy.
  Section 1 of the Ports (Financial Assistance) Act 1981 states quite clearly that the money could be used

  "(a) for measures taken by them to reduce the number of persons employed in, or in ports adjacent to, their respective ports, being measures taken with a view to restoring the profitability of their undertakings; and

  (b) for the carrying on of their undertakings while such measures are being taken."

  790
  Many hon. Members will recall that when that legislation was before the House, the Opposition argued that the money ought to be made available for modernisation, development, maintenance, dredging, services and so on. We were told by the hon. and learned Gentleman and the former Secretary of State that the money would be used only for deficit funding, overdrafts and so on.
  Before the Bill gets its Second Reading it should be made clear whether the money available can be used for severance and redundancies only, or for development, investment or practical daily operating facilities. If so, this measure is different in degree from any others.
  Last year we warned Transport Ministers that financial assistance was too limited in the ports designated. Manchester, Bristol and the Hull ports have all experienced trouble because of the limited scope of that Act. We also warned that the funds provided for the two ports were not adequate.
  How does the Minister forecast the division of the extra £200 million? I should like to make a proposal that will not cost one ha'penny of new Government money. A proposal has been mooted on Merseyside that would aid the ports in the area, the urban development corporation and the inner partnership area, and would do what the Secretary of State for the Environment says that he wants to do on Merseyside—help investment, support and employment.
  The Government should say today—not tomorrow, or after the Crosby by-election or next week—that for all sorts of reasons concerning port development, employment and regional strategy, the ports of Merseyside would be their preferred ports for the development in the Celtic Sea and the Irish Sea.
  There is much oil and gas in the Celtic Sea, north of the Morecambe Bay fields, into the Western Approaches, south from the Isle of Man, past the Irish coast and beyond the ports of the Severn. The natural centre for that development, in the view of every Merseyside Member, is the port of the Mersey. We have shipbuilding, ship repair facilities, chandlering, support services, an airport and enough land in the docks for a heliport. All of this is supported by insurance, banking, commercial services and expertise.
  The Secretary of State knows more about the subject because of his previous role as Secretary of State for Energy and he will realise that the exploitation of oil and gas could be better controlled and organised from Merseyside than from any other part of the country.
  The Government would not have to put in a ha'penny. They need only say that from their point of view the preferred ports for that development are the ports of the Mersey. That would create incentives and hope that would be worth 6,000 jobs on Merseyside over the next five years—and all without a brass farthing from the Government. Merseyside Members of all parties, the development corporation, the chamber of commerce and, I believe, the Secretary of State for the Environment are all asking for that.
  The Secretary of State for Transport ought to be able to make such an announcement tonight. We have a right to ask for it. If it is not made, we shall be entitled to conclude that a decision to concentrate development elsewhere is being held back until after the Crosby by-election.
  I have taken more time than usual and I hope that the House will forgive me. This is a complicated Bill, which

  791
  will have a lively Committee stage. We may not be able to change the policies, but some aspects can be improved. The Bill shows that even if Ministers change Departments, monetarism, the. Treasury and the Prime Minister still rule. The only real hope for the railways, road transport and the ports of Merseyside, London and elsewhere is a change of Government.
  6.3 pm
  Mr. James Hill: This is the third transport Bill to be presented to the House in the past two years. I served on the Committees that considered the previous measures. The Bill has only five clauses, for which we are grateful, four being technical clauses. However, clause 5, which deals with financial assistance to the PLA and the Mersey Docks and Harbour Company, will have a ripple effect on the atmosphere of port life. Such ripples inevitably spread from any concession provided for Merseyside and London.
  I congratulate British Rail on its excellent service from Waterloo to Southampton and Bournemouth. The line has been electrified and coaches have been modernised. We have an efficient and reliable service, and we were even able to overlook the fact that my hon. Friend the Member for Christchurch and Lymington (Mr. Adley) once found some Russian matches in a restaurant car.
  I congratulate the chairman and staff of British Railways for maintaining an excellent service through the many distressing disputes of the past few years. The service to my constituency and beyond is efficient and punctual and has all the facilities that we desire in a railway service. As a pro-European, I can confidently compare it with the service in any EEC country. I say to some of my hon. Friends that sometimes congratulations get a better response from the work force of a nationalised industry than constant harping that pays no regard to whether the industry is efficient.
  As the representative of a port, I have been caused more heartache by clause 5 than by any other part of the Bill. Anyone who reads between the lines knows that the enormous sums that we are considering—an increase from £160 million to £360 million—are earmarked for the special severance scheme for registered dock workers. Our ports have to modernise in step with Continental ports. Containerisation has arrived, and there has been overmanning in the past because the national dock labour scheme made no allowance for modernisation or evolution in port work.
  Whether one loves or hates stevedores, one must accept that they are hanging on for severance pay. The Jones-Aldington agreement was drawn up when stevedores felt that they were being put upon and were at the bottom of the wages structure ladder. They grasped the agreement, as did the port employers, because it seemed that it would bring harmony to port operations.
  About 1,000 volunteers in Liverpool and London have been attracted by the severance pay, which goes up to a maximum of £16.000. More than 300 workers in the port of Southampton have accepted severance pay in the past few weeks, but they had been waiting for the increase that put them in line with the terms already offered in London and Liverpool. On grounds of principle, all severance pay should be at the same level. We should all agree that when my right hon. Friend the Secretary of State specifies the rates, they should be uniform.
  792
  The port of Southampton has had one of its worst years in living memory. We witnessed the distressing spectacle of the port, which handles international traffic, operating only during the hours of daylight and for only five days a week. There was the inevitable log jam. Container ships that came in had no time to turn round, and therefore no time to dock cargoes. They had to take them to other destinations, trans-ship on the Continent and send them back by the ferry services. Large ships were no longer calling and Southampton was losing traffic worth millions of pounds. That occurred because of a difference of opinion between the Transport and General Workers Union, representing the stevedores, and the British Transport Docks Board over fall-back pay. That is a colloquialism for the lowest amount of money a man can get without working in the port while still reporting for work each day. The fall-back pay was fixed by the board at £94 a week, and the stevedores felt that it should be £105 a week. The board refused the increase and the refusal led to the long period of daylight-only working from Monday to Friday. Millions of pounds worth of traffic was lost and there was a consequent general rundown.
  Although in most ports there are a number of unions, in Southampton there are as many as six. What the stevedores managed to get, the other unions also wanted. There was a ripple effect. The crane drivers, who belong to the National Union of Railwaymen, the boilermakers, who although there are only a few of them, have as much effect as though there were several hundred, the cargo checkers and other workers all wanted the same as the stevedores. It is now nearly December and the port of Southampton has been operating at a great loss for some eight months.
  The Bill will probably give more money for the special severance scheme, but the very basis of the scheme should be examined. My right hon. Friend said that no money would be available for revenue lost after the end of 1982.
  The Bill deals with London and Liverpool. But are the other 19 ports operated by the British Transport Docks Board subject to the same conditions? The disputes at Southampton have meant that the chairman of the British Transport Docks Board, Sir Humphrey Browne, will find it increasingly difficult to balance the books as Southampton is perhaps the largest port and the finest jewel in the crown of the British Transport Docks Board. To achieve the financial viability of ports in general, as well as those of London and Liverpool, the Government will have to look at the national dock labour scheme again. As modernisation creeps into the ports the same number of men will have less to do, but the employers will still have to employ and pay them the fall back pay.
  When it comes to the crunch, we shall probably find that the dock labour force is either too big, because the men are not taking advantage of the severance scheme in the belief that they may receive more money, or that so many of them have taken advantage of the scheme that the port has to employ temporary dockers. That latter outcome will create a similar state of affairs as soon as trade falls off again. I am sure that my right hon. Friend the Secretary of State will be looking again at the national dock labour scheme in the not too distant future.
  I am always extremely cautious about reading aloud in Parliament the letters of constituents, because often their views tend to be biased. However, recently I received a letter from a nearby constituency which seemed to come straight from the heart. The constituent writes:

  793
  "I had written to my MP on this subject during the previous strike and suggested to him that as the local Member of Parliament he should intervene before too much damage was done to the port. I also said that it was now quite evident that with this strike and that of the Civil Servants"—
  he is covering a lot of ground with that statement—
  "who by holding up exports are ruining the country, it was the unions who are causing much of the unemployment."
  I do not think that that can be said of a docks dispute. The problem is not the unions; it is the guidelines and rules within which they operate.
  The letter goes on:
  "It is absolutely ludicrous that these dockers are paid £94 a week for doing nothing. Are they attempting to make Southampton a Liverpool where they go every week and draw this amount?"
  By not reviewing the national dock labour scheme the Government are creating not only targets for those who do not understand the problems but an impossible industry for anyone to manage. We come very close to that state of affairs when a port such as Southampton makes the front page of Lloyd's List, as it did on 5 May 1981. The headline was "Dockers' clampdown hurts Southampton." Every shipowner throughout the world will have read that and asked himself "What is the good? How can we go there? If we do, shall we get in? If we get into the port, shall we get out?"
  Another headline that I saw said:
  "Southampton Port: A world-wide joke?"
  It is not a joke. It is a very efficient, modern port. Millions of pounds have been spent on the container port. It is a great asset to the South of England and to the United Kingdom as an exporting country. We never read that Rotterdam is a world-wide joke. We do not want to read that industrial relations in London, Liverpool or Southampton are a world-wide joke.
  Once and for all, we have to get harmony in the ports, and this is a good time to start. My right hon. Friend is in a wonderful position. He has increased the severance pay. He is now introducing a Bill which makes adequate provision for further severance pay. For the first time, he can deal honestly with overmanning in the ports. Having done that, he must bring the national docks labour scheme up to 1981 standards. He must do that, and do it quickly. A great port such as Southampton cannot wait. In many cases it has to move ahead of the Government, because it must attract trade.
  Some of the letters which I receive from my right hon. Friend the Secretary of State for Employment, say in so many words, "We cannot do anything about it. We cannot look at the issue at the moment. We would rather have a rundown of overmanning than have a complete rethink of the national dock labour scheme". I should have thought that most shipowners, and certainly most employers who employ dock labour would like to go back to the old system, when they took on and cherished their own workers, instead of the present allocation system. They took on the people that they needed. They were not forced into the terrible business of taking on eight men to do six men's work.
  The port of Southampton is still involved in a dispute, which will go on. There is no question about that. I have a letter from the British Transport Docks Board in Southampton, signed by the port director. He says:
  "Since troubles began in February the following services have left the port or are seriously at risk".
  794
  He then gives a long list, with which I shall not weary the House. There is no doubt that if our ports are to be viable and if we are to carry out the intentions of the last Transport Act to privatise 49 per cent. of the British Transport Docks Board's shares, we must have profits.
  My hon. and learned Friend the Under-Secretary, who served on the Committee with me, knows full well that his right hon. Friend intended to float the shares this autumn. There is no way now, in my opinion, of keeping to that timetable. If my right hon. Friend and my hon. and learned Friend have to look into the conditions in the port, the sooner they do so the better. The profit figures will then show again, and it will be possible to realise their dream—and my dream—of privatising the British Transport Docks Board.
  6.32 pm
  Mr. Donald Anderson: At one level, this small Bill is simply a technical Bill, a formal uprating of the borrowing powers of certain public transport undertakings. Yet every previous speaker has quite properly used it as an opportunity to make general remarks on investment in public transport and in the economy as a whole.
  The Government's mormal case against public sector investment is couched in these terms: that increased public sector investment leads to higher public borrowing, which leads to inflation and, by a "crowding-out" argument, thus deprives private investors of the resources that they need to generate economic recovery. Clearly, in times of under-used capacity, that is hardly a relevant argument. I believe that the Government will be forced more and more to respond to pressures from all sides to see public investment in a new light, because of the clear relation between public investment and job creation.
  We know that the Manpower Services Commission now estimates that it costs the Government £4,380 per annum for every unemployed person in terms of benefits paid and taxes forgone. Government borrowing is therefore pushed up, and the Government are on a steep learning curve in respect of the employment effects of their own cutbacks in public expenditure.
  We can test this proposition in respect of the railway industry, by looking at the effects of what would happen if the Government were to respond to the major possible investments in railways over the next five years—in electrification, investment in the London and South-East commuter services that British Rail has called for, the rail-air link to Gatwick airport, and preliminary investment in the British Rail-SNCF single-bore Channel tunnel link. All those projects are viable, all of them are at the starting block, and all of them could give a considerable boost to our domestic economy. Yet, because of the present rules, there is a barrier to their proceeding.
  If the Government were to invest over the five-year period in those major transport projects, there would be the following effects. They would generate almost 30,000 jobs by 1985, assuming that the investment was in United Kingdom products. One feature of all these investments is a low import content. The effect on the annual rate of inflation would be less than 0·2 per cent. per annum. The saving to the public purse in terms of the reduction in unemployment, social security benefits and taxes lost would be over £100 million per annum. That is half the

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  cost of the investment itself, and, of course, part of that investment would come, not from the public purse, but from private funds.
  Faced with these possibilities for public investment and with the pressures from all sides, including the CBI, for some moderate increase in public investment, the Government have adopted a wholly negative attitude. I responded to the Government's announced increase in the PSO, which is of course welcome, but it is irrelevant to the longer-term case for investment.
  The expectations that people who work in the industry and people who are interested in the industry held about 12 months ago of a brighter future for the rail industry have now been considerably dashed. As the result of the Government's responses and lack of decision over the past six to 12 months, there has been quite a sea change in morale in the railway industry. That is the backcloth for the productivity talks, yet the Government nevertheless expect the unions to make a full response to the ACAS agreements at a time when investment is being turned off. The Government refuse to accept this trade-off between investment, morale and the subsequent response of the work force.
  We know that the infrastructure of the railway industry is in considerable decay. The signalling systems are collapsing. I understand that the Marylebone to Aylesbury line is in desperate straits and that the workshop situation is also desperate. We understand from the British Railways Board that, as a result of financial constraints, there will be no new investment in 1982. Indeed, the board will be hard pressed to finance the continued investment on programmes already begun. That is the picture of decay that exists in this major industry.
  The Government have dragged their feet on all the major commitments that they made during the past year. I shall go through those commitments speedily, because my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) went through them in detail. The Government changed the rules on rail electrification, following the report of the joint working party and the expectations that were aroused as a result of the joint conclusions. The Government's refusal to sanction the Hitchin line electrification has meant that an experienced work force and 200 men working for Balfour Beatty have now been served with initial redundancy notices. That team will be very difficult to replace. What economic sense is there, when the Government repeat time and again that they have accepted the 10-year programme in principle—whatever that principle may be—in refusing to sanction in the interim period, a plan for the carrying over of that work force? They are prepared to countenance the disbanding of that group, knowing, as Balfour Beatty and the British Railways Board say, that it will take not less than 12 months to construct a team with that expertise, and all for a relatively small investment.
  British Rail says that the rationale behind the Hitchin line investment was that it was the cheapest option for keeping the experienced team in being so that it could continue from Bedford-St. Pancras to electrification in East Anglia. Investment in electrification would benefit British industry almost exclusively. There would be few imports. As it would mostly benefit existing manufacturers, it would assist areas of high unemployment. I have done some research and know in "South Walean" terms that South Wales Switchgear in Blackwood, the two major steelworks at Llanwern and Port Talbot, as well as several
  796
  other firms in this area of high unemployment would probably benefit directly from an electrification programme. In addition, the programme would act as a showcase for exports. The Government have been tardy and have allowed the team to be disbanded. They have undermined a substantial part of the progress that could have been made on electrification.
  I have mentioned the Anglian electrification programme. So far, the Government have maintained that it should be distinct from main line investment. Many press reports have mentioned that the Government's response to British Rail is that it should put up schemes. British Rail says that it has put up a scheme for electrification in East Anglia. Indeed, the scheme was proposed in November 1980, but the Department's officials bombarded British Rail with a plethora of questions. They ran out of questions about four months ago and therefore they cannot use that as a delaying device.
  For the past four months there has been silence. A potentially major step forward in the electrification programme is apparently thought of as distinct from the major programme, yet the Government seem to be doing nothing about it. They have had the papers for more than a year. One wonders whether the Government will seek to change the rules yet again and impose a new profitability exercise on the Anglian line. On normal commercial criteria, the line cannot be profitable. It was never meant to be "profitable". Will the Government seek to change the rules as they did in relation to the main electrification exercise?
  Targets are set. We have heard again today that the Government have set a target of break-even by 1985 for the inter-city lines. However, in this Government-inspired recession the effects are felt first by freight services—they have been felt somewhat earlier than expected in 1979–80—and then by the passenger services. Therefore, the Government are by their economic policies destroying the possibility of attaining the target that they set.
  Despite all the expectations that have been aroused, even the Channel tunnel—if we are to believe the transport correspondent who wrote in Saturday's edition of The Times—is in question. Apparently, only two options are now available. The jumbo British Steel project is no longer possible and the correspondent said:
  "Hopes of a firm decision on the Channel tunnel in the life of this parliament are beginning to fade after what promoters regard as feet-dragging on the part of the Government "
  Is this yet another missed opportunity? I shall be delighted if the Minister can contradict me. However, the timetable is moving against the Government. There will have to be a commitment by next spring if legislation is to be prepared in time for the Gracious Speech. This Parliament will be over before the Government will be able to give a firm commitment. If the Government can contradict that article, I and many others will be delighted.
  I turn to the new uncertainty about the Government's commitment to the network. The Secretary of State's predecessor, now Secretary of State for Social Services, gave a firm commitment to the existing network. He implied that there would be only minor reductions and no substantial reductions. Although the Secretary of State has used the word "substantial", most of us suspect that his interpretation of that word is more expansive than that of his predecessor. Given the pressures on the financing of

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  British Rail "substantial" is likely to mean that the network—or substantial parts of it—will be called into question.
  The rail union and the other two unions in the tripartite alliance are affected by the pledge that the former Secretary of State for Employment, now Secretary of State for Northern Ireland, gave of an open door and of access to him. That pledge has been repudiated by the newly appointed Secretary of State for Employment and will no doubt be reflected in the rail unions' response to matters that are asked of them.
  I turn to London and to the south-east region. The Minister gave a negative response to the report of the Monopolies and Mergers Commission. The report's conclusions might not have been quite what the Government expected. In their response, the Government have removed the room for manoeuvre that British Rail had. They say that there will be no more money and that there will be no increase in fares in real terms. Yet they say that there will be no reduction in the quality of service. Presumably, that will be interpreted to mean that there should be no closure of individual stations on the line. How will the problem then be met? We are told that it will be met by productivity. The report of the Monopolies and Mergers Commission made one point clear. It said:
  "The answer could not be found in productivity alone … it has to be recognised that achieving improved productivity depends to some extent on investment."
  Of course, better housekeeping may give rise to some savings. However, major savings will come from increased investment, in signalling—the Minister mentioned the investment in London Bridge—in automatic level crossings and from technological changes at ticket offices and so on. All that requires an undertaking to invest that the Government have not given.
  The Government can hardly request increased productivity at a time of economic recession. When the rail industry lost a large part of its work force in the decade from 1960 to 1970 about ¼ million jobs were lost. However, there was no Luddite reaction, because there was a boom and the men were absorbed elsewhere in the economy. The Government have asked now for increased productivity at a time of recession and they can hardly expect the same response.
  The picture of an inefficient work force being reduced and of the proceeds being used for investment hardly accords with what we know about the operations of the south-east region and the problems of recruitment in many parts of that area.
  Having looked over those areas of investment—the electrification programme in general, the Anglian electrification programme in particular, the Channel tunnel, and so on—where but a year ago there appeared to be a real future for the industry, it is now clear that the picture is very different. The Government are taking a harder line on investment in the industry and a negative response to the proposals, which must deeply affect the morale and the future of the railway industry.
  6.50 pm
  Mr. Peter Temple-Morris: I wish to speak mainly about British Rail, and therefore it is appropriate that I follow the hon. Member for Swansea, East (Mr. Anderson), who made a valuable contribution
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  to the debate. He made some good points and it will not surprise him, therefore, when I say that I agree with much of what he said. In our transport debates, not only in this Parliament but in the previous Parliament when roles were reversed, there has always been a reasonably constructive approach and a measure of agreement has been reached. There has been a continuity of policy on British Rail and in other areas. Most of the problems that we now face were faced by the Secretary of State's predecessor and his predecessor in the Labour Government.
  As I am speaking about the subject in a bipartisan way, this is an appropriate moment for me to welcome the hon. Member for Liverpool, West Derby (Mr. Ogden) in his new incarnation. It would be remiss of Conservative Members not to congratulate him, not only upon his new incarnation but on his somewhat rapid elevation to the "Front Bench". I trust that I am referring to the transport spokesman of the new party. If it increases its numbers to the extent that it has been doing recently, it will rapidly run out of portfolios. It is just as well, therefore, that the hon. Gentleman made his decision when he did.
  Mr. Ogden: I should be churlish if I did not thank the hon. Gentleman. The reason for my move to the "Front Bench", from my customary place for the past 17 years square in the middle of the Labour Party ranks with my back against the wall, is simply that in my old party it was safer to have my back against the wall. In this party it is a little different. There is no significance in the fact that I am speaking from this Bench. My comments in the debate did not commit my party. They were entirely my personal comments.
  Mr. Temple-Morris: Whatever party the hon. Gentleman speaks for, or whatever part of the House he speaks from, his speeches have always been typified by a moderation that we hope will continue.
  The hon. Member for Swansea, East spoke about public sector investment. I should like to refer to a few of his points and then reiterate them in my remarks in my own way. He related public sector investment to the Government's overall economic thinking. But I hope that he will have the grace to agree with me that there is no doubt that the public purse is not a bottomless pit. Equally, there is no doubt that if any nationalised industry or any other industry is totally secure in the knowledge that it will always receive public support to the extent that it needs and for the deficit that it creates, industry will not perform with the efficiency that we expect. We must try to create a position in which it can perform efficiently. We must try to obtain the maximum from the nationalised industries. Their performance in the past has proved that that is possible. I know that there are differences of opinion about that.
  Our discussion today concerns productivity and public subsidy, and the balance between the two. I appreciate that Opposition Members look more towards investment and that we tend to look more at the productivity angle, but a balance must be achieved and I hope that an accommodation can be reached between both sides of the House. Anyone who knows anything about other countries—where not only are there planned economies, but no discipline whatever in the public sector, not to mention the productivity and living conditions of the work force—knows what that can create.
  In terms of the public sector here, now or in the future, I should be the last to put my remarks in an absolute form.

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  I realise that there is a case for public sector investment where there is high unemployment. It is not for me to go beyond the parameters of the debate into wider economic arguments, but it is no secret to any hon. Member that these matters are being ardently discussed in various places at present.
  The hon. Member for Swansea, East made one good point that I take on board—I hope that my hon. Friend the Under-Secretary of State will take it on board—concerning the balance between public investment and productivity. In order to get it right, we must not destroy the morale of the British Rail work force. That worthwhile point should be borne in mind.
  One of the Government's errors—it goes far beyond transport matters—is that far too often the hearts and minds of men tend to be forgotten in the macro-economics argument. I have said that before and on one occasion I voted against the Government on such a matter. I know that my hon. Friend the Under-Secretary of State will bear that morale point in mind and that he will do his best for British Rail in the difficult economic circumstances.
  I come now to British Rail in general. I am convinced, and I know that many of my hon. Friends are convinced, that it has a vital future in the energy sense, in the environmental sense and in the European connection. I am concerned that the timetable for the Channel tunnel is turning against the Government. The project, has been subject to considerable delay, not just by this Government, but equally there is no credit to be taken by the Opposition. If we were not to follow that path now, I should be distressed.
  I know that unity on the matter does not prevail among Conservative Members any more than it does among Opposition Members. My hon. Friend the Member for Faversham (Mr. Moate) and I have disagreed in Committees considering Transport Bills before now. As a convinced European as well as being a supporter of British Rail, I am in favour of the project and believe that we should encourage it. I hope that the Government will be bold. The British Rail plan is a basic plan which is tailored to basic needs and can be privately financed. I hope that our approach will be even bolder than the basic one-bore tunnel plan. I know that there is scope for an increase there and that that will not be the end of the story even if it is accepted. When my hon. and learned Friend the Under-Secretary of State replies, I hope that he will deal with that matter. I appreciate that consultations are taking place. However, my right hon. Friend should deal with the suggestion that the timetable is moving alarmingly against Her Majesty's Government. It has been put to him that the issue will continue through this Parliament and into the next one. That has been said by the hon. Member for Swansea, East and it is a view that I share.
  There must always be a balance between subsidies and productivity. It seems that a greater reality is striking home. That applies to management and especially to the work force. I appreciate that there is a fear of unemployment. That must be acknowledged by anyone who has any human feeling. However, those who are in work must realise that efficiency is paramount if new jobs are to be created. They must recognise that we must be sufficiently competitive as a country if we are not to sink. That is the nature of the political and economic argument.
  There is now a better climate. We have avoided confrontation in British Rail of the sort that we have
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  witnessed in other industries. Fortunately, in the past few years there has not been too much major confrontation. By and large, British Rail's record is extremely good.
  I pay tribute to Sir Peter Parker. He is an outstanding chairman. The longer that he sees fit to remain in that capacity the better. He can communicate with and lead the work force as well as management. It is a work force that has one of the best traditions in Britain. It is in every respect a noble work force. I have said that before in transport debates and I am glad to say it again.
  As I have said, the work force must recognise realities. It has been extremely awkward in its time when progress has been sought. I am delighted that no strike took place this year. Reason prevailed on both sides. The test has still to come. That will lie in the final productivity agreement that is obtained from the unions. Confrontation was unnecessary and the climate prevailed in which some form of agreement was possible.
  The sooner that we get a confederation of railway unions the better. We have been plagued in our dealings with British Rail generally and British Rail has been put into almost impossible positions because there have been three unions with which the Government and BR have had to deal. There is talk from the union side that a conferderation is about to materialise. That will be part of the better climate that I think is prevailing. I would be the last to take extreme action from the employers' side that might create a strike and make it even more difficult to bring the unions together. Bearing in mind the leadership that Sir Peter Parker can give British Rail, the future of the industry, with the trend of developments and environmental and energy considerations running in its favour, will be extremely good. That future will be enhanced if the unions come together.
  It is necessary to show confidence in British Rail. There is within the organisation the sort of leadership that can avoid the lamentable happenings at British Leyland in recent times. There was near confrontation. That involved one of the major aspects of the company's activities. To slip back into a mini-confrontation of increasingly disastrous proportions over tea breaks strikes me as being sad. That is the sort of behaviour that the management of British Rail will avoid.
  There has been considerable progress on productivity within British Rail. It was agreed that a target should be set following the 1980 pay settlement and that became the shedding of 38,300 posts by 1985. To reach such a settlement and agreement is a considerable achievement. By the end of 1981 British Rail is expected to have shed 14,250 posts. Parcels and other loss-making services will contribute very much to that result, but that performance must have a bearing when we talk about the morale of the unions and their reaction to the formidable target of having about 38,000 fewer posts by 1985.
  We do not know the outcome of this year's wage settlement, but it is clear that progress is being made in certain areas. For example, we have open terminals. The fact that ticket barriers are not being manned is a relevant consideration. There are two pilot schemes, one in Scotland and one in the West Country. There is flexible working which has a bearing on the reduction of overtime claims.
  We no longer have guards on the trains on the St. Pancras-Bedford line. That general issue has been with us for years. The objective has finally been achieved on a line

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  that has been electrified. That shows that when faith is shown in the system there will be progress in other directions. I hope that we can all agree about that.
  Guards are being taken off freight trains and there are proposals for pilot schemes. Last but not least, an extension of single manning is being discussed. British Rail wants a relaxation of the rules that provide for two men to be in the cab. It is forecast that an agreement will be reached before long. That will be critical. If agreement is reached on that issue, many of the other matters will fall into place fairly speedily.
  In my view, nothing would bring about greater confidence within the work force of British Rail than progress on electrification. We have been bottom of the international electrification league among developed countries for many years and our position is becoming worse and worse. My hon. Friend the Member for Faversham talked about the disbanding of the electrification team, which we read about in the newspapers last weekend. That development must worry everybody. It will have a devastating effect on morale. My right hon. Friend the Secretary of State intervened to say that the team was being disbanded because the Government were patiently awaiting the production of schemes. He suggested that schemes were not being presented.
  It is a matter of concern when we hear that when any scheme or suggestion is submitted further questions are raised and there is further delay. Any suggestions for electrification in the initial stages of a 10-year rolling programme must be regarded as forming part of a constructive attitude. When the Government consider public sector investment, they must surely realise that there are few better candidates for such investment than the electrification of British Rail. The British Rail work force and others will lose confidence in the 10-year rolling programme if developments such as the disbanding of the electrification team recur.
  The 10-year rolling programme is grand in its conception. It sounds marvellous. To be fair to it, it was warmly welcomed by Sir Peter Parker, but it is full of "ifs" and "buts". It is up to the Government and British Rail to establish confidence in the rolling programme which would create the willingness of the work force to work out productivity deals. It is pivotal and a major factor in achieving the confidence of the work force and the consequent productivity.
  I have spoken for long enough on this important matter. I am grateful to the House and to you, Mr. Deputy Speaker, for listening to me.
  7.11 pm
  Mr. George Foulkes: It is a great pleasure to follow such a refreshingly positive speech about British Rail from the Government Benches. I did not disagree with one word that was said by the hon. Member for Leominster (Mr. Temple-Morris). Like him, I am an enthusiastic and unashamed supporter of our railway system. I say that as a willing taxpayer contributing towards it and as a regular user of British Rail network.
  An extensive and efficient railway network is essential for the industrial development that we desperately need. It is essential for the development of our tourism and of
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  leisure. That is so self-evident that I am depressed when I hear some of the negative remarks that are made about the railways.
  The railway system is environmentally preferable to the haulage of goods and transport of individuals by road, whether by lorries or motor cars. With regard to energy conservation, it is extremely beneficial compared with the alternative systems.
  I shuddered to read in The Times today that it was suggested that a business man should be appointed to look at British Rail. It would be an examination similar to the one that was undertaken when the mad Dr. Beeching carried out that dreadful chopping of the railways some years ago. I hope that the Minister will categorically deny the report and tell the House that there is no intention of bringing in anyone like that to deal with British Rail. As the hon. Member for Leominster said, British Rail has an excellent management and a chairman.
  The concept of the term "loss" as applied to British Rail is unfortunate. As has been said by a number of hon. Members, we are talking not so much about a loss as about a commitment that successive Governments have sought from British Rail through the public service obligation. It is the public service obligation that we put on British Rail that costs the taxpayers money. It provides us with the services that we request, and we must pay for them.
  Many of the current problems of British Rail, as is said in the annual report, are a mirror image of the economy. It is suffering from the recession and the downturn in the transport of freight and of passengers. That is because of the recession in industry and of individuals' inability to afford to travel. The best thing that the Government could do for British Rail, as for many sectors of our economy, would be to make a big improvement in the economy.
  We have heard some positive remarks about the intercity services. I echo those remarks. The inter-city services are improving. I have experience of that. However, the British Rail network is effectively crumbling at the edges. Outwith the inter-city network, in the feeder services to the cities and the peripheral services, there is a serious reduction in services on Sundays and in the evenings and in timetabling. Those reductions are creeping insidiously into the good services provided by British Rail. That reduces the attractiveness of the services and, together with the increased prices, results in a downward spiral of the railway system. The crumbling at the edges is not the wish of the British Rail management, still less of the British Rail unions. The crumbling at the edges is the result of a lack of investment and commitment by the Government.
  The hon. Member for Leominster efficiently and eloquently gave a catalogue of the improvements in productivity that have been brought about by British Rail management with the co-operation of the unions. He paid a gracious tribute to the unions for what they have done. However, he then talked about the need for electrification. I agreed with everything that he said, but he failed to link the two though they are linked.
  There was a bargain between the Government and British Rail. A bargain has two sides. The side of the bargain to which British Rail and the unions were committed was to improve productivity. The other side of the bargain to which the Government were committed was to increase investment. British Rail and the unions have kept their side of the bargain, but the Government have not. They have not given a commitment to investment in

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  the most important matter—electrification. Such a commitment would improve the morale of the unions and everyone else in the railway system, including the management. Therefore, the Government have let down British Rail management and the unions on that side of the bargain.
  At the Labour Party conference, which I attended, we all talked about the importance to our economy of increased capital investment. Every time we spoke about it, the first capital investment programme that came to every speaker's lips was electrification of the railways. I had an opportunity to watch on television the Social Democratic Party road show. When the members of that party talked about public investment, the first thing that came to their lips was electrification of the railways. The same thing happened at the Liberal Party and Conservative Party conferences.
  The consensus was that electrification was desirable. It would boost the economy, improve the service and help our energy needs by shifting from oil consumption to electicity. However, we have not seen the action. We have been long on talk and short on action. I hope that the Minister, because of the bargain struck by the Government with the British Rail management and the unions and because of the talk by all the parties about the need for electrification, will give us a little hope in his reply.
  I turn now to the electrification of the Ayrshire lines. That is different from main line electrification because the Strathclyde passenger transport executive is principally involved. British Rail has said that it is willing to go ahead with its commitment and its part of the expenditure. The Secretary of State for Scotland has given some reasonably helpful signs of his support. The ball is now in the court of the Strathclyde regional council.
  If the electrification of those lines does not go ahead, Strathclyde regional council will have to consider seriously the alternatives to electrification. In my view, there are three options. The first is to do nothing to the Ayrshire lines. Eventually, as sure as night follows day, that rolling stock will fall apart. It is in a grotty state at the moment. Any continuation will result in its falling apart.
  Secondly, the present diesel multiple units could be upgraded. That would still involve the regional council in substantial expenditure. It would not improve the service in the way that electrification would. It would be a short-term solution only and would put off the ultimate decision when electrification or permanent upgrading would have to take place.
  The third possibility is for Strathclyde, which is worried about the revenue consequences, to hand back responsibility for those lines to British Rail. That, however, would undermine the whole concept of the passenger transport executive, although there are some arguments in favour of it.
  As several of my hon. Friends have said, electrification brings a number of positive advantages. Electrification in Ayrshire would provide construction jobs on the lines in an area greatly in need of new jobs. It would also provide jobs in the building or refurbishment of rolling stock in Glasgow. It would use steel from the British Steel Corporation's plants in Scotland. It would speed up and improve the service. More people would use an electrified service in Ayrshire than use the present deteriorating service.
  If my colleagues in Strathclyde region are worried about section 20 payments, which I appreciate are
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  escalating enormously and represent a great burden for the ratepayer, I suggest that, if they do nothing to the railways, those payments will be enormously increased. There is no stopping that, given the way that things are going at present. But if they electrify the railway and improve the services so that more people use the line, the contributions are likely to be reduced. In the long term, it is a sensible investment. Therefore, I hope that Strathclyde will decide in favour of electrification.
  Under pressure from Ayrshire Members of Parliament, the Secretary of State has now offered a grant of 75 per cent. towards the capital cost of the electric multiple units. That will go a long way to help in the repayment of loan charges. In his letter the right hon. Gentleman also said that he would be happy to
  "submit the fixed elements of the scheme … for assistance to the European Regional Development Fund."
  Can the Under-Secretary of State say whether, in addition, EUROFIMA might have a role to play in financing the rolling stock on the Ayr line if British Rail were to join that body?
  I see great possibilities for electrification in that area. It is somewhat different from the main line electrification, but it involves the same kind of benefit to the area and to the service. I therefore hope that my colleagues in Strathclyde region will take an early decision in favour of the project.
  My last point on main line electrification relates to the Kilmarnock line, which is not included in British Rail's proposals for main line electrification. I hope that representations will be made by my right hon. and hon. Friends on the Front Bench and by the Government, as local Members of Parliament have already made representations, to persuade British Rail that the Kilmarnock line should be included. The line is an important means of access to Prestwick airport from the south through the Barassie-Kilmarnock link. It is an important alternative to the main line south from Glasgow in times of difficulty. It is also important in terms of access from Kilmarnock to Glasgow and from the Cumnock and Doon Valley district, which I represent. That area at present has no railway station, but if Auchinleck station were reopened—a matter on which I and my colleagues are currently pressing the regional council—60,000 people from that area would have access to a railway station. If British Rail provided an improved service on that line, there would be a great increase in railway use because of the rise in fuel costs and the difficulty of road access. I believe that there would be a resurgence in use of the Kilmarnock line, which would benefit not only the Cumnock and Doon Valley area but Kilmarnock itself. My hon. Friend the Member for Kilmarnock (Mr. McKelvey) is unable to be here, but he has asked me to express his support for such a development. There is therefore great potential in electrification if the Government will grasp the opportunity.
  I turn briefly to two points relating to the morale of workers within the railway industry as a whole—a matter which has been mentioned by a number of hon. Members today. Morale among workers in British Rail subsidiaries is very low. The morale of those working in Sealink and British Transport Hotels is extremely low, because the Government are giving them no encouragement whatever. Indeed, they are doing the reverse. If the staff make a success of anything, it is sold off. There is no encouragement for the workers to make a success of those

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  enterprises. There is an incentive to do the opposite. If they wish to retain management of their undertakings, it is beneficial not to make a profit, because, as soon as they make a profit, the beady, greedy eyes of the Minister find their way to it and hive it off to the Conservative Party's friends in the private sector.
  I realise that my next point is not the direct responsibility of Transport Ministers, but I am sure that the Under-Secretary of State takes a close interest in it, as, no doubt, does the hon. Member for Galloway (Mr. Lang) who I see on the Government Front Bench today. I refer to the report of the Monopolies and Mergers Commission on Sealink. I understood that the report was due earlier this month, but we have so far heard nothing of it. It is important for the morale of those working in Sealink that we should know as soon as possible what the position is. I hope, of course, that the bid by European Ferries will be ruled out by the Monopolies and Mergers Commission and by the Government. If it is seriously interested in competition, a Sealink service on the Stranraer-Larne line in competition with the Cairnryan service operated by European Ferries seems manifestly in the public interest, particularly now that the link between Liverpool and Belfast has ceased and shows no immediate prospect of resuming operations. I therefore hope that there will be some action on that matter.
  My last point relates to British Transport Hotels, and in particular to the Turnberry hotel. The decision to sell off that hotel is one of the most despicable decisions that the Government have taken. There has been a great deal of public investment in it. My right hon. Friend the Member for Barrow-in-Furness (Mr. Booth) recently visited it and was very impressed. There is a new conference suite and an indoor sports complex. Moreover, the annual report of British Rail shows that British Transport Hotels was gearing up to make a profit for British Rail. It had delegated responsibility to its managers. It had set up profit centres and was working towards making a profit. Morale has been severely depressed by the Government's attitude. As soon as it reaches that positive position, the potential for making money is hived off to the private sector.
  Mr. Kenneth Clarke: As I am unlikely to have time to dwell at length on the subject of the Turnberry hotel when I wind up the debate, perhaps I should make these points clear to the hon. Gentleman. First the deal leading to the privatisation of the Turnberry hotel was the creation of British Rail. It was not a Government decision at all. Preparations for it even predated our general decision on privatisation.
  Secondly, how does the hon. Gentleman reconcile his demands for investment of various kinds in the main rail business with his total resistance to any money being raised on the subsidiary businesses? Those undertakings have been a drain on the main railway for years. They have been cut off from outside investment by being under the railway umbrella and thus will themselves benefit from privatisation while releasing money for British Rail. British Rail has kept a stake in the new company. It seems to have had £4·5 million to spare for acquiring shares. The National Union of Railwaymen has also acquired shares. how does the hon. Gentleman reconcile his attitude to this aspect with his earlier remarks?
  Mr. Foulkes: I am grateful to the Under-Secretary for that intervention. But it contains two examples of doublethink. First, he pretends that British Rail came up with the proposal willingly, when in fact Ministers behind the scenes made it clear that if British Rail did not come up with some kind of proposal the Government would make it do something even worse. The Government twisted the arm of British Transport Hotels and British Rail to come forward with this proposal.
  The second piece of double-think is that the Government tell British Rail that it cannot have further investment for its hotels and then use that argument to say that, if the private sector is involved, investment occurs. Investment is not obtained because of the limit put upon it by the Government. Those are two pieces of doublethink that the Minister's intervention has allowed me to expose.
  I had hoped to hear the Secretary of State—I hope that the Under-Secretary will remedy this—say something about an "integrated transport policy". Those three words sometimes become almost a totem. There is, however, some meaning in them. What is needed is a rational policy of integration of air, sea, rail and bus transport, ensuring that there is no competition where this is harmful but that there is competition where it is helpful. We need to make sure that rail and air services link up sensibly and that there is no stupid rivalry. What we have from the Secretary of State is not an integrated, but a disintegrating, transport policy—a complete shambles.
  7.31 pm
  Mr. Michael McNair-Wilson: I hope that the hon. Member for South Ayrshire (Mr. Foulkes) will forgive me if I do not pursue his line of argument. I should start by apologising for not having been present throughout the debate. I hope that this will not bear too heavily on the remarks that I wish to make. I welcome the new Secretary of State for Transport, especially because he has a Treasury training, which I believe will be of the greatest value when he examines the problems of British Rail and the National Bus Company.
  I wish to concentrate on the National Bus Company and clause 4 of the Bill, which increases the financial limit of its aggregate borrowing. All hon. Members now present are, I am sure, aware that the National Bus Company came into existence in 1968 when Mrs. Barbara Castle was Minister of Transport. Under the terms of the commencing capital debt, it was prescribed that the debt should be repaid over the period from 2 January 1975 to 2 January 1984. One might have thought that this condition suggested that the amount of capital debt would be a fixed sum and that by the time 1984 was reached there would be some reasonable hope that the figure could be paid off. In fact, the capital debt of the National Bus Company has increased, if not annually, at least considerably, since 1968. It had a capital debt in 1971 of £99·6 million, in 1975 of £121·6 million and in 1980, according to the annual report, of £150 million.
  Within the financial structure of the National Bus Company its entire capital debt is repayable debt which its creator who, I remind the House, was Mrs. Castle, assumed would be paid back from the profits which the company would make. In fact, the National Bus Company has been unable to make such repayments out of its profits. Its repayments have had to be met by taking out loans at

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  high interest rates, which have served only to increase the financial burden of the company, no matter how efficient its management
  I was a member of the Select Committee that published a report on the role of British Rail in the 1976–77 Session. That report, in paragraph 288, stated, about the financial structure of the National Bus Company:
  "The National Bus Company is in the position of having its entire capital treated as a repayable debt. Since there is no prospect of such repayment from profits, the repayment instalments are met by taking out further loans at high interest rates, thus placing an increasing burden upon the company each year, whatever level of efficiency is attained by management. A comparable private sector business would generally display a capital structure composed in part of equity capital, in part fixed-interest capital and in part repayable loans. Both the National Bus Company and Scottish Transport Group—on whom similar obligations have been placed—have suggested that a more workable structure, in line with that of the private sector, could be adopted. The National Freight Corporation is also under a similar burden, described by its Chairman as 'a practice reminiscent of medieval usury'".
  Paragraph 289 states:
  "At the other extreme, two public sector businesses have received 'public dividend capital', i.e. capital equivalent to equity capital in the private sector. One of these is in the transport sector, the British Airways Board. At the end of 1975 some £280 million capital was held in this form. The intention is that interest should be paid according to profitability, as in a private business. However, very little interest has in practice been paid by British Airways on this capital, which in the short run could be regarded as a 'hidden subsidy'".
  Paragraph 290 adds:
  "Apart from the common element of loans from the National Loans Fund—interest on which is dependent upon the conditions of each loan—capital structures and repayment provisions appear to vary widely from one nationalised transport industry to another. The rationale for this is not clear, and in many cases arbitrary factors appear to be involved."
  One might say that those words about arbitrary factors being involved apply peculiarly to the National Bus Company. I have suggested that it it operates a financial structure not only different from private industry but different from other nationalised industries. As it was set up in the period of a Labour Government, it is difficult to understand the choice of this extraordinary financial burden that it has to carry year after year and which, this year at least, has tipped it well and truly into the red. My right hon. Friend, who brings Treasury knowledge to the job, will therefore realise with just how much enthusiasm I welcome his appointment and how much I hope that he will do something to clarify this nonsense.
  Its capital structure distorts the National Bus Company's financial performance. It damages the morale of those who work in the company. No matter how hard or efficiently they work, they still seem to find their company ailing and its financial burden increasing virtually year after year. In the past 10 years the National Bus Company's interest on its capital debt and its long-term loans has increased from £5 million in 1971 to £17·2 million in 1980. That may be one reason at least why the National Bus Company turned in a loss of £11·8 million in 1980.
  Mr. D. N. Campbell-Savours: Will the hon. Gentleman accept additionally that it has the effect of preventing fair and reasonable competition with those companies that have been licensed as a result of the Transport Act 1981?
  Mr. McNair-Wilson: That may be a different point. The National Bus Company's own express coach services
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  are doing well. I shall not therefore pursue an argument that I do not consider to be in the hon. Gentleman's interest but is an argument in mine.
  The Bill provides a further £50 million of borrowing to the National Bus Company. I presume that, like so much of its borrowing, this money will come from the national loans fund. I should like to know from my right hon. Friend at what interest that money is to be loaned. Whether the £50 million will provide new cash for National Bus or will end up, like so much money in the past, providing repayments for the interest that it has to find on its capital debt, must be anyone's opinion.
  The company may also require the additional £25 million over and above the £50 million to produce the necessary cash that it needs. But whatever is the case, this £50 million or £75 million will increase the National Bus Company's financial burden and will do little or nothing to ameliorate that burden. And so one may say "ad infinitum", for, because of its financial structure, I see no way by which the National Bus Company can ever repay its commencing capital debt and can ever get out of the hands of the lenders, even if the lender is the national loans fund.
  I hope that my right hon. Friend will have the courage to stop what I can only describe as a nonsensical tail-catching exercise. I hope that he will look at the structure of the National Bus Company with a view to reconstituting it on lines which, even if they cannot be made absolutely comparable with those in the private sector, would at least be in line with the more favoured sections of the nationalised industries.
  I add a local point. This autumn I visited the Newbury depot of the Alder Valley Bus Company which is the local subsidiary of the National Bus Company. Alder Valley sometimes calls itself Kennet Bus, and, on occasion I find it difficult to know where Alder Valley begins and Kennet Bus ends. But for the purposes of my speech, I shall refer to it as the Alder Valley Bus Company.
  Those who met me told me that the company's earnings annually were about £1 million, and that its outgoings were about £1¼ million, of which £180,000 was its share of the National Bus Company's interest repayments. In other words, every bus operated by the Alder Valley Bus Company carries £6,000 a year of interest repayment. Needless to say, as the figures show, Alder Valley is running at a loss.
  For Alder Valley to be able to continue to run the services that currently it runs, it must go to Berkshire county council for financial assistance. In other words, as a result of the financial structure imposed upon the National Bus Company in 1968, we have saddled it with a debt that it cannot pay, on which it pays increasing interest out of revenue which is ever harder to find and which, as it falls short of what it requires, must be made up by ratepayers.
  This is an extraordinary situation. It is so extraordinary that I cannot believe that my right hon. Friend the Secretary of State will allow it to continue. Therefore, in supporting his Bill, I do so seeing it as a short-term measure, a bridging loan perhaps, until such time as the National Bus Company's finances can be put in order, and in such a way that it is not asked to carry this absurd burden of debt.
  7.44 pm
  Mr. William Pitt: I have been present in the Chamber throughout the debate, but I have found little to give comfort to the hard-pressed commuters in my constituency, nor to those in London and the South-East in general. But it would be churlish to oppose the measures proposed in the Bill, if only because so little money is invested in transport in this country and transport undertakings are allowed to spend so little to improve transport. However, I am curious, as are other hon. Members, about the rather expensive, and third, change of heart that the Government have had over the docks. I should be very interested to listen to a further explanation this evening.
  I shall confine my remarks specifically to rail transport in London and the South-East. I welcome the increase in the public service obligation grant to British Rail. It is welcome news about immediate revenue, but again it offers no hope regarding long-term investment. If we are to believe the Secretary of State's replies to proposals that BR put to him, it seems very unlikely that we shall get long-term investment.
  In the Secretary of State's own words, his board's market research has shown that what the customer wants is most is better punctuality, reliability and cleaner carriages. I ask the Secretary of State to travel up to London on some of the carriages, which are not necessarily particularly dirty but terribly overcrowded, on some of the southern region commuter routes to Victoria and other London Stations.
  In his reply to BR's proposals, the Secretary of State made it clear that, first, there would be fewer carriages. How it is possible to achieve economies from eliminating guards without providing the necessary new rolling stock with sliding doors is a question that is carefully ignored. At present, the annual turn-out of electric multiple units is 220, which would give us, in all, 22 10-car sets. Admittedly, most of these would be for London, but when most sets have a half-life of about 20 years and the other part of their life is very suspect, one sees very little prospect of any real change in the plight of the commuter who does not have a proper and decent train in which to travel.
  While commuters would welcome refurbishment of old stock, one cannot take guards from the back of old stock unless one can put sliding doors in that stock. As far as I am aware, the existing BR commuter stock is incapable of being converted to take such doors, which means that if we want to take guards off the back of old stock, we must put new trains in place of that stock so that the trains can be efficiently and properly run without guards at the back.
  I gather that we are to have what are described in the jargon as higher load factors. That is what the customer understands as more standing and overcrowding. This means that planned crowding is being incorporated into already unplanned overcrowding when trains are late or when they have to be cut for various reasons—mechanical, meteorological or otherwise.
  Productivity will give little increase of comfort to South-East commuters because there is very little productivity that can relieve their plight on crowded trains, largely because most of the productivity there depends on how many men are on the trains. I have already explained my view on that matter.
  810
  There will be no money to improve travelling conditions—for instance, in much-needed station modernisation. Here I enter a little plea for Norbury station. After a normal rainfall, the platforms there are often awash with rain. On a particularly unpleasant day, passengers have to paddle through two or three inches of water to board their trains or leave them. With no more money for the modernisation of stations in the coming financial year, it seems that people using Norbury station and other unmodernised stations will have to continue paddling. Perhaps they should be issued with galoshes as they buy their tickets.
  On a serious note, it is illuminating to compare the subsidies received from the Exchequer by various types of commuters making a specimen 25-mile journey to central London. The British Rail commuter enjoys a daily subsidy of about £1·50 through the public service obligation. I add, as an aside, that if that subsidy were increased just, for example, to £1·75 per commuter per day, such a commuter would gain immeasurably from the investment that that increased subsidy could provide.
  However, the person who drives a car into London and parks free of charge in a company car park avoids parking fees of about £700 a year and taxation of about £1·25 a day. If the car in which he drives is an average—size company car, the daily subsidy from the Exchequer—not from his employer—amounts to more than £9 if he pays tax at the standard rate and more, obviously, if he pays tax at a higher rate.
  That means that the commuter to London who uses a company car is subsidised to six times the extent of the subsidy given to the person who has to come into London by rail. The worst case is the company car user who parks on the street. He is probably subsidised to the extent of £12 a day for his car and £1·25 a day for the space he uses, which is approximately nine times the subsidy enjoyed by the rail user.
  Clearly, in that case the tax regime under which company cars are operated is unfair and objectionable. It is especially nauseating to the hard-pressed, mortgage-paying commuter to be lectured on the evils of subsidised fares by members of the Institute of Directors and other such bodies, all keen supporters of the Government, who are not only provided with company cars but with petrol with which to run them, virtually untaxed. There is one set of standards for commuters and another set for those who enjoy pleasantly subsidised company cars.
  I offer one policy to the Minister that he might consider carefully—the tightening up of parking in London. The number of traffic wardens has fallen from 2,100 in 1975 to 1,300 in 1981. Some may not believe that, but it is the fact. That is not because there is no work for them—far from it—nor because none can be recruited. It is because the Government are playing the numbers game with levels of public service staffing. The systematic contempt of parking regulations by motorists, because the chance of receiving a parking ticket is so remote, and the means of avoiding payment is so easy, is a matter that demands attention from the Government. It is a national scandal that 5 million parking tickets issued in London during the past 10 years have gone unpaid.
  If the Government put their system of levying fines in order, that could provide a source of funds from which to raise the level of investment in public transport. We would especially wish that that money was used to improve productivity and provide reliable equipment. It is

  811
  incredible that the Government should be so doctrinaire in their approach to public transport that London, still the financial centre of the world, expects to spend less to support the provision of a decent public transport service than almost every other capital city.
  The Secretary of State has shown himself insensitive to the needs of commuters in calling for more crowded trains, fewer new carriages and more productive use of railway staff without the necessary investment. The transport services of London and the South-East, both those of British Rail and London Transport, have declined in quality and will continue to do so unless more money is spent on them.
  I speak not only about the passenger transport services. In South London especially we suffer from the juggernaut, which is not the subject of the debate. As I remember saying earlier, if we had built the rail link to Nine Elms we might have enabled railway investment to grow at a greater rate, because much of the heavy goods that now trundle up the Brighton Road and the A2—and other roads that were not built for juggernauts—could have been moved to the railway tracks, most of which already exist and could have been used more profitably than they are now.
  I wish the private car to be put firmly where it belongs—not clogging up central London or the suburbs, while moving towards central London, so that people can get in to work. It should be used for long-distance driving and pleasure. If the Minister was to take that suggestion on board, it would produce not only a useful source of revenue for a much-starved British Rail, but would provide a more pleasurable existence for thousands of people who do not necessarily travel by train but who are fed up to the back teeth with being clogged up in traffic jams and inhaling carbon monoxide fumes when they are trying to go about their daily work.
  7.54 pm
  Mr. Sydney Bidwell: I start by declaring my interest as a Member sponsored by the Transport and General Workers Union. I also remind the House that we have a Select Committee on Transport that has been hard at work since it was set up. It is a new feature of Parliament that Select Committees are now involved with every Department of State. What will happen if we are sensible is that we shall emerge with an exhibition of not too many differences and a concentration on practical considerations.
  The Leader of the House, in the debate on the Queen's Speech, spent about 10 minutes telling us how much more proficient Parliament is compared with the position before the new system developed. If he puts that emphasis upon our work, one hopes that the Prime Minister and the Secretary of State for Transport will also do so. The Secretary of State will find that—I shall not say that it is the finest body of men ever put together—the Select Committee on Transport has assembled Members of the House with a considerable background and experience in transportation. If we speak unanimously, logic says that the Government must pay close attention to us.
  We are engaged in a major study of urban transport and the London traffic mess. We are handicapped in this debate because we must not make direct reference to the current GLC fares scheme. However, the broader aspects of that problem must be part of a consideration of London's transport system. It involves a certain amount of
  812
  philosophy. We welcome the hon. Member for Croydon, North-West (Mr. Pitt) to debates on transport. He will find that he has much to learn when he rubs shoulders with those of us who have been involved in transportation debates for a long time. A consensus must emerge. The Secretary of State has already heard in the debate—which necessarily gave rise to wide-ranging thoughts about transport problems, the sufferings of commuters and those who have juggernaut lorries trundling past their front door, with whom we sympathise deeply—about the wide circumstances that arise from a limited Bill that we shall examine with more care in Committee.
  If the Secretary of State had considered carefully the evidence of the National Bus Company, he would have seen that it has a considerable argument about its longstanding and long-running capital debt, about which it has been complaining for a long time. One hopes that, whatever else arises from the existing circumstances and the Government's attitude towards assistance to the National Bus Company, it will not lead, as one participant has already suggested, to putting old vehicles on the road. A proud record of the National Bus Company has been the turnover of new vehicles. Those vehicles are always kept up to date, which must lead to a better and more efficent system. That policy is followed in the case of company cars for directors. The economy of the matter suggests that if there is a large turnover of cars, they will be more efficient and will break down on fewer occasions.
  That is the proud record of the National Bus Company. However, it is now affected by other considerations, such as the doctrinaire Transport Acts of 1980 and 1981. Some of us served wearisome hours in Committee considering those measures. The new Secretary of State has some Treasury experience. Although I do not know whether that commends itself to most hon. Members, it may be that he has blown in as a refreshing breeze. The proof of the pudding will be in the eating. His predecessor was regarded as a hard case and an avid Tory. However, we have not seen much evidence of that during these long exchanges.
  I must not pre-empt the Select Committee's report, which I hope will contain some sensible conclusions. However, its members have travelled in the United States, Canada and Western Europe in search of truth and knowledge. They wanted to know whether they could learn from the experiences of other civilised countries. We have learnt a great deal. The Select Committee will report to the House. It is not a handmaiden of Government, rather it is a Government tool. Ultimately, we shall present practical proposals based especially on what we have recently learnt from our visits to those other countries.
  It is fair to say that we are not hooked on the doctrine of privatisation. We seem to be hooked on the idea of some form of integration, but that may not necessarily be the old-fashioned ideas of the Labour Party. Over the years, our debates have involved certain sloganising about integration and co-ordination of all forms of transport. But what was appropriate in the 1920s, 1930s and 1940s must be re-examined in the light of events. In any case, we need a heavyweight surveillance of transport in all its forms, and that is particularly so of London.
  The question of London will be examined and re-examined in the light of the evidence that the Committee has taken. In particular, we must consider the illogicality of the GLC's domain. The bulk of the London Transport railway network system is to the north of the Thames.

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  There is a long history of curtailing underground development south of the Thames because the Southern region was the pioneer of electric traction.
  I was amused by what the hon. Member for Huddersfield, West (Mr. Dickens) said about the old days of railway competition. There is no railway competition. From 1921 onwards, one could never talk about railway competition. The various railway companies reached agreements and pooled ideas. At that time, we had such things as the railway clearing house. The railway system was over-ripe for nationalisation when the Labour Government nationalised it in the post-war period. A lot of nonsense is talked about these matters. We are certainly not looking for fierce competition between the various modes of transport, although views may differ on accent and emphasis.
  I am glad that hon. Members, particularly my right hon. Friend the Member for Barrow-in-Furness (Mr. Booth), laid emphasis on the affairs of the National Bus Company. The bus and taxi workers must be involved if our transport system is to develop. Those workers must be willing partners in any new concept.
  Some hon. Members may have seen the article in The Sunday Times alleging that British Rail had clashed with the Secretary of State over an electrification plan. It should be borne in mind that the leaders of the railway workers confront these problems in the interests of the people they represent. They want not only a modernised railway system, but better pay and conditions for the work force.
  It may well be that the Government will get co-operation from the workers by shedding some jobs. But as a former railway worker, I have never been enamoured of the idea that productivity could mean having no railway workers on the trains. As the hon. Member for Croydon, North-West said, there is still a powerful case for retaining someone to be in charge of the train other than the driver. That was the origin of guards. I was a freight guard for many years, but I often worked on passenger trains.
  The vast majority of our road workers are freight workers. In spite of what the hon. Member for Croydon, North-West said, the bulk of the nation's freight transport will continue to be carried by road. However, I concede that a powerful case can be made for a change to rail—for example, with regard to explosives and certain other traffic.
  The Government must deal with the workers involved in the industry. They are dealing not with unorganised workers but with people who have a rich tradition of trade union organisation. They expect to be consulted all along the line. The transport workers are not unprogressive. They realise that the transport system of the 1920s is not suited to the 1980s. They will be co-operative, but the Government must be realistic. They must recognise the importance of the transport workers to the economy. It should be remembered that as we speak thousands of workers are involved in our transport system, many of them throughout the night. If we want their sons to be involved as well, we must give them a fair crack of the whip.
  8.8 pm
  Mr. Peter Fry: First, I apologise to the House and to my right hon. Friend the Secretary of
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  State for missing his speech. I have been acting chairman of the Select Committee on Transport for most of the afternoon and early evening. Hence my late arrival.
  Secondly, as on previous occasions, I declare my interest in the National Bus Company.
  It is a pity that the hon. Member for Croydon, North-West (Mr. Pitt) has left the Chamber. I did not intend mentioning the London problem, until I heard the hon. Gentleman trot out every environmental prejudice that I have ever heard in my life. I do not know how many of the hon. Gentleman's constituents are members of the Institute of Directors, but, even if they received no subsidy at all, there would be little additional money available for the rest of his constituents who daily commute by rail.
  The message that seems to come from the new alliance is "God help you if you own a car, because we will clobber you." I hope that that interesting message wings its way further north before Thursday morning. It was interesting that, yet again, we heard a recital of the ways in which more Government money should be spent, with only an airy-fairy indication of how it should be provided.
  Various comments have been made about the fact that the Secretary of State has come from the Treasury. Like my hon. Friend the Member for Newbury (Mr. McNair-Wilson), I welcome my right hon. Friend to his new post. When my right hon. Friend first saw the Bill, he must have said "Good heavens, am I a member of a Conservative Government? If ordinary people look at the Bill, they will see an initial increase of £3,000 million to £6,000 million payable to British Rail, with provision for another £4,000 million by order. Is this the skinflint Government that will not invest in public industry?" There are signs in the Bill which clearly show that the Government are investing, dare I say it, far too much money in public industry.
  I am particularly concerned about the £200 million grant increase for the Port of London Authority and the Mersey Docks and Harbour Company. I shall not venture, as the hon. Member for Liverpool, West Derby (Mr. Ogden) did, into the affairs of the Mersey company, but everybody knows that the Port of London is dead, and the problem is that we have to pay the corpse millions of pounds of taxpayers' money because it will not go away. It is high time that the Government settled the Port of London problem, grasped the nettle and accepted that the port is finished. The taxpayer must be relieved of the responsibility.
  Mr. Nigel Spearing: The PLA is not finished. London is still Britain's biggest port.
  Mr. Fry: The main expenditure in the Bill relates to British Rail. As I understand it, the Bill is merely a continuation of previous legislation and effectively tops up the amount made available for what is known as the public service obligation of British Rail—what Sir Peter Parker is fond of calling his "contract" with the Government.
  As an EEC member, the United Kingdom is bound by regulation 1191/69, which allows member States to support certain transport undertakings. There is no dispensation in that interesting document to pay for anything like the public service obligation. It specifically allows for payments
  "in respect of any route or installation."
  They are specific words. British Rail is paid annual vast sums which are not specific. I hope that my right hon. Friend will answer that point, but perhaps we shall learn the answer in due course.

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  We are presumably supposed to adhere to regulation 1191/69, which provides that support should be
  "the least costly to the community".
  The regulation continues:
  "The adequacy of transport services shall be assessed having regard to the possibility of having recourse to other forms of transport and the ability of such forms to meet the transport needs under consideration."
  That brings me to the money being made available for British Rail. It is no great secret that large portions of the British Rail network, loosely called "the country services", are hopelessly uneconomic. I appreciate that my right hon. Friend's predecessor—for whom I have the greatest admiration and regard—went on record in the early part of his office saying that there would be no cuts in the British Rail network. I have felt that that statement may subsequently have been a slight embarrassment to British Rail, which knows perfectly well that an enormous amount of taxpayers' money subsidises lines which are little used, particularly by passengers.
  If the Secretary of State and the Government are serious in their attempt to check the unnecessary expenditure of public money, it is high time that they reconsidered the economics of country lines. We must maintain the intercity service and the community networks for our major conurbations. However, if we are to adhere to the EEC regulations, is it not time that we considered alternatives to the existing expensive rail services which are not being used? I hope that my right hon. Friend will consider the matter afresh.
  As a member of the new Select Committee on Transport, I know that it has reiterated the decision of the previous Select Committee on Nationalised Industries regarding the finances of the National Bus Company. It is strange that we are contemplating an enormous increase in the amount of money to be made available to the rail user over the next few years, whereas most of those who travel by public transport will receive a very small subsidy.
  I appreciate that it is difficult to make comparisons between rail and bus travel. If one considers passenger mileage, which is probably the best comparison, one discovers that the rail user is subsidised four times more than the bus user. However, the majority of people who use public transport travel by bus. I do not believe that the present situation should be allowed to continue. It is not only the National Bus Company that finds life difficult. Every bus operator finds it difficult to make a profit, particularly with the problems of replacing worn-out vehicles.
  The Bill concerns subsidising, and we are talking about subsidising the transport sector.
  Mr. Ogden: The hon. Gentleman seems to be under the impression that the Bill will physically provide money for British Rail, bus transport or the "corpse". However, the Bill provides not a single ha'penny for those organisations. It provides the possibility, with the good will of the Government and the Secretary of State of the day, that organisations may borrow money from somebody else or, in a limited number of circumstances, may obtain a loan or grant from the Government.
  Mr. Fry: The hon. Gentleman will surely agree that the PSO will represent the greatest chunk of money in the Bill. I appreciate that my right hon. Friend the Secretary of State will discuss with British Rail next week the size
  816
  of the PSO for the next year. I do not deny that that is necessary, and I am not suggesting that British Rail breaks even or that it should receive public money. However, there is a large discrepancy between the support given to British Rail and the rail user—we must be particularly concerned about the transport user—and the support given to bus services.
  British Rail is subsidised far more than bus operators. Problems will continue in relation to bus services, no matter how many experiments are introduced by the Secretary of State, until the nettle is grasped and we decide how far to subsidise public transport as a whole. I am trying to point out the differences between the amounts given to rail users and those available to bus users. If the Government are serious about providing an effective transport system, they must answer that question.
  The most important aspect of all is that the moneys are not payments for transport—they are social service payments. No Government have ever faced that fact. They always pretend that the money is for transport expenditure, but it never has been and never will be. Despite the passes for old-age pensioners and young people the cost of transporting them is the same, no matter how much the bus company or British Rail has to charge them.
  There is an opportunity for the Government and the new Secretary of State to look again at the subsidies for public transport. I hope that the Secretary of State will bring the analytical mind of an ex-Treasury Minister to bear on the problem. The country is crying out for a transport policy that accepts the realities and is not based on myths such as those I have tried to explain.
  Mr. Booth: I am appalled at what the hon. Gentleman is saying. Is he aware that our total subsidy for public transport is probably lower than that of any other EEC member and that the amount that BR collects in fares as a proportion of total operating expenses is probably higher than any other railway system in the EEC? Is he suggesting that the other EEC Governments live not in the real world but by myths?
  Mr. Fry: That is not what I am saying. The money spent is not transport expenditure—it is social services expenditure and should be treated as such. Looking at it in that light might lead to equal treatment for the various forms of public transport.
  The Bill follows historic precedents. British Rail is subsidised enormously, although every year it and the Secretary of State have words about the level of the Government's contribution. Because the National Bus Company has to break even each year, it ends up with mounting debts. That is not very sensible.
  There are transport costs which are constant, no matter how efficient the operator, but if that operator has certain social obligations to provide a service, whether rail or bus, there is also an obligation on the Government to underwrite that as a social services, not a transport, cost.
  It is not that I believe that there should not be a degree of subsidy. No rail system could run without a subsidy. But we could run the inter-city and commuter lines without such a large subsidy if we considered the future of the country lines. More money would then be available for investment. The right hon. Member for Barrow-in-Furness (Mr. Booth) was right when he said that British Rail had been starved of investment. There should be money for

  817
  electrification. It would take only £20 million a year for five years, rising to £30 million a year for another five years, for British Rail to have a fine, modern system,
  However, for years we have been stuck in a mould of financing public transport—a mould which the Bill perpetuates. We shall continue in the same way until one Secretary of State grasps the nettle, looks at the question again, and realises that subsidies for most public transport should be the responsibility of another member of the Cabinet.
  8.24 pm
  Mr. Bob Cryer: I shall be intereste in what the Secretary of State says about the way that the Bill affects the external financing limit. If the public service obligation grant is increased, will that be within the framework of the external financing limit which will then force British Rail to cut down its borrowing requirement? What British Rail needs is the ability to undertake extensive investment. I shall cover one or two points and then give examples of the effect that the lack of investment is having.
  We have heard about the need for electrification, and British Rail has announced that its electrification team is to be broken up. It will take at least 12 months to reassemble the team, and it is possible that its expertise will be scattered throughout the world, with former team members gaining employment in other countries where the electrification of railways is going ahead, making the team irrecoverable for at least 12 months.
  The hon. Member for Wellingborough (Mr. Fry) spoke about the country areas, where services are much appreciated. They are maintained by ageing diesel multiple units. The same is true of urban areas outside the London region. British Rail wants to provide good services to its passengers and to attract more passengers, but it cannot do it if maintenance work is pared to the bone so that, if there is a difficulty with 20-year-old DMUs—and I accept that a portion of the fleet has been refurbished—maintenance facilities are scattered so far and wide that often it is difficult to get out maintenance fitters to do the necessary work. It is a frequent experience at my own station of Keighley to join a diesel multiple unit which is being locomotive-hauled because there has been no time or opportunity to repair the DMU at its base at Morecambe. This is a very costly exercise, and it is only necessary because of the lack of investment by British Rail on replacing its fleet.
  There are two experimental vehicles in operation—one is a multiple unit and the other is a rail bus. But I have no doubt that the Minister will say that he has received no plans from British Rail for an investment programme to replace the DMU fleet.
  British Rail's difficulty is that it is living from hand to mouth and has to wrest every penny from the Government even to maintain existing services, without embarking on a massive investment programme necessary to replace the fleet. However, the Minister can help. He can say to British Rail how much he will welcome proposals from it for such a replacement programme. One of British Rail's difficulties is that, because it is not sure how electrification will be proceeded with, some areas will have their multiple fleets replaced by electrification. If the area north of
  818
  Hitchin, for example, is extended by electrification a number of diesel multiple unit links will be released for use elsewhere.
  If the Minister is prepared to say that the Government are willing to finance the investment necessary to replace diesel multiple units, British Rail will be able at least to plan with some certainty. That is an opportunity which I invite the Minister to take. Services in West Yorkshire badly need replacement vehicles.
  I want to illustrate how the curbs on investment imposed by the Government on British Rail work out in practice. The Eastern region is near break-even point, give or take a few million pounds. But other regions are looking for ways to make ends meet. I suspect that the London Midland region has decided that it will make ends meet by closing the Settle-Carlisle railway—76 miles of country route of the kind referred to by the hon. Member for Wellingborough who, from what I gather, is a bus and road spokesman—to take away expenditure which it would much prefer to embark upon to maintain a valuable railway system.
  Such a decision will affect my constituency. It will reduce services at Keighley station. It will mean a diversion of the Nottingham-Glasgow services. British Rail proposes to introduce this change in May 1982. It will mean passengers in the Leeds and Keighley areas of West Yorkshire no longer having direct services to Glasgow and as far south as Nottingham. In addition, there is the proposal to remove entirely all inter-city links between Leeds and Nottingham. It is not just the country routes which are affected.
  What is the reason for that proposal, apart from simply wanting to get rid of the cost of maintaining the line? The reason, according to British Rail, is that the cost of maintaining the Ribblehead viaduct—which it has suddenly discovered, although it has been working on it for the past 20 years—will be several million pounds, if it is to be made structurally sound. In my view, British Rail is using that as an excuse to offload its debt in order to break even—a requirement that the Government place on it.
  To close the line would be an enormous tragedy. The railway provides services, not just between Settle and Carlisle, but also in my constituency. The biggest revenue-earning point is Leeds, so there will be a diminution in British Rail revenue. The line also enables people, in a scheme which is unique in this country, to go without cars into the Yorkshire dales, with bus-linking schemes at some of the stations. It is an experiment which has proved extremely successful, and it was pioneered by the Yorkshire dales national park. It takes thousands of people into the dales to enjoy the beauty without the accompanying problems of thousands of cars, either parked or crowding the roads.
  If the services are diverted, as British Rail proposes, and lower standard services are substituted, I believe, as do many others, that it will be a back-door method of closing the Settle-Carlisle railway. My hon. Friend the Member for Carlisle (Mr. Lewis) is present and would willingly endorse what I say. Because of the beautiful nature of the line and the extraordinary scenery that it passes through, and because of the nature of the dales rail experiment—which has been successful, has revived several stations, and is much appreciated by the people of

  819
  the area and further afield—the Government should say "Yes. Investment is needed in the short term—not a long-term scheme, but here and now."
  This is another example of how big public organisations such as British Rail tend to skimp when they are short of money. Seven years ago, for example, Ribblehead viaduct was not waterproofed—to save money. It can be argued that the present difficulty is a consequence of that decision. I understand that the London Midland region has already halted all track replacement expenditure and all further work on the Ribblehead viaduct and associated viaducts along the line.
  We are talking about a national asset. I am sure that the story can be repeated elsewhere. It behoves the Government to provide additional expenditure so that a region of British Rail should not be put into the position of having to break even, as it is being asked to do by the Government.
  I want to comment on the whole British Rail network, with particular regard to what the hon. Member for Wellingborough said. He seemed to be very critical of the support that the Government give to the non-paying services run by British Rail under the public service obligation. We have an 11,000-mile network of passenger services in this country. They are a vital national asset. Our oil reserves are finite. Whether or not additional oilfields are found to extend our oil reserves from 25 to 30 or 35 years, they are finite. The railways represent a vital form of transport for our people. If the Government allow the 11.000-mile network to be diminished in any shape or form now, because of temporary financial difficulties which they have imposed on British Rail, it will be a loss for future generations. We shall need virtually every mile, and more, of the passenger network.
  8.35 pm
  Mr. David Gilroy Bevan: I have listened with great interest to the debate and I am amazed by the amount of accord that seems to exist on both sides of the House on the basic issues.
  My background is that I was honoured, before being elevated to this honourable House, to chair the West Midlands county council transport and highways department. Before that, I chaired the West Midlands passenger transport authority and before that, the city of Birmingham transport authority. Therefore, I have a deep and abiding interest in public transport. We found it possible to integrate public transport, although it is said that that is not being done elsewhere.
  I pay tribute to the Labour Government. Much as I opposed the Transport Act 1968 at the time, it gave us an opportunity to integrate and we found that we could put together schemes at very little cost. We built five new suburban railway stations—the first in the country—and refurbished another seven stations. We provided completely refurbished stock. We joined one side of the city to the other, from Four Oaks to Longbridge. We created over 50 marshalling service facilities at Tysley and upgraded all the suburban railway services.
  The cross-city line led to a 3,000 per cent. increase in passenger utilisation. There will come a time when the refurbished stock, with new brakes, new exhaust systems and internal furnishings, will come to the end of its life. Some of the stock was 20 or 30 years old when we refurbished it. Therefore, at some time the refurbishing question must be faced. I note with interest that as a
  820
  prerequisite to firmly joining—I hope—EUROFIMA we shall at least have a Government guarantee that our membership will be paid. Indeed EUROFIMA is an organisation of 16 countries that will examine similarities in stock and possible areas of standardisation. We shall then be able to examine the possibility of buying standardised stocks at cheaper prices than our techniques and our buying facilities in this country might allow. When the Secretary of State has had a chance to analyse the tests on the two-car train—and whether it can stand the various stresses that will be placed on it—and when he has seen the proposals for the new multiple unit, the time will be right for renewing stock. After all, it must be borne in mind that that will have to be done.
  When I go to the local station that I had the honour of planning—"Birmingham International" station, near my constituency—I might have to wait 20 minutes or half an hour for the excellent train because urgent attention should be given to refurbishing and repairing railway lines. Line maintenance and replacement should be given the first priority. Electrification is also important, and the Government have committed themselves to that over a steady 10-year programme. In addition, new stock is necessary.
  I agree with Opposition Members that the railways are part of our national heritage. As the hon. Member for Keighley (Mr. Cryer) rightly pointed out, it is essential that our public transport system should not be wound down. The newly appointed Secretary of State has said that he does not believe in railway cuts and intends to keep the lines and services in existence.
  I come back to the comments of my hon. Friend the Member for Newbury (Mr. McNair-Wilson). I well remember the Select Committee on which he served in 1966–67 because I had the honour to give evidence to it in the House. He mentioned that the Transport Act 1968 was created in an unfair manner and gave an unfair form of accounts to the National Bus Company. That is true. It also allowed the heart and guts to be taken out of the NBC in the cities. I know that, because it was my job to negotiate the purchase of the Midland Red Bus Company in the West Midlands for about £4 million, which the National Bus Company had to pay back.
  I give another warning. We are now in a position where morale in British Rail may be low because of privatisation, although some areas should properly be privatised. Let us not be guilty of doing the same thing with the National Bus Company. As soon as we have given it the extra money—we are increasing its borrowing limit by £50 million to £250 million—let us not force it to sell its motorway express undertaking, which is giving the very profitability that will reduce the amount of subsidy and borrowing that will be necessary in the future. I hope that we do not immediately siphon off those areas and merely leave the parts that cost the money and need the subsidy.
  The hon. Member for Croydon, North-West (Mr. Pitt), in a flippant speech—on which I congratulate him—"bashed" the motor car. But in transport we should get the mix right between trains, freight, buses and cars—jeopardising no one as far as possible. That is not abusing the transport system as, for example, the West Midlands metropolitan county council is doing at present, where there are the most ridiculous and extreme reductions in fares. A child can travel anywhere in the city at a 2p

  821
  fare and can create much nuisance and vandalism. That is an abuse and that is why the Government must find subsidies.
  Surely this Bill is good news. It includes an increase in British Rail's borrowing powers of £200 million to £1,100 million; an increase of grant to the board of £6 million with another £10 million to be given as and when necessary; the joining of EUROFIMA; and the increase to the National Bus Company. Surely the proposals on the docklands must be admired, whether in Merseyside, the City of London or the Isle of Dogs as an enterprise zone. We are getting to grips with the matter. Money is being made available to transport. I congratulate the Government on getting the balance right and I hope that the good work will be kept up. Like all hon. Members, I hope that the Channel tunnel will be built and I should like a car extension in the future, if possible. I should also like rolling stock to be refurbished.
  There are lessons to be learnt from the 1968 Act. One may be that it is necessary, for example, that the monster that we created in the form of the metropolitan county councils should be wiped out and that we should return transportation areas to the areas that existed over meaningful distances when we formed the passenger transport authorities. I congratulate the Government and wish the Bill well. I am certain that it can only be good.
  8.45 pm
  Mr. Ron Lewis: I must declare my interest because I am a member of the National Union of Railwaymen. I am sure that my union will be delighted with some of the remarks uttered by the hon. Member for Birmingham, Yardley (Mr. Bevan). If a Division takes place, I hope that the hon. Gentleman will express his feelings by supporting the Opposition.
  Transport, especially rail transport, seems to be demoted to the bottom of the league table by most Governments. I have the honour to represent what was one of the best railway cities in the United Kingdom. In the days before nationalisation seven railway companies ran to the Citadel station at Carlisle. British Rail used to be the largest employer in the city. I regret to say that that is no longer so. Since the Beeching proposals, we have been well down the rail transport employment league table.
  I take up the remarks of my hon. Friend the Member for Keighley (Mr. Cryer) about the possible closure of the Ribblehead viaduct. In April the joint branches of the railway unions in Carlisle heard that the viaduct was to be closed. They saw through that closure the beginning of the end of the Carlisle-Settle railway.
  Railwaymen are rightly suspicious. There is always the tendency to start a gradual rundown and to use that as a reason for final closure. My constituents are worried. I met them, and arising from that meeting I contacted the general manager of the London-Midland railway. I asked him whether he could tell me what was happening about such a rare piece of railway line. The deputy manager informed me that there were difficulties. He said that it would cost slightly more than £4 million to make the Ribblehead viaduct operational. He added that no decision had been made on the region's advice. He assured me that when a decision was taken he would advise me so that my constituents could be informed. That is where we stand.
  822
  The general cry from both sides of the House and from the three or four parties whose representatives have contributed to the debate is that we must have more Government investment in better transport, whether by bus or by rail. We appreciate what has been done for the railways, but my union feels that, unless there is more investment, British Rail and many of its lines will be dragged to a complete halt within a few years because of outdated equipment and machinery.
  I am told that it would cost about £4·5 million to put the Ribblehead viaduct in operation. I believe that we can save that wonderful piece of railway line to which I have referred. As my hon. Friend the Member for Keighley said, it is one of the most picturesque stretches of the London-Midland region's network.
  Therefore, I make a plea to the Government on behalf of my constituents. It is nothing short of criminal that the Government should quibble over a mere £4·5 million to repair a viaduct that has stood for 114 years, but give the go-ahead for the spending of £35 million on a spaghetti junction. Where is the difference? Spaghetti junction has been in operation for only 10 to 12 years, yet £35 million can be found for it. When it comes to investment on the line, we should not forget that employment is involved and that it will make a lot of difference to people in that far corner of the North-West. I appeal to the Minister to have another look at that matter. I hope that British Rail will also reconsider it.
  Mention has been made of the qualities of the chairman of British Rail. I endorse everything that has been said about his personal qualities. I believe that Sir Peter Parker is respected by most railwaymen. However, I also believe that he would be more greatly respected if he acted as did the chairman of the British Gas Corporation and staked his claim for more investment to save British Rail.
  I hope that the Minister will not treat the matter with his characteristic disdain. I know what he will say. He will say that the Government give the money, but it is a matter for British Rail. However, not only the Ribblehead viaduct but a number of other areas are gradually declining because of lack of money. I hope that the chairman of British Rail will show his grit, as did the chairman of the British Gas Corporation, when he meets the Minister next month and that he will join the unions in going all out for more investment in British Rail.
  8.52 pm
  Mr. D. N. Campbell-Savours: The House will be grateful to my hon. Friend the Member for Carlisle (Mr. Lewis), who has so eloquently put the case on a matter that is of considerable concern in Cumbria. He has championed his cause not only in the House but in the county. I also thank my hon. Friend the Member for Keighley (Mr. Cryer) for the way in which he effectively reinforced the case.
  The hon. Member for Southampton, Test (Mr. Hill) spoke about heartache. A part of the Bill that will lead to increased heartache is that which increases, in my view insufficiently, the facility for financial borrowing of the National Bus Company. The National Bus Company has major financial difficulties which stem from a number of factors. One is the decision last year to reduce the external financing limit of the National Bus Company. Another is the cuts in the transport supplementary grant and their effects on revenue support. The Government have made a commitment to phase out that support.

  823
  There has been a reduction in the commitment by many county councils, certainly Conservative-controlled county councils, in their transport policies and plans to suggest a sufficiently large amount of money to maintain the services necessary fully to service their constituents. The reason for that is that they have to make a contribution. They find that unacceptable in the light of the other requirements of the Government to cut back on local services and local spending.
  Cuts in bus grants were introduced by the Secretary of State for Transport in the Labour Government who has departed for another political party. He was, of course, introducing or requiring those cuts at a time when the other changes on transport legislation—as with the cuts today—had not been introduced. There is also the operating profit requirement that the National Bus Company should make a profit of £18·5 million by 1984–85.
  Finally, there is the matter of competition which was introduced in the Transport Act 1980. I shall address my remarks to that subject because the requirement for competition which has been imposed on transport undertakings throughout the United Kingdom has led to much of the difficulty experienced by the National Bus Company today. In my view, that will lead to demands for an increase in EFL and certainly to demands for higher borrowing, more than is suggested in the Bill. If greater amounts of money are not borrowed, or if the EFL is not increased, taking into account the requirement for profitability by 1984, it is clear from evidence which I am told was given to the Select Committee that 60 million service miles will be cut out of the national bus programme by that time.
  In referring to the changes in competition, I remind the House of a debate which took place in March 1980, soon after I was elected to the House. During the Report stage of the Transport Bill a number of exchanges took place which were the subject of much public comment in Cumbria. They stemmed from answers and undertakings given to me one and a half years ago by the Under-Secretary with regard to services which existed in parts of my constituency and other parts of the county. I shall quote my own words and the Under-Secretary of State's reply.
  I referred to the fact that in my area there were a number of small villages, including Aspatria, in the Home Secretary's constituency, Brigham, Broughton Moor, Ireby, Bothel, Lamplugh, Deanscales and a number of other small communities where bus services were losing money. I asked the Under-Secretary what action the Government intended to take to ensure that those routes would be preserved. He replied:
  "Its non-profit-making rural routes will be supported, like others, by revenue support and transport supplementary grant. They are not adversely affected by the Bill."
  After a number of other interjections I asked the Minister.
  "What will happen to undertakings in counties such as Cumbria if certain routes are removed from the municipal undertakings and given to private enterprise?"
  The Under-Secretary replied:
  "They will not be removed."—[Official Report, 24 March 1980; 'Vol. 981, c. 988–90.]
  In the county of Cumbria that response was seen as an undertaking and a promise to my electorate and to the electorate of Cumbria that, whatever the effects of the Transport Act 1980, they would not damage those rural routes.
  824
  In that debate I referred to some enterprising young operator who might turn up and apply to take over the profitable routes of CMS. It was in response to that that the Minister suggested that the routes in my constituency would be adequately protected.
  Eight months ago, the enterprising young operator turned up and applied for the profitable routes of Cumberland Motor Services, as had been forecast in the House. I understand that the commissioners refused the application, but that, on appeal, the Minister intervened and overturned the commissioners' judgment. The result was that Yeowart's Coaches, the enterprising operation, was able to set up on the profitable routes of CMS. The matter was not heavily publicised and little was heard from anyone apart from CMS locally to suggest that a number of minor routes would be lost as a result.
  Last week I received a letter from a Captain James, of Hallgarth, Eaglesfield, Cockermouth, saying:
  "The people of this village are appalled by the news that the No. 25 bus service to and from here is to be cancelled on November 28th 1981. This will cause considerable hardship and inconvenience to a large number of our people, many of whom are old-age pensioners and have no means of getting their requirements other than by bus to Cockermouth."
  He continued:
  "Whilst most of us appreciate that a service of any kind must be profitable, we cannot understand why a whole community must be cut off because some competition has been introduced which does not even affect this area in any way, so we ask you to reconsider cancelling our bus service."
  That gentleman's letter to me was but the tip of the iceberg. Further examination revealed that Cumberland Motor Services had withdrawn six rural routes in West Cumberland. So that the Minister cannot escape from the reality of the legislation that he introduced, although I am sure that it has dawned on him, I quote from the views put to me by Cumberland Motor Services:
  "these cuts are as a direct consequence of the abstraction of revenue and the cost of the resources needed to limit that loss of revenue created by the new town service in Whitehaven operated by Yeowart's coaches.
  In fact, with the exception of Services 62, 63 and 64 the other services were on the original list of examples of services that could be at risk, as given at the Traffic Commissioners' hearing in connection with Yeowart's original application."
  In other words, when CMS asked the commissioners not to grant the application, the possible loss of those routes was given as a reason why it should not be caused to lose the funds which it used for cross-subsidisation. The letter continued:
  "I also wish to confirm that the withdrawal of Service 25 will effectively leave the village of Eaglesfield without public transport other than for the odd school journey which serves the village by way of diversion of other services. As far as normal social, work and shopping journeys are concerned the village will be depleted of services."
  That was followed by a letter from Allerdale district council. Again, that is an authority to which I referred one and a half years ago in objecting to the introduction of the legislation. Allerdale district council stated:
  "The effect of this approval has resulted in Cumberland Motor Services lodging counter proposals to make up an estimated loss in revenue which might result by the introduction of Yeowarts service. The Company propose to withdraw certain services not only in the Whitehaven area, but also in Allerdale. My Council are very concerned as Cumberland Motor Services proposals, if successful, will mean the complete withdrawal of some rural services with the consequent effect this will have particularly upon school-children who rely on these services and commuters, generally."
  In other words, the legislation introduced by the hon. Gentleman, and defended by him at the Dispatch Box with

  825
  undertakings to my constituents that the rural routes would not be lost, has led directly to the loss of six rural routes. I submit that the Under-Secretary of State totally misled the House of Commons, the people of this country and my constituents who have now lost the vital services which they should have.
  Mr. Kenneth Clarke: As the hon. Gentleman knows, that has nothing to do with the Bill. He will also realise that I shall not have time to reply to his comments when I reply to the debate as we cannot have an Adjournment debate on bus services in Cumberland in the middle of a debate on the Transport (Finance) Bill. I undertake to reply to him, but I hope that he and his constituents will not take my silence on the matter today as acquiescence in the description that he has given of transport services in Cumberland.
  Mr. Campbell-Savours: The hon. and learned Gentleman may be aware that I had to check before rising to speak that this matter was not sub judice. An application has been made to the High Court to set aside the judgment. This matter is very much to do with the Bill because we are discussing the financial arrangements governing the operation of the National Bus Company. The Minister, in the form of the Transport Act 1981, introduced provisions that led to competition with municipal routes and caused a loss of revenue that directly affects my constituents. I hope that if I put down a parliamentary question the hon. and learned Gentleman will give a written and reasoned reply to the points I have made.
  9.5 pm
  Mr. Donald Dewar: I cannot claim to have any great knowledge of bus services in Cumbria. I listened, however, with great care to my hon. Friend the Member for Workington (Mr. Campbell-Savours). I would have thought that, prima facie at least, there is a case for the Minister to answer. I am disappointed that the hon. and learned Gentleman cannot find time in the half hour that he will be allowed to say a few words on the subject. I hope that he will find an early opportunity of commenting on what seems a sad case of the unfortunate by-products that can arise from this Government's legislation.
  I do not pretend to be knowledgeable about the details of the Cumbrian situation. I am, to some extent, tonight a refugee from Scotland I am glad, however, to be speaking in this wider debate. The public transport system and its financing is a matter of enormous importance in the part of the country from which I come. The problems of inadequate investment, higher fare structures and falling passenger totals are ones with which I am familiar. They are causing enormous problems in every part of the United Kingdom.
  There has been reference to the measure as a split Bill. This creates difficulty when hon. Members are trying to hold a coherent discussion. I should like to say a few words about the ports. I was fascinated by the great certainty with which the hon. Member for Wellingborough (Mr. Fry), who made a brief appearance in the Chamber to make his speech but who has not returned, declared the demise of the port of London. The hon. Gentleman said that it was a corpse that would not go away and objected to pouring money into it. I would have thought that this was, to say
  826
  the least, a controversial view and a message of defeatism that would not be endorsed by a large number of people in London and the country as a whole.
  I accept that there is a case for help for London and Merseyside. Those ports face a great crisis. The Secretary of State said that they were unique. My view is that they have great problems. To call their problems unique may be over-optimistic. There are a large number of other ports that face similar problems. One has only to look at the situation in Bristol or, if I may be parochial, the Clyde Port Authority. The same storm is gathering force around those ports as we have seen in London and Merseyside.
  The Secretary of State outlined criteria justifying the help that he offers. The right hon. Gentleman said that in London and Merseyside there had been a large manpower rundown. In 18 months, the Clyde Port Authority has lost 33 per cent. of its employees, amounting to 600 jobs. The number of registered dockers has fallen from 569 to 382. The second criterion was a dramatic decline in traffic. Here again, the Clyde, like so many ports, has suffered blows. We have lost Manchester Lines with a loss of revenue of £700,000 to the authority. Sea Trains have gone from Greenock with a loss of revenue of £1·7 million. A port that was handling 1·6 million tonnes in 1970 is now down to around 500,000 tonnes. In a decade, the put-through has gone down to almost two thirds. I would count that as a dramatic decline in trade by any standards.
  While there is no immediate threat of closure—the third criterion—it is fair to say that the operating profit in 1979 of £2·5 million went down in 1980 to £46,000, a false figure due to £1 million of non-recurring items. In 1981, we face an unambiguous loss of £1 million.
  I rehearse these facts, rather in shorthand, as a cautionary tale. The Clyde port—this applies no doubt to ports on other estuaries and in other areas—is vital to the economy of the area. Merely in terms of the dredging operations for the shipbuilding industry, for example, and of the attraction and servicing of industry, it is essential that a port survives on the Clyde. While I make no objection to the help that the Secretary of State is offering to Merseyside and London, I believe that he must face up to the fact that almost inevitably he will be forced very shortly into extending the scheme and this approach on a national basis.
  There have been some sneering remarks—and perhaps a shrugging aside—about the possibility of a national ports policy. Whether that comes by ad hoc decisions or by sensible planning in advance and decisions about investment and rationalisation, in any event the Government will be involved in the development of these ports and will not be able to wash their hands of the matter.
  I turn to the problems of British Rail and the proposals in the Bill as to its finances. For a very long time we have all been aware that there have been increasing problems in maintaining services and investment in the rail network. Almost a cliché of British politics is a phrase that Sir Peter Parker coined, I think, about the crumbling edge of quality. If anyone takes the trouble to read Sir Peter's evidence to the Select Committee on the Treasury and Civil Service, on 6 July, he will see that that phrase returns and Sir Peter makes the point that if the present course on investment is maintained—the decision is the Government's, not British Rail's, because it is the resources that are made available and the permission to spend which are necessary—that crumbling edge will

  827
  become more than a minor embarrassment; it will become a major threat to the viability of the whole railway network.
  During the debate many hon. Members have underlined exactly that point very eloquently. When my hon. Friends the Members for Carlisle (Mr. Lewis) and for Keighley (Mr. Cryer) talked about the Ribblehead viaduct, I detected some laughter on the Government Benches—as though a viaduct was some ancient monument of no practical importance. I recognise that it represents a good deal of finance—about £4 million—but it is a very important part of the link between Scotland and England on the West Coast, and it is just one dramatic but important example of the dangers of ignoring the problems involved with having a proper financial basis for the development of our railway network.
  If I remember rightly, what Sir Peter said on 6 July to the Select Committee was that if we maintained our present course, if the present rather stingy approach continued, we would see an enormous increase in the number of speed restrictions. He suggested that about 800 miles of track would be subjected to speed restrictions. He suggested that about 3,000 track miles would be under threat during this decade. He specifically suggested—I am again instancing a Scottish worry which is always with us in railway terms—that the West Highland line might be closed within one or two years.
  I see that the Under-Secretary is already laughing—as though the West Highland line was a matter of no importance. I recognise that it is a problem, and that it is always on the margin so far as the rail network is concerned. But I want to see the present network of 11,000 miles maintained. If people think that I am raising some sort of bogy and that there is no serious threat to it, they have only to read the speech made by the hon. Member for Wellingborough, who obviously takes great interest in transport matters and presumably has the ear of Ministers. Despite all his special pleading it is clear from what he said that he was prepared not only to contemplate but to advocate very substantial reductions in the rail network on financial grounds. I believe that that would be a great tragedy for all of us.
  The Bill will increase the borrowing limits of the British Railways Board. That is fair enough. A written answer today informed the House that the PSO will increase by £110 million. One's first thought is that it means more money for British Rail. However, the Minister must spell out the implications of that increase. My experience is that if the PSO increases but the EFL remains the same, there will not necessarily be increased financial room for extra investment in the British Rail network. If the external financing limit remains static and the PSO takes up a larger share of it, the capital borrowed for investment will be squeezed rather than increased, especially as the external financing limit covers both freight and passenger services. The money that comprises the upper tranche of the EFL has beeen used more and more to cover the freight losses that are so disastrously heavy as a result of the recession manufactured by the Secretary of State and his colleagues.
  One cannot assume that if the PSO goes up that will help British Rail's investment problems. It may help British Rail to compensate for declining passenger revenue, which is another inevitable knock-on consequence of the general recession that every British industry is facing, but there is no direct correlation between the measures announced today and an increase in
  828
  direct investment that is so badly needed in the British Rail network. We shall wait to hear what the external financing limits of British Rail will be. Unless there is a generous approach to that, the problems to which all hon. Members have referred during the debate will be as great and acute as ever.
  I have talked about the possibility of line closures and the protection of the route network. As a Scottish spokesman, I wish to mention the Kilmacolm line. That line, which is near to where I live, will be closed on 1 January 1983. The Scottish Transport Users Consultative Committee unanimously recommended that the line should not close because of the social hardship that would result. That decision had to be taken by the Minister. He has not increased confidence in the future of the rail network by deciding to close it.
  Of course, the matter is not so simple. We have often heard the sound of the buck being passed sharply. The Minister is trying to say that if the passenger transport executive in Strathclyde can find extra cash it can keep the line open. That illustrates what I said about British Rail. The passenger transport executive cannot find the cash because of the cash limits and the EFL. It is hopelessly circular and essentially dishonest for the Minister, who must make the decision, to say that he will close the line, implicitly because of some failure by members of the passenger transport executive to get themselves off their backsides and save the line in the period allowed. However, the executive cannot do that because the Minister responsible for them—the Secretary of State for Scotland—will not take a sensible view about what is in the public interest and what the cash limits of the Strathclyde PTE should be.
  In the financial year 1981–82, the Strathclyde PTE will pay £22·7 million to British Rail for its section 20 expenses out of a total of £45·2 million received from the region. It is a massive burden and it is the only regional authority in Scotland that pays anything under section 20. The knock-on effect upon its other services is very great.
  My hon. Friend the Member for South Ayrshire (Mr. Foulkes) mentioned electrification—I shall deal with that shortly—and specifically the Ayr line. My complaint about that is simple. It is that Ministers have erected a plausible facade that covers a basically dishonest approach. The Government have announced that they will give a 75 per cent. grant towards the upgrading of EMUs that might be used on an electrified line in Ayr. They have said that for the second part of the expenditure on overhead lines, gantries and so on, they will go to Europe and hope to get something like a 30 per cent. grant. The rest of the £18 million that falls under that heading will presumably have to be found by the Strathclyde PTE.
  I do not know whether the additionality system would apply and whether that would be added to the EFL of the Strathclyde PTE. In any event, a 75 per cent. grant will be made for rolling stock. There is the suggestion that we may go to Europe for some sort of funding on the other cost. The other £26 million for basic track and signals, which makes up the total of £63 million, will have to be found by British Rail.
  From what the Secretary of State said, Strathclyde can now go ahead with the electrification programme. But there is not a hope in hell of Strathclyde getting on with that programme unless something is done about its cash limits and a ceiling placed upon its borrowing requirement. The vital missing ingredient, which makes

  829
  the rest a sham and a near-fraud, is the refusal of the Secretary of State for Scotland to do anything to allow Strathclyde to find the money to make up the budget necessary to get the programme under way.
  The message we must hammer on every door, particularly the door of Dover House, is that this electrification will give a reasonable return on capital, create jobs and do much to revive the British Rail network in the West of Scotland, which is being stopped because of the spending limits imposed on the Strathclyde PTE.
  I recognise that much work has gone into general electrification. I do not pretend to be as expert as some hon. Members about option 3 versus option 5 or the working parties that studied this subject. But I find it disappointing that at a time when the Department of Transport has been involved in extensive studies that have come forward with recommendations, Ministers should start trying to shift their ground and alter the rules that were laid down at the beginning by suggesting that instead of looking at network costs and return on capital, we should do it on a line-by-line, almost a mile-by-mile, basis, thus effectively shelving the matter for a considerable time.
  There has been a good deal of comment about the electrification team that is now under sentence of death following the issue of redundancy notices by Balfour Beatty. The hon. Member for Faversham (Mr. Moate) was courageous in his protest and absolutely right. If we are to have a modern railway system, we must move towards electrification. That means that we must preserve the design team and start making progress on the ground. I am disappointed that there Has been so much dragging of feet and that very little has happened over the last few months.
  There has been much discussion about morale in the railway industry. My hon. Friends the Members for Carlisle and Ealing, Southall (Mr. Bidwell) both spoke with authority about that. There is no doubt at all that there is a crisis. I know that from talking to people who work in the industry as well as to their representatives. Anyone at British Rail headquarters in Scotland will admit that for a number of years investment has been about 30 per cent. less than was needed merely to maintain standards, let alone to push the threshold forward. Sir Peter Parker, in his evidence to the Select Committee, almost as a throwaway line, said that this year British Rail is eight months behind on normal track renewal. There is no doubt that the crumbling of standards and general disintegration and deterioration will become a major problem unless halted by a courageous Government who recognise what is in the public interest.
  The record of the railways and BR employees in the shedding of labour over the past 15 to 20 years is remarkable. It has been done in a spirit of tolerance and goodwill. In Scotland, British Rail has about 17,000 employees, and the number is dropping by about 1,000 a year.
  The ordinary employees—not those in the hierarchy or those with a vested interest in causing trouble—are beginning to feel that they are on an endless downhill track. They are making sacrifices, but the public are not being asked to invest in the success of the system. They are told that their sacrifices are essential, but it looks to them as if no one else is prepared to do his bit.
  830
  There has been speculation in The Times about a new Beeching-style inquiry, dreamt up by the Central Policy Review Staff, which I sometimes wish had never been dreamt up itself. That is not likely to improve the general atmosphere.
  If the Secretary of State is a reasonable man, he will accept that, if there is to be any chance of achieving a successful conclusion to discussions about productivity, open stations, more flexible rosters and the reduction of manning on freight trains, the Government must convince the public about their commitment to the railway system. We are a long way from that.
  Let me give one example of the mistaken decisions that have been taken. I refer to an area where, I concede, we are on weak ground in arguing for help for the railways. The lines above Inverness will always be a problem in terms of passenger use, but they are of immense social importance.
  On narrow accountancy criteria, those lines are on the verge of dropping off the BR network, but a little investment in them would produce a high rate of return. For example, more efficient level crossings, radio signalling and even, mundane though it sounds, a cheaper and more efficient heating system on the trains would result in admittedly negative, but nevertheless real, savings and a high rate of return on the money that was ploughed in. There are many such examples throughout the railway system, and no sensible Government should pass them by.
  The Opposition welcome the Bill as far as it goes. It is a technical measure, necessarily so in many ways; but it begs the big questions, and the difficulty is that we cannot go on begging those questions for much longer. The railway people, commuters and the country generally demand answers, and so far we have had a thin diet of answers.
  The Under-Secretary must tell us something more positive about the Government's commitment to a realistic investment policy that will put British Rail on an efficient basis and allow it to do the job that the travelling public demand.
  The Government should soon increase the EFL, because the rise in the PSO is not enough and may even be a complication. Something must also be done to ensure that people believe that the network will be protected and that the electrification programme, which is economically so valuable and has a central part to play in our general economic revival and a vital part to play in the revival of the railways, will be tackled with energy and put in hand without any more of the shilly-shallying, prevarication and buck-passing that have characterised Government policy in the past two years.
  9.30 pm
  The Under-Secretary of State for Transport (Mr. Kenneth Clarke): The hon. Member for Glasgow, Garscadden (Mr. Dewar) has made his debut in United Kingdom transport debates. He captured the mood of a substantial part of the debate with his understandable concern about the state of the transport industries at a time of considerable financial difficulty. He went on grossly to overstate his case, using inaccuracies in a way that can only serve to depress those who read these debates outside and who may believe some of his allegations. In their

  831
  desire to put forward their case, hon. Members have worked themselves up to a state of excitement, often about matters with little or no factual basis.
  In half an hour I cannot answer all the specific transport questions that have been put to me. Tomorrow night there is an Adjournment debate on the Carlisle-Settle line. We know of no proposals to close the Ribblehead viaduct, and there is no question of the Government having refused £4½ million. The diversion of the passenger service which has set off all the fuss was taken on commercial grounds by British Rail and has nothing to do with the physical condition of the viaduct.
  The hon. Member for Workington (Mr. Campbell-Savours) expressed understandable concern about the state of village services in his constituency. I shall have to write to him about those bus services. He repeated the case of CMS about the basis on which it cross-subsidises its services. Ministers looked at that case on the evidence put to the traffic commissioner and to the inspector on appeal. The evidence was not sufficient to satisfy us that the granting of the new licence to Yeowart's, which seemed to us a desirable innovation in transport in Cumbria, was the cause of the threat to rural services that the hon. Gentleman described so dramatically.
  The hon. Member for Garscadden spoke about the problems of the Glasgow to Kilmacolm line. He accused my right hon. Friend of using near-fraudulent arguments to attribute part of the blame to Strathclyde regional council. But that council withdrew financial support from a line which previously it had supported. In giving reluctant consent to the closure, my right hon. Friend delayed it to 1 January 1983 to give the council time to reconsider its decision. No doubt the other Scottish matters will be taken up by the Secretary of State for Scotland.
  We all accept that British Rail faces a difficult financial time. We are in the middle of a recession, and that business is not unique in being affected by it. British Rail's difficulties are not due to any reduction of financial support by the Government. On the contrary, the Government have tended to increase the financial support for the railways. British Rail has suffered sharp drops in revenue on both passenger and freight services, and it has not yet succeeded in reducing its costs.
  Nevertheless, despite those financial difficulties, it does no good to dismiss the substantial investment in all parts of the network. It is leading to an improved performance in important parts such as the London and South-East services. Both British Rail and the Government would like a more efficient, better invested modern railway, and whilst there is a long way to go we are moving in the right direction. It is not right to make speeches such as that of the hon. Member for Swansea, East (Mr. Anderson) which became increasingly pessimistic as he surveyed a whole picture of gloom and decay. We have quite a reasonable railway and, as my hon. Friend the Member for Leominster (Mr. Temple-Morris) pointed out, with partnership between railway management and railway unions it should be possible to achieve the future for the railways that we all desire.
  The Bill centres on the question of financial support. The right hon. Member for Barrow-in-Furness (Mr. Booth) described the railways as being in a financial straitjacket. He then plunged into detail in an attempt to identify what he thought were the constraints. The detail is something of a maze and it is difficult to secure
  832
  agreement on figures. However, in almost all areas the Government have been flexible and have improved financial support to the railways.
  The trouble is that the railway is the system that we have and one which we inherited from the Labour Government, and there are a number of controls exercised by the Government over the finances of British Rail. The first is the so-called external financing limit which governs the total amount of grant and borrowing available to the railways from public sources. That has been revalued recently and at the moment stands at £920 million for 1981–82. It has been increased by the Government to take account of British Rail's trading difficulties in the recession. There is no doubt that it is not as high as some people would like. But at a time of serious economic crisis £920 million for one year's EFL is a fairly large proportion of national resources to direct towards the railways.
  I move to the grant that subsidises the losses on services that the Government and local government regard as socially desirable and necessary. That is measured by the so-called public service obligation. In response to the question of my hon. Friend the Member for Wellingborough (Mr. Fry), I can say that that is a European Community imposed system whereby the Government lay an obligation on British Rail—it was done in 1974—and pay a certain sum to enable the railways to discharge that obligation.
  Only today my right hon. Friend the Secretary of State announced an increase in that grant for this year of £110 million. It is the first time that the grant has been upvalued in the course of a year. The total grant to the railways from central and local government will be £850 million this year. That is more than £2 million a day by way of subsidy going into the railways. Roughly, it means that the present level of subsidy to British Rail to support passenger services costs about £15 each year for every man, woman and child in the country, and that is before anyone has bought a ticket and chosen to make a journey by train. For every 60p that British Rail received in rail fares in 1980, it received 40p in grants from the Government.
  On the PSO and the grants and subsidy, British Rail is not being constrained. My right hon. Friend announced only today a substantial increase.
  The other control on British Rail is the investment ceiling imposed by the Government. I do not criticise the right hon. Member for Barrow-in-Furness because I have the advantage of substantial advice in finding my way through the maze, but he was confused when he said that the ceiling had been reduced. The Government impose an investment ceiling, and that remains in real terms at the exact level set by the previous Government. We have not reduced it. The figures keep varying as they are updated for each year. My latest figure is £427 million for 1981–82.
  The word "ceiling" was used by the right hon. Member for Barrow-in-Furness to describe the spending on investment by British Rail. They were board figures and a board ceiling that he gave. It is true that the board's spending on investment is not at the moment reaching the ceiling imposed on it by the Government. It is investing at a lower level because of the pressures on its external finance limit. But the only way in which that can be looked at is that British Rail is finding it difficult to get up to the level of investment that it would like and up to a level that the Government would allow because the declining business performance of the railways makes it difficult to achieve that within its EFL. It is because of this lost

  833
  revenue, the failure to control costs and the level of pay settlements in line with the productivity return that British Rail has difficulty in investing to its ceiling within its EFL.
  Mr. Booth: The hon. and learned Gentleman implies that my case is unsound because my figures are wrong. I insist that he says which of my figures is wrong. I quoted separately the ceilings and the actual expenditure. I made it clear that my expenditure figures were based on the average 1981 expenditure adjusted to uniform limits. I was talking about the total expenditure dropping from £475 million at 1981 prices in 1979 to £400 million in 1981. That is the drop in investment expenditure. If we take actual prices rather than constant prices, the board's ceiling in the same period was set at £398 million, and it spent £308 million, but only if one excludes the constant welded rail expenditure. However, one cannot properly exclude that. I ask the Minister to accept that as fair, because the convention was to take that out at the end of 1979.
  Mr. Clarke: The right hon. Member for Barrow-in Furness keeps changing his phrases. I am talking about the Government ceiling, which is imposed by the Government as a limit on investment. It remains unchanged in real terms. He uses the phrase "board ceiling", which is not relevant to any Government control. He describes the board's actual expenditure. Plainly, he is not talking about Government controls because, as he says, we took continuous welded line replacement out of our controls and our investment ceiling. The Government's investment ceiling has not been reduced. The reason why the board has not felt able to invest up to that ceiling in recent years is the decline in the business performance of the railways within the EFL, and that is not a Government-imposed restraint.
  The investment performance enables the railways to achieve a great deal. Hon. Members have talked about the decay of the railways. The newly elected hon. Member for Croydon, North-West (Mr. Pitt) described the state of the London and South-Eastern services, as did the hon. Member for Swansea, East, who was perhaps less at home with the details of the matter. Nevertheless, when one considers what is going on in the railways within the present levels of spend and within Government controls, one can see that British Rail is bringing the advanced passenger train into service; it has 95 high-speed trains in service; there is a continuous programme of introducing new electric rolling stock on the Southern region; it is spending a large amount on signalling at Victoria, on new signalling on the Brighton line, and on signalling in the West of England. Refurbishment is going on all the time.
  It does no service, nor does it improve the morale of the staff of British Rail, to gloss over that and to say that somehow the railways are going to the dogs when, despite the difficulties, the railway management is succeeding in investing and producing substantial improvements in some parts of the service.
  Many questions were asked about electrification, which is the key issue now facing British Rail. Many people are anxious that progress should be made in that regard.
  Mr. Moate rose——
  Mr. Clarke: I shall not give way, because I have two more industries to cover, and I am still on British Rail.
  834
  There was a lot of interest in electrification. There has been absolutely no change in the Government's position from the statement that was made on electrification by my right hon. Friend the Member for Sutton Coldfield (Mr. Fowler) on 22 June. His statement was welcomed at the time as a challenge to the railways. We are now waiting for the railways to put forward the revised business programmes for inter-city and freight, and we are awaiting submissions on particular routes, to show whether they are profitable. Even in transport, involving the kind of figures that I have mentioned, one cannot wave away the idea that investment should be demonstrated to be profitable at a time of great financial difficulty.
  We have committed ourselves in principle to a 10-year programme of electrification. Now there is understandable concern about the timing. I can only say that the phrase that was used, that the new programmes and timetable for electrification will be produced by British Rail in weeks rather than months, was a phrase which, to the best of my recollection, was used by the chairman of British Rail, and not by my right hon. Friend the Member for Sutton Coldfield last year. It appears in the Official Report only in the statement given by the rail council, after it had met my right hon. Friend and myself on 22 June. It was with the same disappointment that was felt by British Rail that we heard on 12 October from the chairman that the programme would not be ready before the end of this year. Indeed, some of the programmes for individual schemes will not be ready until the middle of next year.
  Mr. Ron Lewis rose——
  Mr. Clarke: I shall not be able to answer the questions that have been put to me if hon. Gentlemen keep asking more questions.
  The Hitchin and Huntingdon scheme has been mentioned. Indeed, it appeared recently in the press. We knew that British Rail wished to begin work on that line when the chairman wrote to us on 23 July, asking us to agree in principle to the electrification of that section of the East Coast main line. He did not say at the time that there was any threat to the future of the Balfour Beatty team, although Balfour Beatty got in touch with us and began to alert us. British Rail then raised the question with us again, when we had a meeting with board members on 30 September to consider progress on electrification. We have had exchanges with them ever since. However, we have not yet received the new business plans or a submission on the Hitchin-Huntingdon line in any form other than the letters from the chairman.
  It makes no sense to look at that short section of the East Coast main line in isolation from the proposal to electrify the rest——
  Mr. Ron Lewis rose——
  Mr. Clarke: We look forward to receiving British Rail's full submission as soon as possible. So far, we have received only letters. I am sure that British Rail will be anxious to come forward with a full submission soon.
  We remain committed to electrification. We are also trying to make progress on the Channel tunnel. The hon. Member for Swansea, East and my hon. Friend the Member for Leominster expressed concern about the Channel tunnel's timetable. The Government have aroused interest in the Channel tunnel. We have made it clear that we are interested in propositions and they are

  835
  now coming forward from a wide range of contractors and engineers. We are anxious to make progress, to reach an agreement in principle with the French about a desirable form of Channel link.
  However, the Government have not dragged their feet. Hon. Members must appreciate that France has a new Government, who are now in discussions with us as a result of the recent Anglo-French summit meeting. The French Government are scrutinising all our proposals for a Channel link in order to try to reach that agreement in principle. We had hoped to reach that agreement before the end of the year, but it is understandable that the French Government should wish to go into such matters in detail. As soon as he can, my right hon. Friend the Secretary of State will make a statement or announcement to the House in the new year.
  In that short explanation of the position, I hope that I have made it clear that it is wrong to say—as several hon. Members have insisted—that the Government's relationship with the railways and the unions is all take and no give. We have maintained the investment ceiling and extended the external financing limit. Today, we have raised the public service obligation. We have committed ourselves, in principle, to a 10-year programme of electrification. We have been encouraging about the Channel tunnel and we have also said that some productivity and improvements in performance should be given in return.
  I am prepared to acknowledge that British Rail is making reasonable progress towards the productivity improvements that it set. We took the first productivity targets from British Rail's corporation plan, and it cannot be argued that those targets are impossible. British Rail is now well on time with the targets. However, British Rail is in the middle of important and difficult negotiations about productivity improvements, the manning of engines, the rostering of crews and open stations and so on, which flow from the pay settlement. We shall stick to the terms of our electrification agreement and I am sure that British Rail will stick to its terms. In that way, we shall soon achieve the productivity improvements, the business programmes and submissions for particular lines.
  Mr. Foulkes: Will the Minister rule out the possibility described in The Times today, that some business man will be brought in? That report casts a great shadow over both workers and management in British Rail. I am sure that all hon. Members will want the Minister to rule out that possibility.
  Mr. Clarke: I am grateful to the hon. Member for South Ayrshire (Mr. Foulkes), because he has reminded me that I had failed to answer that point. I read today's report with astonishment. The review of British Rail's finances was first suggested to the Government by British Rail. The chairman of British Rail has agreed with my right hon. Friend about the desirability and need for such a review. The idea that it will be some type of Beeching review is extraordinary. The phrase has crept into today's press stories. However, my right hon. Friend has reiterated the previous Secretary of State's commitment that the Government have no desire to see any substantial cut in the network. We agree with British Rail that there is a need to review British Rail's objectives, the finances to serve those objectives, the way in which the railways are run and their efficiency in achieving those objectives.
  836
  I shall turn briefly to the subject of the National. Bus Company. I should hate to give credence to the description given to the National Bus Company by the hon. Member for Liverpool, West Derby (Mr. Ogden). He described it as the poor relation of the nationalised industries. I know that he was not saying that in a critical spirit, and I agree that we often do not pay the National Bus Company the attention it deserves.
  The Bill includes a modest increase in the borrowing limits of the National Bus Company. The hon. Member for Workington (Mr. Campbell-Savours) said that the increase was not enough, but it reflects the NBC's decreasing reliance on borrowing and its expectations that it will not need to borrow. For that reason, the increase in the borrowing limits, compared with former levels, is not in line with inflation.
  Several hon. Members raised the question of the interest on the capital debt about which many National Bus Company subsidiaries and their managers are anxious and have been pressing hon. Members throughout the country. The National Bus Company would obviously prefer all its interest charges and commencing capital debt written off. No Government have ever felt able to agree to that, because the charges on capital and the cost of servicing the capital are as much a cost of any business as wages, fuel and other operating costs. We could not put NBC at an unfair advantage vis-a-vis its competitors by wiping off all its capital debt at the taxpayers' expense.
  Nevertheless, the interest charges, complained about by some subsidiaries, are worth examining. Hon. Members should bear in mind that the charges amount to less than 3 per cent. of the NBC's total turnover. Although there is a campaign about the interest charges, they are not rising. They have been declining in real terms as a charge on the National Bus Company for some time. However, we have agreed to set up a study, with the assistance of Touche Ross, to examine the way in which those interest charges are divided between the different companies.
  When looking at the problems of the National Bus Company, which has been given fairly tight financial limits and demanding commercial targets at which to aim, we must not talk ourselves into the belief that the NBC is deprived of support or that the Government are not giving subsidy to desirable services that local authorities and politicians of all parties agree must have some support from public money. The NBC received more than £90 million of public money from the central Government in 1980 in the form of new bus grant, fuel duty rebate and local authority revenue support. A further £20 million was provided by local authorities for concessionary fare schemes. It is not true that we are phasing out the transport supplementary grant. In each year's settlement we accept a given level of revenue support expenditure by each local authority. Unlike some Labour-controlled councils, such as the GLC, West Midlands and Merseyside, we have some regard to the taxpayers' and the ratepayers' ability to pay for the level of support that we accept. I am sure that that commends itself to most taxpayers as a basis for financing bus services.
  Mr. Stephen Ross rose——
  Mr. Clarke: I shall not give way to the hon. Gentleman, because he has not been present during the debate. I usually give way to him when I reply to a debate, because he is normally present for the debate. I have only eight minutes to talk about ports.

  837
  I shall not spend much time on the usual panacea of the right hon. Member for Barrow-in-Furness that we should have a national ports policy. He was no more successful in explaining to my hon. Friend the Member for Faversham (Mr. Moate) what that meant today than he has been before. It seemed that he was opposed to the Government approving a profitable investment in our flourishing ports, such as Felixstowe and Medway, because he thought that in that way we might reduce the embarrassments at London and Merseyside. I do not accept that.
  The right hon. Gentleman should not be so proud of his legacy on the national dock labour scheme. He left behind legislation that implied that that scheme should be extended to large amounts of dock-related work throughout the country. I recall that his proposals then would have made much work subject to the dock labour scheme at Newark-on-Trent, near my constituency, which is rather a long way from the sea. That was not the general tenor of most of the speeches by my hon. Friends with port interests.
  I should like to answer the general allegation, which had credence on both sides of the House, that the Bill is somehow a change of stance by the Government from previous Bills. This is the third, as I know only too well. My hon. Friend the Member for Faversham and I have been through them all. The last Bill, which was published in May 1981, was at the time declared to be interim legislation until we had the full corporate plans from the ports and were able to take long-term decisions about their future.
  I remind the House of what I said at the stroke of midnight on 14 May 1981 on Third Reading. My words were the last words in the House from the Government on the Bill. I said:
  "The Government will therefore now be considering whether to continue providing assistance pending receipt of the full plans from the PLA and the Mersey Docks and Harbour Company in the summer. We hope in the summer to be able to make decisions on the longer term future of these two authorities and to be able to chart a clear and early return to profitability. Meanwhile, this Bill provides the means for the ports to continue in business until those long-term decisions can be taken."—[Official Report, 14 May 1981, Vol. 4, c. 996.]
  I made it clear in Committee that there would be another Bill this Session once we received the corporate plans and the advice of the accountants and were able to take clear decisions for the future. My right hon. Friend now has the corporate plans and the accountants' advice and the Bill is the result of that information and the Government's commitment to the ports in future.
  The basis of the support is not very different from what has existed. Basically, it will cover severance, because there are still surpluses of labour in the docks. Meanwhile, it provides support to cover operating losses to keep the ports open while severances are taking place. There will be provision for essential capital investment.
  There was provision in the previous Bill, as there is in this Bill, for essential capital investment. The capital investment that is needed will require the consent of my right hon. Friend. My hon. Friend the Member for Faversham thinks that this might give an unfair advantage to London and Liverpool vis-a-vis the other ports. All support for capital investment, if any be given, will be by way of loan. Precisely the same level of interest will be
  838
  charged as that which is chargeable under Harbours Acts loans, which are available to other ports. The bankrupt condition of the London and Liverpool ports means that they would not be able to qualify for Harbours Acts loans without Government support, which they would otherwise receive.
  Several hon. Members have referred to severance schemes. No decision has been taken to have a special severance scheme. The underlying problem in both ports continues to be an excess of labour when compared with traffic. There was criticism of the scheme that was operated last year but that scheme was successful in London and Liverpool in bringing both ports back to a healthier condition. It was followed by the recent NAPE voluntary scheme, which was operated throughout the country. That scheme up-valued severance in line with inflation. There was bound to be some up-valuation sooner or later.
  Although we were criticised for the way in which we separated the two schemes and the two ports, the recent National Association of Port Employers scheme was successful. Most of the other ports that have been referred to and described as being in difficulties, or potential difficulties, took good advantage of the NAPE scheme last summer. Clyde had a substantial surplus of registered dock workers and was getting into some financial difficulty earlier in the year. The port is not expected to have any surplus registered dock workers following the special NAPE scheme severances.
  There is a clear difference between Clyde and London and Liverpool. Clyde has reserves. It is not faced with a threat to cease trading. No ports save London and Liverpool would have to close tomorrow if the Government withdrew support. We are not closing the ports. We are providing the opportunities of further severances and further productivity improvements. In fairness to other ports, we are saying that London and Liverpool must break even on revenue account by the end of 1982. There will be no support for further revenue losses beyond 1982.
  I do not accept that that is a draconian or impossible regime to place upon the ports although it might be described as difficult. It is a modest step in returning to viability and it is one on which we hope both ports will be able to improve.
  Both ports have been asked by my right hon. Friend to produce action plans to show how they will achieve the targets that my right hon. Friend set for them. In due course we shall provide support up to the ceiling that the Bill will impose upon Government funds.
  I shall underline some of the issues that lie behind the reality of all transport debates. Several hon. Members referred to the loss of traffic that the Mersey Docks and Harbour Company has suffered in recent times. The hon. Member for Liverpool, Scotland Exchange (Mr. Parry) knows a great deal about that. The hon. Gentleman listed some of the traffic that has been lost.
  My hon. Friend the Member for Southampton, Test (Mr. Hill) detailed some of the damaging effects that Southampton has been experiencing as a result of industrial trouble. The right hon. Member for Barrow-in-Furness seemed to imply that the problem caused by shippers moving their traffic to other ports could be solved if we adopted his national dock policy. That is not so. The movements of traffic represent shippers' decisions to move their traffic in and out of ports that give them the service

  839
  that they require. We are a trading country. It is important that our importers and exporters should have the ability to move their goods to where they do best. In the end it is up to those ports to win their traffic by productivity improvements such as those agreed in Merseyside and the sensible move out of the Royals and down to Tilbury that London has achieved. That will determine the future of an overall policy. Meanwhile, the Bill shows sound support for public transport and for the ports. It is based on financial reality. I do not believe that many of the criticisms have faced up to the financial realities.
  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).

  Transport (Finance) [Money]
  Queen's Recommendation having been signified—
  Motion made, and Question proposed,
  That, for the purposes of any Act of this Session ("the Act") to increase certain limits relating to the indebtedness of the British Railways Board and the National Bus Company, to the amount of compensation payable in respect of certain public service obligations of the Board, and to the amount of certain financial assistance given to the Port of London Authority and the Mersey Docks and Harbour Company, and to enable the Treasury to guarantee the discharge of the Board's liabilities to the European Company for the Financing of Railroad Rolling Stock, it is expedient to authorise——
  (1) any increase in the sums payable under any other enactment out of or into the National Loans Fund or the Consolidated Fund, being an increase attributable to—

  (a) any provision of the Act substituting references to £1,100 million and £1,300 million for the references to £600 million and £900 million in section 42(6) of the Transport Act 1968 (which relates to the Board's indebtedness), or

  (b) any provision of the Act substituting a reference to £250 million or such greater sum not exceeding £275 million as may be specified by order for the reference to £200 million in section 27 of the 1968 Act (which relates to the National Bus Company's indebtedness);

  (2) any increase in the sums payable under any other enactment out of money provided by Parliament or into the Consolidated Fund, being an increase attributable to any provision of the Act substituting a reference to £360 million for the reference to £160 million in section 1(3) of the Ports (Financial Assistance) Act 1981 (which imposes a limit on certain financial assistance to the Port of London Authority and the Mersey Docks and Harbour Company);
  (3) the payment out of the Consolidated Fund of any sums required by the Treasury for fulfilling any guarantee of the discharge of the Board's liabilities to the European Company for the Financing of Railroad Rolling Stock, and the payment into that Fund of amounts received by the Treasury by way of repayment of, and interest on, sums required for that purpose.—[Mr. Thompson.]
  Mr. Ogden: It is a little unusual for someone who has already spoken in the debate to speak again, but the circumstances are different. On the Government Benches at the moment are a Secretary of State, an Under-Secretary, four Treasury Ministers, a Scottish Minister, a PPS, four Conservative Members of Parliament and a galaxy of supporting talent in the civil servants' box. I think that it is a galaxy of talent; I cannot see them as they are just disembodied heads. Who on the Government Benches would be prepared to answer questions on the money resolution? Is it to be taken for granted that the House will agree to a money resolution without an explanation from a Treasury Minister?
  Mr. Kenneth Clarke: The convention that Treasury Ministers answer questions on money resolutions died out some time before I became a Member of the House. It was probably extinct before the hon. Member for Liverpool, West Derby (Mr. Ogden) became a Member. Perhaps he will feel less agitated if I use the extra minute that he has given me to answer his questions.
  The hon. Gentleman asked about the funds already being granted under this year's Ports (Financial Assistance) Act. If that is what is troubling him, I can tell him that so far the Port of London Authority has received grants of about £47 million, mostly for severance, plus a guarantee of a commercial loan to the PLA of £25 million. The Mersey Docks and Harbour Company received grants of about £17 million, again mostly for severance. So far no guarantees are extended to Merseyside.
  Mr. Arthur Lewis: On a point of order, Mr. Deputy Speaker. You know as well as I do that the money resolution is restricted. If the Minister proposes to answer questions that arose on the Second Reading debate when we have proceeded to the money resolution, I hope that it will be taken as a precedent. Usually we are precluded from raising matters on the money resolution that we wanted to mention on Second Reading. It is kind of the Minister to reply, but it is not right because it will mean that in future, perhaps on a stronger matter, an hon. Member will be precluded from having the same rights as are now being given.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): In this case the money resolution is as wide as the Bill. I hope that the hon. Member for Liverpool, West Derby (Mr. Ogden) will not speak again, I understood that he had finished his speech.
  Mr. Clarke: I am on my feet because I am answering points on the money resolution. Perhaps the hon. Member for Liverpool, West Derby——
  Mr. Deputy Speaker: Order, Apparently the hon. Member for West Derby gave way to an intervention. The Minister will have an opportunity to reply in a moment.
  Mr. Ogden: I was asking what opportunity there would be on the money resolution for questions that should be asked, perhaps by someone else, on the sum of up to £1,000 million. The Minister has said that he would be prepared to answer any questions. He is quick on his feet and in his thinking. He has at least answered one of the questions that he was not able to answer before, Will he declare tonight that for the development of the Celtic Sea Merseyside is to be a preferred port?
  Mr. Clarke: If that is the only specific question that I am being asked on the money resolution, the hon. Gentleman has finally put his finger on a question that has nothing to do with the Bill or the money resolution. It is not even my responsibility. I suggest that he addresses his question to my right hon. Friend the Secretary of State for Energy.
  Mr. Michael McNair-Wilson: In my speech on Second Reading I asked the Secretary of State to say what the going rate of interest was on money borrowed from the national loans fund. Is my hon. and learned Friend able to answer that?
  Mr. Clarke: About 9½ per cent. is the best bet from the distinguished galaxy on the Government Front Bench. I promise to write to my hon. Friend with a specific answer.
  Question put and agreed to.

  London Docklands Development Corporation
  10.5 pm
  The Under-Secretary of State for the Environment (Mr. Giles Shaw): I beg to move.
  That the London Docklands Development Corporation (Vesting of Land) (Tower Hamlets London Borough Council) Order 1981, a copy of which was laid before this House on 10th July, in the last Session of Parliament, be approved.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): With this we may also take the following motion: That the London Docklands Development Corporation (Vesting of Land) (Greater London Council No. 2) Order 1981, a copy of which was laid before this House on 10th July, in the last Session of Parliament, be approved.
  Mr. Shaw: On 1 July, the House approved orders setting up the London Docklands Development Corporation and vesting in it certain lands owned by the Greater London Council and the Port of London Authority. Two further orders were approved by the House on 30 July vesting in the corporation lands owned by the London boroughs of Southwark and Newham. In the debate on those orders I told the House that further orders had been laid affecting some 63 acres of land belonging to Tower Hamlets borough council and some 44 acres owned by the Greater London Council. It is those two orders that we are concerned with today.
  The Local Government, Planning and Land Act 1980 enables urban development corporations to acquire land compulsorily and, in the case of publicly owned land, by means of a vesting order subject to affirmative resolution of both Houses. The principal purpose of the latter provision is to enable UDCs to have enough land at the outset for their own early projects and to prepare a range of sites for private development.
  The corporation put forward proposals for the early acquisition of some 850 acres of publicly owned land. Orders vesting 278 acres of Port of London Authority land in the West India and Millwall Docks and in Beckton, 15 acres of GLC land on various sites, 142 acres of Southwark land and 87 acres of Newham land, have already been approved. The Corporation is also negotiating for the purchase of land from the British Gas Corporation, British Rail, the Thames Water Authority and the Central Electricity Generating Board.
  The Government's case for the orders is that, to be effective, the London Docklands Development Corporation needs to own a substantial amount of vacant or underused land on which it can carry out any necessary preliminary work and then release it for development. That is a key component of its strategy.
  Most such sites are in public ownership and several of them are included in the orders before us. Hon. Members may recall that the Government's proposal to set up a development corporation was considered by a Select Committee of another place. That Committee heard evidence and sat for 50 days and produced a unanimous report which endorsed the Government's proposals, with the exception of a proposed change in the boundaries. Although that Committee did not consider the specific proposals for vesting land, it clearly accepted the need to vest land in the corporation.
  844
  The two orders before us today were laid on 10 July and were open to petitions for a period of 14 days. One petition, by the Greater London Council, was received against the GLC order. Two petitions were received against the Tower Hamlets order: from Tower Hamlets borough council and the Association of Wapping Organisations—a local community group.
  In its petition, the GLC argued that the vesting order would deprive the councill of potential sites for public sector housing, and that the inclusion of various plots would prejudice the implementation of various development proposals envisaged.
  Tower Hamlets council argued that the vesting order would deprive it of land which it proposed for public sector housing, that the corporation already had sufficient land for its purposes, that the order would frustrate a civil engineering contract for the reclamation of various parts of the London docks complex and that in any event the order made no provision for indemnifying the council against the obligations arising from that contract.
  The Association of Wapping Organisations argued that the vesting order would deprive the local community of new public sector housing, and that community facilities enjoyed on some of the plots proposed for vesting would be taken from them.
  In response, the Secretary of State pointed out that the question of the availability of housing land had been considered during the lengthy proceedings on the designation order, that assurances had been given to all three bodies concerning particular points which they raised, and that the development corporation would take over the reclamation contract. Compensation will be paid to Tower Hamlets for any loss suffered as a result of the vesting order, in accordance with the provisions of the compensation code.
  The three petitions and the Secretary of State's representations were considered by a Hybrid Instruments Committee sitting in another place. The Committee's report was published and is available to hon. Members in the Library. In it, the Committee took the view that, as far as the land for housing was concerned, that matter had already been sufficiently dealt with by the Select Committee. The Committee also felt that the assurances given by the Secretary of State and the corporation adequately met the remaining points raised by the petitioners and, therefore, that no substantial ground for complaint remained.
  The way is therefore open for both orders to be considered by hon. Members tonight. The development corporation has the task of regenerating the whole of docklands, and it is essential to that task that the corporation should have an assortment of sites in all parts of the urban development area as a base from which to pursue its activities. These two orders will finally give the corporation that broad base, and I commend them to the House.
  10.11 pm
  Mr. Gordon Oakes: I thank the Minister for his explanation of the orders. It is clear from what he says that there has been considerable contention about the orders in that the Greater London Council, Tower Hamlets London borough council and a community organisation have been prepared to petition against them in another place. It is well known that the Opposition opposed the concept of the UDC. We opposed it on two grounds. The

  845
  first was the question of local democracy and local accountability—something of which we have heard a lot with regard to other Bills that now seem to have disappeared from the purview of the House.
  We are concerned that the people of Tower Hamlets and Newham, that the people who elect the Greater London Council and their local councils and that those local councils, as elected, responsible bodies, should have some say in deciding how key land in their areas should be developed. We were also concerned that the urban development corporation, a new concept in Liverpool—I see the hon. Member for Liverpool, Wavertree (Mr. Steen) present—and docklands, which are strictly urban areas, would tend to react as though dealing with a green field site where no one lived, no one had roots and no one belonged. One could get away with that attitude in a new town. One cannot get away with it where there is an established local democracy and an established pattern of living and where people have lived for generation after generation, as in Tower Hamlets.
  It would be improper and it is not my intention to refight old battles. We are, however, entitled to examine the order to see how the development corporation is tackling its duties. We were assured by the Minister for Local Government and Environmental Services that there would be enormous co-operation and that the urban development corporation would not attempt to seize all publicly owned land in the area. We were told that it would look at prime sites and that it would examine its needs for the proper planning of the London docklands. We were told in regard to the local council or the Greater London Council, that there would be no attempt to acquire every square yard of land belonging to the council.
  These orders give us serious disquiet as to how the UDC goes about its job. It seems to us that the UDC has sought to acquire, under the vesting order, all land in the area which was earmarked for houses with gardens, and all land in the area with housing on the river frontage which was owned by public authorities. They are the keynotes of our disquiet. I shall go into details of particular plots later. Considering Wapping, for example, we find that it is not only all the available land in Wapping that would be available for houses with gardens. That virtually means, as no doubt my right hon. and hon. Friends will say later, all the available land in the whole of Tower Hamlets that is available for houses with gardens.
  We must consider whether land and houses with gardens should be the sole preserve of the private sector. Should it not be possible for the local authority and for generations who have lived in Wapping to acquire what most of my constituents in Widnes and most of all our constituents desire—not a high-rise or other flat but a house and garden of their own? I think that that is a perfect entitlement for the people of Wapping and of Tower Hamlets.
  On the question of land earmarked on the river frontage—and many of the GLC orders as well as some of the Tower Hamlets orders deal with land on river frontage—the councils concerned have over years planned that these sites should be available for people who live in the borough and who should have the right to live on the river frontage. I shall explain one of our fears. River frontage houses fetch, understandably, a considerable price on the market. Houses on some of the sites that may
  846
  have been acquired under these orders will fetch between £100,000 and £250,000. I doubt whether many of the people of Wapping or of Tower Hamlets have the ability to buy houses that cost between £100,000 and £250,000.
  Mr. Robert Mellish: Has my right hon. Friend any proof to back what he is saying from the Opposition Front Bench—that it is the intention of the UDC to build houses on the river front for sale at between £150,000 and £200,000? He has said that as though it were a fact. Will he let us know where he got that information from?
  Mr. Oakes: I have no proof whatsoever. These orders are coming before the House on an affirmative resolution for approval.
  Mr. Ian Mikardo: It is a blank cheque.
  Mr. Oakes: It is well known that river front houses sold by private enterprise command very considerable prices. I am very grateful to my right hon. Friend the Member for Bermondsey (Mr. Mellish) for his intervention, because if he or the Minister can say that there is no possibility of that sort of thing happening in regard to these river front sites, and that the people of Wapping and Tower Hamlets can have some of the choice sites on publicly owned land and at rents that they can afford—or, if property is sold, to which I have no objection, at prices that they can afford—I have not the slightest objection. I am certain that my right hon. Friend the Member for Bermondsey will agree that from the Opposition Front Bench I am entitled to ask questions about this matter.
  Mr. Anthony Steen: Does the right hon. Gentleman agree that the problem with the docklands in London—it is true of those in Liverpool as well—is that the land has been allowed to deteriorate and that what the UDC, as I understand it, is planning to do is to put in the infrastructure to service that land so that it can be productively used by private enterprise and that, as it is now, it is fairly useless and has been for many years?
  Mr. Oakes: If that will regenerate and redevelop London docklands in a way that is fair to its inhabitants, I am in agreement. There is a difference—I must say that from the Front Bench because I know the hon. Gentleman's area as he knows mine—between London docklands and the Merseyside dockland. There is not the same resistance by the local councils in Merseyside. Also, the areas are different. Some people live in the Merseyside area, but not as many as those who live in the middle of the urban development corporation area in the London docklands.
  I do not wish to deal with the orders in detail, because many right hon. and hon. Members represent the areas concerned in the vesting orders. They know much more about the local problems and difficulties than I do. However, I wish to question the Minister about the Tower Hamlets order, and especially plot No. 1. That plot is 36 acres of land in Wapping. It was earmarked for local authority public housing with gardens. Again, I come back to my point that people who live in London are entitled to have gardens if they wish. Thirty-six acres of prime land in Wapping is an enormous area, although it may not seem so in a rural sense.

  847
  On the Tower Hamlets order, plot No. 6 is the next largest amount of land—about 17 acres. We are talking about a total of 53 acres that was publicly owned and designed for public authority housing with gardens for people who were qualified to live in the area and whose families had lived there for generations. Plots Nos. 3 and 5 mentioned in the same order do not represent the same quantity of land, but they are riverside sites. The local authority petitioned in another place against the order. It planned to allocate public housing on the riverside land to people who lived in the area, who wished a site by the river and who could afford to acquire one.
  Will the Minister tell us the intention of the urban development corporation towards those plots? The corporation has the power to build the houses. Will it do so rather than the Tower Hamlets local authority? I would feel some satisfaction if it did. I cannot understand the lack of local democracy in the matter. Will it be possible for those who live in Tower Hamlets to have their homes on such prime site?
  Some of the sites were earmarked for ordinary public authority housing. Some sites were designed for housing associations ——
  Mr. Mikardo: Two of them.
  Mr. Oakes: ——and they have also been swallowed up. Will the urban development corporation work together with the housing associations so that housing association houses can be built? They may do that, but I am entitled to ask for an assurance that the Government and the urban development corporation intend to do so.
  The GLC order deals mainly with the Isle of Dogs. Here again we are talking about prime land right on the river front. I refer particularly to plot No. 15, amounting to nine acres; to plot No. 8, which amounts to 11½ acres; and to plot No. 17, amounting to four acres. All three are riverside plots. If the London Docklands Development Corporation viewed those sites with the same mind as a building entrepreneur, it would make a fortune. But what about the rights of the people who live in the area?
  On the face of it, the orders give us some cause for concern. The development corporation has acquired almost every square inch of publicly owned land, but we fear that the democratically controlled local authorities in the area, be it the GLC or the Tower Hamlets borough council, have been excluded. We were concerned that the corporation might operate as though docklands was a new town or green field development, and we fear that that might be taking place.
  I want to hear what the Minister says before deciding whether to call for a vote on the orders. I hope that what I have said is wrong. I want docklands to do well. I want the area to be developed. I do not want to see the dereliction that now exists. However, I do not want the corporation to do well at the expense of people and their families who have lived there for generations.
  10.27 pm
  Mr. Neil Thorne: I listened to the right hon. Member for Widnes (Mr. Oakes) with interest. I am disappointed with the fact that both the GLC and the borough of Tower Hamlets have opposed the orders.
  I am one of the small band of hon. Members who have served on the joint docklands committee. From my own experience, I know how the authorities represented tried
  848
  hard to retain both influence and property within their boroughs. They were gravely mistaken. I was disappointed with the lack of progress. The only way in which the London Docklands Development Corporation can properly address itself to its task and overcome years of neglect is to take an overall view.
  The right hon. Member for Bermondsey (Mr. Mellish) is our guarantee that this work will be undertaken in a proper and sensible fashion. That was why the right hon. Gentleman was appointed to such an important position on the development corporation. I am quite convinced that no one will be sold a house for £150,000 or £250,000 on the river frontage.
  Mr. Mellish: Well said.
  Mr. Thorne: Moreover, I should be interested to learn, if such houses now exist, how much the boroughs concerned paid the previous owners. Had there been such houses, I suspect that the authorities would have taken a different view from the one that has now been put forward.
  I am disappointed with the fact that the authorities should take such a negative view. I hope that this is not merely a dog-in-the-manger attitude. I was not impressed with the behaviour of their representatives on the joint docklands committee, on which I served for three years. I have every confidence in the present management, and I am certain that it will do a proper job of which we can be proud and on which we can look back with pride in the years to come.
  10.29 pm
  Mr. Peter Shore: The orders concern the ownership and control of about 107 acres of land, all of which, apart from half an acre in Rotherhithe and the Surrey docks, is located in the London borough of Tower Hamlets, and particularly in the constituency that I have the honour to represent.
  The land is owned by the London borough of Tower Hamlets and the GLC. The orders will strip them of their ownership and transfer or vest the land in the new Docklands Development Corporation. It is a not insignificant quantity of land and it is concentrated in Wapping, around the old London dock area, and in a substantial part, though not the heart, of the Isle of Dogs.
  No one who knows anything of the history of the area, the needs of the people of Tower Hamlets and the plans made and already far advanced to meet them will fail to understand the anger at the orders that is felt by the people of those areas and by Tower Hamlets as a whole.
  The borough has had a more difficult and intractable housing problem since the war than any other London borough, perhaps even greater than Bermondsey, though we have been virtually on a par. I think that when my right hon. Friend the Member for Bermondsey (Mr. Mellish) became Minister of Housing in 1964 he put Tower Hamlets at the top of the list. That was the state we were in at the time. The borough now has one of the worst unemployment records in the country as well.
  In the past 12 years the movement of the port of London's activities down river towards Tilbury has gradually released large acreages of land, which, as it became available, opened up the prospect of use for the many purposes of the people of Tower Hamlets—new factories, offices, amenities, educational purposes and the housing that the people still urgently need.

  849
  With great foresight and at considerable cost and effort, the London borough of Tower Hamlets bought the London dock in 1975 and, through the Wapping plan, laid out, after consultation, a programme for the development of the whole 100 acres involved. Fortunately, part of it has already proceeded to a point where the Government and their agent, the development corporation, can no longer intervene. The area reserved for industrial development was occupied by the vast new premises of International News and by The Daily Telegraph and other job-creating enterprises. For the first time, substantial estates of small houses and gardens have been built in that area of docklands.
  I should tell the hon. Member for Liverpool, Wavertree (Mr. Steen), who intervened earlier, that there is no question of this being an abandoned, unused, long-held, rotting area of publicly owned land. The council bought the land in 1975 and proposed its development as part of the docklands strategy in 1976. I adopted all the major parts in 1977, when I was Secretary of State for the Environment, and the go-ahead and the funds were given. The results can be seen on the ground.
  The future of a large area of the rest of Wapping and a huge contract for the infrastructure, which went to the Hybrid Instruments Committee in another place, were being debated. Things are moving and the situation is quite different from that which I remember in some parts of the inner dockland in Liverpool.
  It is on the use of the remaining land in the London dock area and the land that has recently become available on the Isle of Dogs—some of it has become available only very recently—that the people of Tower Hamlets have pinned their hopes for a transformation in the amenities and circumstances of the area and, indeed, the whole borough.
  Those prospects are seriously under threat and for many people they have been cruelly dashed. More than half the 107 acres—a total of 55 acres—is reserved for housing. It will still be reserved for housing but not, I fear, for the people of Tower Hamlets. It will not be for houses to rent. The houses will be offered for sale at prices which I am afraid will be beyond the reach of all but a small minority of the people of my borough.
  The enormity of what is being done must be considered against the quantity of land available for housing which will be left to the borough of Tower Hamlets if and when the order is approved. We shall have precisely eight acres left for housing in the borough. I remind the House that in a single plot listed with others in the schedule to the Tower Hamlets order 30 odd acres in Wapping are to be transferred, still for housing, to the London Docklands Development Corporation, and, as we have heard, other land in Wapping to be developed by housing associations and for sheltered flats for the elderly—with riverside views—will be lost to my borough.
  My right hon. Friend the Member for Widnes (Mr. Oakes) spoke of a number of prime riverside sites on the Isle of Dogs at London Yard, Caledonian Wharf and Masthouse Terrace.
  There are other areas, too. I shall be interested to know what, somehow, can intervene between the market mechanism and the price of those properties, especially the riverside ones. Is any intervention possible in a way that will bring the price remotely within the grasp of the people of my borough?
  850
  My right hon. Friend spoke of prices of £100,000 and £150,000, and I know where he got those figures. They are not all that fanciful. There is a thin scree of warehouses in private ownership at the bottom end of Wapping. They have been converted into flats by private people and are on the market. The original conversion price was about £60,000, but they are selling at well over £100,000. How it can be different if private owners are to take over and develop for flats and houses the riverside views on the Isle of Dogs and elsewhere in Wapping and how they can be made available at prices lower than what I anticipate, I do not see, and the onus of proof is upon the advocates of the order who occupy the Government Benches.
  The enormity of what is being done can be measured further by the size of the Tower Hamlets waiting list. Eight acres of land in Tower Hamlets will be left, and we have a waiting list of 8,000 families seeking to be rehoused. The prospect of dockland enabled my borough to plan for the future, and it planned for between 1,500 and 2,000 new dwellings in the dockland area which, with the modernisation of existing dwellings, would have enabled it within a measurable period of years to overcome the greater part of our housing need in Tower Hamlets. This transfer of housing land will wreck the housing strategy of my borough and condemn its people to years of prolonged housing shortage.
  That is not all, however. Because of its originally dense building and its shortage of building land, Tower Hamlets has been forced almost throughout the post war years to build high-rise flats and not houses. We have a higher proportion of flats and a lower proportion of houses with gardens than any other borough in London. I am not speaking simply of people's preferences, which are overwhelmingly in favour of having houses with gardens. I am speaking of certain categories of need. I have in mind families with disabled children, for whom houses with gardens are often essential. In present circumstances, it is a need which we cannot meet.
  The case against the orders was only partially deployed before the Hybrid Instruments Committee in the other place on 21 October. However, I acknowledge that the general case against the Docklands Development Corporation was argued at greater length in the earlier part of the summer. Putting on one side the question of whether we go ahead with the Docklands Development Corporation, I contend that this massive transfer of land, particularly housing land, is not a necessary part of the major purpose of the Docklands Development Corporation. Those purposes can go ahead if the housing land is not so transferred. I contend further that it has clear and obvious disadvantages for the people of Wapping, the Isle of Dogs and Tower Hamlets generally. It is strongly opposed by them. They cannot see—nor is it possible to show them—that their interest lies in this particular transfer of housing land. For those reasons, I join with others in opposing these orders.
  10.41 pm
  Mr. Anthony Steen: I shall confine my comments to what should happen to the land that we seek to vest tonight on the basis that there is a certain relevance between what happens in London docklands and what happens in Liverpool dockland, although I accept that there is a difference between the land in the docks in the two cities.

  851
  It is probably less than useful to run round the course and consider Whether the UDC is a good thing or whether the public money would be better used in in-filling vacant sites that already exist in the inner city. A substantial amount of public money has been put aside, and will increasingly be put aside, to revitalise dead areas of the docks in two of the principal urban areas of this country. The importance to the House and to the Labour Party is that this involved massive Government intervention in rundown, depressed areas which have been neglected, although there have been attempts in London, whereas there have been fewer attempts in Liverpool, to revitalise them.
  It makes good sense for the urban development corporation to be used to prepare land. Its function must be to use public funds to install services and to make the land attractive for urban development and expansion at the point where private investment will be ready to use it. That, in my view, is the major purpose of the urban development corporation. It should not get involved in building factories and spending money on development. Its sole role, in my opinion, is to market the sites and to sell them and sell the freeholds to those people who are prepared to develop them. It is no good if the corporation just offers leaseholds and short leaseholds to companies which are willing to come into the area, simply because as experience has shown, when local authorities let their property to factories on short leases, the factories are unable to get bank loans to improve the premises and are not prepared to sink large sums of their capital in revitalising ailing factories. One of the cardinal rules for urban development corporations in Merseyside and London is that they should sell off the sites for private development once they have put in the infrastructure.
  I want to say something about the London docklands, and about waterfront sites in particular. A unique opportunity will be lost if some of the lands that we seek to vest is not used to establish a small experimental free port. There are free ports in Germany and Eire. They work well, and I understand that the Hamburg free port works particularly well. The EEC may well oppose a further extension of the free port concept. However, there is a strong case for placing a free port in the London docks and another on Merseyside.
  The free port is a simple concept that will bring great benefit and prosperity to such an ailing part of London. I think that all hon. Members will agree that the fundamental requirement of city renewal is the attraction of fresh private investment into our declining urban areas. That is the thrust of the Government's enterprise zones, and the partnership, the urban aid and other urban development initiatives. We must also lift unnecessary controls and reduce bureaucracy. Such considerations support the concept of establishing a tax-free port, which—unlike enterprise zones and the urban development corporation—would require virtually no additional public funds and no extra staff on the public payroll.
  Such ports would be designated by the Government in areas that have sufficient water front space. There is plenty of water front space at the London docks and on Merseyside. The key point is that there must be sufficient space away from the rest of the port and separated by a fence or wall. For all tax purposes the port would be viewed as being on foreign soil. On Merseyside, a wall already exists round the docks and a small part of that site could be set aside for the free port. A similarly small site
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  of only 20 or 30 acres could be set aside in the London docks for a similar tax-free port, when the land is vested tonight.
  The important factor is that once the goods had been unloaded from ships into the zone they would be free from all Customs entry procedures and would attract no duty or VAT until they had crossed the port's boundaries into the country. The land in the tax-free zone would be foreign soil. While the goods were in the zone they could be processed by factories specially built inside the zone and on the water front site for that purpose. Goods could be manufactured, consolidated, reassembled and shipped out again to other parts of the world and no levy would be raised. Importers could inspect the goods before they came into Britain from the zone. They could discard substandard items and spot shrinkage and evaporation before duty was paid.
  Mr. Arthur Lewis: Has the hon. Gentleman checked whether, even if the scheme were good and acceptable, it would be permitted under the Treaty of Rome and EEC regulations? I am glad that my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) is in the Chamber. As we are virtually prevented by the EEC from cooking our own sausages. I doubt whether the EEC will permit us to do such a thing.
  Mr. Steen rose——
  Mr. Deputy Speaker (Mr. Bernard Weatherill): The hon. Member for Liverpool, Wavertree (Mr. Steen) must confine his remarks to the use of the land and should not hold a general debate on whether it would be a good idea to have a free port.
  Mr. Steen: I have almost concluded that point. However, the land could be used for a particular purpose. Opposition Members have been talking about using it for housing. The right hon. Member for Widnes (Mr. Oakes) devoted most of his speech to housing. I am trying to explain that a tax-free port would be far more appropriate for the site. Nevertheless, Mr. Deputy Speaker, I accept your ruling.
  In response to the hon. Member for Newham, North-West (Mr. Lewis), I should say that there are three of four tax-free ports in Europe. Britain should not be at a disadvantage. There is a tax-free port in Shannon and one in Hamburg. The advantages that Hamburg and Shannon have should be extended to London and Liverpool.
  There would be obvious advantages in establishing a free port. Factories located in the zones would enjoy advantages similar to those that they would enjoy if they were located abroad. Business men would need to find less money for cash flow, so they could bring in goods and take them out again without having to find capital to pay duty first. There would be less bureaucracy and paperwork.
  The attraction of using the land in that way is that the responsibility for policing and general security would be in the hands of a self-financing board of commissioners who would maintain and supervise the security operations of the zone, raising the necessary finance either by way of a general service charge from those doing business in the port or from a percentage payment of goods passing through the zone.
  The attraction of private enterprise in the London clocks is well understood by hon. Members on both sides of the House. I welcome the orders and the transference of the

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  land to the urban development corporation, but it must be used to develop private enterprise and to extend the opportunities by which wealth creation may be returned to this country, to London and to the docks.
  10.52 pm
  Mr. Ian Mikardo: The case against these orders has been marshalled so comprehensively and thoroughly by my right hon. and hon. Friends that I need to add little to what they have said.
  I underline the comment of my right hon. Friend the Member for Widnes (Mr. Oakes) that the great mistake that has been made in setting up and giving powers to the London Docklands Development Corporation is to operate it as an analogy to an urban development corporation, which takes a green field site where it is not necessary to carry out exhaustive consultations with the starlings in the air or the earthworms under the ground or which builds up a small village into a city of a quarter of a million people—as is the case with Milton Keynes—and apply the same method to an area that has been densely populated for at least a century and a half.
  Of the total area that was originally contained within the joint dockland scheme, the part that is covered by these orders and operated by the London Docklands Development Corporation is about a quarter of the acreage of all the docklands area in the five boroughs. But more than half the population of the docklands area lives on that quarter of the acreage.
  The area is along narrow strip of land, a little wider at one end than at the other, and between 25,000 and 30,000 people live there. Although the Isle of Dogs, knocked about badly during the war, has a mainly new community, at the western end of the patch, in Wapping and Shadwell, people have been living there for generation after generation and they have a fierce and intense local patriotism. They are being treated by the Government and by the corporation as though they were not there. The area is being treated as though it were a green field site. No consideration is being given to the principle that the views of those who live in the area should influence the development of the area. The views of those in Tower Hamlets, as my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) has explained so clearly and graphically, are that they need a much greater provision of low-cost housing. Most of them want to rent, but there are others who want to buy. Like my right hon. and hon. Friends, I do not fuss about that, as long as it is housing that is available to those with relatively low incomes in an under-developed area which has suffered many setbacks from the bombing blight of the war to the planning blight of post-war years.
  If we were to receive an assurance from the Minister or from the corporation that that is what will be done with the land, we should all be happy. We have had no such assurance so far. There is no sign of any such assurance forthcoming. If it is to do no more with the land than what was planned to be done by the Toynbee housing association, which is doing a marvellous job in another part of the borough, or on a site at Shadwell which was to be developed by the Circle Thirty-Three housing association, or the rest of the area that was to be developed by the borough council, or it wishes to do exactly the same, what is the point of the operation? What is the point
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  of switching control? What is the point of setting up a new organisation to do precisely what it was intended to do before?
  If that question is posed, the only conceivable answer is that the development corporation wishes to use the land differently. If it wanted to do the same, there would be no point in making the proposed changes. The Minister talked about the Government providing great resources. His right hon. Friend the Secretary of State said that on many occasions when I and others have questioned him. Those resources could have been put into the local authority. A large proportion of those resources consists of money that has been filched from the local authority in cuts in rate support grant. If that had been done, the money would have been spent and the developments would have taken place subject to democratic accountability. The public would have been able to have a say in the way in which it was spent, instead of having this Jove-like corporation with Olympian powers. The Attorney-General should not look so puzzled. He knows who Jove was. The corporation will be accountable to no one. It will be remote as it sits on top of Mount Olympus.
  Let no one think that it is any substitute for real consultation for the corporation to take one chap from each of the three councils that are affected and to put them on the board. That will not provide real consultation with the local community, whose standard of living and environmental assets will be decided by the corporation.
  We have all talked about housing on riverside sites. I do not want £100,000-£150,000 flats, or houses that are valued at even larger sums, such as those that are in that beautiful area at the bottom end of the Isle of Dogs that looks across to Greenwich. I do not want either those or council houses going to the river edge. I want a river walk all the way from Tower Bridge round to the bottom edge of the Isle of Dogs.
  However, that costs money, because it means that some land is being taken away, which can be sold at about £250,000 an acre. A local authority does such a thing. If it does not, its electors will kick it in the teeth. I dare anybody to kick the London Docklands Development Corporation in the teeth. It has shown up to now a considerable degree not merely of authoritarianism but of what can be described as contempt for the views of those who live in the area that it administers. It is not even implementing the promises that were made by the Government and the guidelines that were laid down by the Select Committee in the other place.
  I am particularly concerned about that and about the attitude of the corporation and its officers towards the public. There was a promise "to involve the public". There was a directive from the Select Committee which stated:
  "The UDC must win the confidence of local organisations…They must always let the Docklands Forum know what they are thinking of doing."
  That is not done. No adequate information has been provided to docklands organisations. When the corporation asks for opinions, it never allows anything like adequate time for people to put together those opinions, mobilise them and pass them over, nor is there the least evidence that when people rush to give a view in the agreed time, it is taken into account. The Select Committee laid down that the corporation should take cognisance of those opinions, but there is no evidence of that at all.

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  I shall give some examples. I repeat that inadequate information is given about the intentions of the corporation. It has been terribly difficult to obtain lists of planning applications from it. It has been a great battle to obtain them. We have succeeded in getting them for the Joint Docklands Action Group and for the Docklands Forum, but none of the other organisations, for example those represented in the Association of Wapping Organisations, which petitioned against the orders, received any lists of planning applications. Therefore, they do not know what applications are coming forward or what developments are likely to take place.
  The corporation will not even publish the dates and the agendas of the meetings of its planning applications committee. It goes to great lengths to ensure that the people in the area do not know what is being planned for them. I repeat that in that it is failing grossly to implement the promises made on its behalf in advance by the Government and the instructions of the Select Committee.
  Mr. Arthur Lewis: Does my hon. Friend recall that exactly the same thing happened in that part of London when, without adequate consultation of the local people, the monstrosities of the tower blocks were erected? We know what has happened since. We even have to blow them up because the buildings are falling down. There was lack of discussion and consultation with the people.
  Mr. Mikardo: I take that point. But when an elected authority is involved people can make demands on the authority with a sanction behind their demands—the sanction of the ballot box at the next local authority election. The people of Wapping, Shadwell and the Isle of Dogs, and the people in my half of the borough who are on the housing waiting list and are affected by the fact that almost all the land available for housing in the borough is being swiped from it today, have no chance of influencing the development corporation because they have no sanctions and no vote. That is a monstrous violation of the system of democratic accountability that we in this country hold so dear.
  I have grave doubts about what will happen. My right hon. Friend the Member for Bermondsey (Mr. Mellish) says that nobody can say what the corporation will do and nobody can prove that it will do anything nasty. He is quite right. But one can put two and two together and draw some conclusions. If its intentions are impeccable, why does it not tell people its intentions? Why does it not disclose more of what it is up to? Why does it not let people know what the planning applications are? If some of us are suspicious, it is the corporation's own fault because it is so tardy in letting people know what it is up to.
  The corporation was set up to maximise the private enterprise development element in the area. That is what was said when it was set up. It operates under a chairman who, according to his autobiography, was one of the toughest, most ruthless private developers of expensive property that there have ever been. I am not doing him an injustice in saying that, as I am merely repeating what he has written about himself. It would therefore be very surprising indeed—I should be very happy, but I should certainly be very surprised—if the corporation then used the land to provide housing for the people of Tower Hamlets at prices they could afford.
  It is because I believe that is not what will happen that I shall certainly vote against the orders today.
  Mr. Deputy Speaker: Order. I remind the House that it agreed earlier to take both orders together. The debate will therefore end at 11.35 pm.
  Mr. James Wellbeloved: On a point of order, Mr. Deputy Speaker. When that proposition was put to the House and we indicated by not commenting that we had no objection, there was no thought at that time of the vast interest that would be generated by this debate. I wonder, therefore, whether it is possible for the orders to be taken separately. It is a matter of considerable importance. The proposition was to take the orders together if it was for the convenience of the House. I believe that it would be for the convenience of the House if they were taken separately to allow this very important issue to be thoroughly examined.
  Mr. Deputy Speaker: Order. I am sorry to have to tell the hon. Gentleman that that is not possible. Mr. Speaker has previously ruled on that. I think, with respect, that the problem is the length of the speeches.
  11.9 pm
  Mr. Christopher Murphy: It is a great pleasure to follow the hon. Member for Bethnal Green and Bow (Mr. Mikardo) as it is in consequence of our having been political opponents in two general elections that I can claim a certain valuable knowledge of that part of the East End.
  The House should recognise that in Tower Hamlets there has been an appalling history of the destruction of Regency and other older homes, many of which were originally in private ownership. Rather than improve them, the Socialist council replaced them with public sector tower blocks which did little to improve either the quality or the quantity of housing stock.
  It seems to me that the intervention of the new urban development corporation would provide the opportunity for choice in housing that has been sadly lacking in this part of the East End of London. The clear imbalance that exists in Tower Hamlets between private and public housing has been a key problem in this unfortunate and somewhat wasted area.
  Tower Hamlets has been renowned for two things for too long—the incredible areas of unused land surrounded by corrugated iron that strike anyone travelling through that part of the East End and the aforementioned tower blocks that have given rise to the description of the London borough of Tower Hamlets as "the London borough of tower blocks". Many of my constituents, who are former constituents of the hon. Member for Bethnal Green and Bow, have had to move to the green field areas of Hertfordshire because of the lack of suitable housing that is open to them in that part of the East End.
  It is, therefore, in the interests of the people of Tower Hamlets that the urban development corporation should be given the opportunity to redevelop these wasted areas and give the people in that part of London the choice of housing that they so sadly need.
  11.11 pm
  Mr. Robert Mellish: As this debate is concerned with what the development corporation has done, what it has not done and what it should do, and as I am its vice-chairman, I hope that I shall be allowed some time to explain what it has done and what it hopes to do. I do not think that it is the Minister's responsibility to

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  defend what we have done or what he have not done. It is for those who like myself have accepted the job to stand up and be counted.
  I agree with my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) that Tower Hamlets, which I have known all my life, although not quite so well as Bermondsey, is a borough that was affected by the worst kind of housing problems of any borough in the country. The borough has faced those problems with courage and bravery. Over the years, it has done a job that I have understood and respected. If it has made mistakes the same applies to every borough council in Britain. However, when one considers the area's immense problems and also the devastation of the war, I have nothing but praise for what the borough has attempted. It is unfair to comment on what one sees on the perimeter of Tower Hamlets. One needs to see some of the better housing within the borough.
  An obvious fact, missed throughout the debate, is that opposition to the establishment of the London Docklands Development Corporation means that nothing happened until the end of July. We were made legal on or about that time. There followed the beautiful month of August when, as everyone knows, hon. Members and borough councils work like mad. So there was a hiatus. Our first action was to appoint staff. We had appointed a general manager designate. We had then to appoint a chief planner, a chief development officer, a chief financial man and a whole range of chief officers while bearing in mind that this House and the whole of docklands would resent any idea that we had built up a huge empire that was uncontrollable.
  I am not making excuses. I am simply stating the facts of life. It was September when we started getting these officers into place. For one post alone, there were 1,500 applications. It takes time to open envelopes, sort out the candidates and arrange interviews. As soon as officers were appointed, we tried hard to get things moving. I was appointed—this will not surprise hon. Members—as chairman of the committee that would deal with housing. I have already signed contracts for 600 houses in the Newham part of docklands and recently signed a contract for another 600 in my own constituency of Bermondsey, making a total of 1,200 houses. The contracts have been signed and will be started before 31 March. I hope that they will be completed before the end of 1982.
  I shall be asked what sort of houses will be provided. Hon. Members have every right to ask what is planned. I have always maintained that the development corporation should be judged on what it does. It is right that we should prove to hon. Members and to docklands people that the right decision was made when we were appointed, so I just throw up the first thing that comes to mind, which is the fact that I have signed contracts for 1,200 houses. I hope to go to Tower Hamlets to be involved in the signing of more contracts for new homes, all to be completed as quickly and as efficiently as possible.
  I want to make it abundantly clear that every house with which I am associated—past and present—has been in the price range of £18,000 to £25,000. That makes a mockery of the figure of £150,000 that was thrown up from the Opposition Front Bench, as though I were the type of
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  person, or the board were the type of board, that would look for characters with that sort of money to spend. That is not in my orbit at all.
  This is what we have done, so let us be judged on that and on what we are doing.
  My hon. Friend the Member for Bethnal Green and Bow (Mr. Mikardo) made a very important point about consultation, and rightly so. I shall explain that matter to him and what I intend to do. We have started building the sort of houses that ordinary people can afford. I say that without offence. I talk about it in my constituency. In dealing with its problem, Tower Hamlets had to go—as did Southwark in dealing with its problem—for massive redevelopment by the local authority. No one quarrels with that. The removal of acres and acres of slums alone could be done only by a local authority. In the place of the slums, various kinds of flats were erected.
  We all have tower blocks in our constituencies. I take my share of the responsibility for those, as much as anyone in the House, because I was the Minister when we continued the previous Government's policy of building high. In those days we believed that that was the right policy. That was wrong. Looking back, I wish that we had never built any tower blocks. I wish that we had never got involved in industrial building, but that is another argument.
  It is easy to say that now. When people first went into the tower blocks, they were a heaven upon earth. With one particular lot of buildings, Queen's Buildings, five families shared one toilet and one tap. They were put into a tower block and they thought it was heaven. It was fabulous. But now, a few years later, it is not heaven. It is lousy; it is hell. That is especially so for people with children. I suppose that this is because of the progress of living standards. No borough council, even in its wildest dreams, would ever go for that policy again.
  However, as a result of that policy of clearing the slums, and so on, about 86 per cent. of the entire accommodation in Tower Hamlets is rented. It is owned by the borough council. In my constituency the figure is about 82 per cent. I propose to make an injection here by building homes at a price range of £18,000 for a one-bedroom flat to £25,000 for a three-bedroom flat. I shall be giving people in those areas the chance to buy for the first time.
  Perhaps it will be shown that this is wrong and that I should not have done it; I do not know. But I have a strong feeling that I shall be killed in the crush. When my local authority experimented with about 20 houses, overnight it had 600 applications to buy. The irony of the case being advanced by some of my hon. Friends is that they talk in terms of putting up council flats. Let us forget my argument about accommodation for rental and building for sale, and so on, and let us just take the council's case. My local authority has just done this. It has built houses where I come from. They are very nice houses. But the rents are £42 a week. That is to rent a house from the borough council. When my hon. Friends say that people want to rent property because they cannot possibly afford to buy, I must say to them, with great respect, that £42 a week is a hell of a lot of money. It is a hell of a lot of money for a place that will never belong to the tenant anyway.
  Mr. Nigel Spearing: My right hon. Friend has tonight announced that he has signed some contracts for new private housing in my constituency. Will

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  he take it from me that not only has the borough council provided homes for sale in Newham previously but that the information regarding the activities of the UDC is inadequate? Will he please look at this matter? The information that he is giving to the House tonight has not been officially transmitted either to myself or, as far as I know, to the public in the area, and the present situation is no good.
  Mr. Mellish: I was at Newham a week ago, when I met the council officers and the Mayor. I am sorry that my hon. Friend was not there, but I have nothing to do with those who attend meetings arranged by the borough council.
  Mr. Spearing: I mentioned the UDC.
  Mr. Mellish: I took four members of the UDC with me, including three senior officers.
  My right hon. Friend the Member for Stepney and Poplar raised an important point that should be answered tonight. What are we doing to inform the local community? It would be appalling if we went to those areas with a sense of arrogance and decided that we were going to do certain things without telling anyone locally. We have tried very hard to devise a fair and honourable scheme, but we have some difficulties. I do not know if my hon. Friend Knows the number of community groups that wish to be consulted. There is not just one—there are dozens. That was the heartache with the Docklands Joint Committee. Nothing could be fairer than the principle and democratic right of consultation with those people, but one cannot spend one 's life discussing with groups. One must do something, if it is only to say "Goodbye".
  We must set up an organisation, which I call the "Docklands forum". We must pay for it and its staff, separate it from the urban development corporation, give it its own offices and make sure that it has complete independence. We inform the forum of everything, such as details of planning, and let it transmit the information to the various groups about which they will know. That is the only way in which I can see the plan working.
  That does not mean that I and other members of the board should not receive representations from groups—such as the Wapping association—where it is justified. That type of group is not on the list that I talked about. We have heartaches and problems. My hon. Friend the Member for Newham, South (Mr. Spearing) said that we have not told anybody anything. We started only in September, apart from my dashing around to get housing projects started. We are trying to build up a strategy plan and sell all the areas to private enterprise, for housing and infrastructural development.
  I have already taken up too much time, and others wish to speak. We must set up a consultation system. This speech will be read by my critics next year, by which time I sincerely believe that we shall have not less than 2,500 houses under construction in London's dockland area and not less than about £800 million of commercial work. Judge us on merit. We must bring the area to life. It has been derelict for so long—I have seen the process of dereliction—that whatever we do must be a success.
  11.23 pm
  Mr. James Wellbeloved: The House is fortunate that the right hon. Member for Bermondsey (Mr. Mellish), despite the fact that he is vice-chairman of the corporation, is still a Member of the
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  House. Although I have perhaps a vested interest in his concentrating on his vice-chairmanship and thus giving an opportunity for one of my colleagues to take his place as Member for Bermondsey, it would be in the interests of Parliament if he would continue for a little longer and bring to bear his knowledge and activities in debates on the docklands.
  The plots of land that are being vested in the corporation have ramifications that go far beyond Tower Hamlets and the other boroughs. While I do not wish to detract from what has been said by hon. Members who have spoken about Tower Hamlets, the use of the land, especially those parcels contained in the GLC order—which I understand will form part of the enterprise zone in the area—has a wide impact on the surrounding area. I have received many representations from industrialists in my constituency who are worried about the use of the land and the development of an enterprise zone.
  Mr. Mellish: I hope that the Minister will confirm later that what we are discussing has nothing to do with enterprise zone land.
  Mr. Wellbeloved: I am advised that a small parcel of the land is in an enterprise zone. That is why I believed that I was in order to mention the matter. The enterprise zone is not the responsibility of the corporation, but. the Minister has a responsibility to re-examine the propriety of having an enterprise zone in the development area because it will have such a devastating effect on the industry in the surrounding boroughs.
  I suffered grave discourtesy from Lord Bellwin, the Under-Secretary of State. He did not have the courtesy to reply to my letter but merely sent me a duplicated copy of a letter to another hon. Member. I hope that the Under-Secretary who is to reply will convey my displeasure, and that of the House, at such discourtesy.
  I am delighted that the land is being taken away from the GLC. I do not make a party point because, whether Labour or Conservative is in control of the GLC, the development that it is doing in Thamesmead is a disgrace. It has suffered delay after delay. If the GLC had been left to do the development in dockland I doubt whether it would have taken place. I support the order on that ground alone.
  I agree with the right hon. Member for Stepney and Poplar (Mr. Shore) about the river walk. It is an important item. I hope that the corporation will preserve a river walk through the area.
  The right hon. Member for Bermondsey referred to £42 a week being charged for rent and rates in Tower Hamlets. The GLC is charging well over £50 for rent and rates for accommodation in Thamesmead. That is a scandal. I hope that the right hon. Gentleman and his corporation will succeed in selling the property to people who are suffering from the scandal of local authorities charging excessive rents and imposing high rates so that they may escape and enjoy benefits similar to those of owner-occupiers in the development corporation area.
  11.28 pm
  Mr. Giles Shaw: With the leave of the House, Mr. Deputy Speaker, I shall comment briefly on the points raised in the debate.
  I wish to correct an impression that the vesting of land by the corporation is a huge undertaking in relation to the

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  land mass involved. I remind the House that the total for which the corporation is responsible is 5,100 acres. Its intention is to vest 523 acres and, if the House agrees, a further 107 acres, making a total of 630 acres. That is the total amount of land which the corporation intends to vest.
  I also remind the House of the supreme problem that the corporation must face. It is a question not just of revitalising land for productive uses but of trying to recreate within a vast and important area of the East End a whole new economy. It is achieving in the initial stages the vesting of land for housing development, open space, environmental improvement and riverside walks. Its intention is to produce a substantial amount of riverside walk. But its primary purpose is to generate sufficient development of industrial and domestic provision so that the community can live again. I remind the House that the corporation has been in operation for barely four months. It is therefore incumbent on us to recognise that we are discussing the very early stages of what is hoped will be its successful and profitable development.
  The right hon. Member for Stepney and Poplar (Mr. Shore) was concerned about the provision of housing in Tower Hamlets. I reiterate that the corporation has reached agreement with the borough of Tower Hamlets that it will give due consideration to those on the waiting list in that borough for the housing that it hopes to provide. The right hon. Gentleman knows that the chairmen of the borough councils of Tower Hamlets, Southwark and Newham have agreed to become members of the board. I suggest to the right hon. Gentleman that it is important to ensure that the housing policies pursued by the LDDC bear a proper relationship to the needs of the area and the aspirations of the community. I think that most hon. Members on both sides of the House would welcome that development.
  The hon. Member for Bethnal Green and Bow (Mr. Mikardo) referred to the problems associated with the contract in Wapping. I assure him that the LDDC is taking on that contract. It is hoped that agreement will be reached between the contractors and the corporation on the maintenance of the contract.
  I assure the right hon. Member for Stepney and Poplar that, in so far as the borough of Tower Hamlets and the LDDC wish to negotiate compensation, the requirements will be met in accordance with the public principles laid down for compensation in these matters. I wish to reassure the right hon. Gentleman that there is no intention by the LDDC of selling the borough of Tower Hamlets short either on the housing policies that it pursues or on the handling of the land for which originally the borough was responsible.
  Reference has been made to the developments at Beckton in the area represented by the hon. Member for Newham, South (Mr. Spearing). Some 600 houses are to be built there at an average price of £25,000. I recognise the feeling of hon. Members that the housing policies of the LDDC—I remind the House that the LDDC is not a direct housing authority; it is seeking to sell land for the development of housing—should provide mixed pricing and ownership. The role of housing associations, of low-priced ownership and of shared ownership is part of the plan. Therefore, there is no question of housing land being developed purely for the kind of speculative development that the hon. Member for Bethnal Green and Bow, as is his wont, would seek to try to frighten the House about at
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  this time of night. If there is any Olympian prospect, it is that the hon. Gentleman, who has noted the appalling failures of the housing policies pursued in that borough, should now find himself in a vindictive mood against the new policies being pursued by a corporation that is seeking to rescue much of the Isle of Dogs from the desecration of the previous incumbent.
  I suggest to my hon. Friend the Member for Liverpool, Wavertree (Mr. Steen) that we cannot be involved in an argument about free ports. We have established an enterprise zone within the Isle of Dogs. I am sure that all hon. Members agree that it is sensible to try to get new commercial and industrial development, but that to get involved in free ports is not on.
  I welcome the points made by my hon. Friend the Member for Welwyn and Hatfield (Mr. Murphy) about the sheer scale of the problem. It is vital to keep that in our minds.
  The right hon. Member for Bermondsey (Mr. Mellish), who has by far the greatest knowledge of this matter as regards the development corporation, was right to say that rooting in the community is being sought. Consultation, availability for discussion, discussion with the boroughs and agreement that the borough leaders are now involved in the corporation are the ways in which we should seek to move forward in what is undoubtedly the biggest challenge that the capital has seen for four or five generations.
  I commend the order for approval by the House.
  Question put:—
  The House divided: Ayes 90, Noes 18.

  Division No. 11]

  [11.35 pm

  AYES

  Alexander, Richard

  Jopling, Rt Hon Michael

  Ancram, Michael

  Knight, Mrs Jill

  Bendall, Vivian

  Lang, Ian

  Benyon, Thomas (A'don)

  Lee, John

  Bevan, David Gilroy

  Lester, Jim (Beeston)

  Boscawen, Hon Robert

  Lloyd, Peter (Fareham)

  Bottomley, Peter (W'wich W)

  Lyell, Nicholas

  Bright, Graham

  MacGregor, John

  Brinton, Tim

  McNair-Wilson, M.(N'bury)

  Brooke, Hon Peter

  Major, John

  Browne, John (Winchester)

  Mates, Michael

  Budgen, Nick

  Mellish, Rt Hon Robert

  Cadbury, Jocelyn

  Meyer, Sir Anthony

  Carlisle, John (Luton West)

  Mills, Iain (Meriden)

  Carlisle, Kenneth (Lincoln)

  Moate, Roger

  Chapman, Sydney

  Murphy, Christopher

  Clarke, Kenneth (Rushcliffe)

  Myles, David

  Cope, John

  Neale, Gerrard

  Costain, Sir Albert

  Nelson, Anthony

  Cranborne, Viscount

  Neubert, Michael

  Dorrell, Stephen

  Newton, Tony

  Douglas-Hamilton, Lord J.

  Normanton, Tom

  Dover, Denshore

  Onslow, Cranley

  Durant, Tony

  Osborn, John

  Eggar, Tim

  Page, John (Harrow, West)

  Elliott, Sir William

  Page, Richard (SW Herts)

  Fairgrieve, Sir Russell

  Parris, Matthew

  Faith, Mrs Sheila

  Pollock, Alexander

  Fenner, Mrs Peggy

  Proctor, K. Harvey

  Forman, Nigel

  Raison, Timothy

  Fox, Marcus

  Rhodes James, Robert

  Gardiner, George (Reigate)

  Roberts, M. (Cardiff NW)

  Garel-Jones, Tristan

  Sainsbury, Hon Timothy

  Goodhew, Victor

  Shaw, Giles (Pudsey)

  Gow, Ian

  Shaw, Michael (Scarborough)

  Gower, Sir Raymond

  Shelton, William (Streatham)

  Hamilton, Hon A.

  Speller, Tony

  Hawkins, Paul

  Spicer, Michael (S Worcs)

  Hawksley, Warren

  Steen, Anthony

  Hicks, Robert

  Stevens, Martin

  863

  Stradling, Thomas, J.

  Watson, John

  Thompson, Donald

  Wellbeloved, James

  Thorne, Neil (Ilford South)

  Wheeler, John

  Trippier, David

  van Straubenzee, Sir W.

  Tellers for the Ayes:

  Waddington, David

  Mr. Selwyn Gummer and Mr. Alastair Goodlad.

  Waller, Gary

  NOES

  Campbell-Savours, Dale

  Mikardo, Ian

  Canavan, Dennis

  Parry, Robert

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

  Powell, Raymond (Ogmore)

  Dean, Joseph (Leeds West)

  Robertson, George

  Dixon, Donald

  Shore, Rt Hon Peter

  Flannery, Martin

  Skinner, Dennis

  George, Bruce

  Spearing, Nigel

  Hooley, Frank

  Leighton, Ronald

  Tellers for the Noes: Miss Jo

  Lewis, Arthur (N'ham NW)

  Richardson and Mr. Bob Cryer.

  Mc Taggart, Robert

  Question accordingly agreed to.
  Resolved,
  That the London Docklands Development Corporation (Vesting of Land) (Tower Hamlets London Borough Council) Order 1981, a copy of which was laid before this House on 10th July, in the last Session of Parliament, be approved.
  Resolved,
  That the London Docklands Development Corporation (Vesting of Land) (Greater London Council No. 2) Order 1981, a copy of which was laid before this House on 10th July, in the last Session of Parliament, be approved. —Mr. Giles Shaw.]

  London Docklands Development Corporation

    MEMBERS' SALARIES
    Ordered,
    That the Minutes of Evidence taken before the Select Committee on Members' Salaries in the last Session of Parliament and not reported to the House, together with Memoranda laid before them, be referred to the Select Committee on Members' Salaries.—[Mr. Brooke.]

  LD50 Toxicity Test
  Motion made, and Question proposed, That this House do now adjourn.— [Mr. Brooke.]
  11.45 pm
  Mr. Frank Hooley: The LD50 toxicity test is a method of trying to determine how poisonous a chemical or pharmaceutical substance is by forcibly feeding it to live animals and then determining what single dose is required to kill 50 per cent. of them within a maximum 14-day period, hence the expression "lethal dose 50", or LD50. The technique generally used is to push a tube down the throat of the animal and then feed it with the substance, or the chemical may be applied to its skin or, in some cases, a vapour may be used which the animal is forced to breathe.
  An official report to the Home Office in 1979 by the advisory committee on the administration of the Cruelty to Animals Act 1876 said rather baldly in paragraph 13:
  "LD50s must cause appreciable pain to the animals subjected to them."
  It would be a good deal more accurate to say that they cause agonising pain, convulsions, bleeding, diarrhoea, and eventually lingering death over a number of days.
  The number of animals used is not insignificant. In 1980, it was 484,849, according to official statistics. The test was devised by a Dr. J. W. Trevan in 1927, more than 50 years ago, to measure the strength of highly poisonous but potentially beneficial drugs such as diphtheria antitoxin, digitalis and insulin. Unfortunately, its use has been extended to determine the acute toxicity—in normal speech, poisonous potential—of industrial chemicals, natural compounds, food additives, pesticides, detergents and even substances used in cosmetics. The LD50 test was developed originally for drugs. It has now been taken over for the toxicological evaluation of all other classes of substances, hence the use of nearly 500,000 animals for this purpose in 1980. Mice, rats, birds, fish, rabbits and guinea pigs are used mostly, but sometimes dogs and, very rarely, monkeys.
  Unfortunately, its use has been built into the law. In the United Kingdom regulations under the Medicines Act 1968 and the Health and Safety at Work etc. Act 1974 refer to it specifically. An EEC directive is being considered to harmonise practice in the Common Market, and many other countries have similar legislation. The consequence is that the test is widely employed not because it gives useful results scientifically but to satisfy legal requirements in marketing products within the United Kingdom and in export markets.
  If a manufacturer produces a substance which subsequently causes damage or harm to a person and that person sues the manufacturer, he can argue in his defence that the LD50 test was carried out according to the rules and thereby seek to satisfy the court that he did nothing wrong in marketing the product.
  However, the test has serious defects. The results can vary drastically according to the species of animal used. One compound administered according to the LD50 procedure to male mice produced a slightly toxic effect. Given to male rats, for the same purpose, it qualified as highly poisonous and therefore subject to strict controls. This example is quoted in an article published this year—I stress this year, 1981—by G. Zbinden of the Institute of

  865
  Toxicology in the Swiss Federal Institute of Technology and University of Zurich, an institution of international reputation in scientific matters.
  The same article draws attention to variations in results from the tests according to the sex, age, diet, genetic strain, health, degree of starvation, and method of dosing of the animals used. The temperature and humidity of the laboratory, the type of cage, and even the bedding material of the animal could affect the results. There are also seasonal variations.
  A special international study was undertaken in the late 1970s of the variability of the LD50 test, covering 100 laboratories in 13 countries. By the end of 1979 information from 80 laboratories became available. Despite careful control of experimental conditions—caging, feeding, weight and age of the animals used—the results for the five substances in this control test showed marked discrepancies as between different laboratories.
  More fundamental is the objection that species difference—different types of animals reacting differently to the same chemical—is a major obstacle to the extrapolation of results from animals to man. I shall quote what Professor Zbinden said in his article:
  "Unfortunately, even with carefully designed animal experiments it is sometimes not possible to predict all relevant symptoms of an acute intoxication in man. Human response to chemical substances is often quite peculiar, and valid experimental model systems to assess these reactions are lacking. For this reason, it is very important to intensify research which will permit us to expand the range of toxicological knowledge and to improve the predictability of the test procedures. Governments and industry would be well advised if part of the funds now spent for routine investigations would be allocated to the study of better testing methods."
  We should recognise that in the half-century which has elapsed since this test was devised, a revolution has occurred in the biological sciences, and alternative techniques could and should be developed. A single-cell culture system can give a rough guide to the human lethal dose of a substance, if that substance acts by damaging the cell function. This would filter out the more poisonous chemicals and drugs, which could then be discarded without further testing and without poisoning unnecessarily thousands of animals.
  Some work carried out in Sweden has shown that a simple cellular system derived from human cancer of the cervix can be very useful. The system is based on a metabolic inhibition test supplemented by microscopy. For 39 out of 52 drugs, dosages toxic to the cell were grossly similar to the estimated human lethal doses. The advantage of cellular systems such as those used in Sweden is that they are controlled and, of course, are much cheaper. That is one reason why the Swedish work was initiated.
  The greater complexity of living animals—there is a difference between testing on cells and testing on live animals—is of no value when based on fundamental and unalterable differences between the species. In other words, one cannot simply extrapolate from animal to man. Increased demand for testing by regulatory bodies has spurred the investigation of these cheaper non-animal tests, but continued reliance on the animal method has delayed the development of new and more effective procedures.
  866
  It is possible to get a more sophisticated assessment by using tissues from various organs such as the liver, nervous tissue, muscle cells or the thyroid gland. One of the advantages of tissue culture is that human cells can be employed to reduce the problem of species difference between animals and humans. I shall quote briefly from the article by Professor Zbinden:
  "For the recognition of the symptomatology of acute poisoning in man and for the determination of the human lethal dose the LD50 test in animals is of very little value. Much more relevant information could be gained from a well conducted comprehensive short term test which includes clinical and biochemical monitoring and gross and microscopic pathology. Such a test could be done with small numbers of animals … The use of the LD50 test as basis for selection of doses for sub-acute and chronic toxicity tests and other procedures … is obsolete".
  These alternative techniques can be supplemented by theoretical studies of new chemicals which belong to classes of substances whose mechanism of poisoning is already well known. However, if more humane and more satisfactory techniques are to be developed, both Governments and industry must allocate more funds to investigate better testing methods. Of course, there would have to be some change in the regulations under the Medicines Act 1968 and the Health and Safety at Work etc. Act 1974. Special responsibility must rest on the Government, and particularly on the Home Office, to change that legislation.
  First, the LD50 test is obsolete. I have already cited the evidence from the special study made in Zurich, which categorically reaches that conclusion. Secondly, it is now widely used for purposes for which it was not originally designed. It was developed in 1927—more than 50 years ago—for testing the poisonous nature of special substances that were, and no doubt still are, of enormous importance as potential medicines. Substances such as digitalis and insulin are extremely important. It was not designed as an all-purpose test for industrial chemicals or for the compounds that are found in detergents, cosmetics, and pesticides, although over the years it has been steadily extended to them. Thirdly, it produces results that are scientifically unreliable and cannot be extrapolated from animals to humans. Again, I cite the findings of the Zurich paper, which are specific and important. Fourthly, it causes agonising pain and death to nearly ½ million experimental animals each year in this country alone. All hon. Members will agree that we should avoid that if possible and if there are other options.
  Fifthly, the main use of the test now is to satisfy legal—not scientific—requirements. It does not have a sound scientific base. The regulations under the various Acts have incorporated the test as a requirement and, as a result, it is being widely used for legalistic rather than truly scientific purposes. Sixthly, there are other, supplementary techniques that could drastically reduce both the number and type of animals used and might ultimately eliminate their use altogether.
  I am aware that cruelty to animals is an emotive subject. All civilised people are anxious to make arrangements that prevent or limit it. I am equally aware that there are powerful schools of thought that claim that the experiments made on animals are necessary either for the advancement of science or to ensure the safety of substances that are widely used both in medicine and for various industrial purposes.

  867
  I emphasise—I am sure that no one can dispute it—that in the past 10 or 15 years we have had a biological revolution. It is now possible for scientists and biologists to manipulate the fundamental structure of life. We can disentangle the genetic code that determines the nature of living things. The advances in that direction have been enormous. I do not believe that it would be impossible to develop and use similar techniques so as to avoid inflicting violent pain on hundreds of thousands of animals every year. Perhaps we cannot eliminate the LD50 toxicity test altogether, but I am convinced that we could go a long way towards it, and that Government action is now required to set out on that road.
  12.1 am
  The Minister of State, Home Office (Mr. Timothy Raison): The hon. Member for Sheffield, Heeley (Mr. Hooley) has selected for debate tonight a subject about which there is a good deal of continuing discussion among those concerned with the use of live animals in experiments. It is right that the House should join in the discussion.
  Let me make it clear that the Government fully understand the strength of feeling on the matter. I want to leave no doubt in anyone's mind that we welcome the constructive discussion on the way forward in what is inevitably an emotive area.
  I am fully aware that there are those who take the view that no animal experiments are justifiable and that it is morally wrong to use animals in that way. I do not think that the hon. Gentleman would hold that view, but we respect the sincerity of those who do. However, all the recent discussions, both in Parliament and outside, have made clear the overwhelming view that experiments on animals should be permitted to continue but that they should be regulated and controlled to preserve a proper balance between the welfare of animals and the legitimate needs of scientific advance. That should be the guiding principle.
  The hon. Gentleman has expressed particular concern about the LD50 test and the possibility of using other methods that do not require the use of animals. I understand his concern. As a general principle, the Government support the view that alternatives to living animals should be used wherever practicable. There is no difference between us on that score. At the same time, as I shall explain, we should be quite clear about the extent to which it is practicable to use alternatives to animals, either now or in the foreseeable future. It is regrettable, but unavoidable, that many sorts of biomedical research will require the use of animals for some time to come. It is necessary to dispel any misconception that there may be on this point.
  The LD50 test has been the subject of a good deal of controversy in the past few years. That led the Home Secretary at the time to ask his advisory committee on the administration of the Cruelty to Animals Act 1876 to inquire into the test; the extent of its use in accordance with statutory requirements and otherwise; the scientific necessity and justification for the test in its various applications; and to make recommendations in the context of his powers under the Act. The advisory committee made a thorough study of those issues and its views were set down clearly in its report to my right hon. Friend the Home Secretary in 1979.
  868
  As the hon. Gentleman broadly indicated, the LD50, the lethal dose 50 per cent., is a numerical index that gives some information about the acute toxicity of a chemical substance in experimental animals. The LD50 test is only one of a number of types of acute toxicity experiments, all of which are recorded together in the Home Office statistics published annually without distinction, so a figure for it can only be roughly estimated. The estimated number of animals used for LD50 tests in 1977, for the purposes of the advisory committee's study, was 229,500 out of a total of about 560,000 acute toxicity animal experiments, which represents about 10 per cent. of the total number of experiments. Of the 229,500 some 60 per cent. were mice; some 27 per cent. rats, some 11 per cent. fish and about 2 per cent. birds. In 1980 the total of acute toxicity animal tests was about 485,000, which represents a significant fall. No estimate has been made of the number of LD50 tests, but if the same comparison is applied about 199,000 animals were used. The LD50 test was originally devised in 1927 to overcome difficulties arising in measuring the potency of highly toxic yet potentially beneficial medicines of natural origin, such as diphtheria anti-toxin, digitalis and insulin. Though there are still occasions when it may be used for its original purpose—the standardisation of therapeutic substances known to be toxic—it has in recent years come to be used increasingly in many countries for a different purpose, that is as a step in the estimation of the relative safety of new substances such as medicines, industrial chemicals, pesticides, weed-killers, detergents and food additives.
  A preliminary step in the LD50 test is to determine the approximate dose of a substance which is the minimum lethal dose. This usually involves its administration in geometrically ascending doses. At this stage at least three dose levels are required with a minimum of two animals in each group. From the results an estimate is calculated from a graphical plot of the relationship between the number of deaths and the dose of the substance given. The LD50 figure is the quantity estimated to kill half the number of animals. For the LD50 test, five dose levels are commonly employed with 10 animals in each group. Some 14 days after dosing any surviving animals are painlessly killed.
  In carrying out its expert review of the test, the advisory committee paid particular attention to the question of pain and alternatives to the test. It did not find it possible to make any judgment on the extent of the pain suffered which would be applicable to all animals subjected to LD50s, because the substances administered varied enormously in their toxicity and the sizes of the doses vary with different groups. In this connection, the requirements of the pain condition attached to all licences granted under the 1876 Act shorten the period over which severe pain is felt. Nevertheless, the committee was concerned that LD50s must cause appreciable pain to a proportion of the animals subjected to them.
  The possibilities of determining LD50 values without experiment through the development of computer-based information retrieval systems was considered by the advisory committee. In particular, it considered a claim that the LD50 of any compound administered to a rat orally could be determined by computer from the compound's molecular formula. It reached the view that the limitations of computer-based figures in this field were such that it

  869
  doubted whether the technique involved would result in an appreciable reduction in animal usage in the foreseeable future.
  After spending two years receiving and examining evidence from animal welfare bodies, industrial associations, advisory and regulatory bodies and medical and veterinary experts, the advisory committee concluded that for the proper testing of new substances some acute and chronic toxicity tests must be carried out on whole live animals; and that where it is necessary to estimate the lethal properties of a substance there was no evidence that there was any better test or one more economical in the use of animals.
  Accordingly, the committee recommended that LD50 tests should be allowed to continue but that those who prescribe them or carry them out should always bear in mind that for safety evaluation purposes an LD50 test giving a reasonable indication of the order of toxicity is all that is required; and that wherever practicable a "limit test" —that is, the largest dose-equivalent that a human being might take—should be used in preference to an LD50. If this does no harm to the animal, there is no need to use more extreme tests.
  The committee also recommended closer liaison between the Home Office and the bodies concerned with the framing of relevant regulations, both here and in the European Community, relating to the transport storage, marketing and use of toxic substances; the possibility of a uniform code of laboratory practice; that LD50 tests should not be begun at a time which will not ensure adequate supervision of the animals during the expected period of maximum effect; and special controls over the use of primates in any kind of experiment.
  My right hon. Friend accepted all these recommendations in principle, and, within the limits of the resources available, they have been carried forward. Through the authorities responsible for registered places where experiments are carried out, licensees under the 1876 Act were urged to take careful account of these conclusions and to act accordingly.
  I am aware that there continues to be concern about the use and value of the test. I am equally aware of the constructive consideration which is being given to the question of alternatives, which was discussed by the hon. Gentleman. However, the present state of knowledge does not enable us to avoid the dilemma which arises from the fact that, on the one hand, many new drugs and other substances confer great benefit but carry some risk of toxicity against which the public have a right to be protected; while, on the other hand, there is concern for the welfare of animals. In this situation, we have to strike a balance.
  In talking about the defects the hon. Gentleman perhaps overstated his picture. We accept that there may be defects, but the problem is that there is nothing better. It is easy to quote variability, for example, but that would lead to more extensive and larger tests. A species' difference is important, but who can use man as a test species? The variation is minimised by the use of several different species.
  870
  Also with regard to alternatives, perhaps cell cultures have a future, but the validation of such tests has far to go. We cannot call the LD50 test obsolete until it is satisfactorily replaced, which has not yet happened.
  As I have already explained, we support the use of alternatives where they are practicable. It is my understanding that, where proven alternatives exist, researchers adopt them, not only on humanitarian grounds but because such methods are generally quicker, cheaper and more reliable. Indeed, the use of alternatives is believed to be one of the factors that has led to the levelling off of the number of experiments performed on animals over the last 10 years or so, and indeed to the fall in numbers over the last three years. The Government regularly bring to the attention of all those carrying out experiments under the Cruelty to Animals Act 1876 the importance of taking every reasonable step to confirm before using live animals that their investigations cannot be effectively carried out by any alternative means. Licensees are also urged to give thought to the possibilities of developing new alternatives.
  However, calls for the Government to promote research into the development of alternatives tend to ignore a number of important factors. There is likely to be disagreement among scientists about new alternatives in any particular area, and about the relative costs of them in terms of manpower, materials and time.
  I understand that the Medical Research Council takes the view that it is not practicable for scientists to be engaged specifically in devising alternatives as their sole or main activity separately from research experiments; and that the person conducting an experiment is in the best position to decide, from discussions with his colleagues, from his own experience and from the literature, whether techniques of his own or others will serve his purpose without using animals. It is also through knowledge of his own techniques and those of others that he is best able to judge during the course of his experiments when an alternative could usefully be developed.
  Those well-established approaches to the conduct of research are far more likely, in the council's view, to be fruitful and economical in the use of animals than for scientists to be engaged in the search for alternatives to the use of animals in other scientists' experiments.
  This is not a complacent attitude. It is one of realism. We understand the concern that the hon. Gentleman expressed. There is no difference between us in wishing to see a continuing reduction in the use and number of animals subjected to experiments which may involve pain; but this must be consistent with our overall obligation towards human and animal health.
  The use of the LD50 test and the question of alternatives will, without doubt, continue to be the subject of debate both in Parliament and in the country. We hope that the debate will be both realistic and constructive, and that it will take proper account of the factors which must be weighed. I am grateful to the hon. Gentleman for raising this issue and hope that I have been able to show to the House that, while we appreciate and understand his concern, there are very real difficulties in advancing at the pace he advocates to the goal which both he, and I, would wish to see.
  Question put and agreed to.
  Adjourned accordingly at Fourteen minutes past Twelve o'clock.

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  "Common Land: Preparations for Comprehensive Legislation"
  "Common Land: Preparations for Comprehensive Legislation"
  Non-departmental Public Bodies
  Non-departmental Public Bodies
  Civil Servants (Free Parking)
  Civil Servants (Free Parking)
TRANSPORT
  Roads (Expenditure)
  Roads (Expenditure)
  Roads (Expenditure)
  Roads (Expenditure)
  Highway Authorities (Development Control)
  Highway Authorities (Development Control)
  A1, Seaton Burn
  A1, Seaton Burn
  Vehicle Imports
  Vehicle Imports
  Private Car Imports
  Private Car Imports
  British Railways
  British Railways
SOCIAL SERVICES
  Nurses (Pay)
  Nurses (Pay)
  South Yorkshire (Geriatric Beds)
  South Yorkshire (Geriatric Beds)
  Ill-health, Mortality and Unemployment
  Ill-health, Mortality and Unemployment
  Prescription Charges
  Prescription Charges
  Nursing Service (Expenditure)
  Nursing Service (Expenditure)
  Home Defence (Planning Posts)
  Home Defence (Planning Posts)
  Occupational Pension Schemes
  Occupational Pension Schemes
  Family Income Supplement
  Family Income Supplement
  Pensions and Benefits
  Pensions and Benefits
  Overseas Doctors
  Overseas Doctors
  Social Security Fraud
  Social Security Fraud
  Dental Therapists
  Dental Therapists
  Community Health Councils
  Community Health Councils
  St. George's Hospital
  St. George's Hospital
  Invalidity Benefit
  Invalidity Benefit
  Benefits (Earnings Allowance)
  Benefits (Earnings Allowance)
  Mentally Handicapped Persons
  Mentally Handicapped Persons
  Vaccine Damage Payments Scheme
  Vaccine Damage Payments Scheme
  London (Health Services)
  London (Health Services)
  Dangerous Drugs
  Dangerous Drugs
  Child Benefit
  Child Benefit
  Children in Care
  Children in Care
  Redundancy Payments
  Redundancy Payments
  District Health Authorities
  District Health Authorities
  Orthopaedic Waiting Lists
  Orthopaedic Waiting Lists
  Waiting Lists (Outpatients)
  Waiting Lists (Outpatients)
  National Insurance Commissioner
  National Insurance Commissioner
  District General Hospital, Haywards Heath
  District General Hospital, Haywards Heath
  Death Grant
  Death Grant
  Pension Age
  Pension Age
  National Health Service (Expenditure)
  National Health Service (Expenditure)
  Special Patients (Transfer)
  Special Patients (Transfer)
  Invalid Care Allowance
  Invalid Care Allowance
  Nurses (Status)
  Nurses (Status)
  Personal Social Services
  Personal Social Services
  LD50 Test
  LD50 Test
  Disabled Persons (Benefits)
  Disabled Persons (Benefits)
  Dental Care
  Dental Care
  "Personal Social Services, Expenditure, Staffing and Activities"
  "Personal Social Services, Expenditure, Staffing and Activities"
  Health Charges (Overseas Visitors)
  Health Charges (Overseas Visitors)
  Non-Contributory Invalidity Pensions
  Non-Contributory Invalidity Pensions
  Renal Dialysis
  Renal Dialysis
  Family Income Supplement
  Family Income Supplement
  Mentally Handicapped Persons
  Mentally Handicapped Persons
  Private Patients
  Private Patients
  Non-departmental Public Bodies
  Non-departmental Public Bodies
SCOTLAND
  Cystic Fibrosis
  Cystic Fibrosis
  Fife (Youth Unemployment)
  Fife (Youth Unemployment)
  Short Tenancies
  Short Tenancies
  Non-departmental Public Bodies
  Non-departmental Public Bodies

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Liverpool
The Viscount Chandos—Sat first in Parliament after the death of his father.

Legal Services: Complaints Machinery
Lord Molloy: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider establishing an examining board comprising representatives of the office of the Lay Observer and the Law Society, in an endeavour to agree on procedures, and consider financial implications, based on the report of the Royal Commission on Legal Services with specific reference to complaints of the general public.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): No, my Lords. The Law Society has already undertaken consultations on the recommendations of the Royal Commission relating to the handling of complaints and is assessing the cost and effect of the changes recommended by the commission. It has already received considerable assistance from the Lay Observer, both from his reports and in less formal communications. In the circumstances, an examining board would appear to serve no useful purpose.
Lord Molloy: My Lords, is the noble and learned Lord the Lord Chancellor aware that there is some concern by the public about the lack of proper machinery for complaints? May I also say that I am most grateful to the noble and learned Lord for his very considerate reply?
The Lord Chancellor: Yes, my Lords, of course I am aware of various complaints from the public. If they care to communicate with my office either directly or, preferably, through some Member of this House or the other place, I shall do my best to sort them out. I think that what really has to be understood about this is that the machinery which does exist relates to disciplinary offences against members of the solicitors' profession, but a great number of the complaints that I get are related to allegations of negligence, which of course are matters for the courts. One has to bear this distinction clearly in mind.
Lord Elwyn-Jones: My Lords, so far as the disciplinary side of the matter is concerned, it is the case, is it not, that there is a lay presence in the disciplinary tribunal of the Law Society?
The Lord Chancellor: Yes, my Lords, the noble and learned Lord is of course quite right. I think he was responsible for the original appointment of a Lay Observer. I think the suggestion was already being mooted about the time when I handed over to him, but I believe he appointed the Lay Observer and I think he has been a great success, probably a much greater success than I originally expected.

London Transport: £50 Payments
2.38 p.m.
Lord Monk Bretton: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many London Transport employees have received a present of £50 from the Greater London Council recently, and whether these sums are taxable.
The Earl of Avon: My Lords, this is a matter for London Transport but I understand that the £50 payment was agreed during the wage settlement negotiated this summer. It is payable to all London Transport employees except the top management and will form part of their taxable emoluments. The Greater London Council are only directly involved through the revenue support they pay towards London Transport's operating deficit.
Lord Monk Bretton: My Lords, may I thank my noble friend for that reply. As I gather that this perquisite may have cost nearly £3 million, may I ask my noble friend whether he would not view it as a serious matter if this particular habit of paying out compensation for what might best be described as assumed loss of value in travel concessions spread to other areas, such as to British Airways because of lower fares brought about by competition from Sir Freddie Laker, or to British Rail because of cheaper away-day facilities offered to the public? Does my noble friend not think that perhaps this practice has gone far enough?
Thr Earl of Avon: My Lords, such payments are really a matter for negotiation between the managements in question and their employees. Obviously, however, the Government deprecate irresponsible pay settlements, particularly in the present difficult economic climate.
Lord Gisborough: My Lords, can my noble friend say under what by-laws these payments are made, and whether there is any limit to the amount of payment that can be made either to all the staff or to individual groups of staff for various good reasons?
The Earl of Avon: My Lords, I do not think this is a question of by-laws; this is a question of a negotiated settlement between the interested parties, and in particular of course it takes London weighting in view.
Lord Bruce of Donington: My Lords, would the noble Earl put golden handshakes in the same category?
The Earl of Avon: My Lords, no.
Lord Balfour of Inchrye: My Lords, would it not be rather inconsistent and rather unfair if the final result of this was that the Revenue now wish to take in tax a large percentage of all Christmas gifts to servants of clubs all over the country while these people get away with £50 without paying tax on it?
The Earl of Avon: My Lords, I think my noble friend is a little wide of the mark here, because this is a taxable emolument and it is part of a negotiated settlement.
Baroness Wootton of Abinger: My Lords, is it not a fact that the Government are strongly in favour of free collective bargaining and that this appears to be the result of free collective bargaining?
The Earl of Avon: My Lords, that is why although we deprecate it in some terms we do not deprecate it in others.
Lord Orr-Ewing: My Lords, would my noble friend say that "negotiated settlement" means that in this case the ratepayers were strongly represented in the negotiations between those who were getting the gift and those who were giving it?
The Earl of Avon: My Lords, this particular settlement was of course a matter for London Transport, and the ratepayers are affected because they are the people who give London Transport the subsidy.
Lord Underhill: My Lords, as the noble Earl referred to irresponsible wage increases, will he say whether or not in his view £50, less tax, on top of a low wage award is an irresponsible increase?
The Earl of Avon: My Lords, I would not necessarily say so, but if the noble Lord were to suggest that to old-age pensioners, they might agree.
Lord Leatherland: My Lords, can the Minister assure us that a similar method of treatment will not be applied towards the passengers on London Transport?
The Earl of Avon: I think they are getting away with quite a lot already, my Lords.
Viscount St. Davids: My Lords, would the Minister agree that some of the subsidies being granted by local councils to their workers are really quite extraordinary? Is he aware, for example, that Camden Council is now subsidising the lunches of some of its workers to the tune of £3·75 a day, a sum which in your Lordships' House would buy a three-course lunch and wine?
The Earl of Avon: My Lords, I am grateful for the noble Viscount's culinary expertise. The Government are opposed to inefficient, indiscriminate and in
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equitable subsidies, but we recognise that public transport needs a measure of support and that is one of the purposes for which expenditure is accepted for transport supplementary grant.
Lord Brockway: My Lords, is not the real issue here the contrast between what the labour force receive in wages, amounts which are such that often they are unable to meet the cost of living, and the amazing gifts to management and directors who are already receiving £25,000, £50,000, even £95,000 a year? Is not that the real issue in this Question?
The Earl of Avon: No, my Lords.
Lord Molloy: My Lords, is the Minister aware that many of the ordinary people who work for the GLC are also ratepayers? Would not the Government be showing a much more responsible attitude if they were investigating the £9 billion that is being fiddled in tax evasion, as revealed in an examination? Does the noble Lord agree that that figure is absolutely astounding, yet in your Lordships' House this afternoon we are straining at a little gnat in relation to working men who might be getting a negotiated increase of £50? Which issue does the noble Earl think should have the priority of the Government?
The Earl of Avon: My Lords, I should hate to trespass on the territory of my noble friend Lord Cockfield, which I feel that most of the answer to that question would do.
Lord Monk Bretton: My Lords, would my noble friend agree that the most significant aspect of this matter is the need to bear in mind that waste of public money must inevitably contribute to increased unemployment?
The Earl of Avon: I entirely agree with my noble friend, my Lords.

London Transport Subsidy Scheme
Baroness Trumpington Baroness Trumpington had given notice of her intention to ask the following Question:
To ask Her Majesty's Government whether there is any element of central Government financial support involved in the London Transport subsidy scheme.
The noble Baroness said: My Lords, in view of the fact that matters closely connected with my Question are at this very moment under judicial consideration, I do not propose today asking the Question which stands in my name.

Exchange Controls Removal: Capital Outflow
2.46 p.m.
Lord Beswick: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what has been the estimated capital outflow from the United Kingdom since exchange controls were removed in October 1979.
The Minister of State, Treasury (Lord Cockfield): My Lords, between the fourth quarter of 1979 and the second quarter of 1981, identified investment and other capital transactions resulted on balance in a net outflow of £6·3 billion. This net outflow is the natural reflection of the large current account surplus earned over the period.
Lord Beswick: My Lords, while thanking the Minister for that reply, may I ask whether he agrees that, with the evidence of this quite phenomenal amount of available money, it is difficult to sustain the Government's argument that capital raised for investment in the public sector must necessarily mean less for the private sector in Britain?
Lord Cockfield: No, my Lords. The noble Lord refers to the size of this outflow. It is important to bear in mind that a great deal of it consists of portfolio investment by pension funds and other institutions. I do not think the noble Lord would wish to criticise the trustees of pension funds, including those in the public sector as well as in the private sector, for endeavouring to protect the interests of their members in this way. As for the other part of his supplementary, the level of investment in this country—this applies to the public as well as to the private sector—is determined not primarily by the availability of finance but by the availability of profitable investment opportunities. Unfortunately, in the public sector much experience indicates that investment projects undertaken have not proved to be profitable.
Lord Bruce of Donington: My Lords, would the noble Lord agree that this massive outflow of capital from the United Kingdom is merely a reflection by those sending it abroad of a lack of confidence in the control, stimulation or activities of the Government in relation to domestic economic policy?
Lord Cockfield: No, my Lords, it is nothing of the sort. So long as you have a freely-floating exchange rate, it is a reflection of the very healthy surplus on the balance of payments which has been built up as a result of the success of the Government's policy. If there is any evidence of a flight of capital from this country, which I would not accept for a moment, it is because of the unfounded fears of the possibility of a Labour Government at some time in the future.
Lord Beswick: My Lords, if the Minister is saying that this money is simply the surplus on the balance of payments, may I ask how he can reconcile that with the fact that, in the first six months of this year alone, £7 billion went out of the country? Is he really telling us that it is the surplus on our balance of payments?
Lord Cockfield: My Lords, in the first two months of this year there was a surplus on the balance of
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payments—in two months alone—of £1·9 billion. The figures are not available for a period of months, for reasons that will be familiar to the noble Lord, but a surplus has reappeared in the months of September and October. With a freely-floating pound the net outflow of capital—one must not look at the gross figure alone; what matters is the net outflow—must be equal to the surplus on the current account on the balance of payments. This is proven by the fact that the total of official reserves today is almost the same as it was in 1979.
Lord Mackie of Benshie: My Lords, surely the Minister must be disturbed by the fact that the managers of the pension funds prefer, or appear to prefer, to invest their money in foreign industry, as against British industry? Surely this must be one of the most disturbing factors?
Lord Cockfield: My Lords, what causes concern is the low level of profitability of British industry. If the level of profitability were significantly higher than it is, then investment in British industry would be more attractive and there would be a higher level of investment. This point is brought out very clearly in the report of the committee under the distinguished chairmanship of Sir Harold Wilson.
Lord Beswick: My Lords, if our economy is as healthy as the noble Lord is suggesting, if the availability of money is so great as he is suggesting, why was it necessary last week for the Bank of England to operate in the market to maintain the interest rates?
Lord Cockfield: My Lords, on a Question of this kind I do not think it appropriate to enter into a discussion about very short-run movements in the rates of interest. As the noble Lord will be aware, it is necessary to pay regard to both internal monetary conditions and international monetary conditions.
Lord Nugent of Guildford: My Lords, is my noble friend aware that in the management of any large funds, in particular pension funds, which are very large, it is normal practice to spread the risk? Is he also aware that when the Government gave investment funds the opportunity to invest abroad, which they have done for the first time for many years, it was natural that many funds should wish to place part of their portfolios in foreign investments? This is normal, prudent investment policy.
Lord Cockfield: My Lords, I entirely agree with my noble friend's analysis of the situation. Indeed, one would expect to see a fall in the level of portfolio investment after the considerable increase following the abolition of exchange controls.
Lord Mackie of Benshie: My Lords, would the Minister care to say what he thinks is short run? We are talking about a high level, an enormous level, of interest over two years, or more than two years. What does he think is short run?
Lord Cockfield: My Lords, the noble Lord, Lord Beswick, was referring to what he claimed to be

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intervention by the Bank of England last week. I should most certainly regard a period of one week as a short run.
Lord Beswick: My Lords, for the sake of the record, may I say that the noble Lord placed emphasis on the word, "claimed". Is he suggesting that my claim was not accurate?
Lord Cockfield: No, my Lords. I was drawing no inference of any kind. I was repeating what the noble Lord himself had said, and I assume that the noble Lord accepts responsibility for the statements that he makes.

Business
Lord Denham: My Lords, it might be for the convenience of the House if I point out that, in view of the fact that there will be two Introductions tomorrow, Wednesday, 25th November, the House will, in the normal way, sit at 2.15 p.m., and not 2.30 p.m. I am sorry to say that the advance notice has not yet appeared on the Order Paper.

Harbours (Transport of Farm Animals) Bill [H.L.]
Lord Houghton of Sowerby: My Lords, I beg to introduce a Bill to enable harbour authorities to make by-laws for regulating or prohibiting the transport of farm animals intended for slaughter outside the United Kingdom; and for connected purposes. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Houghton of Sowerby.)
On Question, Bill read 1a; and to be printed.

Greater London Council (General Powers) Bill
Read 2a, and committed to an Unopposed Bill Committee.

Consolidation Bills: Joint Committee
The Lord Chancellor: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That pursuant to Standing Order No. 48, the Lords following be appointed to join with a Committee of the Commons as the Joint Committee on Consolidation Bills:

Airedale, L.

Alexander of Tunis, E.

Caithness, E.

Campbell of Alloway, L.

Hanworth, V.

Janner, L.

Lloyd of Kilgerran, L.

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Meston, L.

Milner of Leeds, L.

Nathan, L.

Roskill, L.

Stewart of Alvechurch, B.

That the Committee have power to agree with the Committee of the Commons in the appointment of a Chairman; and that a Message be sent to the Commons to propose that the Joint Committee do meet on Wednesday the 9th of December next at half-past four o'clock in Committee Room No. 4.—(The Lord Chancellor.)
On Question, Motion agreed to; and a Message ordered to be sent to the Commons to acquaint them therewith.

Hybrid Instruments: Select Committee
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That, as proposed by the Committee of Selection, the Lords following, together with the Chairman of Committees, be named of the Select Committee on Hybrid Instruments:—

Bacon, B.

Beaumont of Whitley, L.

Cawley, L.

Collison, L.

Cork and Orrery, E.

Drumalbyn, L.

Fletcher, L.

Lee of Newton, L.

Reay, L.

Sligo, M.

Stamp, L.

Teviot, L.

Wise, L.

—(Lord Aberdare.)
On Question, Motion agreed to.

Standing Orders (Private Bills): Select Committee
Lord Aberdare: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That a Select Committee on the Standing Orders be appointed; and that, as proposed by the Committee of Selection, the Lords following, with the Chairman of Committees, be named of the Committee:—

Hailsham of Saint Marylebone, L. (L. Chancellor)

Mancroft, L.

McNair, L.

Mowbray and Stourton, L.

Nugent of Guildford, L.

Ponsonby of Shulbrede, L.

Redcliffe-Maud, L.

—(Lord Aberdare.)
On Question, Motion agreed to.

Civic Government (Scotland) Bill [H.L.]
2.56 p.m.
The Minister of State, Scottish Office (The Earl of Mansfield): My Lords, I beg to move that this Bill be now read a second time. The Bill marks the beginning of the end of a remarkably long lived and wide-ranging corpus of legislation, the Burgh Police (Scotland) Acts 1892 to 1911. Yet the draftsman for the 1892 Act recorded that no less than five attempts to enact the legislation were made, until finally—and here I quote him:
"The Bill emerged maimed and mutilated by Members whose constituencies it did not affect, shorn of some of its most valuable provisions, its usefulness contracted, and its symmetry impaired. It was hurried through the last hours of a dying Parliament, and became law on 28th June 1892".
Despite those imperfections and its inauspicious beginning, the Burgh Police Act of 1892, and its later amending Acts, have had a remarkably long and pervasive influence in Scottish local affairs. We have, I think, a natural reluctance to say goodbye to what might be called an old friend, but we have to accept that it has outworn its relevance. Not only are large parts of the Burgh Police Acts now obsolete and anachronistic, but they also bear very little relationship to the present structure and functions of local government.
At the time of local government reorganisation it was recognised that the radical changes of boundaries and functions brought in their wake problems for the application of the Burgh Police Acts to the new areas, but it was thought impracticable to attempt to resolve these in the Local Government (Scotland) Act 1973. Instead the then Secretary of State (my noble friend Lord Campbell of Croy) appointed a working party of officers drawn from the local authorities, the procurator-fiscal service, police forces and the Scottish Home and Health Department to consider what improvements might be made in the law. The working party was chaired by Sir Ronald Johnson, a distinguished former Scottish Office civil servant. The working party laboured for almost four years and produced its report in early 1976. We undoubtedly owe it a considerable debt for the care and thoroughness with which it tackled what at times must have seemed a truly Herculean task. Copies of the working party report are available in the Printed Paper Office, and I wish to add that Notes on Clauses will be available within the next day or so.
I shall not at this stage attempt to summariese the recommendations of the working party, but noble Lords may wish to glance at the annotation of the Burgh Police Acts on pages 127 to 140 of the report. Suffice it to say that it recommended that many of the old colourful offences in the Burgh Police Acts should be allowed to lapse, some on the grounds that they were now obsolete, many on the grounds that they had probably been replaced by later legislation, and others because they were now inappropriate. However, despite the many such recommendations for lapsing, many other powers have been recommended for re-enactment and continuation in modern form, and it is in essence with that element of the report that we are most concerned today with this Bill.
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On publication of the report in 1976 there was a period of extensive consultation from all conceivable interests about the terms of its recommendations. As soon as we came into office in 1979 we gave a new impetus to the preparation of the necessary legislation. In the summer of 1980 we took the unusual step of publishing as a consultation document a draft Bill, reflecting as best we could the consensus of the comments that we had received, and our own views on them. That document (Cmnd. 7958) broke new ground for the Scottish Office by publishing in draft a major Bill in such an open way and inviting detailed comment upon it. We received many and varied comments on the consultation document, and in the light of these comments many of our proposals have been substantially modified and, I hope, improved. I hope that the House will agree that the principle of publishing such a draft Bill in a complex area like this is wholly to be commended.
I now intend to outline briefly the broad provisions of the Bill and the underlying thinking behind it with reference both to the working party report and to changes there have been since the consultation document. Broadly speaking, there are, I think, three broad divisions of subject within the ambit of the Bill. First, there are the provisions in Parts I and II for continuation and updating of existing arrangements for the licensing of a number of activities; secondly, in Parts III, IV and V there are provisions which are primarily related to matters of public order and the duties of the police in relation to lost and abandoned property; and the third section is in effect the remainder of the Bill—that is to say, Parts VI and VII—and this covers fairly detailed provisions in relation to building and modifications and improvements of the laws relating to by-laws and a variety of other miscellaneous matters.
To begin with the licensing Parts—that is to say, Parts I and II—I might remind the House that the working party recommended that there should be provision in the legislation for a standard general procedure for the issuing of licences. Part I and Schedule 1 to the Bill are designed to achieve that. We have taken close account of the working party's detailed recommendations on procedures, subject to one major exception. The working party recommended that there should be no right of appeal to the sheriff against the refusal of an initial application for a licence; the appeal could be against only revocation or failure to renew an existing licence. We feel, however, that in the present climate it would be quite wrong to allow any public body, even a local authority, to have the right to deny a livelihood to an individual without there being any right of appeal.
Some may still feel that we have a rather cumbersome procedure, but I think the House has to remember that we are talking here about arrangements which may affect an individual's livelihood. It is therefore very important in the interest of civil liberties that we spell out precisely what are the rights of the individual applicant and provide specifically for arrangements for appeal. We have also to take account of the wider public interest in some applications, hence the arrangements for optional advertisement of certain classes of applications. It would be tempting to rely on a much

671
simpler procedure, but I fear that the experience of the Burgh Police Acts over the years has shown that the differences in practice up and down the country can lead to anomalies and, indeed, injustices.
Of course, Part I and Schedule 1 really pave the way for the key clauses in Part II, which in our view indicate those activities for which there is a justification for licensing. I should make it clear that we do not think that licensing of all these activities throughout the country can be justified. In many cases there may be no need to license a particular class of activity listed in the Bill, and in others it may be necessary to do so only for certain parts of an area; for instance, central parts of a city district. We see no justification for the imposition of licensing provisions, even those under the Bill, unless the need for them in the particular area has been demonstrated. Broadly speaking, the three criteria against which the need for licensing should be assessed seem to us to be, first, the protection of public safety; secondly, the maintenance of public order; and, thirdly, the prevention of crime. It is for that reason that only two activities in the licensing provisions of Part II are mandatory on authorities, and those are, first, the requirement to license places of public entertainment, which is needed on grounds primarily of protection of the public and maintenance of public order, and, secondly, the licensing of scrap metal dealers, which we are assured by the police authorities is necessary for the prevention of crime. For all the other activities provision is made under Clause 9 of the Bill for authorities to exercise their discretion as to whether or not licensing should apply, and, if so, in all classes of that activity or in all parts of their area. Clause 9 imposes on the authority a fairly stringent requirement about prior notification and publication of their proposals, and I say again that we expect that authorities will not introduce licensing lightly, without proof of need.
The activities which will be covered by the so-called "optional provisions" will be taxi and hire-car licensing, second-hand dealing, boat hire licensing, street trading, late hours catering, window cleaning and private markets. I might emphasise that all of these except the last are already covered in some degree or other by existing licensing or regulation requirements under the Burgh Police Acts or local Acts, so what is proposed now is a continuation of the existing system but on a discretionary basis, with provision for authorities either not to adopt provisions at all or to adopt them only in relation to certain areas or certain classes of activity.
Finally on Part II, I should draw your Lordships' attention to Clause 46, which provides that the Secretary of State may by order subject to Affirmative Resolution in both Houses apply the licensing provisions of Part to activities not mentioned in the Bill and which may not even yet have been thought of. We are all aware of the pressures of relentless commercial ingenuity in devising new ways to entertain the public and make a living, and it may be that some of these activities will in time create problems for public order, public safety or crime prevention, and should therefore be regulated in some way. If the House approves the general principles of Part I for licensing, it would seem
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appropriate that any further activities which may have to be licensed in the future could be dealt with not by new primary legislation but by the application to that activity of the procedures of Part I. I emphasise yet again, however, that we do not think that licensing of activities should be anything other than an exceptional measure, and the power to extend the provisions of licensing under Clause 46 will not be asked for, or, I am sure, given, lightly.
I now turn to the middle section of the Bill; that is to say, Parts III, IV and V. It is in the area of offences that the Burgh Police Acts contain some of their most archaic provisions, and, as can be seen from the annex to the working party report, a very high proportion of these colourful offences are recommended for repeal (or, at least, are to be allowed to lapse), and there may indeed be some who might argue that we are taking a step down the road to anarchy if we legalise some hitherto illegal activities. By the end of 1984—perhaps a significant year—the man in the street will be free to indulge in a number of hitherto forbidden, if not unmentionable, practices. He will, for example, be able to begin the day by purchasing tobacco before 5 a.m. and then discharge his steam trumpet without the permission of the local authority before setting off on a day's work while enjoying the new-found liberty of being able to carry a picture on horseback. He will be able to spend the day looking for, if not finding, a woman washing windows while standing on a window-sill, or perhaps a bull or stallion doing its duty alfresco. A good day's freedom, if not licence, could well conclude by assembling in a house of refreshment with other dissolute boys and girls before indulging in a "moonlight flitting".
My Lords, in this Bill all that, and more, will be possible by the end of 1984. We are indeed confirming the Conservative tradition of "setting the people free", although I have to say that they may be caught by other enactments. Many of us will no doubt regret the passing of what has been part of the warp and weft of the fabric of what used to be known as the police courts. However, I think that there can be little argument but that all these offences have outlived their usefulness, and they and many like them are therefore being allowed to lapse. The Bill of course needs make no specific provision for this to happen. The expiry of the Burgh Police Acts is automatic under the terms of the Local Government Act 1973, and the absence of a mention of the archaic provisions in this Bill means that they will lapse at the end of 1984 if not specifically repealed under the powers in Clause 130 of the Bill.
Perhaps I can now turn, albeit half regretfully, from the archaic provisions which are not in the Bill and concentrate on more mundane matters which are there. I do not want to go through a detailed catalogue of the provisions of Part III, but I suspect your Lordships will be particularly interested in Clauses 47 and 51, which deal with soliciting and obscene material, and Clauses 59 and 60, which deal with preventive offences. Clause 47, on soliciting and importuning by prostitutes, is basically a consolidation of the existing provisions in the Burgh Police Act 1892, and the only change is a minor one in that it is made quite clear that the offence can be committed by either a male or a female.

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Clause 51 deals with the display and publication of obscene material. It does not, however, attempt a major revision of the law on obscenity. In a wide-ranging adjournment debate in the other place earlier this year on the recommendations of the Williams Committee on Obscenity and Film Censorship, we made it quite clear that in the absence of a reasonable measure of agreement both in and out of Parliament on the form of any comprehensive revision of the law on obscenity, there was no early prospect of general legislation, Clause 51 is therefore designed to bring the law on obscenity up to date by bringing within its scope modern methods of recording sound and visual images and by modifying it to take account of the provisions of the Indecent Displays (Control) Act 1981, sometimes referred to as the Sainsbury Bill.
Clause 51(1) complements the Indecent Displays (Control) Act by making it an offence to display publicly any obscene material, and Clause 51(2) makes it an offence to make, print, publish or offer for sale or distribution, or to have or keep with a view to its eventual sale or distribution, or to sell or distribute, any obscene material. Clause 51(3) provides for a maximum penalty for offences under the clause of an unlimited fine and two years' imprisonment. This represents a very substantial increase on the existing maximum penalty in the 1892 Act of a fine of £25 or 60 days' imprisonment.
The one major difference between Clause 51 and the existing law on obscenity in the 1892 Act, is that, unlike the provision in the 1892 Act which covers indecent and obscene material, Clause 51 is restricted to obscene material. This has been done primarily in order to remove an inconsistency which now arises under Scottish law as a result of the passing of the Indecent Displays (Control) Act 1981. The 1981 Act implicitly permits the display of indecent material in certain clearly defined circumstances—for instance, behind a warning notice. Under the present law on obscenity in Scotland, however, a shopkeeper who complies with the 1981 Act and withdraws behind such a notice material which could be regarded as indecent could still find himself falling foul of the criminal law on the grounds that he is offering indecent material for sale. This difficulty does not arise in England and Wales because the prohibition on offering for sale under the Obscene Publications Act 1959 applies only to obscene material. The restriction of Clause 51 to obscene material only thus not only removes this inconsistency but secures a greater measure of uniformity in relation to the law on obscenity throughout Great Britain. The clause does not attempt a definition of "obscene" but leaves it, as at present, to the courts to interpret that term in the light of the prevailing moral consensus.
The consultation document contained three "preventive offences" (at Clauses 79, 80 and 81) but, following the Government's commitment to reform the law relating to suspected persons—which was achieved for England and Wales by the Criminal Attempts Act 1981—the provision in the former Clause 80 was dropped. That was the clause which continued the offence of being a "convicted thief frequenting a public place with evident intent to commit theft"—I might call it the main "sus" offence. We have also modified the remaining preventive offences so that
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Clause 59 in this Bill—the offence of being found on enclosed premises with apparent intent to commit theft—no longer requires an element of "unknown bad character" but, on the other hand, is now confined to an apparent attempt to commit theft and not, as in the Burgh Police Acts, any crime involving dishonesty.
The second preventive offence—in Clause 60—that of being a convicted thief found in possession of burglar tools—is also considerably narrower than its Burgh Police Act counterpart which also made it an offence to possess money or articles whose origins could not satisfactorily be explained. Since our intention in this clause is primarily to prevent crimes being committed rather than to solve other crimes, it was decided to delete references to possession of "money and articles".
My Lords, this brings me to the final third of the Bill, the buildings and miscellaneous and general sections of Parts VI and VII. There is much useful material in those Parts, but little, I think, that will arouse controversy. t might be helpful, however, if I indicated the areas which it seems to me are likely to be of most interest to your Lordships. Part VI is concerned primarily with a number of matters relating to the maintenance and repair of buildings and it contains powers which are particularly relevant to the Scottish pattern of widespread tenemental property. I might particularly mention that we have included the so-called "Edinburgh powers" as Clause 84 of the Bill because, following publication of the consultation document, many representations were received, not least from the Convention of Scottish Local Authorities, that the powers at present available to Edinburgh District under the provisions of the Edinburgh private Act were valuable for the maintenance of tenemental property. We were impressed at the volume of the evidence we received that the relatively good quality of Edinburgh property is attributable in no small degree to the judicious use of these powers. We received representations not just from local authorities but from conservation bodies and, indeed, private owners; and in the light of these have now included wider powers based on the Edinburgh Act which can be used throughout Scotland.
Part VII of the Bill contains a variety of useful provisions. I would particularly refer to Clause 106, which makes new provisions requiring local authorities to review periodically their by-laws and keep a register of those current. This is designed to encourage authorities to get rid of by-laws which have long outlived their usefulness. Following the recommendations of the working party, we have also introduced at Clauses 108 to 114 provisions for a new system of management of public property giving local authorities power to make management rules. We hope that these will be more flexible than by-laws and while still enabling authorities effectively to control behaviour on public premises will mean that minor misdemeanours will not attract criminal sanctions as is at present the case under many obsolete by-laws. The main sanction of the management rule system is that, if a user of the property in question is in breach of a management rule and refuses to leave if so requested, he will be guilty of an offence. The management rules will automatically lapse after 10 years and will have to be renewed specifically by the authority.

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That, my Lords, I think covers the points of immediate or major interest in the Bill. The Burgh Police Acts covered a very wide scope and, indeed, in some ways were the statutory provisions on which most local authority activity was based at the turn of the century; but, if anyone has any reservations about the need to replace the Acts now, I might refer them to a fascinating article in the current edition of the Journal of the Law Society of Scotland. That article, by a Mr. Wilson Finnie, charts the developments of the Act and their haphazard incidence and, I think, forcibly underlines the need for early replacement. Mr. Finnie observes:
"Conversation with legal practitioners leads inevitably to the conclusion that though all are aware of the existence of these Acts few are aware of the mechanism of their differential application and none knows fully where they apply. Even some local authority legal departments are unaware of how such Acts apply in their own areas. This legislative octopus of invisible tentacles while historically comprehensible is obviously indefensible in modern conditions…and [highlights] the need for a Civic Government Act irrespective of its contents to render the law knowable, which in practice it is far from being at the moment".
I cannot do better than that for a peroration except to observe that T hope that, after this House has considered the Bill, the Civic Government Act will be commended, not irrespective of its contents but because of them. It is in these circumstances that I commend the Bill to the House. I beg to move.
Moved, That the Bill be now read 2a—(The Earl of Mansfield.)
3.20 p.m.
Lord Ross of Marnock: My Lords, we are grateful to the Minister of State for his very full speech and his elucidation of the Civic Government (Scotland) Bill. It had its beginnings a long time ago, even before 1892; because it was, I think, between 1883 and 1885 that three attempts were made to get that Police Bill through Parliament—and they failed. One has to consider that it was tried again in 1888 and that it did not get through until 1892. It then consisted of 516 clauses and 10 schedules. That was after the dropping of a considerable part of it. In fact there was a cry, which must be a cry that goes up from the heart of any draftsman who sees a favourite child being slaughtered, in the draughtsman's introduction to his annotated edition of the Act, which reads:
"To carry a Bill of such dimensions through the various stages of the parliamentary procedure in the few short hours that constitute Scotland's share of the attention of the legislature"—
I do not think that I will repeat that phrase—
"was no light task. It was evident that any serious opposition would be fatal and unfortunately a most pertinacious opposition arose. To disarm this, the sanitary clauses were sacrificed and at length maimed and mutilated by Members whose constituencies they did not affect. Shorn of some of its most valuable provisions, its usefulness contracted and its symmetry impaired, the Bill was hurried through the last hours of a dying Parliament and became law on 28th June 1892".
Only a draftsman could have designed those delightful sentences. Even at that there were 518 clauses.
Even today, with the passing of the years, there are—or there were in 1976–184 of them still extant, and after the 1903 Act another 45. That is over 220 clauses which stem from that time, which really is almost a
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gathering together and almost a foundation of new branches of local government law.
Many of the clauses that have disappeared have been taken in by more general statutes, statutes in relation to building; in relation to housing, to health, to criminal justice and procedures. There is no doubt that a very considerable debt of gratitude is due to Sir Ronald Johnson, that former genial "guru" of the Scottish Home and Health Department for all the work that he has done. Indeed, let us also pay tribute to Edinburgh Corporation because their Private Confirmation Order of 1965 must have been very helpful to them when they tried to bring up to date the Police Acts.
The working party sought to get a new and more general civic code. But I think we had only to listen to the Minister of State to realise that well as they did, they did not quite succeed in that because there is no symmetry in this Bill. It jumps about from one thing to another and, by the very nature of things, the working party could not have achieved that symmetry. They dusted away the accumulations of the decades, but what they were left with was something quite impossible to get together into a coherent whole.
I commend the working party's report to every Member of the House because it is a splendid document. May I say to the Minister of State that the only drawback is that we do not know in this Bill what has been left out; indeed, whether what was left out was left out on advice. He mentioned the question of the harbouring and allowing of dissolute boys and girls to collect in one place. As a matter of fact, the police wanted that to be continued. They felt it had usefulness in the present day, if I recollect, and advised that the statute to the clause that the Edinburgh Corporation had in their Act would have been ideal for this particular purpose. I do not blame the Government for having left that out.
The working party were defeated by the diversity of the subject. We listened to the Minister of State on licensing for scrap metal dealers. Licensing used to be for golf caddies, boot blacks, messengers, window cleaners and chimney sweeps. The chimney sweeps are away although there was a suggestion that they should be continued. The window cleaners remain as likely candidates for licensing as well as boat hirers and those others in these particular clauses. The working party were defeated by the diversity of the subject and by the absurd mixture of the useful, the obsolete and archaic, and indeed the change in the nature and outlook of people themselves because the commonplace and detailed necessities of the Victorian age are rather looked down on today.
Although we have not yet come to any decisive conclusions, we have heard the Minister telling us that we had some clauses in the Bill concerning indecent and obscure publications. I meant to say "obscene", but many of them are obscure too. Even from 1980, and the proposed Bill, to 1981 we have dropped the word "indecent"; we could not define it. But "obscene" is also not defined, although there are certain understandings in relation to the discretions of the court. But the attitude of people to what constitutes good civic behaviour has not made it easy to bring this up to date. The Government too have tended to be put off by unresolved problems that are not

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going to be resolved for a long time. But they have left Scotland in a position of uncertainty.
The noble Earl did not mention that there were, I think, four clauses in the proposed Bill of last year—I think they were Clauses 95 to 99; and I commend the Government—on proposals for a code of civic government dealing with processions. This was the matter raised in the last Local Government Bill. If the local authority in Glasgow area wishes to stop a procession which they consider would be likely to lead to a breach of public order, they cannot do it. They can do it in Edinburgh over the powers they have in their local statutes, but it cannot be done in Glasgow. Glasgow has to ban all processions for three months in order to get at one.
I sought to put that right and give them the same powers as Edinburgh has in the last Local Government Bill. I was told that I was too early, that there was a new Bill coming. Here is the new Bill, but it is not in it. Last year the Government decided: Yes, we can do that. Four clauses were going to be in the Bill. But they have been dropped. t may well be that there is validity in their suggestion. I was looking at this matter again in the light of events in England last year, as to whether this is right in the terms of a public order Act. It still leaves—and will leave for a considerable time—unsatisfactory the situation in Glasgow and in other parts of Scotland. What the Minister of State said is quite right: there are about 216 burghs all covered by different statutes, and there are also the cities—and Greenock—covered by local Acts as well as the common law provisions and the statutory changes which have been made since 1892.
As a matter of fact, it is sometimes a question for the police as to how they would act, because they very often have three options open to them. It does not constitute the easiest form of civic code when there are these different provisions applying to the same kind of offence. I had hoped we might have got nearer a generally accepted code but the situation was appreciated by the working party; and remember that they reported in 1976. That is five years ago. How many local government Bills have we had since that time? How many criminal justice Bills have we had since that time? I would have hoped that what the working party said as one of the commendable things they saw as part of their labours was that they were laying out provisions that now could be seen as requiring to be absorbed, brought up to date and put into general statute form.
The powers of arrest by police concerning suspicion or loitering with intent—I admit the situation has been brought up to date, but we will go further into that when we reach Committee stage—really should not have been put into this Bill. Surely that matter should have been in the Criminal Justice Bill that we dealt with just a year ago; and the more we get rid of all this material that is not really civic government material, the better this Bill will be. I am sorry about that and I am sorry about the question of the disarray of the law in relation to processions in Scotland, because it is becoming more important every day that we should have some measure of certainty until such time as we treat the whole United Kingdom with a new public order Bill.
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It may well be that the answer is in the report of the noble Lord, Lord Stodart. As I remember those clauses, they gave power in relation to processions to the regions—and there may be arguments that it should properly be dealt with by the districts. That is a point of view I had put to me a fortnight ago in a former Ayrshire borough; not Kilmarnock and not Ayr. I feel we should have taken the chance and made these changes and I think I will seek to do that in Committee, and if later, by overtaking general legislation, the Government approve the matter, so much the better; but let us have some certainty now.
There was another thing the Minister did not mention. There is a new power in relation to the licensing of markets. There always was a power in relation to markets: actually it was a duty laid upon local authorities to provide them. If you compare this Bill with the proposed Bill of last year, you will discover that a lot of duties which they sought to continue in legislation have been dropped. I presume the duties are already there in other statute form—duties of providing baths and all sorts of similar functions. There was a lovely one, I think in 1903. There was a duty laid upon them to provide baths, and one of the conditions was that there were to be at least twice the number of baths for the working class that there were for the better-off class. I can understand why that has been overtaken by the times; but not so long ago I can remember that in the area where I was brought up you could have a whole street, a whole district, and you could say without fear of contradiction that there was not a single bath in the whole place. That is within my lifetime. There were whole sections of towns, whole areas of Glasgow, where there was not a single bath. This was a groping towards something which is now accepted. It all started from the 1892 Act and the 1903 Police Act which followed.
Coming back to markets, there has been a development during recent years—it has been very popular with the public—the starting up of Sunday markets. I think it is on page 56 of the report that something is said about this. They refer to its growing significance and say it is not covered by existing Scottish statutes, and they refer to the setting up of markets by private persons and organisations, particularly the so-called Sunday markets. They suggest that it requires regulation. I am glad to note that this kind of market is now covered because, although it is popular, I know that many local residents complain about it and many local shopkeepers complain; arid they complain even more as rates rise and they are faced with what they consider to be unfair competition. In many cases the police, too, are obliged to devote a great deal of time and manpower in this respect. I am glad of the fact that it is now in.
I want to deal with the whole question of licensing. I can understand the desire to give as much freedom as possible to local authorities, but I should have thought that not only should it be mandatory to have licensing for metal scrap dealers but also that there should be no possibility that there would be areas where, because this is one of the optional parts of this licensing procedure, there would, on the decision of the local authority, be no licensing of hire cars and taxis.

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Of course, once a local authority by resolution goes for licensing in the prescribed categories which are there, and which can be extended by the Secretary of State, then they must apply the new code of licensing referred to in the earlier clauses, Clauses 1 to 8 in Part I of the Bill. I am wondering whether it is just a wee bit bureaucratic that we apply this kind of procedure to the licensing of window cleaners, with all the form and regulation that has to go through. It is wonderful in theory and on paper, but it is a very, very heavy-handed business, and at the moment it is also very haphazard. Local authorities give a licence but they do not seem to know why they give it and under what conditions. There is no appeal or anything else.
That being so, I can understand the problem for many of the more important aspects of licensing—for instance, in relation to taxis, where people's livelihoods are involved. There is the question of fares and so on, because, if they do pass a resolution in the optional cases, then they must apply these clauses not in part but entirely. That means advertising, the right of appeal and appeal to the sheriff. One thing which is suggested is that this Bill is not going to cost local authorities anything. However, local authorities will have to set up a completely new department in relation to licensing, and I shall he very surprised indeed if it is not going to cost them anything.
It is also suggested that the cost of the various licences should meet the expenses of the local authorities. I doubt very much whether it will, and still be reasonable. But, on the question of taxis and hire cars, the working party suggested there should be two separate codes of licensing, clear-cut—one for the taxi and one for the hire car. So far as I can see, they are a bit muddled and mixed up.
There is another thing—and let nobody underestimate the importance of this—because running a taxi may be one man's business. That is his capital and his livelihood. The suggestion was made by the working party that the local licensing authority should be able to control the number of taxis. There is nothing in the Bill about that and of course it means that if somebody is overtaken by ill health he can sell the business, sell the taxi and transfer the taxi licence—that is, the car licence; not his own driver's licence, because they are two separate things. I think that the Minister of State should make it clear why he made no reference to these points. This is mentioned on page 6 of the working party's report and I am glad that my noble friend Lord Underhill is to address some remarks to the House on this matter. There is so much to be said.
There is one important point about lost property. The advice in respect of lost property came from the Scottish Law Commission's report, and they were quite clear about it. They wanted a completely new system. In ordinary cases, if people lose anything the first thing they do is go to the police. When they have been on a train, a bus or anything else and are not sure where they have lost something, they go to the police. The unanimous view in the Law Commission's report, which emerged in consultation, was that the responsibility for dealing with lost property should remain with the police, because they said that there was public satisfaction with the system.
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They went on to say that certain transport undertakings in Scotland are at present permitted to operate under special schemes. If you find something on a bus, you have to give it to the conductor. If you find something on a train, you have to hand it in somewhere else. The other day, a Member of Parliament had some difficulty about where he should hand in a credit card or a student's travel card that he had found.
The Law Commission went on to say in paragraph 33 on page 12:
"It is difficult to resist the conclusion that schemes which enable certain transport undertakings to apply different rules of law should not survive in this branch of law. The lack of uniformity can and does cause inconvenience both to the police and to members of the public who have lost their property"
They came to the conclusion:
"If our conclusions on rights of ownership of lost property are accepted, it would be inconsistent to confer qualified confiscatory rights of statute on certain selected public undertakings only, while denying such rights to private concerns and to members of the public"—
for instance, department stores with branches all over the place. They could claim the same rights as a public undertaking, so that, if something was found on their property, it should be handed to them and not to the police. Finally, the Law Commission said:
"We recommend, therefore, the abolition of these special privileges and that the chief constable should be placed in the position of being in control of all lost property".
That has been departed from. Why?
Secondly, the Law Commission suggested that in respect of lost property a compensation fund should be set up, out of which the chief constable should at his discretion pay rewards. There was quite an argument about what the reward should be, whether it should be 10 per cent., or a minimum or a maximum. All these matters are in the Bill, but I am afraid that the question of the compensation fund has not been dealt with.
Subjects such as charitable collections and touting are important, and I am glad that they are there. In certain parts of Scotland, if you want to have a collection at an outdoor political meeting, you have to get permission. I can well remember having staggered my way through the 1945 election on a day when I was fighting a place called Ayr Burghs. I started at Ardrossan and then had a meeting in Salt-coats, another in Irvine, another in Troon, another in Prestwick, another in New Prestwick and, finally, one in Ayr. I staggered on to Ayr Low Green, faced with thousands of people. I thought that I had done very well and when I finished I said to an old ILP supporter, "That wasn't a bad meeting", to which he replied, "Aye, but we hadna' permission to take a collection".
But control in respect of this is quite right and quite wise, as indeed—when you come down to it—applies to what was in the 1892 Act for its day. The amazing thing is that it worked, and it worked for over 90 years. I hope that the Minister of State was right. We should be very careful not to give hostages to fortune. What is to happen in 1984?—because one of the powers taken in this Bill is power to extend the life of the Burgh Police (Scotland) Act, in many of its aspects, for yet another two years. We had hoped to do this job by 1979, but we did not make it. We are now hoping to do it by 1982, and there are extensions to 1984 and, in

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certain respects, to 1986. I sincerely hope that we make something of it.
It will be a fascinating Committee stage, to which all are cordially invited. Do not leave it to the Scots to deal with these problems of police powers, indecency, obscene publications, management codes and all the rest of it. Remember what went wrong in 1892, when the despairing draftsman talked of, "only the few hours that are allowed for Scottish legislation". There will be plenty now. Let us make this a real, lasting Civic Government Bill. But, on the whole, I have to commend the working party, and also commend the Government and those civil servants who have laboured long at this. I trust that with their further help we shall make it a better Bill before it becomes an Act.
3.46 p.m.
Lord Mackie of Benshie: My Lords, I find it extremely difficult to make a Second Reading speech on this Bill, and I shall not disguise the fact that it is the kind of Bill that a person like me dislikes terribly. There is no broad sweep of policy on which one can elaborate or, indeed, put a profound principle. One cannot criticise the noble Lord, Lord Stodart of Leaston, on his report and one cannot—like my noble friend Lord Evans of Claughton—go into the electoral system. It is a beastly Bill which is dealing with the needs of the ordinary person, which arises from a practical working party and on which even the noble Lord, Lord Ross, was bound to commend the Government for producing.
A Bill of this kind, which deals with so many diverse matters affecting the people of Scotland on which they can feel very deeply, is one which one must commend. But I do not know what one says about the general principle, because it is wholly a collection of practical propositions arising out of a working party of practical people. I suppose that one should commend it on that ground alone, and it is probably an advance on those things arising out of theory and totally un-commended by practical people.
The general subjects in the Bill are all to do with local people and I think that in Committee—it is really a Committee Bill—we shall need to examine the licensing of the various activities of the people of Scotland. On the licensing of markets, it is quite extraordinary how people have appreciated the markets, and the Sunday markets, that have sprung up. The Highland Agricultural Society derives a very large amount of its income from the market which has sprung up at Ingliston, and it is very much a factor in the lives of the people. But I think that we need to look at whether it is necessary to license window cleaners. There are aspects in the Bill which require examination. The noble Lord, Lord Ross, has already touched on the question of taxi services and their importance in a district, as well as their extreme importance to the people who run them and who want protection for their living.
As regards Part III, I am wholly in accord with the need to do something about dogs. It is a very unpopular subject upon which I have received letters. I am in agreement with everything that will bring them under some form of control. The provisions relating to arrest and other matters are outwith my experience.
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However, I will ask the lawyers in our party to look with some care at these provisions when we come to the Committee stage.
Because of my enormous lack of knowledge of the subject, it is very difficult for me to say any more. However, the noble Lord, Lord Ross of Marnock, has already given us the benefit of his extremely valuable knowledge, in 25 minutes, and has promised us many hours during the Committee stage. Then the noble Lord, Lord Hughes, is sitting beside him, and all around the House there are many experts. Therefore, let me only say that I look forward to dropping in on them occasionally in Committee to see that they are doing well. We shall examine many of the provisions with some care.
3.51 p.m.
Lord Wilson of Langside: My Lords, I can see force in some of the detailed criticisms directed against the Bill by the noble Lord, Lord Ross of Marnock, and I can understand well enough why the noble Lord. Lord Mackie of Benshie, described it as "a beastly Bill" Having said that, I venture to think that it is a good Bill because, as the Explanatory Memorandum says, it consolidates much of the Scots law and at the same time in a sense codifies much of the Scots law related to civic government. This was a very necessary exercise, so I see it as a good and as a necessary Bill. I sec it also as a Bill to be commended, in that most of its language is comprehensible and understandable, even to myself. This is not over-common in our statute law. For most of my life, though not so much now, I have been puzzled as to why parliamentary draftsmen apparently enjoy drafting in language which it is difficult to understand and to comprehend. Far be it from me to suggest that the circumstance that clarity of language would reduce the need for so many lawyers has anything to do with it. However, the Bill is a good and a necessary Bill and its language, because it is fairly readily understandable, is to be commended.
We are indebted to the noble Earl the Minister for introducing the Bill to us with such distinguished ability and clarity, and also good humour—a combination which, having regard to what he often has to face from the Scots on this side of the House, is a great tribute to him. I have often felt that in his position good humour is an essential for survival. In presenting this measure to your Lordships the Minister combined all those qualities.
It is not to detract from anything that I have said or to qualify or modify any of it when I say that the Bill jolly well ought to be a good Bill. It is well nigh 10 years since the noble Lord, Lord Campbell of Croy, set up the working party upon which the Bill proceeds. So we can take it, can we not, that the Scottish Office had been thinking about it for some time before then? One comes to the conclusion, I hope not too unkindly, that the speed of sound is perhaps only rarely achieved in the Scottish Office. I hope I am not telling tales out of school or breaking any of the rules, written or unwritten, of your Lordships' House if I say that when I worked in the Scottish Office this was very much my impression.
It is not to qualify anything which I have said commending the Bill when I say that it is not surprising that the language is clear. Whatever else may be said—

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and a certain amount has been said—about the old Burgh Police (Scotland) Acts, I always found them (I had a good deal to do with them when I was young, practising in the law), and I think most lawyers and even laymen did, too, to be pretty easy to understand. There was no undue complexity about them. It may be that this has contributed to the relative clarity of the provisions in the Bill that is before us today. As the noble Lord, Lord Mackie of Benshie, said, this is not the kind of Bill upon which one can really make a Second Reading speech. When I took a preliminary canter through it last week my first impression was that it would be difficult to take much more than, I think I said, six minutes on a Second Reading speech on this Bill, whatever we may have to say during the Committee stage. I see that I shall have lived up to what I said then if I sit down now and merely say that I hope your Lordships will give to this Bill a Second Reading with alacrity and with a certain amount of pleasure.
3.58 p.m.
Baroness Elliot of Harwood: My Lords, I shall follow the example of the speakers who have already taken part in this debate and be very short. First may I congratulate my noble friend Lord Mansfield on the way he introduced the Bill. The noble Lord, Lord Ross of Marnock, said that this is an extremely complicated and rather difficult Bill to make one speech about because it deals with so many subjects. However, I think that my noble friend Lord Mansfield introduced it in a most encouraging way and I shall certainly support him as much as I possibly can. May I also congratulate the noble Lord, Lord Ross of Marnock, on his researches into history. The fact that in 1892 there was a Bill which contained 500 clauses whereas this Bill contains only 132 is an improvement. The way in which the noble Lord, Lord Ross of Marnock, looked back on the past was most engaging. I was fascinated by all he had to say about it.
The uniform licensing procedure and the right of appeal which are dealt with in the first part of the Bill are excellent. They will simplify matters and make things easier for everybody. I agree also with the proposals contained in Part II: that a class of business or person can be licensed, if considered necessary, without making this mandatory. I agree with the noble Lord, Lord Mackie of Benshie: I do not know whether or not window cleaners are necessary, but the point is that they will not be included unless they are necessary. I agree that there should be some deterrent relating to the sale by metal dealers of anything which could be turned into a dangerous weapon of any kind. The provision that a completely new activity should be licensed is safeguarded by the requirement that Parliament must give its approval. So we have got something there which we can also use, if required. Part III will work against the very great increase in burglary and theft. Any legislation which can prevent these happenings, which are all too prevalent today, I am sure we should support.
I am a little concerned because Clauses 47 to 51, which deal with the question of the dissemination of obscene literature and the distribution of indecent material, may not be strong enough. I should like
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to see quite strong action taken against this particular form of trading, which is bringing in vast sums of money, I think quite wrongly and at other people's expense. I hope that when it comes to discussing this matter the noble Earl, Lord Mansfield, will tell us that he has sufficient powers in this Bill to stop this kind of thing.
With regard to the powers of entry, Clause 96 seems to give local authorities much greater powers than they have had. That is all right provided that the owners have had sufficient warning, or that the landlords or whoever it may be have consistently refused to carry out the necessary works. Have the owners or the landlords these safeguards?
I agree with the regulations with regard to charitable collections, and I am sure they are timely. I have never met with the misuse of charitable collections but one reads of these abuses and clearly they should be prevented.
In my view, this is a wise Bill. It is wise to have a transitional period to bring it into effect, which is included in Clause 129. The fact that we have in your Lordships' House today three former Secretaries of State, one former Lord Advocate and two former Under-Secretaries of State, all taking part in this debate makes it very unlikely that anything in the Bill will not be dealt with in a very practical manner. I commend the Bill and I shall support it in any way that I can.
4.2 p.m.
Lord Underhill: My Lords, as my noble friend Lord Ross of Marnock has indicated, I wish to deal in particular with the position of taxis and hire cars under the Bill. I do so because there are important changes from the report of the working party to which reference has been made, and indeed from the consultation paper issued in July 1980.
Before I come to those two changes I wish to raise a question on Clause 9, to which my noble friend referred. As he explained, under Clause 9 the licensing procedures will not be mandatory, except in two cases. It may be that this is covered by other legislation, but I should like to ask what would be the position if, although a licensing authority should decide not to pass a resolution dealing with the licensing of taxis and hire cars, somebody wishes to operate a taxi or a hire car. Can they do so without any procedure at all, or is that situation covered by some other legislation?
Clauses 10 to 22 relate to the licensing of taxis and hire cars, but we find that the provisions of Schedule 1 contain all the detailed procedure for all the various activities for which licences would be permissible, including those for taxis and hire cars. I wonder—and certainly the taxi trade is wondering—whether it is not advisable to keep separate the position of taxis and hire cars, with all the procedures appertaining to them, rather than dealing with them all together in Schedule 1, which would apply to all licensed activities.
While I am dealing with Schedule 1 I should like to make another point. There is provision in Schedule 1 that for all applications for licences and renewal of licences public notice should be given in one or more newspapers. I am told that in the case

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of Glasgow there are 1,500 taxis and 2,500 taxi drivers. I know that there is provision in one subsection for the Secretary of State to prescribe where that public notice shall apply, and it may be that the Minister of State can assure us that there is no intention of applying it to the large number of licences and renewals for taxis and hire cars because the newspapers will have a very good time if that is not to be the position.
I welcome the inclusion of Clause 17, because that provides for a taxi operator to be able to appeal to the traffic commissioners against the scale of taxi fares which may be determined by the licensing authority. For quite a while the taxi traders considered it wrong that their appeal should be to the very council that fixes the fees. So that particular clause is welcomed. Similarly, I welcome the inclusion of Clause 14 which deals with signs on vehicles other than taxis. That brings the position in Scotland into line with the Transport Act 1980 dealing with England and Wales.
I referred to two important changes in the Bill. Naturally I do not wish to give a Committee stage speech, but I must deal with the omissions to some extent, so that the Minister of State may be able to give me an answer when he winds up the debate. The first omission concerns the power for licensing authorities to determine the number of taxis that may be licensed in a particular area. That power is not to be included in the Bill. That proposal was included in the report to the working party. I will not quote it at this stage, but the working party was quite definite that there should be power to determine the number of taxis, and they made it quite clear that it was necessary in order to provide a service for the public on the one hand and also to ensure that in the licensing area operators can make an adequate living.
The consultation paper also contained a reference to the fact that a licensing authority shall refuse an application to grant a licence if in their opinion, having regard to facilities of the same or of a similar kind already available in the locality, the grant of the application would result in the over-provision of such services. So we have the working party report which is quite definite, we have the consultation document which is quite definite, and yet the whole reference to this is not now included in the Bill. Is there any reason why there has been a change of view and this provision has been taken out?
At present, both in Scotland and in England, there is existing power for a local authority to licence such number of taxis as it thinks fit. Unless something is put into the Bill we shall have the position that that provision will remain in England and Wales but not in Scotland. I know there is a suggestion that including the right to limit could protect a monopoly situation; but of course the limitation of the number of licences has some effect upon a taxi operator's business, and I believe that the Minister, in his very useful opening statement, referred to the fact that there was a right of appeal on another matter affecting a person's livelihood. If there is no limitation on the number of taxis and hire cars, that will affect a person's livelihood, and I suggest that there is no problem whatever in a district council assessing the number of taxis that it is desirable should be licensed in a particular area. I suggest that limitation is required not only for the protection of the
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taxi trade and the livelihood of the individual, but also for the protection of the public, because the standard of the provision of taxis and the quality and character of taxi drivers must be maintained in the general public interest.
The other very important omission relates to the provision for the transfer of a taxi licence. Again, provision for this was recommended both in the working party's report and in the consultation document. In fact, in the latter the draft Bill suggested two quite long clauses—Clauses 15 and 16—but those clauses have been omitted from the Bill.
I must point out that, as contained even in the consultation paper, provisions for transfer would have related to all the various activities for which licences would be granted and not just to taxis and hire cars. There may be some reason, in certain of the activities for which licences are granted, why the licence should not be transferred, but I suggest that in view of the very special nature of the taxi trade it is essential that there should be provision in the Bill for the transfer of a taxi licence. I understand that it has been suggested that the procedures which were outlined in Clauses 15 and 16 of the draft Bill were cumbersome. If that is so, surely it would not be beyond the wit of parliamentary draftsmen to redraft a clause which was less cumbersome. Even if it was still considered undesirable to put in definite procedure, surely there ought to be at least provision in the Bill that there shall be arrangements made for the transfer of taxi licences.
I suggest that the withdrawal of the power to transfer a licence will change a well-established law which applies at the moment throughout the whole of the United Kingdom. We shall have a situation where licences will continue to be transferable in England and Wales but will cease to be transferable in Scotland, unless something is put into the Bill. I ask why there has been this change. As recently as September 1980, the Minister of State at the Home Office—admittedly, the Home Office is not concerned with legislation in Scotland—made it absolutely clear that the Government view, from the Home Office, was that both these provisions should be maintained, and presumably the Home Office view would be the view of the Scottish Office. I hope the Minister will be able to say why these clauses have been removed and, I hope, give us an assurance that there will be continued consultation on these two subjects, so that it may be possible for the Government themselves to bring in amendments to make provision for these two important features affecting the taxi trade and hire cars. If the Government feel that they do not want to bring in changes themselves, it is a matter we shall have to deal with by way of amendment at Committee stage.
4.12 p.m.
Lord Campbell of Croy: My Lords, I should like to start by thanking my noble friend Lord Mansfield for having introduced so clearly what is a long Bill with many different subjects in it. I would have raised some points which the noble Lord, Lord Ross of Marnock, has already dealt with, some of the principal points in the Bill; in drawing attention to them in the way that he has he has shortened my speech by about half.
When I saw the name of the noble Lord, Lord Underhill, down to speak, I had a feeling that it would

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probably be on the question of taxis or vehicles for hire. will not follow him in that; I hope he will understand, because there are many other things in the Bill. I would say that we know that he is very knowledgeable on this subject, and I am sure my noble friend and the Government will take into account the matters to which he has drawn attention.
I should like to take this opportunity, the first I have had in public, of thanking the working party for carrying out their task, because I set it up in 1972. At the time when I did that, as Secretary of State, it did seem a thankless task. They were asked to embark on Herculean labours and were faced with a huge quantity of miscellaneous local Acts and the many provisions of the Burgh Police legislation. All these had to be examined and discussed with the police and other authorities, and many of them had only local application in different parts of Scotland. The terms of reference given to the working party were to look into the Burgh Police Acts and related and corresponding local Acts; also to examine the powers to make by-laws and make recommendations on that. Broadly, it was to rationalise, simplify and clear up loose ends. This meant that it was recognised that quite a number of the existing provisions in the 1970s would be dropped. One hoped that as much as possible which no longer had real relevance today would be allowed to lapse or be repealed. In general, bringing up-to-date was necessary, and it was hoped that there would be a modernisation which would also involve a new code for authorities working in licensing and in the other tasks with which this Bill deals.
There has, of course, been a process of repeal of the Burgh Police legislation in a piecemeal way. I will give your Lordships an example. I was involved 20 years ago in getting through the House of Commons and your Lordships' House a Private Member's Bill to carry out certain modernisation which was much required. It concerned putting down salt on roads in burghs in Scotland because this was something which was necessary in order to dispose of ice. Of course it is done now in winter time, as necessary, on a very wide scale. But it was discovered that under the legislation existing then in many burghs it was illegal to put down salt on the roads, for the very good reason that that legislation had been enacted in the days of the horse and it would have been had for horses' hooves. It was necessary to make these changes from year to year when clearly parts of this legislation were quite irrelevant and needed to be dropped.
On the question of licensing, I hope the Government really have examined whether it is necessary to continue licensing for the subjects which are in this Bill. Certainly one of the objects of setting up that working party was to see to what extent licensing could be dispensed with altogether. One does not want to have a bureaucratic system of regulation unless it really is necessary, for safety, to prevent crime or for other reasons. When we come to the Committee stage I would hope that my noble friend would be able in each case to explain why licensing is required, and, if it is for safety, for whose safety.
I understand that some subjects which might have been in the Bill, such as licensing of hairdressers, have
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disappeared. In due course, if my noble friend could remind us of some things that have been dropped, this would be helpful to us. We would like to know why it should be necessary for street trading and markets to continue to be licensed. I do, like everyone else who has spoken about this subject, approve of the discretionary principle, so that a licensing system does not have to be established over the whole of Scotland for each subject but can be brought into existence in areas where there is a definite proved need for licensing.
Having looked at the White Paper which was published in July 1980, which did carry out the innovation for Scotland of publishing a complete draft Bill, and comparing it with the Bill before us, one does see the differences, and therefore what has been dropped, no doubt as a result of consultations or for other reasons. I should particularly like to refer, as the noble Lord, Lord Ross, did-but I will do it more briefly because he did put the point very clearly-to the question of public processions. Clauses 95 to 99 of the White Paper Bill set out new regulations for public processions-and many of us in both Houses have said that we do need better legislation, in the form of a Public Order Act for the United Kingdom, or whatever it may be, to govern this subject. I would ask my noble friend why those clauses have been dropped. I believe myself that it is because the Government are hoping to bring in a new Public Order Act for the whole United Kingdom. If that can be done within reasonable time, that would be the best way of doing it, to promote uniformity over the country.
The noble Lord, Lord Ross, pointed out the extraordinary difference now between Glasgow and Edinburgh. If we can bring in a new Act which would have general application, that would be the best solution. The noble Lord, Lord Ross, suggested that it might be because the report of the committee which was chaired by my noble friend Lord Stodart suggested that this power should rest with the districts. In fact I think I am correct in saying that, in its paragraph No. 243, the Stodart Committee recommended that this power should be with the regions because the regions have more direct contact with the police and also the police areas are nearer in shape and boundaries to the regional authorities. So I am led to think that it must be that the Government are thinking of a new Public Order Act but I shall also be interested, like the noble Lord, Lord Ross, to hear what my noble friend has to say at the end of the debate.
I turn next to Clauses 59 to 64 which are concerned with preventive offences and which provide powers for constables and also for entry and search. These clauses seem to be aimed particularly-as were the Burgh Police Acts-at past or habitual offenders. They are designed to try to stop a crime; for example, when somebody is discovered who is, to put it crudely, known to be a criminal type and is found on premises or in circumstances with perhaps the kind of equipment which make it look as though he is going to commit a crime. I, too, would have preferred to see this provision in a Criminal Justice Bill, and we went into the whole question of powers of search by the police at considerable length in your Lordships' House at different stages when the Scottish Criminal Justice Act, as it now is, was going through. So I would

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ask my noble friend, either this evening or in Committee, to assure us that these provisions fit in with those powers of search which we examined so closely during our discussions on the Criminal Justice Act.
Paragraph 10 of the White Paper referred to what is known south of the border as the "sus" law and said that the White Paper clauses would be reconsidered and redrafted in the light of what came out of the report on that matter. My noble friend in his opening speech referred to some changes which have been made, but I think that again this is a matter that we shall need to look at very carefully because this is the area of the law where a number of people, particularly young people, and particularly if they are of a different race, are inclined to think that they are being picked on by the police. We must look at this very carefully and it may well require further changes to ensure that these provisions, which are clearly aimed at preventing crimes before they happen, are not thought to be aimed at a particular section or sections of the community.
I should like to mention one other point very briefly which was touched on by the noble Lord, Lord Mackie; namely, dogs. I mention it because over the past eight years or so a large number of Scottish local authority Bills have been passing through Parliament. I would say that I have seen at least 20, but there have probably been 30 or 40; and almost all of them have been dealing with one subject only—the question of stray dogs and how to cope with them and the nuisance that they can create. The other side of the matter is that there must be provisions for humane treatment and for making sure that dogs which really are pets and have just become lost are not killed within, say, 24 hours before their owners can rightfully trace them. My main point is that I hope that the Government are now, by the measures in the Bill, carrying out what we were told they were going to do, which was to bring in for the whole of Scotland provisions which would make it no longer necessary for this procession of local authority Bills on dogs to come through Parliament. I hope that my noble friend can tell me that the local authorities, through their associations, are content with these provisions.
The Government are aiming to bring most of the burgh police legislation for Scotland to an end at the end of 1982. I observe that that deadline is not inflexible because Clause 129 gives the Secretary of State powers to vary the repeal of parts of the burgh police legislation and also other local legislation up to the end of 1986. I commend that and I am glad to see it. However, I should like to ask my noble friend whether general agreement has been reached on the most important provisions in the Bill. Is there still opposition from local authorities—for example, the Convention of Scottish Local Authorities (COSLA)—to important parts of this Bill?
As regards the licensing part of the Bill, my noble friend has mentioned that much of the licensing is aimed at assisting safety and preventing crime. But where licensing regulates numbers, or the quality of service, it involves the livelihoods of people and therefore there must be a proper and acceptable system of appeal in relevant cases. I believe that we must try to reach the best possible arrangements before the entry into force of sections of the Bill and the repeal of the old
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legislation. So I would ask my noble friend whether he thinks that any time after 1986 may be needed.
The parent Act has been on the statute book for almost 90 years, and I feel that in replacing it, it is important to achieve the best and most acceptable new code even if it means that we might have to spend a few more months on particular subjects, such as licensing or preventive offences, if there is serious disagreement. But I hope that we shall complete this Bill, all parts of it, within this Session and that Clause 129 means that there can be flexibility if further consultation should be necessary on any particular subject. I believe that the reforms—because several different subjects are being dealt with in the Bill—arc necessary and that we certainly need to bring up to date generally the matters dealt with in the Bill. I welcome the Bill in principle and I applaud the hard work and effort which has been applied to its preparation.
4.27 p.m.
Lady Saltoun: My Lords, while I welcome large portions of the Bill—in fact most of it—I have, like the noble Baroness, Lady Elliot of Harwood, some reservations about the clauses in Part VI. I hope I am wrong, but Clauses 84 and 96 appear to me to give local authorities carte blanche to require owners of property to carry out repairs to their property or themselves to enter and carry out repairs, without any better reason for doing so than that they do not like the owner's face. Moreover, having carried out possibly quite unnecessary repairs to private property at possibly enormous expense they can then recover that expense from the owner of the property. For example, it seems to me—and I hope that I am wrong—that if I were the owner of a derelict cottage standing in a field, I could be obliged to restore it even though no one wanted to live in it let alone pay an economic rent for it and even if it were no danger to anyone.
I turn to Clause 93. This seems to me to give local authorities far too much power to do as they please as regards both public monuments and private monuments. As I read it, they could move or demolish a war memorial or demolish my grandfather's statue at my expense just because they did not like his face or mine.
Clause 94 gives local authorities absolute power over street names and alterations to street numbers. Apparently they have no duty to consult local opinion and they do not do so. In the old days the bailies—that is the borough councillors to your English Lordships—were local and they knew the history of the place and the local place names and they were in touch with local feeling. Now the district councillors are largely what, in my youth, in the part of the world which I come from, were called foreigners and they may live as much as 25 miles or more away from the place for which they can legislate with absolute authority.
On the other hand, I am sorry to see that there is no onus on them to number their own council houses and flats clearly. I know an area of council housing which is so badly numbered that only the inhabitants and the postmen can find their way about, and that only in daylight. After dark the police cannot and, what is very serious indeed, the local doctors cannot. It is like this: you find Nos. 14 and 15—and I have

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done house-to-house collecting in this area—next door to each other; then you look for No. 16, see no sign of it and ring the bell at No. 15 again; the lady says, "You see the door over there, Nos. 16, 17, 18 and 19 are through there and up the stairs". But there is nothing outside that door to indicate that that is where they are.
Although I am sure that it is not the Government's intention that Part VI of the Bill should give local authorities such absolute powers, and although I also believe that most local authorities would hesitate to use them, I think it is better to get the law right than to have many appeals to the sheriff. I very much hope that the noble Earl, Lord Mansfield, will consider these points.
Finally, I do not like the Title of this Bill. We have never had civic government in Scotland. Even in the good old days of the borough and county councils the generic term was "local government". The word "civic" has misleading urban connotations as this Bill affects districts and islands councils, and hence the country. I wonder whether the noble Earl would consider changing the title to "Local Government (Scotland) Bill", or something along those lines.
4.32 p.m.
Lord Stodart of Leaston: My Lords, soon after I was privileged to join your Lordships' House one of your number warned me to look out for the unexpected. I have certainly discovered it today. It is rare for two farmers to agree; certainly not one who farms in a small way and one like the noble Lord, Lord Mackie of Benshie. Frequently, I, like a hungry sheep, have looked upwards hoping to be fed or to drink, and have rarely received satisfaction. But I agree with the noble Lord when he says that this is not the easiest of Bills on which to make a Second Reading speech. I suspect that there are many questions which will arise in Committee and, therefore, I propose to concentrate on only two matters, which I think are principal matters.
One has already been touched on by many noble Lords, and it is licensing, which occupies the whole of Part I of the Bill. The other, which may have escaped the notice of some of your Lordships, is that of dual responsibility. I speak about that with some feeling because it formed what was possibly the cornerstone of a report dealing with Scottish local government, about which, so my information goes, legislation is proposed. First, I want to agree with my noble friend the Minister of State, with the noble Lord, Lord Ross of Marnock, and with my noble friend Lord Campbell of Croy: what a herculean task this committee undertook. I thought that what I was invited to do in 12 months would be hard work; this occupied four years and covered a very much wider amount of ground.
On licensing, 46 clauses of this Bill deal with nine activities for which a licence may or must be required. In the last of these clauses, No. 46, the Secretary of State is allowed to designate any other activity which he believes ought to be licensed, subject to the approval of the licensing authority. The public entertainment clause alone embraces 10 separate recreations and, rather like my noble friend Lord Campbell of Croy, I
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wonder whether in these days licences are really needed for all these subjects. I am not only referring to public entertainment. I believe that there is a clear need for licensing where public safety is involved, and that undoubtedly brings in such things as taxis, pleasure boats, cinemas and theatres with fire risks, and I would even go so far as to say—although I think that misgivings have been expressed about it—the holding of Sunday markets where hazards for traffic are regarded as being intense.
However, I have put a query beside billiards rooms, which is to have a mandatory licence under the entertainment clause. Perhaps my difficulty is that I have never been in a billiards room; I watch billiards on television. But one only has to read the White Paper to see that the members of the committee were very halfhearted in their comments about the necessity for that. The noble Lord, Lord Ross of Marnock, mentioned what I think is the classic doubt, that about window cleaners, a licence for whose activity is admittedly optional, like most of the others. I am bound to confess that I never knew that a licence was required for cleaning windows. I have made numerous inquiries of English noble Lords in this House, and they have expressed the utmost surprise that such a licence is needed. Quite frankly, I am not quite clear—and I hope that my noble friend the Minister of State will make it quite clear—why this licence is required.
It is true that the 1892 Act forbad females to stand on the sill of any window above basement level in order to perform any operation on the outside of such window. But my own suspicion is that this discrimination between male and female window cleaners was based rather more on propriety of dress than on anxiety for safety. Is it, therefore, the police who want window cleaners to be licensed today? There is a slightly ambiguous comment in the White Paper, which reads:
"A licence system for window cleaners would make possible a degree of policing which may be useful in large centres of population, though not necessarily in rural areas".
I can appreciate that a window cleaner has an admirable chance of seeing what is inside a house and that, therefore, the police may want to keep tabs on him. If that is the reason, so be it; though I still find it somewhat difficult to understand why the working party's comment about the greater importance of city areas should apply. This, in fact, opens up the whole question of the optional licence. In this particular case, if it is the fact that it is the police who want window cleaners to have licences. I should have thought that the chances of nefarious activities were just as great in rural areas as in cities.
I turn, as many have, to taxi licences. I do so because this matter caused a heated and totally unexpected discussion in the committee whose chair I occupied. The argument ranged between all licensing being done by the districts and all transport being done by the regions. It was pointed out with considerable emphasis that the region was the highway authority, the region ran the buses, the region was the police authority, and that taxis today form a significant part of public transport. However, in fact, we came down, as did the working party in the case of this Bill, in favour of all the licensing going to the districts, although we were concerned about the variation in fares between districts. I see nothing in this Bill

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regarding inter-district agreements about fares, apart from those involving precise destinations such as going out of one district to an airport or a railway station in another. All the same, I must say that I am glad that a single tier of local authority has been designated.
It is this which leads me to one subject, admittedly very minor in this Bill, which worries me, as a possibility of dual responsibility seems to appear. There is very little said about public lighting in this Bill, into which my committee went exhaustively, finding a total network of complexities. We found that the regions have permissive powers—I repeat, permissive powers—to light roads which are, or are to become, highways. We found that, under the Burgh Police Acts and local legislation, districts are bound to light all streets and places where lighting is necessary, but the district cannot light roads for which the region, as the highway authority, is responsible without the latter's approval.
The only reference to lighting in this Bill appears in Clauses 87 and 88, and refers to common stairs and installation of lights on private property, each of which is to be a function of the districts. It may be—and I do not know of this—that there is to be legislation about lighting in another enactment. But much of it comes at the moment under the Burgh Police Acts, and I am bound to say that I am puzzled as to why this minor item has been selected for attention. It may be that the districts are to be given responsibility for all lighting; streets, highways, the lot. I should be surprised, after the evidence we heard, and even more surprised after the working party said specifically that regions would normally be the authority to light common stairs, and that area of concurrency in lighting should be kept to the absolute minimum, but if the responsibility is all to go to the districts, it would at least be clearer.
I remember that the Scottish development department told my committee of difficulties because of the split by the 1973 Act of responsibility for street lighting between districts and regions, and that each tier had its own electricial department. We tried to point a possible way out, by putting all lighting in the hands of one tier. What I hope profoundly is that I am not being pessimistic in seeing in this proposal for lighting common stairs and private property the thin end of the wedge that is going to make nonsense of the words that the Secretary of State himself spoke not very long ago, when he said that duplication is the enemy of success.
I end on a subject that has again been mentioned by several noble Lords—that is, the question of processions. There were two pages on the subject in the working party report, with recommendations that the districts should be responsible. There was a whole section in the consultation document, and the consultation paper took the opposite view and thought, as did the committee over which I presided, that responsibility for public processions should rest with the regions. I hope I have not appeared to be critical. I think that this is an admirable tidying-up exercise. I believe that almost certainly the Bill can be improved in Committee, and I therefore congratulate my noble friend on its introduction.
4.47 p.m.
The Earl of Selkirk: My Lords, I hope that the noble Lord will not expect me to follow him in the interesting remarks that he made, though I viewed with great sympathy what he said about window cleaners. I am very glad that both the noble Lord, Lord Campbell of Croy, and indeed the noble Lord, Lord Stodart, have said that we should look at all licences with care and see whether they really perform a function and are necessary. I think it is a price we probably have to pay for living in densely populated areas, but nonetheless the price should not be higher than is absolutely necessary. The noble Lady, Lady Saltoun, referred to street names. I believe that this is a matter which local authorities could be greatly encouraged to see carried out more clearly and more universally.
I have only three points, which are inevitably Committee points. I raise them now because I think it is fair to the Scottish Office, who are sometimes rather slow in accepting new ideas, if I suggest them now. Strictly speaking, Part I and Part II are in the wrong order. Part I deals with the council which makes the decisions. It then deals with the functions, and it is not until you get to Part II that you know what the functions are about. That is the wrong order. If you want to make it clear you first of all say that the council will do the work, you then say who the work will apply to, and thirdly how the work will be carried out.
I come as a complete newcomer to this, and I do not know anything about it. I was reading it through, and until you get to Clause 46 you do not know what the Bill is about at all. I know nothing about police Acts. All my life I have tried as best I can to avoid them, and have treated them with a great sense of revulsion, so I am starting entirely fresh in looking at what is concerned.
The second point is a quite small one which was dealt with by my noble friend Lord Campbell of Croy. Clause 73 deals with dogs and in it Section 3 of the 1906 Act is amended. Can we not have that printed in full in what I believe is called the Renton system of legislation? This is a matter which could affect anybody, both the loser and finder, and it is a subject about which emotions can be quite high. It is, therefore, desirable that the procedure should be as simple as possible and be understood.
Thirdly, why have we no estimate of what the cost of all this will be? There are some, I would call them uncertain, remarks in the introduction from which it appears that the Treasury will meet the cost. It is also said that no central manpower will be employed. The whole cost of setting it up will, I understand, fall on the Treasury, although it does not say so. As I say, we should have some idea of the cost, and it is normal in statutes to be given a picture of what the cost will be. There is a second side to that; in a sense, licensing is a tax on activities. Licensing can be done economically and carefully or it can be done extravagantly, and I am sure we all feel that it should be done as economically as possible. What pressure will there be for it to be done economically? It is said that it will be through the local authorities, but one need take any of the organisations concerned—second-hand dealers, taxis or boat-owners—to see that none of them could exercise much pressure on a local authority to see that the work is done efficiently and economically.

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I have put forward what I know are basically committed points. If the Minister could say something about them now I should be grateful, but I shall fully understand if he says he prefers to wait until the Committee stage.
4.53 p.m.
Lord Hughes: My Lords, in recent weeks I have been abroad a great deal on parliamentary business, at the Council of Europe and the like, and a result is that I did not see this Bill until I arrived in the House today. So I am afraid that my comments on it must be rather bitty, and I have picked out a few points in passing. I wish to say at the outset how much I enjoyed the speech of the noble Lord, Lord Mackie of Benshie, which he made in his usual fashion, although on this occasion he claimed to have an almost unique lack of knowledge of the subject. I hasten to assure him, as one formerly engaged in local government for many years, that that need not worry him in the slightest. It has been one of the grievances of local authorities that lack of knowledge of local government appears to be a necessary requisite for legislators, so he is well qualified to seek to amend the Bill.
I will start right at the beginning by joining with my noble friend Lord Ross of Marnock and the noble Lords, Lord Campbell of Croy and Lord Stodart of Leaston, in expressing thanks to Sir Ronald Johnson for having undertaken this work. He may feel a sense of satisfaction that he has not had to wait quite so long as sometimes the producers of these Herculean labours have to wait before their proposals reach some degree of legislation. But, like my noble friends Lord Ross and Lord Underhill, I hope the Minister will comment on why some things have not appeared in the Bill because the Explanatory Memorandum starts by saying that the Bill gives effect to "certain recommendations".
It is, of course, easy to be either approving or critical of what is in the Bill. It is not so easy to be approving or critical of what has been omitted without some reference being made to it, and while I do not want to add unduly to the task of the Minister in replying, perhaps he will refer, as briefly as is desirable, to any of the more important matters which may have been omitted from the Bill and the reason for their omission. For example, on the subject of processions, a subject to which several noble Lords have referred, there is an extraordinary difference between what is permissible in Edinburgh compared with Glasgow. It seems unreasonable to leave this matter in its present unsatisfactory state unless there is some very sound reason for not dealing with it in the Bill.
The noble and learned Lord, Lord Wilson of Lang-side, made a complimentary reference to the Minister of State when he referred to the sense of humour which he imported into his remarks. I also noted it and I thought that, if it was a change of style which the Minister was contemplating as a permanent feature, probably life would be made a little more easy for him because I am certain that even my noble friend Lord Ross (if he will forgive me using the word "even" in this context) will appreciate a sense of humour in the Minister from time to time.
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The Bill, as is inevitable with measures of this kind, covers such an enormous range that the thought occurred to me that for the first time since I started receiving yellow pages—not the telephone directory but documents about the activities of the EEC—we have here in a piece of legislation something which almost competes with the EEC in the variety of subjects dealt with in a single document. But, of course, when the Government produce a Bill which takes in its stride legislation which has been on the statute book for almost 90 years, obviously enormous variety is inevitable.
I will therefore briefly refer to the few subjects which, in the little time I have had available to me, I have noticed, and it will not surprise your Lordships if I, like others, pitch on the subject of window cleaners. It occurred to me in reading Clause 45 that apparently it is not an offence to clean windows without a licence. The offence is not being able to produce a licence when a policeman asks you for it. I cannot imagine that in our cities policemen will, when seeing a man or woman standing on a window-sill—now apparently to be able to be done legally—cleaning windows, want to approach them to find out whether it is the householder doing it or a window cleaner doing it with or without a licence. On a more serious note, I wonder why it should be necessary for window cleaners to be licensed at all. In the cities today it is exceedingly difficult to lay your hands on anybody who is willing to come and clean your windows, either for a reasonable or extortionate payment. It may be that the need to have a licence is part of the difficulty of finding anybody who is prepared to do the work.
Clause 53 is about,
"playing instruments, singing, playing radios, etc. in public places"
according to the caption to the clause, yet in the body of the clause it is not only, "in public places" but, "in or adjacent to" a public place. What is adjacent to "a public place? If your neighbour is playing his television or radio far too loudly, can you ask a policeman to do something about it because his house is adjacent to a public place? A little information on this point might be helpful.
I turn to Clause 56—"Dangerous games etc." I am surprised that this provision appears in the Bill. I wonder how many children in Scotland will realise that each time during the coming winter they make a slide on the pavement they will he laying themselves open to the possibility of being fined £50. I know that such slides are very dangerous. Probably like me many of your Lordships have ventured on to a slide, not for the purpose of sliding, but simply because we did not know it was there. We discovered its existence in the wrong way, by falling on it. However, I very much doubt whether the remedy here is for the child, providing he is aged over seven years, to be liable to be hauled before a court and fined.
That point brings me into line with the noble Lord, Lord Campbell of Croy, and other noble Lords who, on the question of the licensing provisions, have indicated that in Committee our task will be to require the Government to satisfy us on each of these provisions for licences. I appreciate that with two exceptions the provisions are not mandatory. But the Government will have to satisfy us as to whether it is desirable to

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include all these provisions in the Bill, even if only to the extent of granting permissive powers regarding licences.
I was very glad that my noble friend Lord Underhill spoke in particular on the subject of taxi licences, and I look forward to having his help in this matter in Committee. When many years ago I was a magistrate, one of the most difficult tasks that faced the local bailies concerned the subject of taxi licences, and I am quite sure that most authorities found it exceedingly difficult to find a satisfactory way to deal with the matter. If in the Bill we can devise a uniform and acceptable system for licensing of taxis, that will in itself justify having the Bill.
Finally, I want to turn to the part of the Bill dealing with buildings. Unlike the noble Lady, Lady Saltoun, I am not particularly worried that local authorities will go out of their way to repair buildings because they do not like the face of the owner. As my noble friend Lord Ross of Marnock knows, in the 1960s enormous damage was caused to property in Glasgow. Dwelling-houses were made uninhabitable because of the extent of the damage to them. The difficulty of my noble friend, as Secretary of State for Scotland, did not lie in the local authority in Glasgow rushing to do repairs; rather the difficulty was to get the Glasgow authority to do anything about the matter. That was in large part due to the fact that the then town clerk advised the local authority that it was exceedingly doubtful whether it would get its money back from the owners of property if it carried out repairs. I am fairly certain that the present position will continue under Clause 84. Local authorities will be very reluctant to carry out even necessary repairs to buildings, unless they are quite sure that the owner of the property will be able to repay them at the end of the day, and I believe that in many cases where work is most necessary the local authorities will not be able so to satisfy themselves.
In regard to the building provisions—I admit that I have had only a cursory glance at them—I was puzzled by the clause relating to the owner of a part of a building being given authority to do certain things. Such an owner—
"may at his own expense instal water supply pipes and soil, waste, ventilating and rainwater pipes to serve his part of the building…"
He may do that—
"through or under any part of the building which he owns in common with any other person"
or,
"if unavoidably necessary, through any part of the building owned by any other person…"
So far as I can see, the clause contains nothing to require a person wishing to take such action to obtain any consent from the owner of the other part of the property. The second part of the clause gives an owner authority, without obtaining consent, to carry out work through the land of another person.
I can see difficulties arising in this regard. For instance, a person might acquire a piece of land for the purpose of building a house on it only to discover that he cannot in fact use all of the land because, unknown to him, a drain or water pipe runs through the land and he cannot build over it. As I say, a person may be able to carry out certain work without obtaining even the consent of the owner of the land.
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I can appreciate the necessity to turn to another authority to seek consent if the owner is unreasonably withholding it. However, as the clause stands, unless I have totally misread it, it seems to propose a rather high-handed way of dealing with the matter.
Those are some of the points which have occurred to me and, like many other noble Lords, I emphasise that this is not basically a Bill on which to make a Second Reading speech, though that has not stopped any of us, including myself, from doing so. However, essentially it is a measure which must be examined very carefully in Committee, and I am quite certain that when my noble friend Lord Ross said that there would be much work to be done on the Bill he was not threatening the House with time-consuming procedure, but rather was giving a warning that this is proposed legislation which will need very close examination. In conclusion, I wish to commend the Government for having brought forward the measure. The fact that it might contain some points which could be the subject of legitimate criticism should not in any way detract from the thanks that are due to them for having brought it forward.
5.7 p.m.
The Earl of Mansfield: My Lords, first, I wish to thank those noble Lords who have been good enough to extend a welcome to the Bill. I think that most of your Lordships did so; one or two of your Lordships even accused me of a sense of humour, and that is equally welcome. I must say that since being on this side of the House, in the position that I now hold, there has been very little legislation that has been in any way funny. If for the first time the noble Lord, Lord Ross of Marnock, has not made a party political speech in addressing himself to a Second Reading, or for that matter to any other stage of any Bill with which I have been concerned, that has come before your Lordships' House, that merely shows what agreeable legislation we now have before us.
The noble Lord, Lord Ross, asked a very important question about processions, or rather about the absence from the Bill of any clauses dealing with them, and that anxiety was echoed by a number of your Lordships. It is quite right; the clauses dealing with local authority powers to regulate public processions have been omitted, at least for the time being. I shall explain the reason for that. As your Lordships may recollect, in a Green Paper my right honourable friend the Secretary of State for Scotland gave an undertaking about a review of the Public Order Act. He undertook that this Bill would take full account of the review that is coming to an end. I have to tell your Lordships that the results of the review are not yet quite to hand, and it is intended that the appropriate clauses be introduced at a later stage of the Bill.
The noble Lord, Lord Ross, then turned his attention to the question of taxis and hire cars, a matter which exercised a number of other noble Lords, including the noble Lord, Lord Underhill, who based his speech upon these provisions of the Bill. I appreciate that this is a matter upon which the trade feel strongly—and who shall blame it?—because it concerns particularly their livelihood. I know that they feel strongly that the Bill, unlike the consultation document, does not contain the specific power for local authorities

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to refuse an application on the grounds that granting a licence would result in an oversupply of the facilities in question.
The fact that we dropped from Part 1 of the consultation document the specific reference to limitation of numbers—and that I may say related not merely to taxis but to all licensed activities—was because in general we are against limitation and restriction of trade by authorities controlling entry purely on quantitative grounds. But I recognise that under the new arrangements for appeal against fare fixing decisions by local authorities taxis could be said to be unique in being the only trade covered by the Bill whose charges are fixed not by market forces but by decisions of officials and, as it were, promulgated by local authorities. So I shall be willing to listen to and look at arguments that this factor of fixed fares is sufficient to justify distinguishing taxis from the rest; but I think the onus will be on those who advocate limitation to show that it will operate in the public interest.
It might be better, on the other hand, to say, as some areas in Scotland in fact do, that self-regulation of numbers is not too bad and will rest on market forces; that if local operators decide that there is not a living to be had together with an appropriate return on the capital invested in their businesses, then either they will be discouraged from entering the business or, if they are in the business, they will give it up.
There is very little guidance to be obtained from existing practice. Some authorities in Scotland operate limitation at present, some do not. Some who in theory limit numbers do so by fixing a limit which the trade themselves regard as unrealistically high, and therefore it will not be difficult, if local authorities are to be given these powers, for the powers to be exercised in an equitable way. But I merely want to say that this is a matter to which we will no doubt return in Committee and the Government's mind is open. The noble Lord, Lord Underhill, particularly asked me: What would happen if the local authority do not adopt taxi licensing at all; would an operator be able to operate? Would he not need a licence? was really the burden of his question. The answer is that already I think 23 local authorities in Scotland operate no licensing scheme at all in relation to taxis. That of course means that a licence is not required and, so far as I know, the system works comparatively well.
The noble Lord went on, as did other noble Lords, to talk about the transfer of licences. The reason why these provisions were dropped was quite simply because of local authority views that the proposed provisions for transferability were unnecessary and unduly complex. The National Federation of Taxi-Cab Associations were strongly of the view that a taxi licence should be regarded as property which could be sold or transferred with the vehicle. There are arguments in principle against a licence granted at the discretion of the local authority being bought and sold for private gain. But I recognise that many local authority decisions do indeed have a significant capital value—in other words, planning permission—and it would be difficult to view this issue in a non-doctrinaire way. So this, too, is a matter to which we can, and no doubt will, come back in Committee.
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The noble Lord, Lord Ross, asked in effect: Why do we not adopt (I think he said) from the report of the working party, the recommendation that there should be a single system of handling lost property? The commission in fact suggested a unitary system of lost property administration carried out by the police. However, after consultation with the police and public transport undertakings it was established that existing arrangements for the handling of property lost in transit are satisfactory and do not require to be changed. So accordingly in the Bill, as the noble Lord observed, the provisions do not apply to property found on the premises or vehicles of a transport undertaking where provision for such lost property is already in existence. The noble Lord, finally, I think, asked why there was not a special fund financed to pay compensation to persons whose property had been sold. It was regarded as being extremely complicated with accountancy problems, and Clause 75 therefore provides that the running costs of the lost property service should simply be treated as part of the ordinary expenses of the police authority.
The noble Lord, Lord Mackie, was the first of many of your Lordships who exercised himself or herself about the question of window cleaners. This of course is a matter upon which your Lordships, I am sure, are peculiarly suited to debate. In my original speech, if your Lordships will recollect, I said that there were three criteria which prompted us over the matter of all licensing: first, the protection of public safety; secondly, the maintenance of public order; and, thirdly, the prevention of crime. I think my noble friend Lord Campbell of Croy related two but not the third. In fact they are comprehensive and go together.
The working party stated that it may be advisable to provide separately for the licensing of persons to carry on the trade of window cleaning, and also in respect of self-employed window cleaners. The proposal was more than supported by the police in the interests of crime prevention, because window cleaners are probably unique among persons in the category of street traders in that they normally need access to the inside of domestic premises; they are in a peculiar position to observe all and anybody who may be inside the premises in question; they are particularly needed by elderly people who cannot always wash and wipe their own windows, and they also frequently ply their trade when other folk are working and therefore can quite easily gain admission to empty houses. In those circumstances, not least for the prevention of crime, it was decided that they should be in the category to be licensed or on an optional basis. I think, with respect, that that is a sensible provision and one which, upon reflection, your Lordships would probably agree with.
The noble and learned Lord, Lord Wilson of Langside, welcomed the Bill. He mentioned that the Scottish Office does not move at the speed of sound. My Lords, we do not aspire to: we aim to move at the speed of light, on the basis that illumination is very much better than noise, though I daresay that, from his observations, my noble friend Lord Selkirk will not agree.
My noble friend Lady Elliot in effect questioned the powers of entry. All these powers are precedented in the Bill. In most cases, the re-enactment of them in the Bill is in a more restricted form than in the existing

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legislation and in some cases is very much narrower. The powers of entry conferred by Clause 96 furnish a case in point. The provision is much narrower than the old general powers in Section 325 of the Burgh Police (Scotland) Act. One has to make a judgment on the necessity of the situation and the rights of the individual, and it is considered that these are the minimum necessary powers to render the provisions of the Bill dealing with licensing, regulations and building, et cetera, to be effective as being in the interests of justice.
My noble friend Lord Campbell of Croy also asked a number of pertinent questions. He dealt with the matter of public processions. I have given your Lordships an undertaking in regard to them. Then my noble friend went on to question what I might call the preventive clauses of the Bill. I have to say to him that they are, indeed, perfectly harmonious so far as the Criminal Justice (Scotland) Act is concerned. He asked why we had not, in effect, tidied up this part of Scottish law when that Criminal Justice Bill was before your Lordships as a Bill. The answer is that this is a review of the Burgh Police Acts, and it would have been difficult, if not impossible, to have jumped forward before a full consideration of the working party report and to have taken these particular powers out of context. I hope, therefore, that my noble friend will feel that they are, as I have said, totally consistent with the Criminal Justice (Scotland) Act.
So far as the stop-and-search powers are concerned, I must tell my noble friend that, as in all these powers given to police officers, one has to draw a line somewhere between the rights of the individual and the interests of the community, and that very much depends upon the way in which these powers are exercised by police officers—that is, upon whether they exercise them in a way which is sympathetic and reasonably tactful, bearing in mind the character and type of people with whom they deal. This is a matter to which we can return on Committee.
My noble friend expressed the hope that the Bill will obviate future order confirmation Bills. I have pleasure in saying that indeed it will. The local authorities will be able to appoint those who used to be called dog wardens but who now will be called dog officers in the way that they used to though they needed the blessing of the Secretary of State before they could do so. There has been a great deal of consultation on the Bill with the Convention of Scottish Local Authorities, and, in general, they are in agreement with the revisions in it.
Perhaps I may now turn to the categories of trades which are, or can be, the subject of licensing, because my noble friend dealt with that. This is a matter with which I am sure the House will concern itself in Committee at considerable length. I do not propose to do so tonight. We have had to take a view, and we have dropped licensing or registration of porters, chimney sweeps, messengers, golf caddies, piggeries and stables in Glasgow from the list of categories requiring licensing or registration. But it is a question of paying one's money and taking one's choice as to the activities which one may consider desirable from one's own subjective viewpoint.
I now turn to the noble Lady, Lady Saltoun. Her distaste for this part of the Bill, and particularly Clause 84, probably springs from a fairly active dislike
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(if I may so describe it) of the new local authority which has replaced the cosy burghs which used to exist in the North-East of Scotland—and perhaps Fraserburgh was one of the cosiest of the lot. If her contention is that the district councillors are in any way less able to serve the interests of the community who elect them than some of the old bailies whom I used to encounter, I reject that criticism. I think that my noble friend Lord Campbell when he reformed local government was totally right to do so and I have very little evidence—certainly little that has come to me in the last couple of years—that the district councils are in any way acting in an obnoxious or overpowering way towards the smaller communities within their districts.
Clause 84 is part of the "Edinburgh powers". The clause is based on what has worked very successfully in Edinburgh, and that is why it has been extended to the rest of Scotland. It has been pressed for by property owners and local authorities—one may think it an unholy combination—and, if all else fails, no doubt the noble Lady has already turned her attention to Clause 102, which gives ground for adequate rights to appeal. So I cannot accept that particular criticism. She also criticised the name of the Bill. I merely say that we had to look for a name for this Bill. There are so many local government Bills knocking about from the last few years that it would not have been appropriate to have added yet another and—who knows?—another may be coming to your Lordships ere long. This particular word "civic" has an excellent provenance. It is used by the working party themselves, and the working party consisted of an admirable bunch of Scotsmen, with the possible exception of a Mr. Evans. I do not say that he was not admirable but only that he does not sound very Scottish. Unless the noble Lady can think of a better name I think we will stay with what we have.
Lord Hughes: My Lords, if the Minister will allow me, I must object to a man with the name of Evans being necessarily classed as not being Scots—when one considers that my name is Hughes.
The Earl of Mansfield: My Lords, I do not know the noble Lord's antecedents any more than I know those of Mr. Evans, so I will pass to my noble friend Lord Stodart of Leaston, and, if I resist the temptation to go down the path which he so attractively set out for me—that is to say, if I decline to tread on dangerous ground which covers the subject of the excellent committee under his chairmanship—I am sure he will realise my point. In a very short time the legislation which was promised to follow the report of his committee will be published. A great many of the points he made will then be cleared up. If there are any further matters, particularly on the powers as between districts and regions, then we can consider them in Committee.
Regarding consultation on the matter of taxi fares between districts, I would have thought that this could be achieved quite well without legislation. The traffic commissioners can exercise a unifying influence on these matters in respect of appeals.
I am sorry to refer to my noble friend out of turn but my noble friend Lord Selkirk criticised the juxtaposition of Parts I and II of the Bill. This is a matter for the draftsman. I would not venture to offer any

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opinion which was critical. We have removed most of the contents of Part I into the schedule. No doubt we can address ourselves to this matter in Committee, if it is necessary.
Regarding dogs in Clause 73, I will certainly look at that. If the matter can be set out in the Bill in a more comprehensive, intelligible or understandable form, I will see to it that that is done.
My noble friend asked whether the costs of the licensing system in effect will fall on the Treasury. Under Schedule 1, paragraph 16, the costs of the licensing system have to be met from fees. So we have to rely on the elected members of the local authority to keep the costs and efficiency of the licensing system under review. We expect that the Convention of Scottish Local Authorities will consult with each other and lay down the necessary charges. The cost will not be borne by the Treasury.
The noble Lord, Lord Hughes—in spite of coming to the Bill very new—asked one particular point that I want to answer concerning Clause 53 and the meaning of the word "adjacent". Perhaps I can best explain it by saying what it is that it is sought to deal with in this part of the Bill. The clause will cover noise emanating from, for instance, a garden or a room overlooking a street or, for that matter, any other public place. Noise coming from either of these sources could cause considerable annoyance to other people. That is why the clause has been drafted as it has.
I have already said to your Lordships that Notes on Clauses will be provided in the next day or two. I anticipate that we shall have a lively and—dare I say it!—at times a humorous Committee stage. With those words, I hope that the House will give this Bill a Second Reading.
Lord Wilson of Langside: My Lords, before the noble Earl sits down, may I ask him this? I enjoyed his riposte to my suggestion—a veiled criticism I thought—that the exercise had taken rather a long time. It showed that, combined with his good humour, he has the quality of quick thinking. I thought that it was a very good reply. I acknowledge the hard work of the working party, which took four years. Does he not acknowledge that prima facie the exercise which gave rise to this has taken more than 10 years, and that suggests that prima facie—and I put it no higher—we should look at the working of the machinery of Government in Scotland? Does he not think there is at least that much validity in the point which I sought to make on the timescale of this whole matter?
The Earl of Mansfield: My Lords, Governments of the day of course always have to steer a course between that criticism which accuses them of being slow and incompetent, and that school of criticism which accuses them of being fast, hasty and therefore incompetent. I hope that of this Bill, scrutinised as it will be most carefully—not least by your Lordships' House—it will eventually be said that we have got it about right.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

Redundancy Fund (Advances out of the National Loans Fund) Order 1981
5.35 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers)The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers) rose to move, That the draft order laid before the House on 20th October be approved.
The noble Earl said: My Lords, the Redundancy Fund Act 1981 limits the amount which the Secretary of State for Employment may borrow for the purposes of the Redundancy Fund to £200 million, but it makes provision for that amount to be increased by order to an amount not exceeding £300 million. The effect of this order is to increase the limit to £300 million.
As the House knows, the Redundancy Fund is used to pay rebates—which are currently 41 per cent.—to employers who have made statutory redundancy payments to employees. It is also used to meet certain debts which may be owed to employees should an employer become insolvent. 0.2 per cent. of an employer's National Insurance contribution is allocated to two funds which are administered by the Department of Employment, 0.15 per cent. normally goes to the Redundancy Fund and 0.05 per cent. to the Maternity Fund. Since March of this year, the 0.05 per cent. which normally goes to the Maternity Fund has been diverted to the Redundancy Fund, because the Maternity Fund has had a healthy surplus.
There have been a number of occasions in the life of the Redundancy Fund when it has been in deficit and when its borrowing limits have had to be adjusted. At the end of February this year, just after the current borrowing limits were set, the surplus in the Fund was just over £34 million. The fund went into deficit in May and, since then, the deficit has been increasing. At the end of October it was over £140 million.
If the deficit were to continue to increase at the current rate the present £200 million limit on the amount which may be borrowed from the National Loans Fund could be reached early next year.
Clearly, a number of factors can affect expenditure from the Fund other than the actual number of people being made redundant. Age, length of service and earnings all affect the average level of payments made. The average payment made from the Fund has increased by nearly 14 per cent. over the past year. This was due not so much to changes in the age or the length of service of those who were made redundant, but to the increase in average earnings.
The causes of redundancy are, of course, complex. Even in periods when new employment opportunities are being created, other jobs may disappear through changes in the pattern of demand or in the organisation of industry or methods of production. We must accept the harsh truth that, where there is over-capacity or structural inefficiency, redundancies may be inevitable, and improvements in competitiveness are vital if those industries are to survive and prosper.
In the meantime, we need to ensure that the Redundancy Fund can continue to meet its commitments and hat is why we are seeking parliamentary approval to extend the borrowing limit to the £300 million which

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is permitted by the 1981 Redundancy Fund Act. I beg to move.
Moved. That the draft order laid before the House on 20th October be approved.—(Earl Ferrers.)
5.40 p.m.
Lord Bruce of Donington: My Lords, we on this side of the House are pleased to welcome the terms of the statutory instrument. When it was first drawn to my attention I immediately started on some lengthy research because the instrument was short and, in my experience, short statutory instruments are always a matter of some suspicion. So I did a certain amount of research, going all the way back to the Redundancy Payments Act 1965, and traced the matter through. But that was before I read the Thirty-Second Report of the Joint Committee on Statutory Instruments which was published on 27th October and which unhappily escaped my attention, in which it says that the committee had considered this particular instrument and
"…determined that the special attention of both Houses did not require to be drawn to it".
So I would not propose to delay the House very long about this since the Joint Committee has already recommended that our specific attention should not be drawn to it. This, of course, will very much shorten my remarks. Indeed, practically everything has been said, if the noble Earl will forgive me—because it was clear that what he said in regard to this instrument, except for the updating of the figures, was said in the course of the debate on the Bill itself which took place on 26th February last. I would respectfully draw the attention of the House to that debate, since it will save me the trouble of going over the points myself, and to the very excellent speech delivered by my noble friend Lord Davies of Leek, who dealt with the matter very thoroughly.
I would not have spoken further had it not been for the political remarks that the noble Earl addressed to the House in very mild terms towards the end of his very short statement, when he referred to the causes of redundancy and made some observations about the necessity for our becoming competitive and so on. It is important that it should be realised that the Redundancy Payments Act, when originally passed, was intended to remedy a very considerable social evil; that was to do something about allaying the fears of people that they would, on becoming redundant or in the event of unemployment occurring and therefore occasioning their redundancy, in addition to the anxieties they face as a result of having nothing to do and having a bleak life in prospect in which they would be unable to take any active part in the productive work of society, additionally be faced with a financial anxiety.
That was the whole purpose of the original Act, and if one goes through the proceedings of another place and of your Lordships' House it ought perhaps to be noted that it received a very tepid welcome from the Conservative Party, who regarded it as being some obstruction to what they considered to be the very desirable mobility of labour in various areas of industry. The Act itself was introduced at a time when unemployment was very low and now it is very high indeed, and
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therefore it is important that this order comes into force.
I would dissent from the noble Earl that there are causes other than the policy of the Government themselves that have caused this very large increase in unemployment and its attendant distress. They know perfectly well that the monetarist policies they have been following since they came into office have produced the state of unemployment from which the country is suffering at the present time and they cannot palm it off by referring, as they do from time to time, to competitiveness and to the allegedly high wages received by workers who are therefore pricing themselves out of jobs. This really will not wash any longer.
Those remarks are addressed purely in reply to some of the remarks which were made by the noble Earl at the conclusion of his statement. We on this side of the House have great pleasure in approving this statutory instrument. Our regret is that the increase in the fund to its present levels, and the increase in the borrowing powers should in fact have become so necessary.
5.47 p.m.
Earl Ferrers: My Lords, T am grateful, I think, to the noble Lord, Lord Bruce, for what he has said. He did say that the particular part he wanted to comment upon were the political observations I made at the end of my speech. What I would say to the noble Lord is this: he is a delightful but a curious noble Lord. I did not think I made any political observations at all: I merely made observations of pure practical common sense. The fact is that we have to be competitive as a nation, and if you do have a period of recession periodical redundancies are bound to come about. I would agree with the noble Lord when he referred to the original purpose behind the Act. I think it was his right honourable friend the then Minister of Labour, Ray Gunter, who is 1965 in moving this Bill, as it was then, in the House of Commons said that it had:
"an important and necessary part to play in allaying fears of redundancy and resistance to new methods and economic change".
It is perfectly true that although this fund may enable people not to have financial anxieties it also is an inducement and an encouragement to change. It was the noble Lord, Lord Bruce, who made the most political observation in the whole of this debate that we have had, when he said it was totally the Government's fault that unemployment is as it is. He quite clearly laid the blame for the whole of the unemployment on the Government's economic policies. I reject that totally. The noble Lord knows perfectly well that there is a recession in the world which is hitting almost every other country in the world, and certainly in the western world. Why is it that in the last month alone German unemployment has increased by over 100,000? Why is it that in France unemployment is over 2 million? We are not responsible in the United Kingdom for the policies of those Governments, but they are also affected by world recession.
I would only, if I may, in thanking the noble Lord, Lord Bruce, for his courteous and generous welcome of this order, say in all sincerity that we in the Government

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dislike unemployment as much as any member of the party opposite. It is a thing which we wish to see removed, and there are two ways in which you can do it. One is by keeping down as far as possible the rate of inflation, because only by doing that can you become competitive. The other is, in a period of recession, to make your industries sufficiently crisp and sharp, which may mean redundancies, to enable those industries to be competitive and enable them to take advantage of the changed conditions when the recession ends. It is to that end that this Government are seeking to pursue their policies, and in so far as there are redundancies we wish to see those as few as possible, but to make provision for them in the way we have by means of this order. I repeat that I appreciate greatly the generous way in which the noble Lord, Lord Bruce of Donington, welcomed this order.
On Question, Motion agreed to.

Scottish Seed Potato Development Council Order 1981
5.50 p.m.
The Earl of Mansfield The Earl of Mansfield rose to move, That the draft order laid before the House on 17th November be approved.
The noble Earl said: My Lords, I beg to move that the draft Scottish Seed Potato Development Council Order 1981, a copy of which was laid before the House on 13th November last, be approved. This order is presented for your Lordships' approval in accordance with the Industrial Organisation and Development Act 1947. The effect of the order will be to establish a development council for the seed potato industry in Scotland.
This is an important industry not only for Scotland but for the whole of Great Britain, and I am glad to declare an interest in it as a producer myself. As an industry, we produce about 20,000 hectares each year of what are probably the best seed potatoes in the world. Our product is directly worth about £40 million annually with exports abroad worth about £5 million, but it provides the planting material for most ware potato crops in England and Wales, as well as many other countries especially in the Mediterranean area. So in addition to its contribution to Scottish farm incomes, the industry provides a base for an important part of the diet of very many people. The quality of our seed has made a substantial contribution to the steadily increasing yields of the potato crop.
I am particularly pleased to move the approval of this order, because the origin of the proposal for the establishment of a development council was made to me by the Scottish Seed Potato Association. This association was set up by the industry itself and it has collected a voluntary levy to finance its work from about half the producers, including substantial representation of the important merchant grower sector. I am a member of the association: I have paid my levy and I have given strong support for its work on every possible occasion. However, the association feels that work to promote the products of the industry should be paid for by the whole industry, and that voluntary contributions
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would decline if the willing participants felt that they were having to carry a substantial number of "freeloaders" who would benefit along with the contributors. The Government have accepted the validity of this argument and this order makes provision for a compulsory levy to be paid by all producers of seed potatoes in Scotland.
The Act of 1947 requires that before establishing a development council the Minister responsible shall be satisfied that a substantial number of the persons engaged in the industry want it, and he must consult the organisations representative of people in business and in employment in the industry. To that end, we have carried out a poll of all seed potato producers in Scotland and we have consulted organisations which we considered to represent both producer and merchant interests, as well as those of employees in the industry. Of the producers who responded to the poll 62 per cent. supported the proposal to set up a council. No objections were expressed by the organisations consulted, but a number of useful suggestions were made and the present draft order incorporates a number of changes resulting from these suggestions. The main organisations concerned have been further consulted about these changes.
Before turning to the order itself, I should like to say something about the situation in the industry. I have already pointed out that the industry is important but it is fragmented, being made up of many small producers and individual merchants. It has long been recognised that some form of central organisation would help the industry. This was so even some years ago, when the industry was largely concerned with supplying a "captive market" South of the Border. It is much more important now when there is the possibility of competition from the European Community within the captive market, and when overseas export markets have assumed major importance as customers. Thus in both home and overseas markets, our industry faces well-organised competition which it is not organised to meet. In the other main seed-producing countries of the Community, the Netherlands and France, there are well-established national or regional organisations which can collect levies to finance their efforts to promote the sales of their products.
What this order will provide is a basis for an organisation by which the Scottish industry, by its own efforts and with its own money, can fight back. It will not involve any public expenditure in its creation or its operations, because it will be financed by the levies collected. Nor will it mean more civil servants, because it will engage and pay for its own staff. It could be described as a "quango", but if it is, it is one which the industry itself has asked for and which the industry itself will finance. Its powers would be limited essentially to the collection of a compulsory levy, which it would do on the basis of information which is published annually by the Department of Agriculture and Fisheries for Scotland as a register of seed potato crops. The council would not be empowered to market seed potatoes, to enter premises, to demand information from producers or merchants or to impose fines for failure to provide information. What is proposed, then, is a small representative body with very limited powers, but with important executive functions to perform. The order proposes a maximum rate of

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levy of £15 per hectare—the actual rate is likely to be less initially. On the basis of present production, this would yield a maximum of about £300,000 annually, but this relatively modest sum would provide the potential to achieve significant advantages for everyone in the industry.
The order, like the council which it aims to set up, is small and uncomplicated. It provides for the establishment of a development council with specified functions. The majority of its members will be appointed from nominations of both producers and merchants (many of whom are also producers) to be made respectively by the National Farmers' Union of Scotland and the Scottish Potato Trades Association. One member will represent the interests of workers in the industry: two will be independent members, of whom one will be chairman; and, if it appears expedient, not more than two other members with special expertise in marketing and distribution may be appointed. The main provision is for the collection of an annual charge to meet the legitimate expenses incurred by the council in carrying out its assigned functions: it covers the possibility of further contributions of up to £500 annually for this purpose from interested parties, such as traders or exporters who may not be producers. Finally, provisions are included for the routine handling of the council's monies.
I am certain, in my own mind, that this order will be of great help to the Scottish seed potato industry in meeting a very real challenge from other seed potatoes which are aggressively and effectively marketed by its well organised competitors. I commend it to your Lordships, therefore, as a desirable and logical step forward in improved marketing which is generally recognised to be necessary. My Lords, I beg to move.
Moved, That the draft order laid before the House on 17th November be approved.—(The Earl of Mansfield.)
5.56 p.m.
Lord Ross of Marnock: My Lords, I think we are grateful to the Minister, once again, for bringing in something that is fairly well agreed in the House. I was delighted to hear him saying how much he welcomed this quango, and to see how he managed to avoid the use of the words "closed shop". He might have been more careful about his use of the term "free-loaders" and about compelling anyone who will get a benefit to pay, whether they want to or not.
But there has been pressure, for at least the last 20 years, for some central organisation that would act on behalf of the Scottish seed potato industry. Of course, one section of the industry, mainly prompted from Angus, set up the Scottish Seed Potato Association which, with the achievement of this new development council, will itself go out of existence altogether. This is a very important agricultural resource. We have the facilities, we have the climate, we have the soil and we have built up an expertise and have produced what are probably, as the Minister said, the best seed potatoes in the world. There is quite a competition in another place about which part of the world merited mention, and anything from the Pentlands, from Angus and from Perthshire has got its mention today, as well as anything from Bute, and in particular, Arran. The value is about £40 million, two-thirds of which is outwith
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Scotland, while £5 million of that represents exports abroad.
I think the feeling is that we must be careful here. We cannot rest on our laurels. There has been criticism that we are under certain pressures. There has been a shrinkage of demand. I do not know whether the Minister noticed it, but last year there was a 7 per cent. fall in the production of seed potatoes. The figure fell to, I think, 20,300 hectares. That is in addition to the fact that we are open to challenge from the EEC. We had a protected market earlier, so far as England and Wales were concerned. Now we do not have that. Then the Dutch, who export more than the whole of the Scottish production of seed potatoes, might well come in if we let things slip. For about 60 years there has been a close connection between the Scottish Office, the Department of Agriculture and Fisheries in Scotland and the industry.
We have taken steps to control, protect and improve the quality of Scottish seed potatoes but, as the Minister said, there is fragmentation. There is no commercial organisation big enough to give authority and financial backing to the kind of moves required to be made to promote exports and sales. I believe that it was the National Farmers' Union, and the Hay Committee Report which they commissioned, which pressed for this for a long time.
It is fair to say—and the Minister should tell the House—that there was not unanimity about it. Because of the very nature of the council and because of what has been laid down in respect of the levy one could not expect it. But the Scottish Office carried out a consultative referendum. I noticed that there was no mention of the figures. In fact, 65 per cent. of the people involved in the industry voted. Of that 65 per cent., 62 per cent. were for and 38 per cent. were against. If my calculations are right they might just, but no more, have got past that celebrated referendum figure of 40 per cent. which was laid down in respect of Scottish devolution.
Agreement has now been reached. It says a lot for the work that has been done that agreement has been reached. The structure of the industry demands that it should be reached. The position in which the industry finds itself and the challenge which it faces means that agreement is required, and I am glad to say that this has come about.
Now £15 per hectare should produce about £300,000. An organisation working on that basis is not going to be very "lush". Of course, it has other powers in respect of money. But is it going to be £15 per hectare? I understand that it is much more likely in the first instance to be about £10 per hectare. In a council which consists of 12 members from the producers and those in the industry, one from the employees, two independents and two special members—which comes to 17—why should the quorum be as high as nine? It means that more than half of the council are required to be present before there is a quorum. Furthermore, who is going to appoint the chairman? Am I right in thinking that he is going to be appointed by the Secretary of State and that the chairman is going to be one of the independent members? This is the kind of thing which ought to have been left to the council itself.

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There is already in existence a Potato Marketing Board which is equally concerned about the sale of potatoes. There is also the National Seed Development Organisation whose very purpose is to look at seed varieties, including seed potato varieties, to see whether we are up to date, whether they are meeting the needs of the various markets, and what can be done. The organisation which is to be formed will be required to liaise very closely with these organisations. I do not know whether the Minister has noticed that these two organisations are to set up a company which is to be called Solanex, which means Export of Potatoes Limited, to develop markets overseas for potato varieties. These varieties are to be bred at state-aided research institutes—for instance, in Scotland at Mylnefield, in England at Cmabridge and in Northern Ireland at Lough Gall. The Northern Ireland organisation and the Scottish organisation, when it is formed, are to be invited to join. Could we be given a little more information about this and about what effect it will have upon the first year's levy? The people who are interested in this part of the industry tend to be very single-minded people. They must be very pleased indeed that this step has been taken. I certainly wish it well. But is there any question of the Potato Marketing Board extending its activities in the future and taking over this organisation? I believe that the House should give its backing to an important industry whose quality we want to retain and build up.
Lord Mackie of Benshie: My Lords, I, too, would very much like to welcome the setting up of the Scottish Seed Potato Development Council. It is probably overdue. The history of the promotion of Scottish seed potatoes is interesting. As the Minister said, we produce the best seed potatoes. The justification for this statement is that there has been an enormous amount of propaganda in the farming papers against Scottish seed for as long as I can remember. The Northern Irish came into the picture at the start of the war, and afterwards, with an organisation which had the distinct advantage of inspection at the ports. They had a Government organisation which was able to give an after-sales service. We did not have this in Scotland.
Despite all these disadvantages, the inherent quality of Scottish seed has held the English market. I know many extremely tough and commercially minded English farmers who swore at me about Scottish seed and the standard of dressing but who eventually went back to it. With this inherent advantage I believe that the new council has a tremendous chance to expand the business.
As the noble Lord, Lord Ross of Marnock, said, Holland exports more seed than we grow altogether She has a very disadvantageous climate. Her lowlands abound with aphids in all sorts of forms. They go to enormous lengths to control the pest and to produce a seed which they market around the world. Because of our natural advantages, this new council can do a tremendous amount to expand the trade, in particular the export trade. If we can hold up against the disadvantages of propaganda in the trade
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with England, I am sure that we can push it into other countries as well.
May I ask the Minister why the Secretary of State is to appoint the chairman—if he is to appoint him? The chairman will be a vital part of the organisation, because this body will have to grow—obviously gradually. It will not have a great deal of money, and will have to use that money to the best advantage. As the noble Lord, Lord Ross of Marnock, said, it will have to co-operate with all the other bodies in the business in order to promote the trade as a whole.
I am sure that a body of this sort, to promote Scottish seed, is right. We cannot have a national body, like the Potato Marketing Board, representing the special interests of Scotland. It is an excellent concept. Considering the comments we heard in the last debate, the Government have moved with remarkable speed to set it up. However, it will need to be carefully watched and it will require people of the highest standard. And as it develops it will certainly need more money. I welcome its setting up.
The Earl of Mansfield: My Lords, I should like to thank both noble Lords who have expressed their welcome for this fairly modest measure. As I said at the beginning, it is barely a Quango if, indeed, it can be called a Quango at all. But I believe that it will do nothing but good. I was conscious when I drafted my remarks that the term "freeloader" might grate a little on the usceptibilities of the noble Lord, Lord Ross of Marnock. I appreciate that I suppose it could be said that we are going some way towards setting up what might be described as a closed shop. The difference between this and other sorts of closed shop would be that, first, we have had a poll before it was set up—and I shall come to that—and secondly, unlike other closed shops this one will not prevent individuals from working in their chosen occupation, that is to say producing and selling seed potatoes. Those who do not pay the levy will certainly not be thrown out of their job in any way, but they may find themselves liable to pay for certain useful services by virtue of a civil suit.
The noble Lord, Lord Ross of Marnock, pointed to the percentages. I do not think that a previous referendum is really comparable, but the favourable vote of 62, which I mentioned in my opening remarks, is well above the 52 per cent. which I think was the figure in the devolution poll. The proportion of the total electorate was over 40 per cent. of those who were entitled to vote, as compared with 33 per cent.
To come to slightly more serious matters, the noble Lord, Lord Ross, first asked me, in effect, whether there is a possible association with the Potato Marketing Board and the National Seed Development Organisation in Solanex. The answer in short is that, when this company was set up, a space (if I may so describe it) was left for the Scottish Seed Potato Development Council to occupy, if it wishes to do so. But of course it will be up to the Council to make its own decision. The opportunity is there if it wishes to avail itself of it.
The noble Lord, Lord Ross, then asked about the Potato Marketing Board and whether in fact it would take over the functions of the Seed Potato Development Council. As the noble Lord will realise, the Potato

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Marketing Board, which is a Great Britain organisation, is primarily concerned with the sale and promotion of ware potatoes. It turns its attention to seed potatoes to a very small degree. I do not think it would ever want to take a leading part or indeed to have anything much to do with the promotion of Scottish seed potatoes, though, in the original thoughts and consultations which we had in the early days of this exercise, we certainly consulted the Potato Marketing Board. However, even if it did, it is not possible for it to do so under the terms of the Act.
The noble Lord, Lord Mackie of Benshie, asked in effect about the chairman. He is one of the two independent members of the council and, as with other organisations which are fairly similar to this one, the appointment will be by the Secretary of State for Scotland. I think that on reflection noble Lords will agree that this is the best way of achieving a useful body which will look after the money which it levies from potato growers in the most efficient and, one hopes, effective manner.
On Question, Motion agreed to.

Motor Vehicles (Variation of Speed Limits and Speed Limits on Motorways) (Metrication) Regulations 1981
6.14 p.m.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin) rose to move, That the regulations laid before the House on 19th October be approved.
The noble Lord said: My Lords, I welcome this opportunity to explain why we are introducing these regulations. In the first place, I wish to make it quite clear that they are not controversial and I assure your Lordships that it is not in any way an attempt to introduce metrication by the back door. What we are doing is bringing our primary and secondary legislation into line by removing from the former certain proscribed imperial units. The need for these amendments arises from United Kingdom obligations under the EC Directive 80/181 on Units of Measurement (formerly Council Directive 71/354 as amended by 76/770), which obliges us to metricate certain units wherever they occur in our law. The task has already been done in our secondary legislation in the course of amendments for other purposes, but a specific exercise is needed to do the job in primary legislation. It is a simple matter of completing a task which is already three-quarters or more done—and it would, indeed, he anomalous if it were not brought to a conclusion.
In this amendment, the units involved are: square inch, ton, hundredweight and degree Fahrenheit. I should like to emphasise that only proscribed units have been metricated, using conversions which are well known in our secondary legislation and have caused no difficulty to manufacturers or anyone else. Imperial units such as mph are not included in this metrication exercise, as the Community has postponed making a decision on this and other controversial units until the end of the decade. These amendments therefore will have no effect at all on our road signs.
The draft regulations form part of a larger metrication exercise to delete references to proscribed units which have been found mainly in the Interpretation sections, (containing vehicle definitions) of the Road Traffic Acts 1960 and 1972. the Road Traffic Regulation Act 1967 and the Transport Act 1968. These Acts have been metricated by two statutory instruments under the negative resolution procedure. They are Statutory Instruments Nos. 1981/1373 and 1374, which were laid before Parliament on 5th October 1981 and came into effect on 1st November 1981. The metrication exercise is being carried out by three statutory instruments, as our legal advice was that they could not be combined in a single instrument.
The present regulations metricate certain imperial units in the vehicle definitions found in Schedule 5 to the Road Traffic Regulations 1967 and the Motor Vehicles (Speed Limits on Motorways) Regulations 1973. These lay down vehicle speed limits, but the regulations make no changes to the speed limit requirements themselves, which are still subject to review following the Armitage Inquiry.
There were no adverse comments on the draft regulations on consultation, nor were any expected, as manufacturers are familiar with the units proposed which have been used in motor vehicle secondary legislation for some time. It is against this background that I submit that the regulations will harmonise motor vehicle primary and secondary legislation without causing any hardship or surprise to manufacturers or users. I therefore invite this House to approve them. I beg to move.
Moved, That the Motor Vehicles (Variation of Speed Limits and Speed Limits on Motorways) (Metrication) Regulations 1981 be approved—(Lord Bellwin.)
On Question, Motion agreed to.

Wormwood Scrubs Prison
6.19 p.m.
The Earl of Longford The Earl of Longford rose to ask Her Majesty's Government what steps they are taking to deal with the grave situation revealed by the letter in The Times of 19th November by the governor of Wormwood Scrubs Prison.
The noble Earl said: My Lords, over the years this House has had to listen to me many times on the subject of prisoners and prisons. When I first became involved in penal matters as a prison visitor before the war in Oxford there were about 10,000 men and women (as always, mostly men) in prisons. When I opened the first debate held in this House in 1955 there were in prison about 20,000, and now there are 44,000. It is not exactly a success story, either from the personal or from the national standpoint. Today I shall he quoting mostly the views of others, although my own attitude should become plain before the end. If for reasons of time I rely mostly on the The Times I apologise to other newspapers, particularly the Guardian, which has a unique record in this field.
Noble Lords will surely agree that the letter which appeared in The Times last Thursday from the governor of Wormwood Scrubs was perhaps the most startling in living memory. I will refresh the minds of your

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Lordships with a few quotations. The governor began his letter to The Times:
"As the manager of a large penal dustbin I wish to write about the latest proposal of the Home Secretary to reduce the prison population".
He then discusses that proposal, finds it very inadequate, and proceeds:
"From my personal point of view I did not join the Prison Service to manage overcrowded cattle pens, nor did I join to run a prison where the interests of the individuals have to be sacrificed continually to the interests of the institution, nor did I join to be a member of a Service where staff that I admire are forced to run a society that debases".
I will pick out only one more sentence:
"I wish to give notice that I, as the governor of the major prison in the United Kingdom, cannot for much longer tolerate, either as a professional or as an individual, the inhumanity of the system within which I work"—
a system for which, I hope I can say without discourtesy, the noble Lord must be held responsible in this House, though the ultimate responsibility lies elsewhere.
I had assumed when I read that letter in The Times that the governor would be called upon to resign, that he might indeed have been called on to resign before I read the letter. Not at all, I am glad to say. By the next morning we learned that there was no intention of reprimanding him. The impression was gained, or has been gained by me and others, that for the governor's point of view there is a good deal of sympathy in the Home Office, not least on the part of the Home Secretary, and I do not doubt on the part of the noble Lord who is to reply to this debate. Outside those circles widespread support has been expressed almost everywhere.
I hope that the House will agree that this matter cannot be left in this unprecedented condition. The governor of our largest prison indicates that he intends to resign unless something drastic is done. Is something drastic going to be done? The Home Secretary cannot shirk the responsibility—and our much-respected Home Secretary is the last man to shirk any responsibility—of responding to the governor's letter in clear words and urgent action There is general agreement that something drastic must be done. But let me acknowledge at once that there is not agreement as to what form that action should take. I would hope that this debate would clarify the options and in that way promote positive reforms.
Before the Conservative Party Conference Mr. Whitelaw appeared to favour a policy of introducing automatic parole for short-sentence prisoners. To quote The Times of Friday—and I am quoting The Times, and these might or might not be my own views:
"Since the Party Conference Mr. Whitelaw has gone cold on the idea… He is now ready to ditch it".
Well, The Times may know more about what has been going on in Mr. Whitelaw's mind than I do. It may well be, and I am ready to believe this, as perhaps a slightly more glorious explanation, that he has had to give way under pressure from the judiciary at all sorts of levels. Be that as it may, he is now in fact abandoning the proposal which he favoured earlier and he is backing the idea of the courts being given power to
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suspend part of a sentence.
To quote The Times again:
"There is a vast difference between these two conceptions. Automatic parole could mean the immediate release of people already in prison".
It is reckoned that within a fairly short period the prison population could be reduced by up to 7,000. The decision would not be that of any court. By contrast, under this newer proposal of the Home Secretary, giving the courts power to suspend part of a prison sentence could have no possible effect on the existing prison population and would be outside the Government's control. I believe other eloquent and more expert speakers may develop some of these points much more closely.
I have already mentioned two methods of attempting to reduce the prison population, which I will call, without disrespect, Whitelaw Mark 1 and Whitelaw Mark 2. I must at least touch on, or at any rate mention, several others, and I do not pretend that the list is exhaustive. In its leading article on Saturday The Times mentions the possibility of an amnesty. It points out that when M. Mitterrand took office 5,000 prisoners were released. Indeed, some of your Lordships may recall, though perhaps not from first-hand memory, in 1910 the same kind of step was taken by Sir Winston Churchill, then Home Secretary, at the beginning of the new reign.
To mention another variant, the All-Party Penal Affairs Group of the Houses of Parliament has recommended the extension of remission from one-third of one-half of the normal sentence, and later they have supported the plan that I have called Whitelaw Mark 1. The prison officers have made a number of suggestions of their own, including the removal of mentally disordered prisoners from prisons. In that particular proposal I am sure there is total concurrence. There is also a strong case, which is growing stronger all the time, for legislation which reduces the level of maximum sentences. As I say, there may be other suggestions which could be made, or perhaps will be made, this evening.
Whatever the precise solution or combination of solutions that we favour, we must face a large disconcerting clement in the situation. Democratic government in this country is carried on through Parliament, whose views are expressed through the Cabinet, acting more particularly in this area through the Home Secretary of the day. If we say, as we do say, that the will of the people must prevail in a democracy, we mean that within his own departmental area, that is the penal area, the will of the Home Secretary backed by the Cabinet should prevail. It is utterly wrong that the Home Secretary should be thwarted, as he now appears to be thwarted, by the judiciary, as I say at all levels. The judiciary are the respected custodians of the legal standards in this country. They of all people must never place themselves above the law. Let me dwell for a moment, before I close and give way to better speakers, on the ambiguity contained in the phrase "the independence of the judiciary"
The Lord Chancellor: My Lords, may I intervene for a moment. There is absolutely no truth in the suggestion that the judiciary thwarted the Home

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Secretary; nor have they the power to do so. Since read a certain piece in the Sunday Times I have been particularly at pains to discover that. The idea that the judiciary could disregard the will of Parliament is utterly repugnant to their whole attitude, and there is not a word of truth in it.
Several noble Lords: Hear, hear!
The Earl of Longford: Well, noble Lords say "hear, hear", without much reflection. I would say there is not a word of truth in the observations that have just been offered to us by the noble and learned Lord the Lord Chancellor. I am not going to give way for a moment; there is not a word of truth in the observations he has just offered us.
The Lord Chancellor: My Lords, I do not know on what authority the noble Earl is questioning my word. I have been at great pains to discover the truth; there is no truth whatever in the suggestion that the judiciary have any desire whatever to thwart the will of Parliament, and I deeply resent that my word should be questioned on that matter. What is true, of course, is that the judiciary were consulted and expressed their view, as they were entitled to do. But of course they accept the sovereignty of Parliament, and it is wholly wrong for the noble Earl either to suggest that the contrary is true, or to challenge me when I assure him on my word of honour that it is not so.
The Earl of Longford: My Lords, I must point out that the noble and learned Lord the Lord Chancellor has challenged me and has said that what I have said is untrue, and what is sauce for the goose is, I am afraid, sauce for the exalted gander. The truth is that the Home Secretary is having very great difficulty—if the noble and learned Lord prefers to put it this way—in persuading the judiciary to give effect to the declared will of Parliament. There will be plenty of this tonight, so it is no good treating me as though I am some sort of eccentric. This view will be expressed several times and noble Lords had better get used to it.
The Lord Chancellor: My Lords, this is a question of fact and not a question of opinion. The Home Secretary is entitled to consult the judiciary as to what they consider to be desirable. The judiciary are entitled to express their opinion when consulted. But to suggest, as the noble Earl has quite unambiguously done, that the judiciary are seeking to thwart the will of Parliament which has not so far been expressed in an Act of Parliament, is wholly untrue and I have been at great pains to discover the fact. It is an allegation which ought never to have been made and that is a question of fact and not opinion.
The Earl of Longford: My Lords, I am afraid that the facts here are, in fact, the sentences which are being passed by the judges. It is not a question of the psychology of the judiciary; it is a question of what sentences they are passing and at the moment the sentences that they are passing are thwarting the will of the people declared through the Home Secretary. If the noble and learned Lord feels happier about that formulation, then so be it, but that is what I am saying.
The Lord Chancellor: My Lords, this really will not do. The noble Earl is now changing his ground. The noble Earl was talking about a plan which my right honourable friend consulted the judiciary about. They expressed their opinion upon it, but the idea that they were thwarting the will of the people—whatever that may mean—or the Home Secretary or Parliament is entirely wrong and it ought never to have been made. Now the noble Earl is making a totally different allegation which is totally false too. Parliament lays down what are the maximum sentences to pass and the judiciary decide as a matter of their own independence and judgment on the facts of the particular case what is the appropriate sentence. This attack on the judges is wholly wrong, ought never to have been made, is utterly without foundation and ought to be withdrawn.
The Earl of Longford: My Lords, the noble and learned Lord says that it ought to be withdrawn. Why should it be withdrawn? I repeat every word that I have said. I have no need to withdraw it at all. What I am saying will be said, in effect, by other noble Lords. I suggest that the noble and learned Lord cools it a bit because I think that he will get quite a bit of this medicine during the evening and if he gets equally annoyed with subsequent speakers he will have a bad time of it. I repeat every word that I have said and Hansard must judge between us.
Let me dwell for a moment on the ambiguity contained in the phrase "the independence of the judiciary". Of course we rightly pride ourselves on the independence of the judiciary when the courts are dealing with particular cases. We certainly do not want any political interference there. But no-one, after a moment's reflection, could say that the sentencing policy of this country, the general level of sentences passed in this country, should be determined exclusively by the judiciary. Certainly the sentences which judges do pass are very much influenced by legislation. They are, in fact, acting within laws passed by Parliament. So to say that sentencing is a matter which entirely rests with the judiciary would be an absurdity. I had better not get too worked up because it might escalate as between myself and the noble and learned Lord. No one could possibly argue that after a moment's reflection.
No one supposes, for example, that judges should be allowed to decide whether we do or do not have capital punishment in this country. They might or might not wish to have it. It might seem to be their idea of a good sentence, but in fact the law has decided to abolish it and they must act within the law. The noble Lord opposite is frowning as though in bewilderment. It is a perfectly clear point. We either decide on the general level of sentences through the democratic process or we leave it to the judges, and at present it is left far too much to the judges.
Let me make the point plain. If it is concluded by the Government of the day, supported strongly by the opposition parties, that sentencing policy in this country is too severe—and that is on the whole the conclusion of official reports—compared with the sentencing policy in other European countries, then the courts have no right whatever, moral or constitutional, to defy the implementation of that policy. I am

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sorry to speak bluntly but it is high time that this issue was brought into the open.
I shall now give way to other speakers who may have a tranquillising effect. I have had dealings with well over a dozen Home Secretaries on penal matters. There is none for whom I have a higher personal admiration than Mr. Whitelaw. I would like to believe that this debate will strengthen his hand. I implore him to recognise that the variety of the remedies suggested is no excuse for failing to take drastic and urgent action. I hope and believe with all my heart that he will not fail.
6.36 p.m.
Lord Avebury: My Lords, I warmly welcome the initiative of the noble Earl, Lord Longford, in raising this important question, and I am glad to follow him into some of the areas where he has perhaps entered into some controversy although I shall attempt to pour a little Largactil on troubled waters, if I may put it that way.
I must begin by agreeing with the noble Earl that it is totally unheard of for the governor of one of our major prisons to ventilate his anxieties in the columns of The Times, and I think that the only pity of it is that a person within the system, such as the governor of Wormwood Scrubs, who had seen what was coming from a mile off, had waited until, as Mr. McCarthy put it, his patience and tolerance were finally exhausted. He has put his head on the block. I hope that other governors and that chairmen of boards of visitors will now speak about what is going on in the prisons, so that public opinion can be alerted to the intolerable strains which are being imposed on staff, the absence of any pretence whatever of rehabilitation for prisoners and the imminent risk of a total breakdown of the prison system.
I am going to refer to some of the recommendations of the Parliamentary All-Party Penal Affairs Group which has already been mentioned by the noble Earl, and I want to ask the noble Lord, Lord Belstead, whether he has had a chance to study those recommendations and whether he will be good enough at the end of this debate to make some comment on them, in particular on those which I would now like to mention.
The report was published in June under the title Too Many Prisoners and it contained quite a number of proposals which would greatly alleviate the strains now being imposed on the prisons. I mention first the important recommendation which the noble Earl also touched on, that mentally ill and disordered offenders should not be in prison at all. Because the National Health Service has not made provision for these patients, hundreds if not thousands of them have to be accommodated in the prisons, including Wormwood Scrubs, where I visited the medical wing not so very long ago and found that there were between 30 and 40 patients being cared for who the principal medical officer told me ought really to have been in psychiatric institutions.
The all-party group refers to the Butler Committee on Mentally Abnormal Offenders which recommended that in each of the regional health authority areas of England and Wales there should be secure psychiatric
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units for these persons. Not a single one has been constructed and although there are temporary units, I understand, in which some 170 patients are accommodated, that is a drop in the bucket compared with the need. I should like to ask the noble Lord the Minister: What are the Government's present plans for providing units such as the Butler Committee recommended—secure psychiatric units—in England and Wales?
There is one thing that the Government have done. The all-party committee mentioned that the courts' powers to impose restriction orders under Section 65 of the Mental Health Act 1959 should be limited to those cases where the public needs to be protected from serious harm. I was very glad to see that this is in fact embodied in Clause 26 of the Mental Health (Amendment) Bill because it was found that hospitals were reluctant to accept patients when they could not be allowed out or transferred to another hospital or discharged without the leave of the Secretary of State.
More generally on the mentally ill offenders, the all-party group recommends that:
"there should be a substantial increase in hostel provision and other forms of accommodation catering for the mentally disordered. The range of voluntary after-care hostels for offenders grant-aided by the Home Office should include some projects catering specifically for offenders suffering from mental disorders".
I should like to ask the noble Lord the Minister: What is being done? The all-party group stresses that it is indefensible for a mentally ill and disordered person to be detained in prison, and yet we know that there are many thousands of them who have to be accommodated there because no other provision is made for them by society.
I want to refer to the particular problem of prisoners who were sentenced for acts of violence and who may be thought to be dangerous to other prisoners. In this matter our practice, under Rule 43 of the Prison Rules, seems to be to segregate those persons, which gives the governors of prisons a quite draconian power to lock a man away in a segregation unit virtually for an indefinite period. In our prison system at the moment there are three men who have been virtually in solitary confinement, where they have not seen another human being for the last three years and more. I really think that this is intolerable.
We shall have to consider in a more general way whether Rule 43 should be modified so that we do not run the risk, as we are at the moment, of violating Article 3 of the European Convention on Human Rights, by reason of the fact that we are imposing a cruel and inhuman punishment on these individuals by locking them away from all other human society for substantial periods of time. So much are they isolated that they are not even permitted to attend church services or to go to the prison library; so they may go throughout the day without encountering another human being. The psychological effect of this over a period of time can only be imagined. Yet although the board of visitors has to approve the renewal of the segregation order every month, a prisoner with whom I have been in touch tells me that he is only visited by a member of the board of visitors every 12 weeks and that he is practically never examined by psychologists to see what may be the effect of these prolonged periods of isolation on his health.

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Related to the problem of the mentally-disordered offender there is the person who commits offences while under the influence of drink. The May Report said that prison should be avoided for drunkenness itself. Even the Home Office in 1971 said that the right answer was to establish detoxification centres. The all-party group repeats that detoxification facilities should be established in every urban area where there is a substantial number of arrests for drunkenness. I go along with that. However, I should like to add something to it. The Home Office should spend much more on prevention by encouraging, wherever possible, voluntary effort, such as that of the Conservation of Manpower Unit, which aims to treat and give support to alcoholics within the community. I think that if there were more agencies like this—I should be grateful if the Minister would consider this—the courts might be able to refer offenders to them instead of giving them custodial sentences.
There is a whole host of other people who are in prison who ought not to be there. There are fine defaulters and maintenance defaulters, and there are plenty of ways in which they can be kept out of prison and in which their financial obligations can be met. There are those who are in prison for soliciting, and we have had several debates on that in your Lordships' House. There are those people who are convicted of simple possession of cannabis; convictions under the vagrancy Acts, other than for "sus"—which I am glad has been abolished—indecent exposure, and a whole host of minor offences for which prison is really not an appropriate penalty.
Then there is the important question of detention pending deportation after a non-custodial sentence, when it is quite common for a person to spend five or six weeks in prison for the simple reason that, if, for example, the offender is a shoplifter and is sentenced to a fine, the Home Office will call for the person to be detained under the immigration Acts pending deportation because they are afraid that the person will go to ground. There are many cases which I have referred to the noble Lord's colleague in another place, Mr. Tim Raison, where, after the courts have imposed a non-custodial sentence, nevertheless the offender spends five or six weeks in prison waiting for the expiry of his right of appeal against conviction and sentence and against the country of destination. It is absolutely intolerable that the court should give someone a non-custodial sentence, but that they should end up spending several weeks in prison.
Even after the end of a person's custodial sentence—because the Secretary of State does not normally make up his mind whether to accept the recommendation of the court that the prisoner should be deported until very near the end of the sentence—it quite often happens that he remains in prison awaiting the decision of the Secretary of State and the expiry of this right of appeal against the country of destination. Even if the prisoner says that he does not want to appeal, as the law now stands he must be given the time to exercise that right.
I turn to the length of sentences on which, rightly, the noble Earl, Lord Longford, concentrated. I want to refer to the Advisory Council on the Penal System and its recommendations of 1978. It seems to me that the council proposed a very sensible scheme: that we
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should review all the maximum sentences that the courts could impose and reduce them to 90 per cent. of the maxima that were actually used by the courts during a period of three years—I think 1974 to 1976. In conjunction with that, the council provided for an exceptional sentence in the case of certain offenders who, it was thought, because of the nature of their offences and the circumstances in which they were committed, ought to be taken out of circulation for the safety of society. A great deal more about that has come to light since the advisory council reported, because the Home Office has produced this excellent research study, Taking Offenders out of Circulation, which shows that because of:
"The infrequency of really serious crimes of violence, their apparently generally random quality and the rarity of anything like a genuinely dangerous type' offers little encouragement for a policy which aims to reduceserious assaults by selective incapacitation of those with violent records".
I am inclined to the view that we should accept the advisory council's recommendation on the reduction of maximum sentences, but without the corollary of the exceptional sentences for these so-called dangerous offenders who are so difficult to identify.
On the question of parole, the all-party group recommends, as the noble Earl mentioned, something very like the Northern Ireland system of one-half remission. I suppose that if we did that, the parole system would still continue to grant that extra one-sixth that would remain with longer sentences; so that if a person qualified for the total of which he was capable, one-sixth plus one-half would be equal to the two-thirds reduction in the length of sentence that he may enjoy at present.
On this point I was, as was the noble Earl, dismayed to see the reports that apparently the judges and the magistrates—I am putting it as uncontroversially as I can—have persuaded the Secretary of State to withdraw the proposals that he was on the point of introducing for automatic parole on shorter sentences. I am obliged to agree with the noble Earl, Lord Longford, that just as the Executive should not be allowed to interfere with the courts, equally it is intolerable that the judiciary should exercise a veto on legislation. I agree that they have not stopped Parliament from doing something which it might otherwise have done, but I think that the question is whether the degree of influence that was exerted on the mind of the Home Secretary was tantamount to dictating to Parliament what it might or might not do.
This is what the noble Earl was talking about; that before the proposals have even been laid before your Lordships or laid before another place, the judiciary have had the ear of the Home Secretary in a way that Parliament has not, and so they have dissuaded him from taking what most people thought to be a very sensible step, which would have had the effect of reducing the prison population by something like 7,000 persons. And all the King's horses and all the King's men, all your Lordships and all the Members of another place, are apparently not going to be able to restore the scheme that the Home Secretary originally had in mind, but instead of that we are going to have a system which, according to the director of the National Association for the Care and Resettlement of Offenders, far from reducing the prison population, is

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actually going to increase it. When these proposals come before us we shall have to consider them carefully to see whether, despite the objections of the judiciary, we cannot in some form restore and reinforce the Home Secretary's original intentions.
Finally, I hope that the Government will do their best to expedite the discussions which are going on in the Council of Europe on a draft treaty to enable prisoners to be returned to their countries of origin to serve their sentences. It is not only a humane idea that prisoners should be among people who speak the same language as they do and who follow the same customs, but it would have the incidental advantage of reducing the burden on our prisons because it happens that there are several times more foreigners serving custodial sentences in Britain than United Kingdom citizens in prisons abroad.
We should not merely be looking for expedients to reduce the prison population because of the tremendous pressure on the system which the governor at Wormwood Scrubs has outlined, but the proposals which I have mentioned and the noble Earl has mentioned are all desirable in themselves, and their urgency is manifest in the letter from the governor of Wormwood Scrubs.
6.52 p.m.
Baroness Macleod of Borve: My Lords, we are all indeed grateful to the noble Earl, Lord Longford, for raising this problem in his Unstarred Question this evening. May I at once assure him that all of us in your Lordships' House, and a vast number of people outside, are very disturbed at the conditions in some of the prisons today which are mostly caused by overcrowding but of course in some cases by old buildings. Although the subject of the Question is specifically Wormwood Scrubs and the Governor's letter, we all know of other major prisons which are suffering some at least of the same problems outlined in the Governor's letter.
I should like to take this opportunity, as a member of the Parole Board, of personally thanking members of the prison staff of all levels for the great care that they take in the dossiers that we see as members of the parole board. It is quite obvious that they give a great deal of time to reporting on the inmates for good or ill, and it is my belief that they go out of their way to say the best things possible for the prisoners under their care.
Of course to accommodate the perpetrators of serious offences—some 2½ million serious offences—we should like to see more prisons built where each inmate could have his own cell, no slopping out, with adequate education and work facilities. But as a prison would take at least 10 years to build we have to tackle the overcrowding problem in a different way. Whatever is done I submit that it is impossible to satisfy the judiciary, the magistracy, Parliament, the prison service, the Home Office, and the general public. As my right honourable friend the Home Secretary recognised in a recent speech to NACRO—I think it was 10th November—there is a good deal of public anxiety about the level of crime. I think it follows that those members who have been mugged, burgled, robbed, and had violence used against them should want the offenders taken out of circulation.
The Home Secretary also said that it must be the first priority of any Government to maintain public
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confidence in the criminal justice system as a whole. In this context the possibility of reducing automatically by a specific amount any sentence passed in any court did not commend itself to anyone despite the fact that up to 7,000 prisoners would have been discharged at once.
In his NACRO speech the Home Secretary hinted that Section 47 of the Criminal Law Act 1977 should now be implemented as a means of reducing the prison population. As noble Lords will know this section provides for the partial suspension of prison sentences between six months and two years. As it stands, the part to be held in suspense must be not less than a quarter nor more than three-quarters of the whole term. I am sure this would be helpful as far as it goes, and I am equally sure that the judiciary and everybody involved would respond to that.
However, as a magistrate, I should like to widen the scope of this provision. We are not empowered to imprison an offender for more than six months. Therefore, this section does not apply, as it stands, to magistrates. I should like to see the reduction in the sentence time to three months plus, and also the power to make the minimum period in custody to 28 days. This would also mean a far wider range of dispersal than before which in itself, in my view, would be a good thing. Incidentally, I wonder whether the Minister could tell me if it is envisaged that remission as practised now would be part of the sentence. We are constantly being told that even one month without one's freedom is a very salutary lesson and can be a deterrent. We are shortly to have a Criminal Justice Bill, and I wonder whether my noble friend the Minister is able to give us any indication of the Government's thinking on these points.
Lord Avebury: My Lords, would the noble Baroness allow me? What does the noble Baroness think of the suggestion that has been made by the director of NACRO that the more the minimum is brought down, as she has proposed, the greater the likelihood that the courts will use the sentence to give a taste of imprisonment to those who otherwise might not have been awarded a custodial sentence at all?
Baroness Macleod of Borve: My Lords, the noble Lord will be most surprised to hear that I am just coming to that. I know that some people will say that given these powers some magistrates may abuse them, but especially if we have guidance from on high, and being well aware of the prison problems, I personally feel confident that this will not happen. There will inevitably be a quicker turnover of inmates in some prisons which might necessitate more staff in these prisons to do the paperwork, because I believe that there will be a great deal more paperwork. But we must try something, and I believe that as it is possible to implement this almost straight away, and if the Home Secretary agrees and this is his thinking, then I for one, realising that these are his thoughts and his thoughts are on the right course, will certainly support it.
6.58 p.m.
Lord Hutchinson of Lullington: My Lords, we are debating this evening a situation of extreme crisis in the prison service. I should like to thank the noble Earl

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for having introduced this debate this evening because there is no question which is more serious at the moment, no more overriding social problem that goes to the whole root of the concept of law and order, a matter so close to the hearts of the party opposite. For two years or more warnings have poured into the Home Office of the possible collapse of the prison system, not least from those noble Lords who have spoken in a number of debates here in this House.
Twenty months ago the prison governors' branch of the Society of Civil and Public Servants said:
"The prison system is collapsing under the weight of numbers. We are running out of cells to overcrowd. We doubt if members of the staff can be expected to tolerate these conditions through this summer".
For two summers they have managed to hang on, but it is doubtful whether they will be able to hang on for a third summer. Since then, the all-party Penal Affairs Group, to which the noble Lord, Lord Avebury, referred, has kept up a constant stream of practical suggestions to the Home Secretary as to how this crisis might be met.
I suggest that now the time for further discussion and argument within the context of a Criminal Justice Bill, as suggested by the noble Baroness, is past. Now—immediately—firm, clear action is required to reduce the prison population by 5,000 people. Tomorrow the prison governors in this country will demand to know what proposals the Minister has put forward tonight to meet this crisis. Prison officers are waiting to hear the same. The Penal Affairs Group, NACRO, the Howard League, the Prison Reform Trust, and of course, overwhelmingly, the prisoners themselves, are waiting to hear.
Eighteen months ago, in a debate on the plight of remand prisoners, I pleaded with the Minister for hard action and no more soothing syrup. I submit that the time for pleading has come to an end and that it is now a matter of making demands. I suggest in all seriousness that the Home Secretary should now convene a prison crisis meeting of no more than 10 or 12 individuals; of himself, the Lord Chief Justice, a representative governor, preferably Mr. McCarthy—one of the most enlightened of all governors at the moment in the prison service—a representative of the prison officers, a representative of the probation service and of the magistrates, the noble Lord, Lord Harris of Greenwich, from the Parole Board, and, particularly, a Treasury Minister, preferably Mr. Leon Brittan, who has had long experience of this matter. The agenda for that meeting should be very simple: first, that within two weeks proposals should be put forward to reduce immediately the prison population by 5,000 and, secondly, that within four weeks proposals should be forthcoming to maintain the prison population within the level of the certified normal accommodation laid down for each institution.
During the last two years, the Secretary of State has had at his disposal three outstanding prison governors—at Maidstone, Brixton and Wormwood Scrubs—each one of them farsighted, experienced and deeply concerned about this problem. They knew, and they know, what should be done. If only the Secretary of State had listened to them instead of listening to the so-called "law and order" lobby, this crisis might have been by this time partially resolved. The governor of
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Maidstone has now resigned early and gone. The governor of Brixton has been removed as a scapegoat following an escape from that prison. The governor of Wormwood Scrubs, who has already been referred to, has broken every rule in the rule book on behalf of his staff and charges, and has threatened to go as well.
Those governors have all known, and to my knowledge have all known, and must surely have advised the Home Secretary, that the vast majority of the 4,000 remand prisoners now in local prisons should be got out of those prisons; that the "inadequates" referred to by the noble Lord, Lord Avebury—the drunks, prostitutes, vagrants, personal possessors of cannabis, and so on—should not be sent to prison under any circumstances whatsoever; that the hostel provision should be given an immediate crisis priority; and that the vacant places in open prisons should be filled.
The building trade is in recession and men are crying out for work. Sites are available in the South of England close to the central criminal courts and Inner London Sessions, and private enterprise could erect within months, if not weeks, two remand centres with hostel accommodation, with minimal but sensible security, to house three-quarters of the remand prisoners who are cramming these prisons in filthy and uncivilised conditions, with half an hour out of the 24 allowed out of their cells. These are unconvicted members of the public who have not been sentenced. Half of them receive no custodial sentence or are acquitted. What has been done since we in this House debated 18 months ago this appalling situation? I hope the Minister will tell us at the end of the debate. I suggested 18 months ago using hutted camps for the purpose. "Impossible", said the Minister, but, immediately the prison officers' crisis arose, hutted camps were introduced to hold men who were on remand and were not being received in prison.
I turn briefly to the matter of the judiciary. It is symptomatic, is it not? that in a debate of this importance, and in every debate which I have heard in the not long time I have been in your Lordships' House, no member of the judiciary is ever to be seen on the Cross-Benches, yet this is a matter of profound importance to the question of law and order.
Lord Rawlinson of Ewell: My Lords, how could a member of the judiciary in your Lordships' House, other than the Lord Chief Justice, be present who has any responsibility for sentencing for criminal offences?
Lord Hutchinson of Lullington: It is not a question of their responsibility but of their interest in the question, my Lords. For too long members of the judiciary—and, I say, members of my own profession—have taken the attitude that their job is to get on with the trial of persons and offences, to see that the law is obeyed and that defendants get a fair trial. When the trial is over they pay no attention to what happens to their clients, to those persons who appear in court, after sentence has been pronounced. For too long has that gone on, and we have seen that one of the main causes of the appalling situation in the prisons is the inability of the judiciary—and the judiciary come from the legal profession—to understand that shorter sentences must be passed, that we must move with the times, that we must see what happens in other

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civilised countries of the western world, and not remain at the top of the league for long sentences. Notice should be taken by the judiciary and members of the legal profession of the results of the sentencing in the courts.
I said the Home Secretary was lucky to have had three outstanding prison governors. He is also lucky to have a remarkable Lord Chief Justice now. He has shown himself acutely aware of the crisis in the prisons and has laid down a number of sensible guidelines for the judges to pass shorter sentences. I do not believe it was his influence that led the Home Secretary to withdraw his previous enthusiasm for supervised early release. If there is opposition to that in the judiciary, I suspect that it comes from the magistrates and the circuit judges. I doubt indeed that it comes at all from the High Court Bench.
One of the factors—and I say this in the presence of the noble and learned Lord the Lord Chancellor—that bedevils decision and action in this area is the inability of the Home Secretary and the Lord Chief Justice to get together and hammer out a solution. I suspect that the historic fear of the interference of the Executive means that contact between these important persons is still minimal. Surely in this situation—
The Lord Chancellor: My Lords, I must contradict the noble Lord there. My right honourable friend the Home Secretary has constantly consulted the Lord Chief Justice, and is still doing so. It really is quite unfair to both the Lord Chief Justice and the Home Secretary, who are in close touch with one another about these matters, with my full approval, and sometimes at my suggestion, to suggest that their contact is minimal. That simply is not true.
Lord Hutchinson of Lullington: My Lords, I am only too happy to hear those words fall from the noble and learned Lord who sits upon the Woolsack, and of course I entirely accept that that is the situation. If that is the situation—and I accept that it is—and that constant meetings are taking place between the Home Secretary and the Lord Chief Justice on this vital matter, then I sincerely hope that, as I mentioned earlier, some solution will be found, rather than have to resort to an amnesty, to which I fear the Home Secretary might finally have to resort. That was suggested by the noble Lord who spoke earlier, and it would be an amnesty which would be the absolutely final solution, making clear the total failure of any controlled or thought out policy.
The partially suspended sentence—and I say this with respect to the noble Baroness who mentioned it—will not solve the problem. All the evidence indicates that far from reducing the number of persons in prison, it is highly likely to add to their number. All the evidence points in that direction, and in any event it cannot be a solution to this crisis which is upon us.
Baroness Macleod of Borve: My Lords, will not the noble Lord agree that until it is tried, we do not know?
Lord Hutchinson of Lullington: I am so sorry, I did not hear the noble Baroness.
Baroness Macleod of Borve: I said, will not the noble Lord agree that if we do not try it, we do not know? It has not been tried.
Lord Hutchinson of Lullington,Lord Hutchinson of Lullington, Well, my Lords, it can always be said that if we do not try something, we do not know. We have tried suspended sentences. It was thought that suspended sentences would result in a lowering of the number of people sent to prison. It had exactly the opposite effect. The trouble is, I am afraid, that in the magistracy—and I say this with the greatest respect to them—there is an overwhelming temptation to give people what is called a taste of prison. If magistrates use this new power, instead of putting people on probation, binding them over, or even giving them a suspended sentence, the result will be more people in prison than ever before.
Supervised early release was supported for a long time by Mr. Merlyn Rees in the last Government, and then abandoned by him at the last moment. The present Home Secretary appears to have gone through the same process, yet, as has already been mentioned, this system is in force in Northern Ireland. I cannot believe that the judiciary here in any shape or form would compensate—
Lord Harris of Greenwich: My Lords, will the noble Lord forgive me for interrupting? I do so only in order simply to correct the record, as I was a Minister of State when Mr. Rees was Home Secretary. At no stage when he was Home Secretary did he consider any such proposal as supervised early release.
Lord Hutchinson of Lullington: Then I am obviously wrongly informed, my Lords. I had understood—and unfortunately I do not have the context with me, but I have seen it; otherwise I would not have mentioned it —that in fact he supported this idea, but then made up his mind to drop it.
I was going to say, before the noble Lord intervened, that in Northern Ireland there is no evidence whatever that the judges have in any way compensated for the 50 per cent. remission, and there is no reason to think that they would do anything different in this country.
Of course, there are judges who would like to abolish the caution. There are judges who do not like the right to silence, who object to the safeguards of identification, who do not like the presence of solicitors in police stations. Indeed, there are some judges who have said openly that they get on much better without the inconvenience of a jury. Those are no reasons for Parliament not to legislate for human rights; and the noble and learned Lord the Master of the Rolls has spoken out at length on the abuse of power in sections of society. But for minor judges and magistrates to continue to send accused persons to prisons which cannot accommodate them, to retaliate against the implementation of early release by passing longer sentences, would in itself be an abuse of power. Such abuses of power do from time to time take place and are worthy of the attention of the noble and learned Lord, Lord Denning.
I implore the Minister to go back to the Secretary of State tomorrow with a message from this House that there are many here—I would say the majority here—who would demand this one solution of supervised early

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release, which could be brought in at once. He should think again seriously about introducing it at the earliest opportunity.
I hope sincerely that this will be the last debate in this House on the matter of the crisis in the prisons. There cannot be anything more to be said about the matter. There is only one thing to do now, and I am sure that all prison governors agree. Everybody who has studied this problem over the past four or five years agrees that it is no longer any good tinkering with the question. The population of the prisons has to be reduced immediately, and it has to be reduced by a minimum of 4,000 to 5,000 persons. Once achieved, that reduction must be maintained. The only person who can introduce the requirements necessary to produce that result is the Home Secretary. I look forward, and shall listen with great concern and deep interest, to what the Minister has to say tonight as to what he now proposes should be done.
Baroness Faithfull: My Lords, before the noble Lord sits down, may I ask whether he would not consider that there must be an advance on two fronts, within the prisons, but within the community too? If there are to be fewer people in prisons, there must be somewhere outside for them to live. Unless there is held a conference of organisations such as the Church Army, the Salvation Army, and many other bodies, in order to set up hostels, it will be very difficult to avoid keeping people in prison.
Lord Hutchinson of Lullington: My Lords, I entirely and absolutely agree with the noble Baroness. I think I said earlier in my speech that priority—a crash programme—for hostels for that very purpose is one of the vital necessities at the moment.
7.19 p.m.
Lord Soper: My Lords, I venture to take part in the debate because I share the desperation indicated in the letter from the governor of one of the block prisons in London. It is a long time ago since I was responsible for Nonconformists and others in Pentonville prison. I remember very distinctly the realisation that then came to me, and which has not altered through the years, though now my visits to prisons are not so frequent as they used to be. The realisation was that a prison such as Pentonville or Wormwood Scrubs is one of the most uncivilised elements in a community which at least claims some civilisation as part of its normal and public life. There have of course been improvements. There has been the right of congress within the prisons, which I welcomed and which is a token of many improvements which are still being made. But those improvements do not alter in any vital degree my complete conviction that the block prison system is uncivilised and immoral, let alone unchristian.
I begin with one or two recriminations, because I think they ought to be made and need to be made. Anybody who had seen the slopping-out in a prison—I have repeatedly seen it—would be disgusted. They would regard the squalor there as no therapy, but would immediately call to mind the suggestion of the dustbin, although, at least, in some circumstances a dustbin is regularly emptied and slopping-out is a continual process, disgraceful and degrading. Then there
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is the fact that so many prisoners have to be accommodated two or three in one cell—a cell which was originally built in the 19th century to accommodate one person, and small at that.
We had better face one or two facts about this which seem to elude general consultation and attention. There are the sexual problems. The problems of homosexual practices are far more widespread to my knowledge and experience than a great many people would like to think they are; and the overcrowding is quite intolerable. It produces a situation in which those who are required to supervise this particular dustbin must feel continuously that they are doing something which is totally unproductive and something of which they themselves should really, in their better moments, be ashamed, though they are doing a job and they feel they must continue to do it as best they can.
But I would invite your Lordships, if I may, to consider two fundamental issues which hitherto have not been introduced into this debate. The first is the concept of prison as a therapy; a remedial process; the kind of process which meets the needs of a crime-laden community and can advance the general wellbeing of that community. I do not believe that is true; and I believe that the experience of governors such as the governor of Wormwood Scrubs is that they are employed upon a task the end product of which is unavailable and the processes, therefore, ineffective.
One of the aspects of this particular issue, of course, is the assumption, which I dare say the judiciary, or some of them, share, that if prison is a good thing then more of it would be a better thing. I have learned—and I would pass on to your Lordships what I have tried to say in previous debates—that it is highly likely that those who suffer long sentences will deteriorate progressively; and the idea that the longer you have the opportunity to correct the offender the better will be his prospect of success is totally wrong. The effectiveness of prison—for good, that is—is more or less confined to the first fortnight of incarceration. After that time there begins the artificial process of contracting out of the real world and accommodating yourself to an unreal world; and when you finally emerge you are much less able to deal with its problems than you might otherwise have been. That is one aspect of the matter.
The other aspect is the traditional attitude, which I think must colour a great deal of thinking even among those who ought to know better, that when we put somebody in prison we can confidently leave them there and not ask too many questions as to what is happening to them. We put them away and we do not want to remember them; we do not want to think about them; we do not have to think about them any more, or we do not have to think about them with any great attention. I hope your Lordships will accept at least my friendly conviction that a great many people who talk about prisons know nothing about the real facts that belong to a prison life, and that only those who have had some more or less innocent awareness of this problem are competent to make the kind of judgments which I am afraid many of the judiciary are incompetent to make. The idea that, somehow, a taste of prison, or a prolonged sentence, will produce the desired effect of reforming the criminal, or at least making him inoperative in his criminal ways, is one of the issues which lie behind the desperation and, indeed, the problems

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that now face prison governors in the block system.
However, recrimination, as Winston Churchill said, is only valid if it is a spur to action. What is to be done? I believe that a reduction in the numbers in prison today is a priority, an absolute priority; and I have the conviction myself that many of those who would be released under various plans which have been advocated and ventilated tonight would be far more likely to lead a decent life when they come out than those who will be retained in the crowded and dangerous conditions in prisons today, who will become hardened in the very processes which will make it much more unlikely that when they do emerge they will be able to find their way back to a reasonable place in society.
I turn now to an issue upon which I would claim some knowledge. For the last 40 years I have been engaged in endeavouring to provide semi-custodial provision for girls in need of care and protection and coming out of conditions of prostitution, and so forth, who otherwise would have been sent to prison. I have some knowledge of bail hostels, and, indeed, was instrumental in setting up the first complete alcoholic rehabilitation centre in Lonodon. There is the detoxification, which is the first stage; the accommodation to a new kind of life, which is the protective stage; and thirdly the provision of some kind of continued protection by way of protected housing, and so forth. I would not be stupid enough to say that we have had extraordinary success in these ventures, but I believe they are infinitely to be preferred to incarceration, particularly of those who have committed drink-related offences. I believe there is a very much greater likelihood that they will recover; and their release would indeed reduce the population of the prisons at the moment and give us time to see what better provision could be made for the delinquents in our modern society.
I would not wish to add to what has been so cogently said by others. What I would ask is that, when provision is at least proposed for this kind of release, as the Home Secretary previously suggested, it is surely not fair that that issue should finally be decided by the judiciary, because I do not believe that, with all the competence that they have, they are necessarily any more able to form a final judgement on these matters than even people like myself. I believe we have to look at the whole question at a deeper level.
I would permit myself one final comment. A man is more likely to return to sobriety, decency and a life of usefulness if he is not deprived of access to the real world in which, alone, that exercise can be fulfilled. The final argument against the block system is that it takes people out of the real world and leaves them in an artificial area for a period sufficiently long to deprive them of many of the vicissitudes and aptitudes which otherwise they might be able to call upon when the time comes for them to be released. The imperative need, it seems to me, for those who would look to a reform of the whole prison system and the abolition of the abuses which now stain it is an attitude whereby those who are miscreants should find their answer within the framework of the same society as they have abused, for it is only there, I believe, that their true future, and the amenity and wellbeing of the community, can be assured.
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Let me end where I began. This is a desperate situation, and those who would seek to minimise it should listen most carefully to what has been said by previous speakers tonight. It is a situation in which the one answer is to be prepared to criticise at root the prison system itself; to begin by taking as many as possible out of it, with the risks that will attend that taking out but which, nevertheless, I think will be justified. Finally, we have to do something better than that which is traditionally called the prison system of this country. It has collapsed. There is no chance of its true resuscitation. We have the time, but it is short, to do better. I pray that we shall.
7.30 p.m.
Lord Campbell of Alloway: My Lords, the noble Earl, Lord Longford, has done your Lordships' House a considerable service by introducing in his Unstarred Question this very important subject for debate; but some of your Lordships may feel, as I feel, that it was a pity that he made an unwarranted attack on Her Majesty's judges, an attack which was wholly irrelevant and utterly misconceived. Some of your Lordships—and I am one; although I have only just the privilege of being here—must say that I feel it was a pity that it was made.
The Earl of Longford: My Lords, perhaps the noble Lord will allow me to interrupt. Whether I was right or wrong, what I said was completely relevant. I am saying that it is impossible to give effect to what Parliament requires unless the judges alter their attitude. That is relevant.
Lord Campbell of Alloway: My Lords, I am obliged to the noble Earl. I shall be at pains to seek to convince your Lordships, by, I hope, a fair process of reasoning, that what the noble Earl has said about Her Majesty's judges is wholly irrelevant, that it does not serve to clarify the subject and that it does not serve to criticise at root the situation—which is surely the wish of all on all sides of the House—to examine this problem. That the overcrowded state of our prisons has reached the flashpoint of unacceptability is not in issue. What is in issue is whether the policy of Her Majesty's Government, on fair and objective review, is open to some of the criticisms which your Lordships have made.
Are they to be criticised for the situation that has arisen; are they to be criticised for the steps that they are now taking to deal with the situation? It is the policy that has to be examined fairly and objectively—as all of your Lordships would wish to do—and, in my submission, on examination, Her Majesty's Government are not subject to the type of strictures some of which have been made.
The prime cause—and let us not forget it—of overcrowding in prisons is the increase in numbers of criminals who commit serious crimes and who have to be sent to prison in order to protect society In this context, as criticism has been made of the judges, and I am no judge, I have to declare my interest as a recorder. I do on occasions send people to prison for substantial sentences—with no relish, but as part of what I conceive to be, and have been brought up to understand to be, a public duty to protect society. Two and half million serious crimes were committed this year and 44,000 of those who committed them are in prison.

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In my submission, it is wholly wrong—and I will come in a moment to the point made by the noble Earl, Lord Longford—to attribute overcrowding, which is the evil, to neglect or to ineptitude on the part of prison staff, prison officers or prison governors. They are a wonderful body of men.
It is equally wrong to attribute this overcrowding to Her Majesty's judges, either the puisne judges, the county court judges or recorders down the line like myself or magistrates, as part of their sentencing policy, because there is no desire that I have come across either in myself, if one examines oneself, or in one's colleagues when one talks to them, to wish to pass cruel, long, harsh, useless sentences. One passes what one feels one must pass. It is, as we know, usually the supervisory control of the court of appeal which will always reduce a sentence that is unconscionable or wrong.
Lord Hutchinson of Lullington: My Lords, does the noble Lord pay no attention to what the Lord Chief Justice has said to all those whose duty it is to sentence persons in the courts to attempt to pass shorter sentences? And if he does not pay attention to that, would he tell us why not?
Lord Campbell of Alloway: My Lords, I do pay attention to it. In the circumstances—although your Lordships may see the force of the intervention, as I do not; and I do pay attention to it—I propose to continue. What I was about to seek to show was that paying attention to it and accepting it, it is wholly irrelevant—if this be so, if this be right, if judges pay attention to it, if such is their attitude and if there is the Court of Appeal as a supervisory and regulating agency—to seek to attack the judges because it is an attack without profit and it ends in no answer.
So if it is inappropriate to attribute overcrowding to the judges, or to attribute the evil of overcrowding to the prisons officers and on that we are all agreed—then I am sure we should all be agreed that it is equally inappropriate to attribute this evil of overcrowding to the want of humanity on the part of my right honourable friend the Secretary of State for Home Affairs or of any of his predecessors under previous Administrations. The problem is that this has built up under successive Governments. True, it has risen to a flashpoint under this Government but it has been building up for years and there is no sudden escape and no instantly available panacea.
The policy of Her Majesty's Government is right. It is relevant and it has been wholly pragmatic. On the one side, they have sought to curtail, to stem, the increasing tide of crime: and to do this they have increased police pay, they have heightened recruitment, they encourage patrols—and this is a positive step forward to reduce the amount of crime.
That is the first way that one should seek, as a matter of policy, to deal with this problem. The obverse is to seek to make available much more accommodation—and here I take the point made by more than one noble Lord. But by the end of this year an extra 5,000 places will have been made available. Over the next decade there will be 60 projects; and this very year £23 million has been spent on 14 new projects. This cannot all be done at once. The question is: Is the broad policy right? One could end, with respect,
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perhaps by accepting that some special consideration should be urgently given to the position of the mentally ill; that some immediate consideration again should be urgently given to the length spent in solitary confinement. Here I declare another interest because as a prisoner—albeit of war—I spent about 9 months, off and on, in solitary confinement. I would certainly wish that anything that could be done to ease the lot of those who spend years in solitary confinement should receive attention.
I accept, speaking if I may wholly personally, that the inadequates who should not go to prison require consideration. I accept that the remand prison situation also warrants investigation. I for my part welcome the type of prison crisis meeting which has been suggested but not in any atmosphere of recrimination where motives of the judiciary are called in question.
If the case for reform is undeniable, is it not equally plain that the requisite remedial remedies should in no way weaken the rule of law and that they should in no way weaken the confidence of the public in our criminal system? In this regard, I would respectfully suggest that partial suspension may be a possibility but that amnesty or automatic remission is wholly inappropriate, and that although immediate consideration should be given to the matters that have been mentioned on the basis of a crisis meeting, there is nonetheless as matters now stand no fair or objective basis upon which Her Majesty's Government may be properly criticised in this regard.
7.44 p.m.
Lord Noel-Baker: My Lords, I join with other noble Lords in expressing my gratitude to the noble Earl who opened this debate. I rise to offer a view which I formed many years ago when I was close friends with a man whom some noble Lords will remember, Colonel Borden-Turner, who for years was governor of Wormwood Scrubs. In my many conversations with him he used to tell me that he was deeply unhappy about the imprisonment of first offenders. He said to me constantly that in his belief the vast majority of all first offenders were in prison only by accident; that they were essentially good men who desired to live by the law and be good citizens. He said—of course we all know it happens—that a long term of imprisonment can turn a good man into a confirmed criminal for life.
The suggestion which I desire to offer is that the prisons should now be relieved of a proportion of their present population—the appalling figure of 44,000—by an immediate and total amnesty to all first offenders, unless in any particular case there should be some special reason why that amnesty should not be given. I believe that that would mean an immediate relaxation of the present problem, and that if it were made a principle not to send first offenders to prison, unless there were some specially grim reason why it should be done, that would continue the relief of the prison population which the original amnesty would bring about.
I venture to agree with the noble Lord who said that what is now vastly important is that we should consider the whole prison system and in particular the efficacy of punishment as a preventive of crime. I

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recall a book which I read many years ago. I should "boggle" the name of the author so I do not attempt it. The title was The Crime of Punishment. I believe it to be true that prevention of crime can be dealt with much more efficiently and give far greater economy at far less expenditure of present funds by other methods—in particular by improvement in our system of education. I cannot develop the theme, for it would take me much too long.
The fact that the prison population has risen from 10,000 in 1955 to 44,000 in 1981 accords with the figures which I believe to be generally accepted: that the cost of crime to the nation in 1972 was £2,000 million and that in 1981 it is £5,000 million. I believe that the Government should spend £1,000 million a year: £500 million on making a reality of their declared policy of sport for all, and £500 million on making a reality of their policy of music for all. Sport and music are the two most potent factors in education which are at present unused or under-used in our schools and universities. I believe that that would work a drastic reduction in the incidence of crime perhaps in the short period of time.
Your Lordships can judge that by what used to happen when a boys' club was opened in a region of London and the level of juvenile delinquency was immediately reduced—perhaps by more than half—when the young people were given somewhere where they could comfortably spend their evenings, where there were games, dances, music and fun. I believe that this is an aspect of policy to which the Government should give the most urgent and careful consideration.
If by spending £1,000 million on improving our education with these two most powerful instnunents of sport and music they could save £2,000 million or £3,000 million on the cost of crime and bring it back to the figure of £2,000 million in 1972, it would indeed be a splendid bargain for the nation. I urge this on the Government with all my power.
7.50 p.m.
Lord Mishcon: My Lords, it is only for a few years that I have had the privilege of being a Member of your Lordships' House, but never have I risen to address your Lordships with more of a hope in my heart that action will result from the speeches following upon the unstarred Question for which I think the House ought to be indebted to my noble friend Lord Longford.
This is no new problem that is being discussed in this House. The May Report is two years old. Debates in this House on the worsening conditions of our prisons have taken place, and I believe that your Lordships tonight are dealing with a critical problem about which discussion has taken place before, but in an atmosphere of crisis with which the Secretary of State, if I may say so respectfully, must deal as a matter of emergency. Without any doubt at all, that crisis has been emphasised by a very courageous governor of Wormwood Scrubs Prison, by writing a letter to The Times, which my noble friend has quoted to the House and which I need not repeat.
The chairman of the Association of Prison Visitors, Mr. McFarlane, has emphasised that crisis only yesterday, as reported again in The Times, by saying that unless something is done he can see—and he is a very
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responsible person—that there could well be outbreaks in our prisons, the like of which we would not wish to see. He, too, expressed a view that there was no way of dealing with the crisis, in his opinion and with his specialist experience, by merely having the remedy of partially-suspended sentences.
It is, as I said, in this situation of crisis that one has to look to the Government for action. I make no criticism whatsoever of the judiciary in the speech I have to make to your Lordships. I think, if I may say so with respect, that is irrelevant. It is for the Government to take action at the crisis level of 45,000 plus prisoners, when all of us know that the maximum capacity is somewhere in the region of 35,000. So in the closing minutes of this debate let us try to see whether we can put to the Home Secretary from this House not only an urgent plea for action but some constructive proposals—and many have been mentioned in this debate, not least by my noble friend Lord Hutchinson and by the dissertation of the whole question of prison life which was given by my noble friend Lord Soper, whose work in this field has met with the admiration of so many, and not least of his colleagues in this House.
What are the things that can be done? The first think that has got to be done, in my humble submission, is not to think ahead for years and years of something that may in fact reduce the prison population. I am all for it, and the process has to be continued; but what can be done at this moment to reduce the prison population to a tolerable number of 40,000? It means that 5,000 prisoners have to be released.
Many of us have an admiration for the Home Secretary. We regard him as a man of humanity, and I believe that his humanity is still there despite the rather extraordinary atmosphere he had to contend with on 13th October at the Conservative Party Conference. I have enough faith in his courage, apart from his humanity, to hope that he has overcome the shock he had on that occasion from his political colleagues at that conference. It is perfectly true, and has been freely commented on, that he did have the idea of the two-thirds remission of sentences which were not long sentences: one-third to be under supervision and one-third to be, as it were, absolute.
It may very well be that those who have criticised that plan have good grounds for doing so on the grounds that the courts might be tempted, knowing of the remission, to see to it that the sentence which was going to be remitted was one they thought appropriate, bearing in mind that they wanted a minimum practical period of the sentence to be served. It may be that criticism is right. It may be that the probation officers, whose views upon this I believe are accurately reported, may have taken the view—and it is understandable—that with their present numbers and their present burdens they could not supervise this one-third period when they were supposed to be doing it.
That may well be so, but if in fact it be true, those of us who thought it was a good idea find ourselves up against a series of practical difficulties in this crisis. Ought we not to be looking very seriously indeed at the proposal that, certainly up to a 12-month sentence—and that cannot be for a very serious crime, or for those who have come back to prison time and time again—save where that sentence be one for violence, because that is something we are all very concerned about, that

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one-half of the sentence should be remitted? That would in fact, so I am told reliably, lead to an immediate evacuation of our prisons by some 4,000 people, and we are well on the way to the 5,000 mark. Is it not right, therefore, to consider that as a very definite priority?
Reference has been made in this debate, by my noble friend Lord Longford and others, to the suggestion made in The Times of an amnesty. Again there are arguments for and against that. If we have an amnesty for those who are serving sentences of less than a certain period, we do not have to be very imaginative to know that some unfairness results, because those who have just got sentences of a little more have to remain in the prison in those conditions for the whole of their sentences, and they have to see go free somebody who may in fact have been convicted of a more serious crime, but who was fortunate enough to appear before a more merciful court. It follows logically that those who have just come in to serve their sentences fare rather more happily than those who are right at the end of their 12-month sentence, if that sentence in fact be the one that is deemed appropriate for an amnesty. But the situation is so critical that, whatever be the criticisms, these proposals have got to be considered as matter of urgency.
I come on to the third proposal that has come out of this debate and that has been made before. Reference was made to it in the May Report. I refer to those who suffer from some mental disability who are not certifiable. It is an absolute, positive scandal that they should be in prison. It is not just a scandal in regard to them. It is a scandal for the National Health Service that ought to have this responsibility. Furthermore, it is not only a question of overcrowding. What you are doing by having those people there is putting a burden upon prison officers, who do not know how to cope with them, and who are therefore having their time and energies taken up, which makes the whole problem for all the other prisoners, and the duties that those prison officers have in regard to them, all the more difficult and makes the problem of overcrowding all the more serious.
Reference has been made by the noble Lord, Lord Avebury, and others to the petty offenders who ought not to be in prison at all and to those who ought to have less severe sentences. In the latter connection, I must humbly pay my tribute to the Lord Chief Justice, who has certainly, both in his guidelines and in other ways, brought all the great influence of his high office to bear on seeing that the question of shorter sentences is well in the minds of the judiciary and indeed of the magistrates.
I do not think that long speeches at the end of a debate register quite as much as speeches of more moderate length. Therefore, I shall not do any more at this stage than conclude my remarks by saying, as I began: please do not let us be put off in this debate —and I beg the Minister not to be—by recitations of the failures of previous Governments to deal with this matter. I take the burden most humbly by saying: all right, I concede that former Governments have neglected this problem. It is not an easy matter in a Cabinet room—I have never been in one—serving as a Cabinet Minister. But I rather imagine that it is not the easiest job in the world for a Home Secretary to
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plead his cause, when there are so many priorities, for expenditure of large sums on prisons.
I hope that the present Home Secretary has enough courage—I know he has that—and enough powers of persuasion, too, to see that this problem is not always made the Cinderella in regard to social services. In my view, it has a very high priority. I am trying in this summing-up speech to put upon the Government the very definite responsibility, at this moment, to listen to the proposals that are made, and that have been made in the past, and to see that something is done urgently to deal with the problem that has been highlighted by the Question that we are considering tonight.
I conclude with a quotation from the Committee's report, delivered two years ago and unimplemented as yet. This is a sentence that I think each individual member of the May Committee and its illustrious chairman would want to have repeated at the end of this debate. It reads as follows:
"If we turn our backs on our prisons, we turn our backs on our society and on our values".
8.4 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): My Lords, the Question of the noble Earl, Lord Longford, concerns the grave situation in our prisons and that the situation is grave is not in dispute. Indeed, I agree with the noble Lord, Lord Mishcon, who, at the beginning of his speech, said, in essence, that the problems are both pressing and serious. Indeed, my right honourable friend the Home Secretary has taken the lead in the past two-and a-half years that he has been in office in drawing public attention to the problems faced by the prison system. In speech after speech, both in another place and elsewhere, my right honourable friend has referred in the plainest terms to the appalling difficulties created by overcrowding, and by a legacy of neglect which produced no new closed prison or borstal built in England or Wales in the 40 years from 1918 to 1958.
However, there has, I think, in the past few years been a considerable increase in public awareness of the problems of the prison system, and I believe your Lordships would accept that the Government's openness of approach—perhaps well epitomised in the television programme "Strangeways", which is being repeated at the present time—has contributed much to a better understanding of a system and a service about which most people in the population know very little.
The problem is essentially one of an imbalance between the resources available to the prison service and the demands made upon it. The Government's objective is to rectify that imbalance by increasing the available resources, by making better use of resources or by reducing the demands made upon them. But, in practice, we have to try to do all three. The noble Lord, Lord Mishcon, expressed the hope that my right honourable friend would argue effectively for resources for the prison service. I think my noble friend Lord Campbell of Alloway gave the answer to the noble Lord, when my noble friend referred to the Government's prison building programme. Six new prisons to be started between this year and 1984 with further starts being planned, and major reconstruction

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at over 60 establishments during the 1980s, constitutes a substantial programme and I hope that it gives the prison service some real encouragement for the future.
Incidentally, it is a programme that is going to make a major contribution to the improvement of conditions at Wormwood Scrubs, where a great deal of new accommodation is now to be provided, as my honourable friend the Minister of State, Mr. Mayhew, stated in another place in the adjournment debate on 20th November. But, of course, we have also to try to make better use of the resources now available.
We propose to go some way to reducing the heavy burden of court escort duties by providing in the Criminal Justice Bill which my right honourable friend intends to introduce shortly for the courts to be empowered to remand accused persons in their absence. We do not intend to disrupt the present eight-day cycle of remand hearings. Provided, therefore, that prisoners give their consent and are legally represented, our intention is that the court will be able to remand offenders in their absence, but only for up to a maximum of three consecutive remands. The safeguards that I have mentioned are very important for this proposal, which ought to bring some relief to our overpressed prison service.
The noble Earl, Lord Longford, is right, just as the Home Affairs Committee of another place was right, in pointing to the overriding need to reduce the sentenced prison population, if we are going to rectify the imbalance to which I have referred. That is the Government's position. It has been reiterated many times by my right honourable friend the Home Secretary. It is central to our objective of bringing relief to the pressure under which the prison system operates—an objective which is clearly shared, whatever our different views about how to do it, by all noble Lords who have spoken in this debate this evening.
Despite that general remark, I realise that some of your Lordships spoke of specific offenders who are in custody. The noble Lord, Lord Hutchinson, spoke of remand prisoners and asked; what is being done? In the Crown Court, my noble and learned friend the Lord Chancellor has, as I am sure the noble Lord will know, opened new courts and appointed extra judges and this has already achieved a significant reduction in the backlog of cases.
The noble Lord, Lord Avebury, and others of your Lordships, including the noble Lord, Lord Mishcon, in the final speech, spoke about mentally disordered offenders and drunken offenders. So far as what we call the regional secure units for mentally disordered offenders are concerned, at last a start has been made with 30 places provided, 170 places to be available by the end of next year and 500 places by 1985. The Government will continue to pursue policies aimed at finding alternative ways of dealing with such offenders, but the great majority of the prison population are sentenced prisoners who are there because their actions are serious enough for the courts to feel that imprisonment is the only response for the offence and for the offender.
In this context I think that a significant statistic to bear in mind is that the great majority of sentenced prisoners have three or more previous convictions. Only 15 per cent. are known to have less than three previous
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convictions. Some of these I have no doubt are petty and inadequate offenders whose actions are a nuisance and who deserves to be dealt with firmly—but also in the hope that they can be steered away from custody. However, there are many others who do not come into that category. As my noble friend Lord Campbell of Alloway said, there are offenders whose offences simply cannot be overlooked so far as custody is concerned.
Of course the Government attach importance to fostering alternatives to imprisonment. As proof of that, the figures for the making of probation orders have now begun to increase which, in the total context of the increase in crime, I find encouraging. And the numbers of community service orders have increased dramatically. En many cases, however, there has to be imprisonment. Nevertheless, consistent with the gravity of the offence and the protection of the general public, sentences ought to be as short as possible. I would not have the temerity to say that off my own bat but it was the basis of a number of recent judgments of the Court of Appeal, of which the best known are the cases of Upton and Bibi of about a year ago.
The criminal statistics of last year show that there was a discernible reduction in the average length of sentence in both the magistrates' courts and the Crown courts following those judgements in the Court of Appeal. I understand that the reduction implied a decline in the prison population of as much as 2,000 to 3,000 prisoners, but in practice the increase in the number of offenders being dealt with by the courts has eaten into what would have been savings. But this development in sentencing policy is of crucial importance if a sustained reduction is to be achieved in our prison population and if we are to give those responsible for running our prisons the opportunity to operate regimes consistent with standards of decency and dignity and to emulate the very good work which is being done by staff, where positive policies for prisoners are made possible wherever there is a reasonable level of numbers of prisoners. So far as that is concerned, last summer the prison population did indeed rise to just over 45,500 for a certified normal accommodation of under 40,000. Since then, however, the population has fallen back to rather less than the noble Lord, Lord Mishcon, mentioned—to just under 44,000—and has stayed there now for many weeks. Nevertheless, this represents a level of overcrowding, particularly in local prisons like Wormwood Scrubs, which cannot he sustained.
In developing the policy to be set out in the Criminal Justice Bill, shortly to be introduced, my right honourable friend has had very clearly in mind the need to reinforce the trend towards shorter sentences. At the same time, a Bill of that kind must incorporate powers which enable the courts to deal adequately with offenders. The noble Earl, Lord Longford, referred to the role of Parliament and to the role of the judiciary in sentencing matters in terms which drew an intervention with which I must make it clear I wholly concur. Of course it is for judges and magistrates to decide on appropriate sentences in individual cases. Parliament's responsibility, surely, is to create the right statutory framework within which the courts feel that they can give the right sentences. This is the basis upon which

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my right honourable friend the Home Secretary has been considering how to move ahead.
Last May, the Home Office Review of Parole put forward proposals by which the benefits of parole might be extended to prisoners serving sentences below the parole threshold, mentioned by all noble Lords who have spoken this evening—what we call the supervised release scheme. The proposal was put forward as one way of reinforcing the call of the Court of Appeal for shorter sentences. But while there was much support for the scheme—indeed, that support has been reiterated this evening—many doubts were voiced about it. I was interested in the speculation of noble Lords about reactions to supervised release. If they will forgive me saying so, it was a remarkable allegation by the noble Lord, Lord Hutchinson of Lullington, that probably the circuit judges and magistrates have persuaded the Government to abandon supervised release.
Let me tell the House the truth. It is true that we had estimated that the supervised release scheme might have yielded a reduction of up to 7,000 in the prison population, but that was on the most favourable assumptions and related to a scheme under which offenders were automatically released after one-third of their sentence to serve the middle one-third under supervision in the community. But it was clear from the reactions that we received that the early release proposal would have created, in the opinion of many, a gap between the length of sentence given and the actual sentence served which would be too great and which could be reflected in longer sentences. If that happened, that in itself would have meant that the estimated saving in the prison population simply would not have been achieved. What is more, the progress made towards encouraging the courts to exercise their sentencing discretion in favour of shorter sentences would have been lost.
Let me go on a different tack for a moment. Let us suppose that the early release scheme were to be applied with judicial discretion. Again that would have made any estimate of the reductions the scheme would have achieved very much more uncertain. We also had to take into account that real doubts had been expressed by the probation service itself, among others, about the likely effectiveness of short periods of supervision under a scheme of that kind. Incidentally, I do not for one moment deny what the noble Lord, Lord Mishcon, said: that the probation service also had in mind that they would need the resources to be provided. But nothing has been said so far as that is concerned to prevent the service from feeling that the resources would be there when such a scheme would be brought into effect.
Lord Hutchinson of Lullington: My Lords, would the Minister tell the House whether the hostile reaction to the proposal came from the judiciary?
Lord Belstead: My Lords, we undertook consultations, which I think was a perfectly natural thing to do, with a whole variety of people: the judiciary, the magistrates, the probation service—a variety of other people who were all free to come to talk to us and with whom we consulted. The situation is exactly as I have set it out there. The reactions and the reservations were of the kind that I have just explained. It was
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because of those reservations and because of the damaging effects, as we saw them, both upon the savings which would otherwise have been made by an early release scheme and possibly upon what is happening to the sentencing trend of the courts at the present time that we looked elsewhere. We have not reneged, therefore, on a cast-iron opportunity to reduce the prison population by 7,000. I assure the noble Lord, Lord Hutchinson of Lullington, that we took a balanced appraisal which suggested that the likely benefits of the scheme were at the best uncertain and at the worst could work against the trend of sentencing practice as it is becoming apparent. Therefore, it was, as I say, to Section 47 of the Criminal Law Act 1977 that we also looked, the section which gives to the courts the power to suspend part of a prison sentence.
My noble friend Lady Macleod of Borve put her finger on a most important point when she said that Section 47 has one immediate advantage over the early release scheme, in that Section 47 is already on the statute book and can, therefore, be brought into effect much sooner than a scheme requiring legislation. This is a point which think should weigh with your Lordships because many of you this evening have said in terms that time is not on our side in these matters.
I should also like to remind the House that, in their report, the Advisory Council on the Penal System, about which a good deal has been said this evening, pointed out that the decision to incorporate a partially suspended sentence provision—incidentally, on the form of which they were consulted—in the Criminal Law Bill in effect pre-empted a recommendation that they would otherwise have made. The Advisory Council on the Penal System concluded:
"We view the partially suspended sentence as a legitimate means of exploiting one of the few reliable pieces of criminal knowledge, that many offenders sent to prison for the first time do not subsequently re-offend".
It is with just that objective that the Government now intend to implement Section 47, subject of course to the agreement of Parliament.
Lord Mishcon: My Lords, I wonder whether the noble Lord the Minister would allow me to intervene and ask him just two questions. First, while one always welcomes U-turns from the Government and sometimes does not receive them, is it not a fact that the Home Secretary himself took the view that the partial suspension procedure, when recommended elsewhere, would not be efficient? Is that not the case?
The second question I wish to ask the noble Lord is this: during what period of time is this scheme likely to reduce the prison population? Also, can he say by how many during that period of time it is estimated that the number of prisoners would be reduced?
Lord Belstead: With regard to the first question which the noble Lord, Lord Mishcon, asked me (a question which I think was asked of my noble friend Lady Macleod of Borve during her speech, and which my noble friend answered) it is indeed a fact that we have said quite openly during debates—and also I think it was said quite openly in the Review of Parole on behalf of the Home Office—that we were suspicious of Section 47, and indeed in his speech the noble Lord, Lord Hutchinson of Lullington, gave the reason. It

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was because—to use the jargon—it might mean that the courts would feel that "a taste of custody" would be appropriate.
I have been at pains this evening to try to say something, and indeed to back up what I have been saying with some evidence, about the trends of sentencing policy shown by the courts as a result of advice given by the Lord Chief Justice in the Court of Appeal. We believe now that there is a good chance that the purposes of Section 47 will be achieved—the purposes of Section 47 which it was hoped would be achieved when it was written into the 1977 legislation.
So far as the savings of places are concerned, I hope I have also shown in my speech what a conjecture this is. I repeat quite openly that we believed in the Home Office that there could be a saving of some 7,000 places in the prison service by an early release scheme but it soon became apparent that this was subject to all sorts of considerations which would almost certainly reduce those numbers. I should like to write to the noble Lord about this, but I understand that we certainly could be talking about something up to 4,000 places if Section 47 were to work out in the way that might be hoped. But nobody can say for sure what in fact is going to happen. If I have got that wrong, I will write to the noble Lord.
Lord Elwyn-Jones: My Lords, can the noble Lord give an estimate of the period of time which that would take? We are facing an emergency situation. What answer are we going to give to the governor of Wormwood Scrubs tonight—"Wait, wait, wait. We will try some other remedies"?
Lord Belstead: My Lords, with respect to the noble and learned Lord, that is an extraordinary intervention. If an early release scheme had been put into legislation, that legislation would not have been through both Houses of Parliament for probably another eight months and then it would have been necessary to put such a scheme into effect, which would have taken a further considerable time. Section 47 is on the statute book. I give no undertakings this evening, but there is no reason why Section 47 should not be brought into operation, in some form, in the reasonably near future, although of course, if we are to alter the effect of Section 47 in the way which my noble friend Lady Macleod recommended in her speech, that would need some legislation which would add to the scope of the section. With respect to the noble and learned Lord I do not think that is a very good point. One of the strong points for bringing in the 1977 legislation on this particular ground is the fact that here is something which can be tried very soon, whereas the scheme which was floated in the Review of Parole was something which, whatever happened, could not have come into effect for a very considerable time.
Lord Avebury: My Lords, I have been trying to intervene, to ask the noble Lord whether he was going to deal with the other suggestion which I made, which is that the Government should consider adopting 50 per cent. remission, as we have in Northern Ireland. No doubt the noble Lord will be able to give the House an exact figure of the number of people who would be released from prison by such a scheme, because
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it is readily calculable, whereas in the case of the provision which the Government are now contemplating, the matter is one of conjecture.
Lord Belstead: My Lords, I think really I have covered that point. Of course we have considered such a matter carefully. Anyone who did not consider as many of the options as possible would be very unwise but that particular proposal falls into the difficulty of the perceived gap (particularly by those who are responsible for sentencing) between the sentence which is actually given and the sentence which is served, as the noble Lord knows.
Lord Avebury: I did not know that.
Lord Belstead: My Lords, I thought the noble Lord did know it, but as the noble Lord apparently does not know there was not a parole system in Northern Ireland—
Lord Avebury: I did know that—of course I did.
Lord Belstead: My Lords, it was not considered either feasible or easy to introduce a parole system into Northern Ireland and resort was therefore made to the 50 per cent. remission.
For the reasons which I have given to your Lordships we have turned to Section 47. We believe that it will give the courts the opportunity to reduce effective sentence lengths while at the same time marking the seriousness of the offence by the sentence given. That would secure a method of supplementing the trend towards shorter sentences within the bounds of the kind of judicial discretion which our consultations carried out in the context of the Review of Parole proposals suggested was necessary and which I think the courts will themselves welcome.
I have no hesitation in admitting that the effectiveness of Section 47 depends on the way it is used. For the reasons which I gave just now after one of the interventions, we believe that in the present climate of opinion it will be used as intended in cases where otherwise full imprisonment would be unavoidable and we believe it will enhance the move towards shorter sentences.
This debate on a very difficult matter and in a very grave situation is, nonetheless, welcome because I think it has given a chance not only for the Government to hear what has been said by your Lordships but also for the Government to explain something of our strategy for relieving pressure on the prison system. But, of course, it is a strategy which is not ultimately subject to rigid control. As your Lordships will know better than I do, the criminal justice system does not work like that. Of course, there are uncertainties inherent in any course of action which is not rigidly controlled centrally. The effect of a supervised release scheme would for many reasons be uncertain, and the Government believe that partially suspended sentences would be the better approach.
But there is one certainty; namely, that we can only hope to contain the crisis in our prison system if the demands made upon the service are brought into balance with the resources which we have. This debate has shown the many and complex matters with which my right honourable friend the Home

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Secretary must contend if this balance is going to be achieved. Unless it is achieved, it will leave the Government with no option other than to use what would amount to executive powers to relieve the situation. That is the measure of the seriousness of the problem with which this debate has been concerned and against which the Government's policy is being formed.

  PRISONERS: SEGREGATION
  PRISONERS: SEGREGATION
  PRISONERS: ADJUDICATIONS
  PRISONERS: ADJUDICATIONS
  DEPORTATION ORDERS
  DEPORTATION ORDERS
  PAROLE AND SENTENCE REMISSION
  PAROLE AND SENTENCE REMISSION
  HOME OFFICE: CIVIL SERVANTS
  HOME OFFICE: CIVIL SERVANTS
  PRESIDENT BREZHNEV: SUMMARY OF PRESS INTERVIEW
  PRESIDENT BREZHNEV: SUMMARY OF PRESS INTERVIEW
  EEC AID TO ENGLISH REGIONS
  EEC AID TO ENGLISH REGIONS
  EEC REGIONAL AND SOCIAL FUND
  EEC REGIONAL AND SOCIAL FUND
  WHALING: USE OF "COLD" HARPOON
  WHALING: USE OF "COLD" HARPOON
  MSC TRAINING SCHEMES: PREMISES
  MSC TRAINING SCHEMES: PREMISES
  SUMMER TIME: ENERGY CONSERVATION
  SUMMER TIME: ENERGY CONSERVATION
  DISABLED PERSONS ACT 1981: CIRCULAR
  DISABLED PERSONS ACT 1981: CIRCULAR
  SOCIAL SECURITY REGIONAL STRUCTURE
  SOCIAL SECURITY REGIONAL STRUCTURE