Sitting of 26 November 1981

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

    HUMBERSIDE BILL [Lords] (By Order)
    Order for consideration, as amended, read.
    To be considered upon Thursday 3 December at Seven o'clock.

Oral Answers to Questions
  HOME DEPARTMENT

    Police (Foot Patrols)
    Mr. Silvesterasked the Secretary of State for the Home Department whether there has been an increase in the number of foot patrols now operated by the police.
    The Secretary of State for the Home Department (Mr. William Whitelaw): I know that chief officers share my view that it is desirable to put more officers on foot patrol, both to improve contact between the police and the community, and to provide more effective policing.
    Mr. Silvester: In view of the acknowledged importance of this matter, will my right hon. Friend pay special attention to that part of the Scarman report that is concerned with the status of the beat officer? Is he satisfied that police establishments are sufficient to enable enough people to carry out this duty?
    Mr. Whitelaw: On the first point, "Most certainly, yes". On the second point, the strength of the police service in England and Wales has increased by about 7,500 since the Government came to power. That should provide the opportunity for more foot patrols. That is the purpose of the Commissioner of Police of the Metropolis and chief officers.
    Mr. Grimond: Is the Secretary of State aware that his statement that he appreciates the importance of having more police on foot on the beat will be widely welcomed, because there is a wide demand for it all over the country? Now that the Metropolitan Police are, I understand, up to strength, has he made any progress on this matter? Has he been able to relieve the police of any of their other duties? Is there any increase in foot patrolling?
    Mr. Whitelaw: Yes, indeed. The Metropolitan Police are not fully up to strength, although they number about 25,000 for the first time in their 150 years of history. Following a recent review the Commissioner has been able to release over 900 officers from mainly internal or civilian duties for operational street duties, so I think that he has done a great deal, as the right hon. Gentleman would want him to do.
    Mr. Marlow: Has my right hon. Friend been made aware of reports that since the number of police foot patrols in Brixton has been reduced, the level of street crime has increased? What deductions does he draw from that?
    Mr. Whitelaw: Police foot patrols in Brixton are extremely important, as indeed—and we must be perfectly clear about this—is the need to deal with crime in Brixton. Nothing that Lord Scarman or anyone else has said leaves any doubt that it is essential to deal with crime without differing standards throughout our community.
    Mr. McNally: Has the Home Secretary any fresh proposals to encourage members of the ethnic minorities to join the police force? In the United States, in Washington and New York, we have seen that, despite accusations of "Uncle Tom", blacks join the police. It is worrying that we do not have enough young blacks coming into the police force.
    Mr. Whitelaw: Yes, that is true. It would be very helpful if we had more. I hope that the House will reject the idea, which has been tried in America and, I believe, failed, of having quotas within the police service. That was a mistake. I trust that we shall not go down that road. Lord Scarman did not suggest that we should do so.
    We need more such recruits, but, first, those in their own communities have to encourage them to join, to treat them well when they do join, and not say that they are scabs, or whatever the term may be, for doing so. That is important. At the same time, they have to reach the right standards so that when we have a chance to increase the quality of our police constables they will qualify for the police service.

    Police Forces (Establishment)
    Mr. Hal Millerasked the Secretary of State for the Home Department to what extent police forces are up to establishment; and if he will make a statement.
    Mr. Whitelaw: All forces outside London are up to or near their authorised establishments. At the end of October the strength of the Metropolitan Police was about 25,000, the highest ever, but the force still has about 1,600 vacancies.
    Mr. Miller: In view of the fact that in the area covered by the West Mercia police force there has been a 20 per cent. increase in crime in the last 12 months and a 30 per cent. reduction in the rate of detection, and that there is one constable to over 500 head of population—way below the national average—when will my right hon. Friend approve the recruitment to the final 90 posts of the 350 originally recommended in 1976?
    Mr. Whitelaw: As my hon. Friend will appreciate, I approved an establishment increase of 87 posts for West Mercia in February 1980. Since May 1979 the strength of the force has increased by 174, and it is now at its full establishment of 1,921. In all these cases we have to consider the total number of police officers and the fact that police officers are today an expensive commodity and that we must get the full value for money for their work. Bearing in mind all those matters, I shall consider what my hon. Friend has said.
    Mr. George Cunningham: Is the Home Secretary fully aware of the depletion of the effective resources

    983
    deployed in individual districts of the Metropolitan Police area because of the removal of large numbers of police for joint London and national occasions? Will he bear that fact very much in mind when next the establishment of the Metropolitan Police comes up for review?
    Mr. Whitelaw: Yes. It should be remembered that all of us are perhaps responsible for promoting strains upon the Metropolitan Police in their national duties. It should never be forgotten that marches and demonstrations of all kinds increase the pressures on the Metropolitan Police. That must be accepted. I shall, of course, consider what the hon. Gentleman has said. I wish, however, to make it clear that the figure of 25,000 for the Metropolitan Police is a very considerable increase on any previous figure.
    I do not believe that it is right to increase the size of the force too quickly. We need to make sure that officers who go on the beat receive proper training to enable them to do the job effectively. I should be worried if I thought that we were rushing to a new establishment before making sure that the officers concerned were fully trained and mature enough to appear on the streets.

    Civil Defence
    Mr. Nicholas Wintertonasked the Secretary of State for the Home Department if he will increase the resources available for civil defence.
    The Minister of State, Home Office (Mr. Patrick Mayhew): My right hon. Friend has no present plans to do so. We are satisfied that the additional resources for civil defence which my right hon. Friend announced to the House on 7 August last year are sufficient for further progress to be achieved.
    Mr. Winterton: Is my hon. and learned Friend aware that the vast majority of people in this country support the nuclear deterrent, but that they require the Government to provide adequate civil defence to go with the nuclear deterrent? Is he therefore aware that more money is required for civil defence, and that if local authorities under Socialist control are not prepared to provide it the Government should step in? Is he further aware that more nuclear shelters are required to guarantee protection in the event of some sad occurrence and to ensure that a large number of people in this country survive?
    Mr. Mayhew: My right hon. Friend announced in August 1980 that national civil defence expenditure was to be increased by about 60 per cent. annually, to £45 million annually by 1983–84. I agree with what my hon. Friend says about the importance of a nuclear deterrent. The Government are equally concerned to make the point that the case for civil defence is a humanitarian one and that one can be wholly committed to unilateral disarmament and at the same time be very firm for proper civil defence.
    Mr. James Lamond: Is the Minister aware that the huge upsurge of interest in the peace movement, not only in this country, but throughout Europe, and the tremendous demonstrations that have taken place are due not to the underground activities of the Communist Party in the CND, or even of the KGB, but arise from a real fear of nuclear war and the realisation that there is no adequate civil defence against nuclear attack?
    Mr. Mayhew: Many of the people supporting those demonstrations are extremely sincere and extremely
    984
    misguided. It is a grave disservice to them and to the whole country to suppose that, in the unspeakable event of an attack upon this country with nuclear weapons, millions of lives could not be saved by the provision of a sensible degree of civil defence.
    Mr. Cyril D. Townsend: How is my hon. and learned Friend getting on with persuading that wayward organisation, the GLC, to play its part in civil defence? Does he appreciate that my constituents and many other people in greater London believe the GLC's attitude to be wholly irresponsible?
    Mr. Mayhew: My hon. Friend will recall that a fortnight ago the Government published a simple pamphlet "Civil Defence: why we need it" giving the answers to a number of questions that are commonly asked. I am glad to say that the GLC has undertaken to distribute the pamphlet. It has also undertaken to carry out a survey of buildings, as the Government have requested, that might be suitable to provide protection against radiation. I believe that persuasion is the way to approach these local authorities.
    Mr. Park: What estimates has the Minister made of the cost of effective protection against nuclear weapons?
    Mr. Mayhew: That is an impossible question to answer. The concept is not capable of being defined. The Government have always made it clear that it is beyond what this country can afford to provide shelters for everyone on the scale carried out in the last war. However, the risk of war breaking out so long as we maintain our independent deterrent is so slight as not to warrant that precaution.

    British Broadcasting Corporation
    Mr. Skinnerasked the Secretary of State for the Home Department if he has any plans to meet the director-general of the BBC to discuss the financing of the corporation; and if he will make a statement.
    The Minister of State, Home Office (Mr. Timothy Raison): My right hon. Friend met the chairman and the director general of the BBC last month to discuss the BBC's application for an increase in the television licence fees. No date has been fixed for any further meeting with them.
    Mr. Skinner: Will the Minister confirm that the BBC is after an increase to £50 in the licence fee? Will he acknowledge that there are nearly 10 million pensioners in this country who, together with those who are unemployed as a result of the Government's policy, would find extreme difficulty in paying a £50 fee? Is he aware that the Government have recently refused to increase pensions in line with inflation, which has meant a loss of about £50 a year to pensioners? Will he ensure that when the £50 licence fee is brought forward, pensioners will be excluded from paying the whole of it?
    Mr. Raison: I think that what the BBC is seeking in terms of an increased licence fee is public knowledge. Our view is that it is better to continue to assist pensioners and the disabled by benefits in cash, which they can spend in their own way, rather than by benefits in kind. The television licence fee is included in the RPI basket.
    Mr. Paul Dean: Will my hon. Friend accept that many pensioners and others dread the prospect of yet another

    985
    increase in the BBC licence fee? Will the Government now respond to the growing view that if the BBC needs more money it should be obtained from advertising, which is what happens with the rest of the media?
    Mr. Raison: Our view is that to introduce a system for the BBC based on advertising finance would seriously change the character of the corporation. It could have the effect of diminishing variety of choice in the programmes that it can offer.
    Mr. Allen McKay: Will the Minister reconsider his answer to my hon. Friend the Member for Bolsover (Mr. Skinner) about old-age pensioners? Will he undertake a survey of what old-age pensioners think? Does he not think that their answers would indicate the need for a concessionary television licence? Does he agree that there is too big a difference between a "5p licence" and the proposed £50 licence?
    Mr. Raison: No, Sir. Concessions would inevitably mean either higher licence costs for everyone else or an increase in public expenditure. We believe that the present system is right. The pension takes account of increases in the RPI, which includes the cost of a television licence.
    Mr. Dudley Smith: Does my hon. Friend agree that many people do not necessarily believe that the BBC puts to the best use the public money that is available to it? Does he think that before any question of an advance in the fees is considered officially there should be an independent survey of the way in which the BBC spends its money?
    Mr. Raison: There are detailed discussions when the size of the TV licence is fixed. We have to be satisfied that the application is appropriate.
    Dr. Summerskill: The Minister says that he prefers to assist pensioners by benefits in cash. Does he not agree that the Government have totally failed to keep pensioners' benefits in line with inflation? Is he not aware that pensioners are finding it harder than ever to manage day by day? What consideration have the Government given to assisting pensioners in the event of an increase in the licence fee?
    Mr. Raison: I do not agree that the Government have failed totally to keep pensioners' pensions in line with inflation.

    Prison Regime
    Mr. Michael McNair-Wilsonasked the Secretary of State for the Home Department if he will give consideration to a reappraisal of the prison regime with a view to achieving a better balance between punishment and reform.
    Mr. Mayhew: It is not the function of prison regimes to add to the punishment of the sentence of the court. The prison department is constantly seeking to develop new and positive elements within the prison regimes, despite the pressures on resources.
    Mr. McNair-Wilson: Does my hon. and learned Friend agree that if we are to counteract the concept of prisons as penal dustbins we should give thought not only to improving the fabric of the prisons but to the purposes of imprisonment? What is the Home Office research unit doing in looking at this aspect of the penal system?
    Mr. Mayhew: We do not want our prisons to be dustbins or any kind, penal or otherwise. It is important that the regimes, notwithstanding the shortage of resources from which we are suffering, should be as positive as possible. The regimes committee is involved in a continuous reappraisal of regimes and a review of the prison service's philosophy of management and arrangement of prisoners' home leaves. About four different groups of one kind or another are undertaking the examination of different aspects of the matter. I agree with my hon. Friend that it is very important.
    Mr. Kilroy-Silk: Does the Minister agree that an appropriate balance between punishment and reform cannot be achieved while overcrowding in local prisons makes it impossible to sustain even basic minimum standards of human decency? Will the situation not be exacerbated by the introduction of a partially suspended sentence? Will the Minister reconsider this decision and introduce instead a scheme of supervised release, which would have the effect of reducing the prison population immediately by 7,000?
    Mr. Mayhew: The answer to the question "Is it impossible for a proper balance to be maintained at present?" is, generally and unhappily, "Yes", but the hon. Gentleman is wrong in what he presses upon me in the second part of the question. The reason why we are now satisfied that supervised release would not be satisfactory is that there is a real prospect that it might add to the numbers of people in prison, rather than reduce them.
    Mr. Lawrence: Is it not a fact that if more of our prisons provided constructive work for prisoners that would not only contribute towards the reform of offenders, but would help to punish those who are in prison because they are work-shy?
    Mr. Mayhew: It is the continuous effort of the prison service to provide opportunities for worthwhile work for inmates. That is the case, notwithstanding the shortage of resources. The purpose of imprisonment is partly to help to prepare inmates for a useful and self-supporting life outside prison.
    Mr. Alexander W. Lyon: As there can be no improvement in the prison regime until we cut the number of people in prison, has not the Home Secretary denied himself the possibility of that improvement by capitulating to the judges and the magistrates in their refusal to reduce the amount of time spent in prison? If that is now the case, does it not mean that we have urgently to move towards legislation, as suggested by the Select Committee?
    Mr. Mayhew: The hon. Gentleman was uncharacteristically inattentive to my last reply. There is no capitulation. The reason why the Home Secretary has changed his mind, as he has made clear, is that he has consulted people and heeded what he has been told. It is absurd to talk of capitulation when referring to a consultation that has been properly carried out, and the results of which have been listened to.

    Civil Defence
    Mr. Ioan Evansasked the Secretary of State for the Home Department how many copies of the publication "Civil Defence: why we need it" have been published; and how extensively it will be distributed.
    Mr. Mayhew: Five hundred thousand so far. The pamphlet has been distributed to county and district councils, police forces and certain voluntary organisations. Members of the public may obtain copies from these bodies or direct from the Home Office emergency services division.
    Mr. Evans: Does the Minister agree that this is a miserable and pathetic document compared with the earlier document "Protect and Survive"? In view of the fact that in the recent civil defence exercise, "Operation Square Leg" it was estimated that 200 megatons of TNT could be used against Britain—which is equivalent to 16,000 Hiroshimas—what does the document say about dealing with that, on the very day that the Cabinet is meeting to discuss further public expenditure cuts in local authority services? Will the Minister at least respect those local authorities that want to make their areas nuclear-free zones?
    Mr. Mayhew: The theme of the pamphlet—which is very far from pathetic—is that civil defence is common sense. Even if the hon. Gentleman's constituents were to live in a nuclear-free zone, they would not be protected from the effects of fallout from nuclear attacks on the Continent of Europe. The pamphlet seeks to dispel the confusion that has been sown in people's minds by a great many people such as the hon. Gentleman, who seek to say that no measure of protection can be given to millions of lives.
    Mr. John Wells: Is my hon. and learned Friend happy that after a disaster the chief civil power should be in the hands of the chief executives of county councils and similar unelected and unknown nonentities? Would it not be much wiser if each county had at the head of its civil defence some well-known local figure, such as Mr. Ian Botham in Somerset, or Mr. Kevin Keegan in Southampton?
    Mr. Mayhew: The Government believe that all their efforts have to be devoted to ensuring that no war ever breaks out. We believe that if we maintain our deterrent policy that will be the case. But if there has to be a system for the post-attack government of this country, we believe that it is right to work through local authorities and those who serve them, because they have the best means of knowing the needs of their areas. I think, therefore, that the Government's policy is broadly correct.

    Police Constables
    Mr. Jesselasked the Secretary of State for the Home Department what proportion of police constables have more than 10 years' service; and how this proportion compares with the position in 1961.
    Mr. Whitelaw: This information is not held centrally and is not readily obtainable. The results of a survey of forces in England and Wales at the end of 1979 showed that over a third of police constables, and just over half of officers of all ranks, had more than 10 years' service.
    Mr. Jessel: So that young police constables can benefit more from the practical experience of the older ones, will my right hon. Friend consider whether a larger proportion of the older ones can be made available for work with the younger ones on the streets? Will he also see whether the salary structure can be examined in order to encourage the retention of the services of experienced police constables?
    Mr. Whitelaw: The answer to my hon. Friend's first question is that that is exactly the purpose of the Commissioner of Police of the Metropolis, and, indeed, of training schemes that he has just instituted at Hendon, the benefit of which will be seen on the streets thereafter. We are suffering from the fact that at an earlier time police pay was allowed to go too low, as a result of which many experienced officers left the force. That has been put right through the Edmund-Davies report, which the Government supported. We must ensure that no similar loss of experienced police officers happens again.
    Mr. Bidwell: With regard to the efforts being made by chief constables and by the Commissioner in London to recruit black and brown people into the police force, does the Home Secretary agree that if there is some shyness on the part of such young people to join and serve in their own localities, there should be a system to move them to other localities in order to follow this laudable objeective?
    Mr. Whitelaw: I am sure that the Commissioner has that in mind.

    Police (Complaints)
    Mr. Hooleyasked the Secretary of State for the Home Department if he will set up an inquiry to study methods of independent investigation of complaints against the police.
    Mr. Winnickasked the Secretary of State for the Home Department if he has given further consideration to the establishment of an independent body looking into complaints made against police officers; and if he will make a statement.
    Mr. Flanneryasked the Secretary of State for the Home Department if the Police Federation has yet approached him in regard to its wish for an independent body other than the police to inquire into complaints made against the police.
    Mr. Raceasked the Secretary of State for the Home Department what representations he has received from the Police Federation concerning the establishment of an independent complaints procedure.
    Mr. Whitelaw: As I said in my statement to the House yesterday, I accept that the procedure for handling complaints against the police must be altered if it is to command public confidence, and I shall bring forward proposals as soon as I can. I met representatives of the Police Federation last week and I shall take into account their views.
    Mr. Hooley: I welcome the fact that the Home Secretary is aware that there is a widespread and dangerous lack of public confidence in the system which Roy Jenkins invented, and which was serverely criticised at the time by Back Benchers on each side of the House. Is the Home Secretary aware that the only sensible remedy is to have an ombudsman, appointed by and responsible to the House, to look into complaints that arise against the police?
    Mr. Whitelaw: We have to be careful about leaping into instant solutions, because there are many problems. Any system has to marry the responsibility of a chief constable for the discipline of his force with the complaints that may be made against individuals in that force. The

    989
    chief constable is accountable for his force. He cannot, therefore, have the discipline of his force—[Interruption.] He is accountable for the discipline of his force.
    Hon. Members: To whom?
    Mr. Whitelaw: He is accountable—[Interruption.]
    Mr. Speaker: Order. An occasional intervention is one thing, but to shout from a sedentary position is ill-mannered, apart from being unparliamentary.
    Mr. Whitelaw: He is responsible for the work of his force and for the money that is provided to the police authority in his area. All the Labour Members who were shouting at me are advocating more accountability for chief constables. That being so, they must not deprive chief constables of the right to be responsible for the discipline of the members of their forces. That responsibility has to be married to complaints and the procedure for dealing with them. I am prepared to listen to anyone who has views on how we should effect that marriage. It is a problem that the House was not able to solve in 1976. It did not solve it, because it produced an Act that nobody now likes.
    Several Hon. Members rose——
    Mr. Speaker: Order. I propose to call first those hon. Members whose questions are being answered.
    Mr. Winnick: Having apparently accepted the principle of the need for an independent body to investigate complaints against the police, will the right hon. Gentleman say when he will be in a position to report to the House? Is it likely that he will report before we go into the Christmas Recess?
    Mr. Whitelaw: I shall not report to the House before we go into the Christmas Recess. I am ready to discuss with right hon. and hon. Members from both sides of the House how we should devise—this is something that the House should do together—a sensible system that will meet the requirements of both discipline and the handling of complaints. The need to deal with discipline is important. Discipline and complaints cannot be separated, because they frequently lie in the same area. That is why the House should work together to find the right answer. If Labour Members are so sure about their answer, I shall be grateful if they will talk to me and tell me exactly what they want to do.
    Mr. Flannery: Does the right hon. Gentleman agree that when he uses the words "accountable" or "accountability" the majority of the electorate understands him to be referring to an elected body and not to be talking in vacuo? The Police Federation, in asking for what in effect would be a civilian body of the right hon. Gentleman's choosing, or the result of an election, thinks that that will defend it against many of the accusations that are brought against its members. Will he note that the Association of Chief Police Officers profoundly disagrees with the federation because it feels that it is accountable only to itself? What will he do to resolve the problem of the Association of Chief Police Officers differing from the Police Federation?
    Mr. Whitelaw: I think that the hon. Gentleman's comments are somewhat unfair to chief police officers. The federation offered to accept a totally independent system. However, I ask the House to consider some of the
    990
    caveats and some of the proposals that the federation submitted at the same time, which would go with an independent system and which would be unacceptable to hon. Members. We must not imagine that the Police Federation's ideas would be easily acceptable in the House, because they would not.
    Mr. Race: Given the depth of public feeling on this issue, as recognised in the Scarman report, and the likelihood that any new system of independent complaint investigation will cost money, does the right hon. Gentleman accept that a balance must be struck between the money that is to be spent and the confidence that is to be gained? Does he also accept that only radical measures can instil the degree of confidence that is required among the public even if there is a fairly substantial increase in expenditure?
    Mr. Whitelaw: The hon. Gentleman touched on an important issue when he referred to expenditure. I have managed over a period to get money for the police, but there are many throughout the country who want the money that is spent on the police to be used in seeking to prevent crime and on helping them to be safe in their own homes. We must remember that hard fact. I accept that the need for a complaints procedure is important. However, if the procedure proved to be wildly expensive, and consequently had an effect on other police operations, I do not think that the House would approve of it.
    Mr. Peyton: I think that we all accept that there should be reasonable machinery in operation to deal with complaints against the police. Nevertheless, does my right hon. Friend agree that there are those inside and outside the House who seize every opportunity to make unreasonable complaints and to fan any incident into real harassment of a most important public service?
    Mr. Whitelaw: I entirely agree with my right hon. Friend. In any system that we devise we should seek to deal with serious complaints by means of the independent element, while at the same time getting rid of a great deal of bureaucratic nonsense involving small, invalid and totally useless complaints.
    Mr. Douglas Hogg: Does my right hon. Friend agree that a Minister should be answerable in Parliament and to questioning in respect of any system that we introduce?
    Mr. Whitelaw: Yes, I think that that is fair. However, the present system has not prevented questions being put to me in the House. I seem to be questioned all the time about it. There are many hon. Members, like the hon. Member for Wood Green (Mr. Race), who think that they can remove themselves from responsibility for what we all did in 1976. I do not seek to remove myself from it, even though I voted against that measure. I am bound to say that I could not think of a better system. We are all in this together. We all decided to accept the proposal that was contained in the 1976 measure. We all know now that we were wrong, and we are trying to find the best way to put things right.
    Mr. Hattersley: I am sure that the right hon. Gentleman is aware of the general welcome that has been given to his clear indication that he proposes to move on this matter. Allowing for the complications involved in a new scheme and the cost of implementing it, will he confirm now that when he is ready to produce a new

    991
    scheme he will avoid the principle of policemen against whom complaints are made being investigated and judged by other policemen and nobody else?
    Mr. Whitelaw: Without committing myself in too much detail, I am prepared to say in advance of producing a new scheme that I shall be pleased to have discussions with the right hon. Gentleman, with the Select Committee and with any number of hon. Members to determine how we can meet all the difficult problems that are involved.

    Scarman Report
    Mr. Christopher Priceasked the Secretary of State for the Home Department when he intends to publish the Scarman report on urban disturbances.
    Mr. Whitelaw: I published the report yesterday.
    Mr. Price: I did not know that when I tabled the question. Will the right hon. Gentleman be rather more forthcoming about what he means by "welcoming" and "accepting" the Scarman report? Does he agree that it is no good welcoming and accepting it if he does not provide the resources and the legislative time to introduce the recommendations that are set out in Lord Scarman's report? Will he confirm that he broadly accepts the recommendations on random checks of police stations and the banning of racist marches?
    Mr. Whitelaw: I made clear yesterday, though some did not think that I did, the matters involving the police that I accepted. I said that the problem of banning racist marches—I have banned them on a considerable scale during recent months—should be considered within the review of public order. I accept also the need to consider carefully how best to achieve arrangements to enable lay people to visit police stations. I think that it is reasonable to reserve some of the comments that I shall make until the debate that is shortly to take place on these issues and until we reply to the report of the Select Committee on Home Affairs on racial disadvantage. I hope to prove that my words yesterday were not empty ones.
    Mr. Stokes: Is my right hon. Friend aware that the prime duty of the police is to protect the public and deter criminals? Is he further aware that, since the riots in Brixton, there has been an increase in street crime of about 25 per cent., mainly involving the mugging of white people by blacks?
    Mr. Whitelaw: It is the job of the police to deter criminals and protect the public. I support what my hon. Friend says. The job of the police is to deal with crime from wherever it comes, without any different standards. That is not my opinion alone. Lord Scarman made that clear when he said that it was right to retain the special patrol group for that purpose. He said that it was right to retain the powers of stop and search. He said that it was important to face up to the need for the police to deal with crime at all times. I fully support what Lord Scarman said. I appreciate the problem involved in policing some of our inner city areas. Equally, I accept that we cannot tolerate crime such as exists in Brixton. That is also something with which the police must deal.

    Union Flag (Abuse)
    Mr. Lawrenceasked the Secretary of State for the Home Department what representations he has received
    992
    about the abuse of the Union flag by political extremist groups at Remembrance Day services; and whether he proposes to take any action.
    Mr. Raison: My right hon. Friend has received a specific complaint about the use of the Union flag by such a group at the Cenotaph this year and both written and oral representations about its use by such groups on other occasions. My right hon. Friend is considering the suggestion that this should be prohibited by law in the course of his review of the Public Order Act 1936, and related legislation.
    Mr. Lawrence: Does my hon. Friend agree that for the National Front to use the Union flag in demonstrations at Remembrance Day services is extremely insulting to the memory of the Service men who died for the country in the fight against Fascism? Does he further agree that the use of the flag by the National Front is extremely distressing for the families of the people who died? Has not the time come to legislate to stop the abuse of the Union flag in public marches?
    Mr. Raison: I share my hon. and learned Friend's repugnance. He will appreciate the practical problems involved in working out how to prevent the use of the flag by a particular group. However, we are thinking about that in the context of our review of public order.
    Mr. Greville Janner: Does the Minister accept that, the use of the flag apart, the appearance of Fascist organisations at the Cenotaph at Remembrance Day services causes grave offence to everyone? In the course of his review of the Public Order Act and the Scarman report, will the Minister consider the possibility of selective bans on Fascist marches and on other demonstrations, not least on that occasion?
    Mr. Raison: I share the repugnance for what has happened. The whole question of marches and racial incitement is part of the examination being undertaken by my right hon. Friend of the Public Order Act.

    Shotgun Licences
    Mr. Newensasked the Secretary of State for the Home Department if he will review the terms on which licences for shotguns are issued.
    Mr. Mayhew: No, Sir. We are satisfied that the existing controls are generally adequate.
    Mr. Newens: Does the Minister agree that the number of crimes in which firearms are used has increased and that it should be any Government's duty to make it more difficult for criminals to get hold of guns? Is it not reasonable that provisions for the issue of shotguns should be tightened? Should not law-abiding gun owners be prepared to accept that for the common good?
    Mr. Mayhew: We are talking about the control of shotguns. We are not persuaded that a more stringent control of shotguns would reduce significantly the level of crime, or that the extra work for the police would be justified. The hon. Member will be pleased to know that the number of serious offences recorded by the police in which shotguns were reported to have been used fell from 760 in 1978 to 552 in 1980 and that that figure was the lowest since 1974.
    Mr. Farr: As there was such a startling decline in the use of shotguns in crime last year, is my hon. and learned Friend looking into the possibility of extending the life of a firearm and shotgun certificate from three to five years?
    Mr. Mayhew: My right hon. Friend is not examining that possibility at present. Welcome though the reduction is, the figure of 552 is still far too high.

    Persons on Remand
    Mr. Kilroy-Silkasked the Secretary of State for the Home Department if he will now take urgent steps to reduce the number of persons held on remand in prison.
    Mr. Mayhew: We share the hon. Member's desire to see a reduction in the number of such prisoners, but action to that end must be consistent with the interests of justice and the protection of the public. My right hon. and learned Friend the Lord Chancellor and my right hon. Friend the Home Secretary will continue to pursue ways of reducing the remand population by expediting criminal trials.
    Mr. Kilroy-Silk: Given that as many as 7,500 prisoners can be on remand in custody on a single day—many of whom will he found not guilty or given non-custodial sentences, but who are nevertheless housed in appalling conditions—will the Minister make a speedy response to the recommendations of the Select Committee on Home Affairs to reduce the length of trials and to introduce the 110-day rule, which operates so effectively in Scotland?
    Mr. Mayhew: The figure is too high. On 31 October the figure was 7,151. Shortly, the Government will be publishing a reply to the Select Committee report. It will comment on individual recommendations. I can say now that I do not see any suggestion in the report of an immediate answer to the problem of reducing the remand population. The Scottish 110-day rule would not provide the solution in present circumstances, because there is a let-out clause when there is a delay that is not the fault of the prosecution.

  PRIME MINISTER

    Engagements
    Mr. Foulkesasked the Prime Minister if she will list her official engagements for Thursday 26 November.
    The Secretary of State for the Home Department (Mr. William Whitelaw): I have been asked to reply.
    This morning my right hon. Friend presided at a meeting of the Cabinet. This afternoon she is chairing the meeting of the European Council at Lancaster House.
    Mr. Foulkes: Is the right hon. Gentleman aware that some of my constituents have nothing in their larders to feed their children on the day before they receive their unemployment benefit? After this morning's Cabinet meeting, are the Government seriously considering reducing the value of that already miserable benefit?
    Mr. Whitelaw: My right hon. and learned Friend the Chancellor of the Exchequer will make a statement next week. I ask the House to await that statement.
    Mr. John Carlisle: May we have an assurance that, in spite of Lord Scarman's recommendations in relation to
    994
    positive racial discrimination, the House will never grant legal immunity to any group of people and that we shall not follow the example of the Director of Public Prosecutions, who recently withdrew charges against offenders in the Bristol riots, in the interests of racial harmony?
    Mr. Whitelaw: There is no question of legal immunity for any section of our population.
    Mr. Cryer: What about the Bingham report?
    Mr. Whitelaw: I understood Lord Scarman to mean—although it has been distorted—that we have a tradition of seeking to give everyone equal opportunities in life. That is the purpose of many policies and it is far beyond racial discrimination. I should have thought that everybody in the House was committed to that.
    Mr. Foot: May I press the right hon. Gentleman further on his answer about the projected cut in unemployment benefit? There is to be a statement next week, but can the right hon. Gentleman say whether the statement yesterday by the Secretary of State for Wales in the City, in which he clearly forecast such a cut, represents Government policy? Can the right hon. Gentleman and the Cabinet understand what a disgrace it would be if unemployment benefit were to be cut when the Government have helped to create the worst mass unemployment that we have experienced since the war?
    Mr. Whitelaw: Sometimes, patience is a virtue. I am entitled to ask the House to await a full and comprehensive statement from the Chancellor of the Exchequer next week. That is what I am doing.
    Mr. Foot: Will the right hon. Gentleman pass on that message to the Secretary of State for Wales? Will he tell us now whether that statement represents Government policy?
    Mr. Whitelaw: I have made it clear that my right hon. and learned Friend the Chancellor of the Exchequer will make a statement next week. I have nothing further to add.
    Mr. Delwyn Williams: Is my right hon. Friend aware that The Observer in 1976 reported the Labour Party's finance and economic affairs sub-committee as stating that by 1980 unemployment would rise to 2½ million? Is he further aware that one of the members of that Committee was the right hon. Member for Leeds, East (Mr. Healey) and that another member of that Committee that forecast 2½ million unemployed in 1980 was a Mrs. S. Williams?
    Mr. Whitelaw: No doubt both the right hon. Gentleman and the lady will be able to answer for the statement that they made on that occasion.
    Mr. McNally: Will the Home Secretary, with his vast experience of these matters, dissociate himself entirely from the intemperate attack on the Secretary of State for Northern Ireland made by the hon. Member for Macclesfield (Mr. Winterton) today? Will he assure the House that neither bombs not bombast will stop the Government from seeking a peaceful settlement in Northern Ireland?
    Mr. Whitelaw: I am always hesitant about saying anything about attacks that I have not heard. I did not hear that attack. Having been subject to many such attacks in my time as Secretary of State for Northern Ireland, I do not like any of them, because I believe that the interests

    995
    of this country rely very much on making sure that we seek to make progress in Northern Ireland, while always accepting that it is a part of the United Kingdom. That is the position that successive Governments have stood for. That is the position that we stand for. We are entitled to seek to make progress in reconciliation against that background.
    Mr. Greville Jannerasked the Prime Minister if she will list her official engagements for Thursday 26 November.
    Mr. Whitelaw: I have been asked to reply.
    I refer the hon. and learned Gentleman to the reply that I have just given.
    Mr. Janner: While welcoming the Scarman report and its recommendations, and their acceptance by the right hon. Gentleman, may I ask whether he accepts that social disadvantage is the root cause of crime and that while the Government continue to fail to bring help to the disadvantaged in all parts of our society, society will continue to be at risk?
    Mr. Whitelaw: I do not accept that. I accept that there are many factors behind crime. Anyone who has had the privilege of being Home Secretary realises only too well that there are many factors. Of course social conditions and unemployment are among them, but there are many others, and none can be an excuse for crime or violence at any time.
    Mr. Cyril D. Townsend: Will my right hon. Friend make it clear to the House that Britain will not give in to Israeli pressure to amend the terms for British participation in the Sinai peacekeeping force, terms that are clearly linked to the Venice declaration and in particular to self-determination for the Palestinians?
    Mr. Whitelaw: I understand that the Israeli Foreign Minister is going to Washington today to discuss those matters with the Secretary of State. It would be wrong for me to comment further in advance of that meeting.
    Mr. Joseph Dean: Will the Home Secretary review the events in Northern Ireland last weekend, bearing in mind that one Northern Ireland Member of Parliament has already been murdered? What level of personal protection is afforded to Northern Ireland hon. Members? What protection, if any, was afforded to the hon. Member for Antrim, North (Rev. Ian Paisley) while he was parading with his armed followers? What was the cost to the long-suffering British taxpayer?
    Mr. Whitelaw: Naturally, those are matters for my right hon. Friend the Secretary of State for Northern Ireland. I shall draw his attention to what the hon. Gentleman has said.
    Mr. Hannam: Will my right hon. Friend draw the attention of the Prime Minister to the fact that over the last six months unemployment in this country has risen at under half the rate of Germany, Sweden and Austria, and is lower than the rate in the Netherlands and Canada? Therefore, is not that a cause for cautious optimism?
    Mr. Whitelaw: What my hon. Friend says is true. [Interruption.] I am disappointed that even a phrase such as "cautious optimism" seems to be so disagreeable to the Labour Party.
    Miss Joan Lestorasked the Prime Minister if she will list her public engagements for 26 November.
    Mr. Whitelaw: I have been asked to reply.
    I refer the hon. Lady to the reply that I gave earlier.
    Miss Lestor: Is the Home Secretary not aware that there is no feeling of cautious optimism among the women of this country, among whom unemployment has more than doubled under this Government? Is he aware that there is an increasing number of one-parent families mainly dependent on women? Is he further aware that unless something is done about child care and nursery facilities, women will be less able to compete for jobs in a diminishing market? Does not he think that that calls for an inquiry into the employment of women in this economic climate?
    Mr. Whitelaw: Those are wide matters that can be most carefully considered. They have to be considered against a background of high unemployment. If the Labour Party's policies for spending ever-increasing amounts of Government money and imposing ever-increasing rates were to be followed, there would be worse unemployment and more trouble for women in that unemployment.
    Mr. Shersby: Will my right hon. Friend tell the House how far the Government have decided to modify public service index-linked pensions in the light of the Scott report?
    Mr. Whitelaw: I have nothing to add to what has been said.
    Mr. Dormand: The Home Secretary has told us three times this afternoon to await the statement from the Chancellor of the Exchequer next week. However, the Chancellor is reported as saying last week that in future sterling M3 will not be regarded as being so important. Is not that another sign of the failure of the Government's fundamental policies? Will the Home Secretary also confirm that the longer leading index has fallen significantly in recent months? Will he tell the Prime Minister to stop kidding the country that the economy is getting better?
    Mr. Whitelaw: I do not accept many of those points. They all seem to add up to the simple fact that it would be much better to wait until my right hon. and learned Friend the Chancellor of the Exchequer makes his statement next week.
    Mr. Montgomeryasked the Prime Minister if she will list her official engagements for 26 November.
    Mr. Whitelaw: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave earlier.
    Mr. Montgomery: Has my right hon. Friend seen the letter in The Times today signed by 17 leading industrialists, in which they urge the Government not to be deflected from their broad strategy against inflation by the rising volume of often partisan opposition? Is my right hon. Friend aware that that is the view of every Conservative Member?
    Mr. Whitelaw: I saw that letter. I should have thought that all Conservative Members would greatly welcome its tone. I know that it will not be acceptable to the Labour Party, which just wants to spend a great deal more money.
    Mr. English: Does the deputy Prime Minister really think that after increasing Civil Service pay in their first year by 26 per cent. and increasing VAT to 15 per cent.,

    997
    the Government are absolutely on course with the economic arguments that they put before the electorate at the last election?
    Mr. Whitelaw: Given the problems that the Government have faced with the world recession, the answer is "Yes".
    Mr. Peter Bottomley: Does my right hon. Friend agree that, looking forward in the economy, it would be sensible for all o us to settle our pay increases in line with the increases in productivity rather than having increases that may continue above 5 per cent?
    Mr. Whitelaw: It is true that low pay settlements would greatly contribute to our productive and competitive capacity, which are vital to our success.
    Mr. Cryer: Is it not disgraceful that the Cabinet is talking about £3·5 billion worth of cuts, which will affect those most in need, particularly those on unemployment benefit, while at the same time it proposes to spend a
    998
    further £2 billion on increasing expenditue on Trident? Does the right hon. Gentleman accept that if the Government spend more on the larger Trident missile they will discard £100 million worth of design expenditure, cause an imbalance in the nuclear position in Europe and invite the Russians to instal more SS20s, because the larger Trident missile——
    Mr. Speaker: Order. I know that this is a very long question, but it will run us out of Prime Minister's Question Time.
    Mr. Cryer:—is 30 times more powerful than Polaris?
    Mr. Whitelaw: One thing that I can say in advance of my right hon. Friend the Chancellor of the Exchequer's statement next Wednesday is that, as he and my right hon. Friend the Prime Minister have made clear, it is not a question of cuts, as the hon. Gentleman said. It is a question of a reduction in planned increases in expenditure, which is a very different thing.

Government Information (Disclosure)
Mr. Arthur Lewis: On a point of order, Mr. Speaker. Again I raise the question of the regular official leaks we are having from the Government. Today we have heard my right hon. Friend the Leader of the Opposition quoting official ministerial statements. The deputy Prime Minister, or the acting Prime Minister—
Mr. Dennis Skinner: He is acting all right.
Mr. Lewis:——has said that there will be a statement next Wednesday. What authority he has I do not know, because I believed that it was Mr. Speaker who decided the business of the House. Then we find that the Home Secretary refuses to answer questions that must be in order. When will something be done to protect the rights of hon. Members, who seem to come second to the media, the press and everyone else?
Mr. Bob Cryer: It is time something was done.
Mr. Skinner: It is a revolution that we want.
Mr. Cryer: Or at least a change. Get the tumbrils out.
Mr. Speaker: Order. I have two points to make. First, it is unfair to interrupt the hon. Gentleman. Secondly, I should be grateful if the hon. Gentleman would come to a conclusion.
Mr. Lewis: This is the only way in which I get to be called.
Mr. Speaker: Order. In that case, that is the hon. Member's conclusion.
Mr. Lewis rose——
Mr. Speaker: Order. The hon. Gentleman is following an old cartoon. He is about to finish his point of order.
Mr. Lewis: You have told me, Mr. Speaker, that I seem to have lost a lot of weight recently; perhaps that is why you could not see me.
I am interested, as the House should be, in trying to ensure that the House reverts to the position that we had for many years. If a Minister made a statement, he was responsible for it and he would be asked questions upon it. The Leader of the Opposition has tried to do that on several occasions. He has a little more privilege than we Back Benchers, but if day in and day out the Government are leaking like a colander and no one protects Back Benchers——
Mr. Speaker: Order. Will the hon. Gentleman resume his seat?
Mr. Lewis: No, I will not.
Mr. Speaker: Order. I have no desire to pick a quarrel with the hon. Gentleman, but he must remember that, like
1000
everyone else—he above all, because he has been a Member for so long—he must observe the rule of the House that he must resume his seat when I stand up to address the House. I am very surprised at him. I believe that we should leave the matter there. We shall now move on to business questions.
Mr. Lewis: I am sorry, Mr. Speaker——
Mr. Speaker: Order. The hon. Gentleman's point of order has already wasted four minutes of the House's time. I do not propose to allow him to continue any further. [HON. MEMBERS: "Hear, hear."] I am telling the hon. Gentleman that. I in no way seek to pick a quarrel with him, but, like everyone else, he must obey the rules. The hon. Gentleman has made his point at considerable length. If he persists I shall ask him to leave the Chamber. I have no desire to ask him to do that, but he must therefore acknowledge——
Mr. Lewis: I wish to raise another point of order.
Mr. Speaker: Order. I shall not take another point of order from the hon. Gentleman. We shall now move on to the Business Statement for next week.
Mr. Lewis: Mr. Speaker——
Mr. Speaker: Order. I have given the hon. Gentleman one more opportunity to recognise that the House has been very tolerant with him. He has been allowed to take up five minutes of the House's time when there is great pressure on the two short debates that are to take place today. No one can say that I have not shown patience with the hon. Gentleman. Therefore, it would be good manners on his part now to accept the ruling of the Chair and to leave the matter there.
Mr. Lewis: What is the ruling?
Mr. Speaker: The ruling is that the hon. Gentleman has wasted our time for five minutes and that he has not made a substantial point of order on which I can rule.
Mr. Lewis: I have another point of order.
Mr Speaker: I am not taking another point of order from the hon. Gentleman.
Mr. Lewis: But I have another point of order——
Mr. Speaker: Order. I gave the hon. Gentleman warning after warning. He took no notice and he will leave the precincts of the House for the rest of this day's sitting.
Mr. Lewis: All right, Mr. Speaker. So I cannot raise another point of order?
The hon. Member, having conducted himself in a grossly disorderly manner, was ordered by Mr. SPEAKER, pursuant to Standing Order No. 23 (Disorderly conduct), to withdraw immediately from the House during the remainder of this day's sitting, and he withdrew accordingly.

Business of the House
Mr. Michael Foot: May I ask the Leader of the House to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Francis Pym): The business for next week will be as follows:

MONDAY 30 NOVEMBER—Debate on the First Special Report from the Committee of Public Accounts, Session 1980–81, on the role of the Comptroller and Auditor General, and on the Government's White Paper Cmnd. 8323.

TUESDAY I DECEMBER—Motion on the Appropriation (No. 3) (Northern Ireland) Order.

WEDNESDAY 2 DECEMBER—Supply (5th Allotted Day): there will be a debate on an Opposition motion on the present emergency in Her Majesty's prisons and ways in which it can be overcome.

Motions relating to Social Security Benefits and Supplementary Benefits Regulations.

THURSDAY 3 DECEMBER—Remaining stages of the Shipbuilding Bill and of the Nuclear Industry (Finance) Bill.

The Chairman of Ways and Means has named opposed private business for consideration at Seven o'clock.

FRIDAY 4 DECEMBER—Private Members' Motions.

MONDAY 7 DECEMBER—Second Reading of the Local Government and Planning (Scotland) Bill.

Mr. Foot: May I put four matters to the right hon. Gentleman? On the question of mass leakages, to which my hon. Friend the Member for Newham, North-West (Mr. Lewis) referred in the early part of his point of order, we have some sympathy, because the flood seems to be greater than ever. I shall put some points on those matters to the right hon. Gentleman.
First, there are leakages about what has happened or is supposed to have happened to the local government finance Bill. We understand that a major part of that Bill—the so-called referendum part—has been dropped. We greatly welcome that if it is correct, because we have exposed the unconstitutional character of that proposition since it was announced. Can the right hon. Gentleman tell us what has happened to that Bill and whether any part of it will be introduced?
The second matter, which has already been referred to, relates to a statement of Government expenditure which the Government are compelled by legislation to make. Can the right hon. Gentleman tell us on which day that will be made and how many leaks there will be before? The Government had better arrange for the statement to be made on Monday if they are to avoid a further flood, including speeches such as that made by the Secretary of State for Wales.
My third question concerns the Scarman report, on which questions were put to the Home Secretary yesterday. My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) described the right hon. Gentleman's statement as opaque. I should not use quite such foul language across the Floor of the House, but no one could determine what the right hon. Gentleman proposed to do in response to many important matters. May we have a clear commitment that we can debate this important report in Government time while it is still fully in the public mind, at least during the week after next?
1002
Finally, may I again remind the right hon. Gentleman that probably the whole House feels that we should debate the subject when judgment has been passed on the GLC's appeal against the Court of Appeal decision? That again is a matter involving constitutional principles.
Mr. Pym: The Government are still considering certain aspects of the local government finance Bill. I imagine that certain matters are being considered on both sides of the House. There is nothing private about it, and it is right and proper that the Government should continue their consideration. When we come to a conclusion, the House will be informed.
As my right hon. Friend the Home Secretary said, there will be a full statement next week on Government expenditure. I regret that I cannot tell the right hon. Gentleman on which day, but, as far as I am concerned, the earlier the better.
The right hon. Gentleman was unreasonable in his criticism of my right hon. Friend the Home Secretary, who in his full statement yesterday gave an infinitely clearer picture of the Government's response on a number of important and profound matters than is normally given immediately a report is published. I accept that the House wishes to debate the Scarman report in the near future, but people should have time to study it. I shall see whether I can arrange for a debate to take place the week after next or at any rate in the near future.
As for the right hon. Gentleman's final question, the right course to take at this stage is to let the judgment be heard on the GLC's appeal, and then to consider what the next step, if any, should be.
Mr. Foot: Does the right hon. Gentleman accept that the statement on Government expenditure is of great importance and is causing concern, particularly as it is suggested that the Government may be contemplating cuts in unemployment pay at a time when more people than we have ever known are unemployed? Cannot the right hon. Gentleman say when an announcement will be made? If the Government cannot tell us officially, perhaps we can have a leak, which appears to be the way that they hit the headlines best at present.
Mr. Pym: It is normal to have a few days delay between the reaching of conclusions—which happened only this morning—and the preparation of the Chancellor's statement. That has happened under Governments of both parties and there is nothing new about it. I am sorry that I cannot say absolutely on which day a statement will be made, but as soon as we establish which day will be best I shall inform the right hon. Gentleman.
Sir William Clark: In view of my right hon. Friend's assurance last week that he would consider a debate on the Scott report, may we know whether we shall have one before the Christmas Recess?
Mr. Pym: I am sorry to disappoint my hon. Friend. I do not believe that we shall have a debate before Christmas. As he will agree, these are complex matters and the Government are still considering them. It would be misleading if I were to say that there would be a debate before Christmas.
Several Hon. Members rose——
Mr. Speaker: Order. In view of the following two debates, I propose to allow questions to run until four o'clock.
Mr. Guy Barnett: Will the Leader of the House reconsider his answer to my right hon. Friend the Leader of the Opposition about the local government finance Bill? We understand why the Government are reconsidering the matter, but is he aware of the total chaos into which they are throwing local government finances? Local authorities should now seriously be considering their estimates for the coming year, and, if we are not to have the Bill, does the right hon. Gentleman accept that we should at least have a statement on precisely what the Government's intentions are?
Mr. Pym: I do not accept that our continuing consideration of the Bill is having that effect. The sooner that a conclusion can be reached the better. I have nothing further to say at the moment.
Mr. Anthony Grant: Is my right hon. Friend aware that the publication of the Scarman report makes it all the more important to debate the matters referred to in early-day motion No. 1, in the names of my hon. Friends and myself, on new life for old cities?
[That this House believes that the pressing problems facing our cities can best be tackled by implementing some of the proposals contained in a recently published study 'New Life For Old Cities' endorsed by 62 Conservative honourable Members and Members of the European Parliament representing urban constituencies which offers new hope for the regeneration of our cities, by turning to people rather than Government and relying more on private enterprise than public bureaucracy; and notes that included amongst the recommendations are: (a) the rapid release by auction on the open market of hoarded public land surplus to requirement, (b) promoting city renewal through self-financing private enterprise agencies which would contract out to existing local businesses and professional firms the job of marketing the city's assets, (c) making urban renewal attractive to private investment by offering cheaper loans through issuing tax-exempt revenue bonds, (d) offering rate holidays not just in enterprise zones but to single-plant family firms elsewhere and inner city retailers who ultimately will pay full commercial rates but only if their businesses prosper, (e) encouraging private business to build new factories, offices and homes in the inner city thus reducing the 60,000 acres of agricultural land and green field sites lost each year to urban sprawl, (f) halting demolition and instead encouraging local authorities to sell off decaying property for £1·00 for those (home-steaders) willing to repair and live in them, and making similar arrangements for shop-steaders to enable run-down shops scheduled for demolition to be saved, (g) encouraging building societies to lend on older houses and discontinue 'red-lining' (that is refusing loans for house ownership in run-down areas), (h) enabling sitting tenants of flats and maisonettes in outer council housing estates to purchase their freeholds for a nominal sum in return for a share in the block's management and upkeep thus saving local authority expenditure and (i) contracting out to private enterprise those local authority services which can be done better and cheaper by private enterprise; and calls on Her Majesty's Government to assume a catalytic role so as to enable public and private enterprise in partnership to realise their
1004
full potential, to reduce those checks and controls which militate against new development and to involve more fully those people living and working in cities in the total revitalisation process.]
Will a debate on the Scarman report be drawn sufficiently widely to cover those issues? Will my right hon. Friend also bear in mind that outer city Members as well as inner city Members are concerned?
Mr. Pym: Being such a substantive document, the Scarman report sets the parameters of what you, Mr. Speaker, are likely to find acceptable in the debate, although that is, of course, a matter for you. Although inner city problems are highly relevant to the report, I suspect that my hon. Friend is looking for a debate directed more specifically to the inner cities. I hope that in due course the House will have the opportunity to address itself to the subject. At present I cannot give Government time for such a debate, but it would be helpful to have a separate debate on the subject.
Mr. Ian Mikardo: Is the right hon. Gentleman aware that the report which will be before us on Monday raises matters of great importance, matters of principle, matters relevant to the procedures of the House and matters on which there will be sharp and interesting differences, not between the parties but between hon. Members? Therefore, may the debate be on a motion that can be amended so that, if it wishes, the House can attempt to reach at least tentative conclusions?
Mr. Pym: I arranged the debate at the request of the Chairman of the Public Accounts Committee before the question about considering the local government finance Bill arose. I understand that there have been discussions through the usual channels about the basis on which the debate should arise. The Government feel that it is correct to have a debate on an Adjournment motion, but that matter can be reviewed and referred again through the usual channels.
Mr. R. A. McCrindle: Does my right hon. Friend recollect that during most of 1981 I have pressed him to hold an early debate not only on those pensions matters relative to the Scott committee on index linking but on the recommendation of the Occupational Pensions Board about the effect of changing jobs on pension rights? If he cannot give us an undertaking that there will be a debate on the Scott report alone before the end of the year, will he consider carefully initiating a debate on all aspects of pensions early in 1982?
Mr. Pym: I am prepared to consider a debate. If it is not possible for me to find time during that period, my hon. Friend may find other means to initiate a debate.
Mr. Dennis Skinner: Does the right hon. Gentleman accept that the Government are in a right old mess as they can give no assurances about arranging a debate on unemployment benefit cuts and are unable to put the local government finance Bill before the House next week? As the Government are the nurses' paymaster, may we have a statement to assure those involved in the negotiations that the pay increase will not be less than the 15·2 per cent. at which their tax and price index is currently running?
Mr. Pym: No, Sir. I cannot give that assurance. As the hon. Gentleman knows, negotiations on nurses' pay are proceeding. I can say nothing further.
Mr. Dudley Smith: In view of the anxieties expressed during Home Office questions earlier, will my right hon. Friend accept that there is a need for an early debate on BBC finances, particularly in view of the likelihood of an approach by the corporation for an increase in the licence fee, which would be a serious matter for pensioners?
Mr. Pym: I will keep my hon. Friend's request in mind.
Mr. Alfred Dubs: Will the Second Reading of the proposed criminal justice Bill take place before Christmas?
Mr. Pym: It is possible that it will.
Mr. James Hill: Is my right hon. Friend aware that the Under-Secretary of State for the Environment said during the debate on the Local Government (Miscellaneous Provisions) Bill last night:
"the Home Secretary's Criminal Law Revision Committee will shortly issue for public comment a working paper on the subject of prostitution."?—[Official Report, 25 November 1981; Vol. 13, c. 970.]
Does my right hon. Friend agree that that is an important matter of interest to all parties? Will he pencil in a full-day debate on the working paper?
Mr. Pym: I doubt whether there will be time for such a debate, but I think that there will be opportunities for the matter to be raised during the Bill's passage through the House.
Dr. Jeremy Bray: Will the Chancellor of the Exchequer's statement be followed by the publication of the public expenditure White Paper at an early date, or do the Government propose to delay publication until the Budget, as they did last year? Will the House have an opportunity to debate the Chancellor's statement before Christmas?
Mr. Pym: The possibility of a debate can be considered. I shall have to check with my right hon. and learned Friend the Chancellor of the Exchequer, but I think that the intention is to do what has been done in previous years, namely, to publish the White Paper at the time of the Budget.
Mr. Teddy Taylor: Is my right hon. Friend aware of the serious concern felt in some inshore fishing areas, including Southend, that the Government may not insist on a 12-mile exclusive fishing limit? Can he assure us that if there is any fundamental change in the Government's negotiating position on fishing there will be a report to the House before any major concessions are made on this fundamental issue?
Mr. Pym: My right hon. Friends the Minister of Agriculture, Fisheries and Food and his Minister of State have kept the House fully informed of developments in the negotiations, our negotiating position and the progress made. I am sure that they will continue to do so.
Mr. Foot: With reference to the right hon. Gentleman's reply to my hon. Friend the Member for Motherwell and Wishaw (Dr. Bray), if the Government make a statement that includes anything approaching cuts in unemployment pay there will have to be a debate in the House. The right hon. Gentleman should not suggest anything to the contrary.
Mr. Pym: That is a matter which we can consider when we have heard the statement.
Mr. Tony Marlow: Will my right hon. Friend bring forward a Bill to prevent the publication of public opinion polls during by-elections so that people are able to listen to the serious issues that are being debated instead of being swept along by the manipulators in the media?
Mr. Pym: I doubt whether a measure with that objective would easily get through the House.
Mr. Greville Janner: Will the House have the opportunity to debate soon the plight of Professor Andrei Sakharov and his wife who are on hunger strike, one in Gorky and one in Moscow? If we are not to have the opportunity of drawing attention to that hideous contravention by the Soviets of the Helsinki agreement, may we have an assurance that the Leader of the House will at least draw the matter to the attention of the Foreign Secretary and do what he can to stop the persecution of those people?
Mr. Pym: Much public attention has already been given to those unhappy events. The hon. and learned Gentleman must find his own way of raising the matter in the House.
Mr. David Winnick: As details of today's Cabinet meeting will certainly appear in the press tomorrow and on Sunday, probably in considerable depth, does that not mean that the House is again being treated with comtempt? Could not a statement have been made today? If, as seems apparent, the unemployed are to be victimised, there will be a storm of angry protests right outside the House and throughout the country.
Mr. Pym: If it had been possible for a statement to have been made today it would have been made. That was not possible. But a statement will be made as soon as possible next week.
Mr. Ioan Evans: As the proposed local government finance Bill would not have been given a Second Reading because there is opposition to it on both sides of the House and universal opposition outside, will the Leader of the House persuade the Secretary of State for the Environment to drop the Bill and introduce a new measure that would have the support of the House? Secondly, as the 3 million unemployed face a weekend of anxiety expecting that their unemployment benefit will be cut, will the right hon. Gentleman ask the Chancellor of the Exchequer to make an early statement—perhaps at the weekend, if he cannot make it to the House?
Mr. Pym: On the hon. Gentleman's first point, I will convey his views to my right hon. Friend the Secretary of State for the Environment. On the second point, the hon. Gentleman ought to be patient. If it had been possible for a statement to be made today it would have been made. It is wrong for the hon. Gentleman or anyone else to seek to speculate on, or invent details of, what may have been decided. I know that many people will be busy doing that. It is a free country at the moment, and long may that continue. I hope that the hon. Gentleman will not attempt to give credence to what he thinks may have happened and will contain himself until he hears what was decided.
Mr. Bob Cryer: Will the Leader of the House ask the Minister of State, Civil Service Department

1007
to make a statement to the House on the proposed closure of the Central Office of Information film unit, which has contributed massively to this country's export promotion campaign but is to be disbanded and discarded because of redundancies imposed by the Government?
Is the right hon. Gentleman aware that a group of Labour Members wish to visit the unit to find out what sort of work it is doing, but the Minister of State has so far denied hon. Members their right to visit the unit? Will the Leader of the House make it clear to his hon. Friend that he is disgracefully abusing his position as a Minister and that hon. Members have a right to investigate and obtain information before taking delegations to Ministers? Will the right hon. Gentleman also bring home to the Minister of State the requirement that he should come to the House to make a statement about the whole miserable business?
Mr. Pym: I am not very impressed by the language that the hon. Gentleman uses about my hon. Friend. I am prepared to convey the hon. Gentleman's views to my hon. Friend, but no doubt the hon. Gentleman has been in touch with him direct.
Mr. Cryer: Yes, indeed.

Questions to Ministers
Mr. Speaker: The hon. Member for Northampton, North (Mr. Marlow) gave me notice yesterday that he wished to raise a point of order.
Mr. Marlow: Thank you, Mr. Speaker.
Although our budget deficit with the Community was a relatively small £92 million over the first six months of this year, it increased by a massive £405 million over the subsequent three months. Suspecting that to be the case, I put down a priority written question for answer on Monday 16 November. The question was so simple that my 10-year-old daughter could have answered it without any trouble. I merely asked what had been the monthly cash figures between ourselves and the Community. I was told that the question was too difficult to answer in the time available and that there would be some delay—the usual delaying tactics.
1008
Last Thursday we had Treasury Questions and No. 3 concerned our contribution to the Community budget. Also last Thursday there was a debate in the Community about our contribution. The substantive answer to my absurdly simple question was not produced until both those events were over.
Hon. Members require available information so that they can participate in Question Time and debates that are fundamentally important to the interests of the country and our constituents. Is there any way in which you, Mr. Speaker, can prevail upon people to bring forward such information in time?
Mr. Speaker: I am much obliged to the hon. Gentleman for the way in which he has made his point. He and the House will realise that it is a matter for someone other than me, but his complaint has been heard by those who can do something about it and make inquiries into it.

Questions to Ministers

  BALLOT FOR NOTICES OF MOTIONS FOR MONDAY 14 DECEMBER
  Members successful in the ballot were:

  Mr. Ray Powell

  Mr. Geoffrey Johnson Smith

  Mr. Robert Kilroy-Silk

  BILL PRESENTED
    LOCAL GOVERNMENT AND PLANNING (SCOTLAND)
    Mr. Secretary Younger, supported by Mr. Malcolm Rifkind, Mr. Alexander Fletcher and Mr. Nicholas Ridley, presented a Bill to make further provision as regards local government and planning in Scotland; to abolish as regards Scotland certain powers of entry and advisory committees; to amend the Tenants' Rights Etc. (Scotland) Act 1980; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 11].

  SCOTTISH AFFAIRS
  Ordered,
  That the matter of alcohol, drug and solvent abuse in Scotland, being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for their consideration.—[Mr. Pym.]

Orders of the Day
  SUPPLY
  4TH ALLOTTED DAY—considered
  SUPPLY

    Law and Order
    4 pm
    Mr. David Steel: I beg to move,
    That this House believes that the maintenance of law and order and preservation of liberty depend upon a relationship of confidence and co-operation between the police and local communities, and therefore draws particular attention to the need for community policing methods and an independent procedure by which complaints against the police can be examined; considers that inadequate help is given to the victims of violent crime; and further considers that urgent action is needed to deal with the crisis in the prisons.
    Any right hon. or hon. Member introducing a debate under the general heading of law and order could clearly cover a very wide canvass. Those who have read the motion will note that it does not seek to go into the necessary background to such debates—for example, the influence of the planning of our cities and towns, the decisions taken by successive Governments and local authorities on housing programmes, and so on. There is an increasing awareness that rehabilitation of older property may lead to a more satisfactory community than the use of the bulldozer and the development of new and remoter housing estates without social facilities. Nor does the motion attempt to cover the role of education in this important area.
    In drafting what I hope is a fairly non-contentious motion we have tried to focus on some of the issues concerning the combatting of crime, which has been the subject of increasing concern in recent years, and particularly on the methods of policing. In the interest of brevity I do not propose to say very much about the crisis in the prisons, partly because I hope that my hon. Friend the Member for Isle of Wight (Mr. Ross) will succeed in catching your eye later in the debate, Mr. Speaker, and talk about that. Furthermore, I learned last night that the Opposition had chosen the topic for an extended debate next week, and therefore it would be idle to go too deeply into the issue now.
    It is appreciated by the House that this debate is taking place on the day following the publication of the Scarman report. Again, I should not like to trespass on the debate that the Government have promised on the details of the report, but it is useful to have an immediate opportunity to make comments on some of the important findings of the report.
    It would be as well to refresh our minds at the start of the debate about some of the current crime statistics. Last year—I give the figures for England and Wales only because the statistics are collected slightly differently in Scotland—there were 97,000 crimes of violence 'against the person, 622,000 burglaries, about 15,000 robberies, and approximately 300 muggings a day were reported. The total number of offenders who were found guilty or cautioned in England and Wales increased from just over 2 million to 2,350,000—an increase of about 16 per cent.
    1010
    in one year between 1979 and 1980. Therefore, it is right that we should pause to express concern about the continuing and almost relentless rise in crime in our society.
    I refer for a moment to the Scarman report. It is interesting that although it has been published for barely 24 hours it has already established itself in the public mind as a major social document, and it has received widespread support from chief constables, community leaders and politicians alike. That is why it is imperative that the Government should arrange a debate soon and act swiftly and imaginatively by implementing all the detailed recommendations in the Scarman report. It would be a mistake—I hope that I misunderstood the Home Secretary's approach yesterday—if the Government were simply to single out one or two reforms, however worthy, undertake to implement them and then brand the remaining detailed recommendations as merely a statement of Lord Scarman's philosophy. Lord Scarman referred in his report to the need for "urgent action" throughout. What is required is not Government acceptance of a statement of philosophy, but a Government programme for specific action.
    The riots that took place earlier this year now seem to have occurred a remarkably long time ago. The House welcomed the Scarman report yesterday in a calm atmosphere. However, it is worth refreshing our minds about the real horror of the atmosphere of the period in April when the riots first took place. Lord Scarman summed it up very well in an early paragraph of his report. He said:
    "During the weekend of 10–12 April the British people watched with horror and incredulity an instant audio-visual presentation on their television sets of scenes of violence and disorder in their capital city, the like of which had not previously been seen in this century in Britain."
    I should like to pause on the three words "in this century". It is easy to exaggerate both the scale of rioting and the general levels of crime in our big cities, and to forget that there have been periods in our life, particularly in the last century, when to walk around the streets was infinitely more dangerous than it is today. Throughout these debates we must keep a sense of proportion when we listen to some of the more alarmist reports.
    Even before the riots in Brixton there was general public concern about the methods of policing and the general principles that the Government were following in the development of a modern police force. Yesterday I selected one quotation from the Scarman report about the effects of racial disadvantage, but the report puts even that disadvantage in a wider setting. Lord Scarman spoke of the mood of despair in our inner cities. It is undeniable that successive Governments have devoted substantial resources to an attempt to cure the problem, but, as I hinted earlier, I am not sure that the money has always been put to the best possible and most imaginative use. Greater forward thinking on how we develop and redevelop the life in our inner cities, rather than simply looking at the amount of money that is available for it, might be more fruitful.
    There is then the current problem, which we cannot balk, of the enforced idleness caused by unemployment. There is an old saying that idle hands find mischief. That is certainly true among younger people who feel deprived of any opportunity to make full use of their daily lives. Under the heading of racial disadvantage—this is not in

    1011
    Lord Scarman's report—I have been constantly critical of not only Government statements but statements by various politicians that add to the feelings of insecurity among the ethnic minorities. Talk of being swamped and about parts of the Government's British Nationality Act have helped to create an adverse climate.
    The Scarman report makes generalised statements that are not limited to the Brixton experience, and it embodies points that many people have been talking about for some time. In my experience of speaking about police matters—I devoted part of my speech at our annual conference this year to criticism of police methods—I have found that if one attempts to criticise them, one is accused of being anti-police. As I am about to make some comments about police methods, I should like to say straight away that I have a brother who is a serving officer in the police force and that I have personal cause to be grateful to the police for their vigilance and protection during the present troubles in our land.
    In my view, a bad policeman, like a bad clergyman, a bad teacher or a bad Member of Parliament, is a menace to society. As a society we are entitled to demand the very highest standards of our police, and any lapses should be rooted out.
    That is why it is extremely important, irrespective of the Brixton experience and the particular recommendations of the Scarman report, to take up the question of liaison with the communities, as Lord Scarman recommended, and to evolve an independent complaints procedure. I listened carefully to the Home Secretary's answers at Question Time today, and I accept entirely that this is a most complicated matter that cannot be dealt with simplistically, but I understood him to give a commitment to it in principle. I hope that that is so and that he will not be long in bringing forward detailed proposals for general consideration in the House on this very important matter.
    I was looking the other day at an opinion poll published some months ago about public attitudes to the police. The good news is that overall there is great confidence in our police force—and so there should be, as it compares favourably with those of many other countries—but there is also a disturbing increase in the number of people who distrust the police. Therefore, despite all the caveats mentioned by the Home Secretary, it is very welcome news that the Police Federation has switched its basic view about the moral proposition of an independent complaints system.
    Last year, in England, there were 7,460 complaints against the police, but only 176 charges were brought. The Government must be prepared to devote at least some resources to setting up a system of independent investigation of complaints, which will remove the element of public anxiety about the police investigating and judging their own cases.
    We should not listen to clichés about throwing money at problems. The Scarman report contains a number of specific and sensible reforms which, given limited funding, could be implemented almost immediately. Certainly the "radical option", as he described it, of a wholly independent procedure to deal with complaints is a candidate for fairly prompt action. Another is the proposal about police training, and the Home Secretary is to be congratulated on taking this up for immediate discussion with the chief officers.
    1012
    I turn briefly to the difficult issue of positive discrimination, which was also mentioned at Question Time. I am sure that Lord Scarman was correct not to urge a quota system for the police force. In the United States, however, there is an obligation on companies to "use their best endeavours" to employ fairly from among the ethnic minorities. I believe that a similar provision for our police forces would be useful.
    As specific instances of racial discrimination by the police are constantly brought to the attention of Members of Parliament, and were found to exist by Lord Scarman, it is astonishing that, so far as one knows, not one police officer has been dismissed for racial prejudice. A most important recommendation by Lord Scarman was that it should be made clear to the police that that would be the normal penalty for acts of racial prejudice.
    A further suggestion to improve relations between the community and the police is to consider the Scottish experience of the prosecution system. It is interesting that in Scotland we have nothing like the same amount of antipolice feeling or criticism. I believe that that is partly because the process of prosecution is removed from the police and transferred to an independent prosecution system.
    Our most important plea in introducing the motion is for a return to genuine community policing. That means a reversal of the policies that have been followed almost automatically in most constabularies for a long period. I remember a few years ago joining a community residents' association in a part of Liverpool protesting about the closure of a local police station. Over the years we have all seen the modernisation of police facilities involving the closure of local community police stations and their replacement by rather grander but inevitably more centralised offices. The result has been the withdrawal of police from local communities to centralised operating units and the increased use of motorised police.
    In a discussion some years ago, a senior officer in my constituency made the obvious point that in the old days when a policeman operated on foot or on a bicycle in a particular community and had a specific territorial base, it was not so much that his presence on the streets or in the houses prevented crime more effectively than a Panda patrol, but that he was more aware of the problems in the community, such as problem families, people returning from prison or people suffering from stress due to marital or other problems. The Scarman report also draws attention to the role that the policeman could play in a far more social sense, but he cannot do so unless he is given a territorial responsibility and real involvement and recognition in a local community.
    Perhaps the Minister will also say something about the role that might be given to the special constabulary. We often forget the value that we could obtain from that force. A few weeks ago I raised the subject of the resignation of Chief Superintendent David Webb in Birmingham on the ground that he felt obliged to abandon his community work because he was not getting sufficient support for it from senior officers. It is interesting to note that, among other things, he had been recruiting more and more people, particularly from the ethnic minorities, to the special constabulary.
    Time and again, the approach that has come to be known as community policing has proved to be correct. Again, therefore, we look to the Home Secretary for a lead and the assurance that that approach will be given higher

    1013
    priority and will be accepted as Government policy for the future, Community policing should not become merely a minor cosmetic for any police force that wishes to be considered progressive. It will be no more than a token if it is suffocated beneath general policing methods which amount to a direct contradiction of it.
    It is worth looking back to the comments of the chief constable of Devon and Cornwall long before the events in Brixton occurred. If anyone is tempted to sneer at his views because he is chief constable of Devon and Cornwall and not of the Metropolis, it should be remembered that he was assistant commissioner of the Metropolitan police before taking up his current appointment.
    In a remarkable lecture about a year ago he said:
    "People who are poor and have a chip on their shoulders against society are inclined to say: 'I am getting nothing out of life so I am going to be angry'.
    If society then says: 'Okay, you can get as angry as you like, but I have a well-paid fat-cat police force and if you get angry I shall just clobber you,' then we are making a big mistake."
    He concluded:
    "One thing is certain—it is no answer to resort to brute force to try to control people."
    If community policing works in Devon and Cornwall, including the city of Plymouth, it can work elsewhere, but it would be a mistake for the public or the House to assume that community policing is something exclusive to that constabulary. It is already practised successfully elsewhere. I have seen it in my own constituency as well as in part, though sadly not the whole, of Liverpool.
    I noticed this morning in a press profile of Sir David McNee a reminder that when he was chief constable of Glasgow he was responsible for the introduction of community policing there. So it is not a madcap scheme dreamed up by some rural policeman. It is a tried and successful method of policing which should become the general policy of the land. It is important that the police are put back into the community, not just as law enforcement officers, but as social leaders working with local people.
    I welcome what the Home Secretary said to me yesterday about his intention—whatever the legal difficulties—to look at the question of banning racial marches in our cities. About two years ago, when I first suggested that in a speech, I came under a lot of criticism from, among others, those in my party who thought that that was a highly illiberal suggestion. Since then, either the Home Secretary or the chief constables have had to make general bans on marches—which are much more illiberal—in order to stop one particularly unpleasant march.
    We must now accept that if we can legislate—as we legislated some years ago against offensive notices to let rooms, which used such phrases as "No coloureds here"—we are entitled to say that it is madness to expect chief constables to make basically political decisions about the type of marches that are calculated to stir up racial hatred in certain parts of our towns and cities. Therefore the Home Secretary should look at the Public Order Act and make whatever changes may be necessary.
    Given the terms of our motion, I should like to say a word about the victims of violent crime. However successful new policing methods might be, there will always, sadly, be victims of crime. They are the neglected party in current criminal justice procedure. They are
    1014
    viewed only in terms of the evidence that they are able to offer. Civilised society has a duty to care for the victims of crime.
    The Criminal Injuries Compensation Board makes provision only for financial recompense for physical hurt. In the first six months of this year there were 368,000 burglaries and 9,900 robberies. That was a considerable increase over the numbers for the same period last year. Compensation orders are made only if specifically requested and if the criminal is caught. Otherwise, no provision is made by our society for the victims, who are sometimes old and infirm and who are left frightened—sometimes even penniless—and helpless to recover or replace their property or their self-confidence.
    In the last few weeks my hon. Friend the Member for Liverpool, Edge Hill (Mr. Alton) has asked the Home Office and the Department of Health and Social Security whether we could devise a system to ensure that at least the weaker members of our society are visited by social security officials in the wake of reported crime, to ensure that they have simple basic things such as enough money for food—perhaps paid for, if necessary, from an emergency fund—and to ensure that damaged entry points are made good and, if possible, to offer alternative sheltered accommodation.
    The giving of such attention and high priority to the victims of crime is long overdue. Perhaps the Home Secretary might wish to look at the recent Scottish experience, where sheriffs are increasingly using their new-found powers to demand on behalf of the victim, restitution from the sentenced criminal. The practice is new and is working quite well. Sheriffs are being encouraged to use that power in Scotland, but I do not believe that the power exists in England and Wales.
    Mr. Charles Irving: I am grateful to the right hon. Gentleman for giving way. I am rather surprised by his comments about the victims of crime. We may hide our light under a bushel, but has the right hon. Gentleman never heard of the national victim support scheme, which I founded, and which is supported by hundreds of volunteers throughout the nation?
    There are now 140 victim support schemes, all managing on a shoestring. They were immediately supported by the Home Secretary when we requested aid to establish a national office. It is a growing voluntary force, and I am surprised that the Leader of the Liberal Party, of all people, should not be aware of such a powerful force in the land. It is the only body of its type in the whole of Europe that is run under the voluntary umbrella. I should like to feel that the Leader of the Liberal Party would not only pay tribute to it——
    Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman has made a long intervention, and I think that he has made his point.
    Mr. Steel: I was not sure whether the hon. Gentleman was making his speech in the middle of mine, but I hope that he will catch your eye, Mr. Deputy Speaker, so that he can develop his theme. I had the great pleasure of visiting his constituency recently, but that was in a political capacity. I was not dishing out compliments then, but as the hon. Gentleman seems to be fishing for them now I should say that I readily accept that the work done by the voluntary organisation is splendid. However, I

    1015
    think that the hon. Gentleman will admit that the organisation is not nation-wide and that it is not a national scheme. I accept that it is a voluntary scheme.
    I am sure that the hon. Member for Cheltenham (Mr. Irving) will be the first to admit that the scheme is not universal. If he wishes to place so much weight on the scheme, I invite him to talk to those victims of crime who feel, even now, that their needs are being ignored, while society, quite naturally, pays attention to the criminal.
    I promised that I would be brief, and I have already spoken for too long. An apt final quotation from Lord Scarman's report is his quotation from President Johnson's Address to the Nation, which appeared at the beginning of the American Report of the National Advisory Commission on Civil Disorders, 1968. Lord Scarman was right to quote that, because President Johnson said:
    "The only genuine, long-range solution for what has happened lies in an attack—mounted at every level—upon the condition that breeds despair and violence. All of us know that those conditions are: ignorance, discrimination, slums, poverty, disease and not enough jobs. We should attack these conditions—not because we are frightened by conflict, but because we are fired by conscience. We should attack them because there is simply no other way to achieve a decent and orderly society in America".
    Lord Scarman said that those words should apply to Britain. In endorsing them, I am not suggesting for a moment that there are not evil and wicked people in our society rather than those who have been sinned against. However, we must pay more attention to the methods of policing that we use. We can be more effective in getting better value from our well-tried police forces in combating the rise in crime.
    4.25 pm
    The Minister of State, Home Office (Mr. Patrick Mayhew): The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) began his speech by saying that anyone who chose the topic of law and order as the broad subject for a debate had a wide canvas on which to paint. That is perfectly true. He also said that it was not his intention to trespass on the ground that Lord Scarman's report covered. However, the first part of his speech dwelt almost exclusively on that ground. I hope that he will forgive me if I do not take up every aspect of his speech. It is always welcome to this Government that the House should debate questions relating to the maintenance of law and order, and the preservation of liberty. There is no subject to which this Government attach more importance. It ranks equally with the defence of the realm. That is why we had, in Government time, a full day's debate last Friday, on the report of the Royal Commission on criminal procedure.
    That very important report discussed many matters crucial to the establishment of—as the motion states—
    "a relationship of confidence and co-operation between the police and local communities,"
    I refer to such things as the power of the police to stop and search people in the street; the power of arrest; the circumstances in which the police shall be able to detain people after arrest; the judges' rules that govern how the police may interrogate suspects; and the right of silence. All of these matters affect how the police are trusted in the community.
    I hope that the right hon. Gentleman will allow me gently to point out that, unhappily, throughout that
    1016
    important debate he exercised his right of silence—and, indeed, his right of absence—as did all his hon. Friends in the Liberal Party and allies in the SDP. On Friday, we had an alliance of silence on this subject. I must therefore begin by welcoming not only the wording of the motion, which we believe is plainly right, but also the right hon. Gentleman and his hon. Friends.
    We shall, of course, be discussing Lord Scarman's report at an early date. Therefore, it is enough to say that yesterday my right hon. Friend stated in the clearest terms his acceptance of what he described as Lord Scarman's philosophy of policing, as well as his resolve that it should be carried into practice.
    An essential component and objective of that philosophy is, in Lord Scarman's words, the establishment of a relationship of mutual trust and respect between local communities and the police. I was glad that the right hon. Gentleman pointed out the good news—that there is a great deal of confidence in the police. That is right. We all agree that we must seek to establish a relationship of mutual trust and respect. That is what a relationship of confidence amounts to, and without it we can look in vain for the co-operation of the local community with the police that the motion calls for. I believe that we are all agreed on that.
    It follows, therefore, and it is almost a truism, that policing must take account of, and respond to, the special needs and characteristics of the local community. That is the essence of what are generally known as community policing methods. That is not a new concept. The right hon. Gentleman did not need to say that this was not a madcap concept dreamed up by a chief constable in a remote part of Western England. No one would dream of suggesting that it was. It has a long and honourable pedigree both in the Metropolitan Police and other forces. As Mr. Barry Pain, the chief constable of Kent and the chairman of the Association of Chief Police Officers said recently, it goes back to 1829.
    There is no one model for universal application. There can be as many variants as there are communities, and probably there should be. In recent years, chief officers have made sustained efforts to experiment and to develop them, and certain features that are worth identifying are common to the most successful schemes. These schemes demonstrate a move away from what is sometimes called "reactive" or "fire brigade" policing towards a preventive approach. Everyone welcomes that. They lay emphasis on the need for the police to enlist the help of other agencies—both voluntary and statutory, to co-operate with the police in dealing not merely with crime and its effects, but also in the long term with the conditions associated with criminal activity.
    Behind them all lies a recognition of the part that the police can play in promoting a sense of community. I agree entirely with the right hon. Gentleman, who spoke of the advantages that can flow from a police officer just being around. One example he used was that such an officer would be able to notice someone who had come back into the community from prison. The advantages of what we describe loosely and without definition as "community policing" are self-evident. Among them is the advantage that a police officer so employed can promote a sense of community, of belonging to a community.
    First and foremost, by a distance, there is in these successful schemes of community policing an emphasis on returning officers to the beat. I am sure that that is what

    1017
    the public want. They are right in wanting to see it. It is on the streets of our towns and cities, and in the lanes and the villages of our rural areas, that the police make their most effective contribution. It is here that they preserve the peace, offer to villains the risk of getting caught and most effectively reassure the public.
    An important achievement of the Government is that since my right hon. Friend the Home Secretary took office, the police service in England and Wales has been increased by 7,500 officers. Without doubt, that is the result of our decision to implement in full and at once the recommendations of the Edmund-Davies committee on police pay.
    My right hon. Friend has also urged chief police officers to do their best to ensure that the police are not used on work that does not require their particular skills, and they have willingly complied with that suggestion and advice.
    In London, where the Metropolitan Police numbers 25,000 for the first time in its history, the commissioner's policy of using civilians has enabled 233 sergeants and 673 constables to be released from their desks for operational duties in the community—on the streets.
    The motion is silent about this, but we should not forget that, in addition to confidence, the maintenance of law and order depends on the police catching those who commit crimes and deterring others who would like to. If they do not catch them or deter them, no amount of good works in the community will win the police the community's confidence.
    I now turn to that part of the motion that calls for
    "an independent procedure by which complaints against the police can be examined".
    I have already mentioned it, and in the circumstances I can pass briefly over it.
    It is perfectly true that public confidence requires this, but it is also true—we do not hear so much about this—that any procedure should deserve and attract the confidence of police officers. On that the motion is silent. I want to say three things about it: first, we already have an independent examination procedure, introduced by Parliament during the lifetime of the last Government; secondly, it is not working well enough to command public confidence in full; and, thirdly, to quote what my right hon. Friend said yesterday, it must be "substantially reformed". He will bring forward proposals to the House as soon as he can.
    Again I gently point out that this was discussed by the Royal Commission and was valuably debated last Friday when the right hon. Gentleman and his hon. Friends were "playing away".
    Sadly, as the motion says, it is also often true that inadequate help is given to victims of violent crime. In one sense, no compensation can remedy that injury. Perhaps the best help can come from within the community itself, in the form of prompt, sensitive, neighbourly support.
    My first duty on joining the Home Office in January was to go to the annual meeting of the National Association of Victim Support Schemes. I was glad that my hon. Friend the Member for Cheltenham (Mr. Irving) intervened in the right hon. Gentleman's speech. He was too modest to say that he was the founder, or at least he was too modest to say it with the conviction that would have registered with me. It is a great achievement that these 140 branches should now be established throughout the country under the wing of the national association.
    1018
    This is an important body. It co-ordinates the activities of all the local schemes, whose appearance we warmly welcome and whose volunteers we greatly admire. I am glad to say that this year we have been able to increase the grant to the national association to just over £23,000.
    Financial compensation, as distinct from support within the community, is important to the victims of violent crime. The State's contribution is made mainly through the criminal injuries compensation scheme, whose chairman of the board is Mr. Michael Ogden, QC. Last year, more than 20,000 awards were made, to the value of more than £21½ million. We have improved that scheme by extending it to victims of violence in the home—a long neglected category.
    But criminals can also be made to pay—and a good thing too. We intend to improve the existing ability of the courts to order criminals to compensate themselves those whom they have violently attacked, or otherwise harmed. The right hon. Gentleman was wrong when he said that a court could not make a compensation order if it was not asked for one; courts can and do make such orders. In 1980 nearly 128,000 compensation orders were made in England and Wales.
    It is right that we should strengthen the law here, so that where a criminal's means are not sufficient to allow him to pay both a reasonable compensation order and a reasonable fine imposed by the court, the duty to compensate his victim shall have priority. We shall make early proposals to achieve that end.
    We intend also that parents can be ordered themselves to compensate the victim of an offence committed by their child, unless the court is satisfied that it would be unreasonable to do so in the circumstances. We are well aware that to the victim of crime it often seems that his interests count less than the interests of the criminal. These measures will help to correct that impression.
    I am glad that the right hon. Gentleman has been able to sweep up, as it were, into this omnibus motion, a reference to what it rightly describes as the crisis in the prisons, even though the "urgent action" which it calls for to deal with this is left unspecified. I know that he said that he proposed not to deal himself with that part of the motion, but he will forgive me if I do, because the Government regard it as a matter of extreme importance, as has my right hon. Friend the Home Secretary from the first day he assumed office.
    No Home Secretary has done more than my right hon. Friend to draw attention to the dangerously and scandalously overcrowded state of the prisons in England and Wales. A measure of overcrowding exists when there are more than 37,000 prisoners locked up. Certified normal accommodation is 39,000. The current figure is just under 44,000, and the local prisons are the worst.
    This is a problem of great gravity which my right hon. Friend inherited. He has consulted very widely on means to lessen the pressure on the prisons. He of all people, needs no reminding of the need for urgent action. During the prison officers' dispute last year, he asked for and was granted emergency powers by Parliament.
    The Government recognise the duty to provide the prison accommodation that our criminal justice system really needs. It would have been better if that had been more widely recognised in the past. For 40 years after 1918 no purpose-built closed prison or borstal institution was constructed.

    1019
    We have therefore, allocated extra resources to the prisons. Six new prisons are to be started, or have already been started, between this year and 1984. Design work on two others is in progress, and feasibility studies are being carried out for a third and fourth. Major reconstruction work at over 60 establishments during the 1980s is planned, at a cost of about £360 million. Simply maintaining the structure of the existing prisons is costing £20 million a year. That is the answer to those who appear to light upon so simple a solution to this problem as bricks and mortar.
    However, this cannot provide immediate relief to the problems of overcrowding, and indeed it has to be seen against the background of further decay in the existing prison estate.
    That is one reason—but not the only reason—why the Government have seen so much significance in the lead set by the Lord Chief Justice in the Court of Appeal to bring about a reduction in the length of prison sentences, in cases where that would be proper.
    This action has already begun to have a perceptible effect on the size of the sentenced prison population, as may be seen in the latest statistics, but an effect which unfortunately has been at least in part offset by the increasing number of cases which have had to be dealt with by the courts. Accordingly, it is clear, and again I believe generally accepted, that some new measure is needed to deal with the problem. The question is, what new measure?
    Earlier this year, in the document embodying the results of our review of the parole system, we put forward the idea that for shorter sentence prisoners—including those now ineligible for parole—there might be provision for early release on licence to supervision in the community. This idea was put forward for discussion and comment, because my right hon. Friend and I thought that it deserved serious consideration. It received the approval of the Select Committee on Home Affairs, and it was welcomed in other influential quarters, too.
    But in our system of criminal justice, it is the courts that have, subject always to the maxima fixed by Parliament, the duty of passing sentences that they consider, in the exercise of their judicial discretion, will meet the justice of each particular case. That is their responsibility. It would hardly be wise if the consultation process were to take no heed of opinion from that quarter and from the probation service, as to the likely outcome of the change that was proposed if it were to be applied mandatorily, without regard to the circumstances of each individual case. It would be especially unwise at a time when sentence lengths are beginning to come down, in response to the guidance of the Court of Appeal.
    So there is no question here of the courts thwarting the will of Parliament, as has been so unwisely suggested elsewhere, or not loyally acknowledging its sovereignity. But until they are deprived by Parliament of all judicial discretion—and may that day never come—they will rightly continue to assess what sentence the justice of each particular case requires. That is bound to take into account the actual time that will be served in prison.
    In the event, we formed the view that our first proposal would be likely to counteract the very welcome downward trend in sentence lengths. So we accordingly have turned our attention again towards what has long been
    1020
    Conservative policy in principle, reflected in section 47 of the Criminal Law Act 1977, which itself represented a Conservative amendment to that measure—the concept of the sentence that is partially suspended, the first part being served in prison.
    This has the great merit of keeping the question whether to release a prisoner with the sentencing court, rather than imposing a blanket release for all cases. The gravity of the offence can be marked by the totality of the sentence imposed. The circumstances of the offender can be reflected in the proportion of the sentence suspended. We intend that a proper case can be dealt with by the court being able to order that as little as 28 days of a sentence shall be served in custody.
    We believe that by this means there is a prospect of obtaining more quickly, and without distortion of sentencing practice, a saving in the prison population substantially greater than we would gain from supervised release in practice. We had thought that 7,000 places, at best, might be saved by that method, but, in the light of our consultation, we discovered that that estimate was quite unrealistic. We now believe that, under section 47, the optimum saving may be as much as 4,000 places. The reason why we are now more optimistic than we were a few months ago is that the consultations we have held give us good grounds for confidence that the judiciary would use partially suspended sentences in such a way as to avoid the risks we had previously foreseen.
    Mr. Nigel Spearing: In dealing with that matter, the Minister has not mentioned community service orders. Whilst acknowledging the discretion of the court in individual circumstances, may I ask whether he is satisfied that a proper assessment of this system has been made, or that the alternative is widely advertised and developed where it is suitable and where suitable personnel are recruited to operate it?
    Mr. Mayhew: Community service orders are one of the great success stories of recent developments of sentencing practice. There has been a marked increase in recent years in the number of community service orders. We very much welcome that, and encourage courts to make use of them whenever this is practicable. We shall continue to do that. We shall bring forward shortly proposals enabling courts to make a community service order for a child of 16. The threshold at present is 17.
    I have tried to offer the House our thoughts on the various components of this broadly drawn motion. The right hon. Member for Roxburgh, Selkirk and Peebles was right in saying that this is, to a great extent, an uncontroversial matter. It is, nevertheless, an exceptionally important matter. The maintenance of law and order and the incidence of crime and of criminality set problems that are among the toughest and most intractable for any Government to grapple with. We must have rules that permit our police to be efficient while requiring them to be fair. The community must have confidence in its police. The community has to care properly for the victims of crime. The prisons have to be humane as well as secure. To all these objectives, the Government attach very high importance and we look forward to the assistance of this debate.
    4.51 pm
    Dr. David Owen: It is by an extraordinary coincidence of timing that hon. Members

    1021
    are able to discuss in this debate many of the fundamental and underlying issues to which reference is made in Lord Scarman's report which was the subject of a statement yesterday to the House. The issues that we face are very grave. The growth of crime is a cause of concern to every household. The growth of violent crime—the growth of violence as a whole in our country—is a particular cause for concern. To that problem of violence there is no solution. Indeed, there is much dispute as to its causation.
    I suppose that I can claim to have supported practically every liberal reform that has come before the House. Yet, on the issue of violence on television, I hold views that I suppose some would say were deeply reactionary. I am convinced, although I know that I have not much evidence to pull to my support, that as a society we have tolerated for far too long the continued expression of violence through television at all hours of the day and night and frequently seen by young children. We shall never do justice to the issue of the growth of violence until we apply our common sense to it.
    The IBA working party on the portrayal of violence on television in 1973 took note of the fact that research clearly indicated
    "that it was precisely the immature and emotionally insecure who tended to be most dependent upon, and the heaviest consumer of, that kind of television output which had the highest violent content".
    The crucial factor is "Who are those affected by violence?" Most of the population may be able to absorb this continued portrayal of violence in the home without their threshold of abhorrence of violence being lowered. I suspect, however, that there is a significant group in the population who are deeply affected by it. It is a matter of high priority, I believe, that we tackle the problem. There may not be a great amount of evidence. As a natural scientist, I like to have the maximum amount of research before making a decision, but, repeatedly, one comes to the conviction that, on this issue, one has to trust one's common sense. I recognise openly that I have no quick or simple solution to the problem of violence.
    I should like to turn to the question of our approach to Lord Scarman's report. There is much wisdom in the report. There is much wisdom in many previous reports that have come before the House. I am worried that what will happen to this report is what has happened to many in the past. A very important White Paper in 1975 on racial discrimination warned of many of the issues that have now come about. There have been repeated reports by Select Committees containing detailed propositions worked out and agreed on an all-party basis. The problem has been the implementation and the effectiveness of the measures taken. There is a danger that this country has become more expert than almost any other in suffocating a report and in embracing a report with general praise and generalised endorsement of its philosophy but not following it through with the most detailed implementation.
    I say to the Home Secretary, who commands a great deal of respect on both sides of the House and who, I think, with a great deal of prestige and authority, is coming, in a reasonable time, to the end of his political career—[HON. MEMBERS: "Not at all."] I believe that the right hon. Gentleman has indicated that he sees his future in that way. His record includes what, in my view, is one of the most imaginative proposals ever produced. I refer to the 1973 Sunningdale attempt to resolve the problem of Northern Ireland. I hope that the right hon. Gentleman will stick
    1022
    firm on all these issues and will come to the House, when it debates the Scarman report, with the most detailed implementation proposals. Another generalised debate would not befit the mood of the House.
    I hope also that the Minister of State will not back off from his clear intention to take a dramatic and bold step to cut the prison population. I understand the resistance that his proposal has encountered. I understand the arguments by the judiciary. I believe, however, that the time has now come when a decision has to be taken in the House. A step has to be taken that leads to a dramatic fall in the prison population. Only by implementing the proposal that he has put forward will the hon. and learned Gentleman achieve that aim. I hope that he will not be dissuaded from taking the decision.
    I agree with much of the Scarman report and its recommendations. I wish to concentrate on some aspects that are either unclear or that I wish to criticise in order to focus the debate on some of the proposals that I hope the Home Secretary will bring forward. Lord Scarman says in his report that he does not believe that institutional racialism exists in Britain. I wish I believed that this was true. One can look at this Chamber, and one can look at this Parliament, but one sees no representative of black opinion. One can look at most council chambers dealing with issues of racial tension and racial stress and ask how many councillors represent black opinion and the ethnic minority groups. One can look at the decision-making procedures of Government, the senior civil servants, the senior military figures and the police force. Everywhere there is a totally inadequate representation of the black community.
    It would be a great mistake if we did not recognise the dissatisfaction about the structure of decision-making reflecting black opinion. We should accept that something much bolder has to be done. I deal first with the police. The ethnic minority in the whole population of the United Kingdom is 4 per cent. The ethnic minority represented overall in our national police forces is a mere 0·27 per cent. In the GLC area the ethnic minority represents 14 per cent. of the community. The ethnic monority represented in the Metropolitan Police is a mere 0·5 per cent. Something has to be done. The Police Complaints Board has at present no ethnic minority member.
    Until we can reflect a much higher percentage of ethnic minorities in many of our crucial and critical decision-making bodies, it will be very hard to resist the argument that there is a form of institutionalised racialism. Furthermore, we have a generation of decision makers who are still being greatly influenced by a past colonial climate and by the years before we had a large and growing ethnic community in our midst. I do not, therefore, accept, the view that we do not have institutionalised racialism in Britain.
    One of the interesting things about the Kernow report, which looked at the American racial problem, was that it was quite open about saying that it existed. The Scarman report would have carried more conviction if Lord Scarman had at least explored the area of governmental and council and institutional decision making, and perhaps been a little more critical about our inability to reflect there the minorities within our society.
    I come from the West Country and I strongly endorse all that has been said about community policing, but I agree with the Minister that it is not new. It is a great mistake to see the advocacy of community policing as

    1023
    being only within the West Country. The chief constable in my area has my complete confidence and support, and I believe that all hon. Members representing West Country constituencies take the same view of him. The chief constable has become an advocate of community policing, but he would trace its origins back through the history of the police force.
    It is important to recognise that there will be variations and different ways of introducing community policing in different parts of the country. I want to see a diversified police force. I am not in favour of steps being taken towards a national police force. I wish to see the police authority and the chief constable, in the closest consultation with the local community, developing a somewhat individualistic attitude to policing.
    One of the most important recommendations in the Scarman report was that a statutory duty should be imposed on police authorities and on chief officers of police to co-operate in the establishment of consultative arrangements. When the Home Secretary made his statement in the House yesterday his wording was slightly different from that in the Scarman report. I may be pedantic in picking up this point. The Home Secretary may have meant "statutory", but he said:
    "I accept the need to develop formal arrangements in every police force area for consultation".—[Official Report, 25 November 1981; Vol. 13, c. 891.]
    There is a difference between "formal" and "statutory", and I believe that Lord Scarman was right in insisting that there should be a statutory arrangement. It is a very important obligation, and I hope that the Home Secretary will clarify that aspect of the report.
    The question of stop and search causes me concern. In my area, the police do not have the right to stop and search. The vast majority of police forces in Britain do not have that right. I understand that it exists only within the Metropolitan area, in Liverpool, and in some parts of the West Midlands. I grow more and more concerned about the operation of the stop and search policy. I agree with the proposition that a mobile special police unit is necessary. Although that is an unpopular recommendation of Lord Scarman, I believe that it is justified. But I am not happy—nor was the Royal Commission on criminal procedure—with the present position.
    The Royal Commission recognises that there must be safeguards to protect members of the public from random, arbitrary and discriminatory searches. But it is extremely difficult to see how such safeguards can be produced. The onus of proof of the effectiveness of stop and search powers is on those police areas which currently exercise them. The statistics show how infrequently the practice leads to arrest. Therefore, one is bound to question whether it is necessary.
    Between January and July 1981, in four major inner city areas, there were 3,842 stops by the police, leading to only 179 arrests. A large number of citizens was inconvenienced. It will be very difficult to produce the safeguards proposed by the Royal Commission, and I urge the Home Secretary to look closely at the matter.
    In my experience, nothing is harder than for a Minister to divest himself and his Department of responsibilities. There will be endless arguments as to why the Home Secretary should retain powers. I was involved in this
    1024
    aspect of policy when I was a Minister in the DHSS. Endless attempts have been made by successive Governments to improve co-ordination.
    I was particularly concerned with how to improve provision for the group under five years of age, and with the difficulty of securing a policy for children, for children's law and for the care of the family, when those questions concerned the Department of Health and Social Security, the Department of Education and Science, the Department of Employment, the Department of the Environment and the Home Office. The problem is well known to the Minister. Machinery of government changes is usually the refuge of last resort and frequently the refuge of despairing initiative, and I am 10th to recommend them, but all the evidence of the past 20 years seems to be that the Home Office is incapable of carrying out the responsibilities in these areas, and particularly in race matters.
    The more I look at the necessity of involving local government in the partnership arrangements and in the programme area schemes, the more I become convinced that we shall not get the co-ordination that is crucial if the prime responsibility remains with the Home Office. There is now an overwhelming case for the transfer of its responsibility to the Department of the Environment.
    The Policy Studies Institute has just produced an important study entitled "Policy and Practice in the Multiracial City". Underlying its detailed criticisms of the problems of central and local government relations and the lines of communication is the need for a transfer of responsibility for race relations to the Department of the Environment, accompanied by a ministerial action group or task force to take the lead in implementing changes. There is a great necessity to have a Cabinet subcommittee—perhaps chaired by a non-departmental Minister, but with the overall responsibility lying with the Department of the Environment—to try to bring together all the issues.
    Various Select Committee reports have drawn attention to examples where local authorities were doing well, where low-cost schemes had produced imaginative cooperation, and where it had been possible to bring play groups into primary schools and to use their classrooms. This had made it possible to have a low-cost alternative to nursery education, sometimes extremely successfully.
    The best examples should be brought to the attention of all local authorities, and there should be more effective pump-priming machinery. Some of the partnership schemes have worked very well, but in some areas there are complaints that the ethnic minorities are not represented in the decision making and are not consulted adequately or early enough. That question should be examined. I hope that the Home Secretary will look carefully at the PSI study to which I have referred and make recommendations relating to it.
    My hon. Friend the Member for Wrexham (Mr. Ellis) initiated a very important Adjournment debate on 6 July 1981 on the Rampton report concerning West Indian schoolchildren. There is grave danger that the Government will lose sight of that report. There is a real need for the Home Secretary to tell us what targets he is setting some of the local authorities in areas of considerable stress. For example, what targets is he setting them for nursery education provision, for pupil-teacher ratios and for special education for children who come from homes where there is a serious language problem?

    1025
    It is not enough to make generalised statements. If money is to be made available, it is legitimate that the House should be told where it is going. I am in favour of earmarking funds. Without earmarking I do not believe that we shall ever achieve the coherent implementation that we all want. We all say that we want a constructive strategy and a coherent pattern. Very often the result is an incoherent pattern and few constructive proposals.
    Our experience of earmarking funds is not good. When I was the Minister for Health I earmarked £3 million for the implementation of Lord Butler's report on abnormal offenders, with a view to introducing regional security units. A few years later a Select Committee discovered that most of the £3 million had been wafted away by regional health authorities and that all too little of it had gone to where it was allocated.
    The House has a right to become much tougher over the allocation of resources. If we allocate resources on the bases of perceived need and positive action, we want to know that they are being spent on genuine schemes. Some of the schemes that have been submitted give the impression that they are too generalised. Sometimes there is rather too much on the cultural side. The schemes are not sufficiently specific and they are not oriented to real need. It is difficult for central Government to interfere in the decision making of local government and I am not keen for it to interfere. The partnership concept is a good one, but there is insufficient monitoring.
    Why is it that the Tavistock report on the Civil Service has been quietly shelved? It recommended that we should monitor the progress of the Civil Service in introducing blacks into the Civil Service. That is not being done. Why did we not take the bold decision of including the ethnic question in the most recent census? I was a member of the previous Labour Government and I know why it was not included. That Government were frightened of including it. Despite the overwhelming endorsement of all the professionals that the question should be included, the Labour Government succumbed to what I believe was an irrational prejudice. There was not ethnic pressure. All the major ethnic groups said that the question should be included. I hope that the House insists that the question be included in the 1986 census. I hope that we shall be prepared to accept a monitoring procedure.
    Quotas have been rejected for the police. It may be that that is right. I know that there are arguments against quotas. However, at the very least we should have an annual report on the progress that has been made in introducing more blacks into police forces throughout the country. I hope that the Secretary of State will produce detailed proposals on how he will make it easier for the percentage to be increased.
    If the Government have to wait a week or two before initiating a debate on the Scarman report, I urge them to take that course and to wait until they can present detailed proposals. There is a great danger of having too early a generalised debate in which we shall not be able to concentrate on specifics. I should prefer a slightly longer pause that will enable the Government to present detailed proposals. The House would then be able to consider whether the Government's response to the Scarman report was what the nation needed. It is no longer sufficient to produce a generalised endorsement. We must grapple with the detail. It is on the detail that in 10 or 15 years we shall be able to judge whether there has been success.
    5.15 pm
    Mr. Dudley Smith: There is not much for which the right hon. Member for Plymouth, Devonport (Dr. Owen) stands with which I agree, but I support his argument about violence on television. Young and impressionable people are inspired by what they see to engage in the wrong sort of pursuits. I suggest that many are desensitised by a continual diet of violence on television. That makes them unconsciously accept more real violence in our society, and that has a damaging and a long-term detrimental effect. I am glad that the right hon. Gentleman advanced that argument.
    I am speaking in this debate mainly because a week ago a woman constituent told me that her young daughter had recently started working in London and that, two days before she spoke to me, as her daughter walked out of Clapham underground station she was set upon by a gang of coloured youths. She was mugged, robbed and quite seriously injured. My constituent asked "What are you, my Member of Parliament, and the Government going to do about this increasingly difficult type of offence?" I was much impressed by what she said. The young woman concerned had only recently started to live in the Metropolis. She is thoroughly respectable and just setting out on her career.
    Crime has reached epidemic proportions. Two sinister aspects are associated with it. The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), the Leader of the Liberal Party, referred partly to them in a fairly low-key speech. First, there is the greater use of violence by all who indulge in criminal activity. It is really tough violence. Secondly, there is the vicious targeting of the weakest in our society. Gangs of coloured and white people—this is not an ethnic issue—now use violence more frequently. There has been a definite move over the past few years—especially the past two years—to attack defenceless old ladies and young women, who may be frail, and the disabled.
    Four months ago I broke my hip. I was using two sticks. Now I use only one. I was told when I went to America in September to be careful because I was a natural target, as I appeared to be disabled. I understand that it is necessary for the slightly less able and the less mobile to be careful here as they might well be attacked by criminals. It is the duty of society to respond toughly. The Government's first duty is to protect the lives and property of their citizens. Those who are attacked often rate only a paragraph in their local newspapers, but often their lives are ruined. Old ladies live in terror of being mugged again or of having their houses or flats broken into.
    I have long felt that in a more ideal society we need a new approach to crime and the treatment of offenders. I am aware, from visits that I have made to special security prisons and from discussions that I have had with officials, that probably a majority of the inmates have some serious mental abnormality or personality defect.
    I should like to see a more radical approach in the longer term, but that time is not now. A desperately serious situation has developed and the Government's remedies should match it. I do not think that we are supplying adequate remedies. I say that in the knowledge that the Government have done much to improve conditions and increase the strength of the police. By and

    1027
    large, the police are doing an excellent job, but they are constantly sniped at by Left-wing elements. However, they are apprehending a large number of criminals.
    We know that our prison system is in disarray and that most of the population are still appalled by the imposition of light sentences for serious crime. The prison building programme is impressive, but we need a crash course to build more prisons. I do not accept that several years must pass before they are completed. Some people say that the building of prisons is negative, but prisons are required because of the large number of desperate and dangerous criminals in our society. The Government's duty is to institute a crash programme both of building new prisons and of refurbishing old ones.
    There should be tougher sentencing for all crimes of violence. Let the perpetrators of violent crime, whatever their age or condition, whether they are unemployed or from one-parent families or whatever fashionable intellectual excuse may be put forward on their behalf, be in no doubt that, if they are caught, they will be sent to prison for a long time. The loss of liberty in unpleasant circumstances is a real deterrent for a criminal.
    Why do we have a near-breakdown in law and order? All the advanced nations suffer from it, but we suffer rather more than others. We are rapidly approaching the position in the United States of America where very few people in the big cities are satisfied with what happens.
    There are a number of reasons why we have reached our position. I advance a personal view. The problem has been created because parents have not fulfilled their basic responsibility of teaching their children the difference between right and wrong and the need for respect of one's neighbour. It has been created by the appointment of the wrong type of school teachers. Large numbers of teachers have failed to keep order and have encouraged aggressive thinking by their pupils. It has been created by unrealistic magistrates and the judiciary who have foolishly pursued liberal sentencing policies as crime has expanded apace. It has been created by politicians on the Left, who are always seeking to push forward the frontiers of permissiveness in all its forms, and those more on the Right, who are fearful of tough, positive action because of a backlash from the unsympathetic media, which in turn carry a great deal of responsibility for the deterioration that has taken place.
    We should not be misled into thinking that a tougher approach means a less fair or unfeeling one. However, it means a realistic approach. Unless we are prepared to act significantly and more strongly than we have, our society will continue to deteriorate to the point where the majority will have to live a restricted and guarded life for fear of attack from the minority. Some old people in my constituency already do.
    Twenty years ago, if one had said that elderly people in Leamington Spa were afraid to go out in the evening, there would have been incredulous cries of disbelief. Nobody would challenge that today. No hon. Member, unless he represents an extremely rural area, would not subscribe to that view. All of us have constituents who are frightened, particularly in the hours of darkness. We should all remember that.
    It has always been said that the fear of detection was the main deterrent, but that should be matched by the fear of a substantial term of imprisonment if a crime of violence
    1028
    has been committed. I do not welcome the Home Secretary's suggestion for remitting parts of sentences. I am glad that, according to press reports, the judiciary has rejected that approach. Suspended sentences have been shown to be a mockery. They do not fulfil their intended function. Once the situation is under control, which we hope will happen soon, we can embark on more radical reform and perhaps a more liberal approach and then indulge in some of the theories put forward by many who have studied the problem.
    The situation is extremely difficult and dangerous. Some say that the present position has been created by deprivation, injustice and high unemployment. I believe that it has been created chiefly by the absence of the basic discipline that our society has signally failed to implement in the last 25 years. That is the root cause of the trouble. We must face the consequences. If we do not, law-abiding society will make a more telling call for a robust and realistic approach.
    5.25 pm
    Mr. Stephen Ross: I do not agree with much of what the hon. Member for Warwick and Leamington (Mr. Smith) said, but I certainly accept that there is a need for greater parental responsibility. Many of the problems can be explained by the breakdown of family life. I agree with the right hon. Member for Plymouth, Devonport (Dr. Owen) that the showing of violence on television as had its effect over many years, and it continues.
    The answer does not lie in incarcerating more and more people in prison. Community work and discipline are needed. It might be unpopular, but the introduction of periods of compulsory community service for the younger generation should be considered seriously. Such service gives youngsters from areas such as Brixton the opportunity to go to different parts of the country, to meet people from different walks of life and to find something worth doing which interests them. When they return they might have a different attitude.
    Towards the end of the last war I served for four years in the Services. I met people whom I had not had the chance to meet before. I met boys from Dr. Barnardo's homes who had gone into the Navy at 16 years of age and signed on for 21 years. I met tough Glaswegians from the Gorbals who became my friends. I had not had the opportunity to meet them before. That opportunity affected my attitude to society.
    I should like more of the younger generation in the Isle of Wight to be able to learn different skills and to meet people from different environments. I am sure that similar experience would benefit the people of Brixton and other areas where the ethnic minorities live.
    My main anxiety is about the continuing crisis in our prisons. My constituency contains no fewer than three prisons. The May inquiry was initiated by the right hon. Member for Leeds, South (Mr. Rees) when he was Home Secretary, largely as a result of a public letter of despair from assistant prison governors. Despite that and the strenuous efforts of the all-party penal affairs group, the fourth report of the Home Affairs Select Committee published last July, the Home Office review of parole in England and Wales published last May, the Howard League, the National Association for the Care and Ressettlement of Offenders, Peter Evans, a regular correspondent in The Times and publisher of books on our

    1029
    prisons and the hon. Member for Cheltenham (Mr. Irving) whose concern is well known, we are on a time bomb. It took the courageous letter from the governor of Wormwood Scrubs to remind us of that.
    If we do not take immediate action to reduce the gross overcrowding in our prisons we shall have a repeat of the riots of a few years ago. If that happens, I suspect that they will be more serious and widespread. We remember the riots in Hull and Parkhurst. They will spread among all prisons that are experiencing gross overcrowding, such as Wormwood Scrubs, Leeds, and Birmingham, and those that are not so affected.
    The hon. and learned Member for Royal Tunbridge Wells (Mr. Mayhew) said that the Home Secretary had regrettably changed his mind on the well-supported modified form of parole. That is the third option, which I feel had a lot going for it, whereby short-term prisoners spend one third of their sentences in custody, one third is automatically suspended and the final one third is, as now, remitted but liable to forfeiture on bad behaviour.
    Like Lord Longford, who made a notable speech in the other place last Tuesday, I regret that news, if true. His contribution was criticised, but I believe that it was sound and I recommend other hon. Members to read it. Instead, we gather that the Home Secretary is to rely on the courts being given the power to suspend part of a sentence as provided for under section 47 of the Criminal Law Act 1977 but never implemented.
    I am not a lawyer, so to me the proposals look rather complicated. There is however a substantial difference between the two proposals because automatic parole means the immediate release of people already in prison. Despite the comments of the hon. Member for Warwick and Leamington, I believe that there are too many people in prison. I regret that we are having to build more prisons. The Dutch experiments of halving the number in prison has not led to a sudden increase in crime. Even in Mexico there is a more humane form of imprisonment than in this country.
    Mr. John Wheeler: They shoot the prisoners.
    Mr. Ross: They do not shoot them. They allow wives in, which we do not allow in this country.
    By contrast, giving the courts the power to suspend part of a sentence may not have the desired effect of reducing the prison population. A recent press release by NACRO states:
    "The accumulated evidence is not very encouraging. If the main objective of the suspended sentence was to reduce the prison population, there are considerable doubts as to whether it has achieved this effect. It may even have increased the size of the prison population. One reason for this disappointing result is that courts, initially at least, misused the sanction by passing it on offenders who would not, but for the existence of the suspended sentence, have been given a custodial sentence. Experience suggests that courts have passed suspended sentences greater in length than the sentence of immediate imprisonment they might otherwise have given, and when these have been activated in full the result has been a longer stay in custody for the offender".
    A document published by the Home Office last May refers to the one-third idea. In paragraph 58 it states:
    "A development along these lines would not be wholly novel. There is already provision, in section 47 of the Criminal Law Act 1977, for the courts to suspend between a quarter and three quarters of a sentence of imprisonment of between six months and two years. That section has not been activated because of fears that the new sentence would be used to give a 'taste of
    1030
    imprisonment' in cases where at present the courts would impose a fully suspended sentence or non-custodial sentence. Inevitably, too, in a proportion of cases the suspended part of the sentence would be subsequently activated. Thus there can be no certainty that implementing section 47 would achieve any reduction in numbers in custody and would not confer any advantage in the treatment of individual offenders. The new approach"—
    the one-third idea—
    "outlined above offers a rethinking of section 47, using a similar framework to extend the concept of parole to those at present ineligible."
    Obviously that was the belief of the Home Office when that document was published, but there has been a substantial change of thought. I regret it. Too often a short custodial sentence is imposed when a community service order or fine would have sufficed.
    Apart from parole or a suspension of sentence, if we wished we could introduce 50 per cent. remissions. We do that in Northern Ireland. Therefore, why cannot we do it here? We could reintroduce the amnesty. Mr. Churchill did that when he was Home Secretary. He is probably the last person to have done it. We could do it on celebrations of State occasions. I refer hon. Members to the leading article in The Times on 21 November which states:
    "Whatever permanent system is introduced, it would have far better efficacy if it started on the base of 40,000 rather than more than 45,000 inmates of our prisons."
    I gather that that figure is now 44,000. The article continues:
    "For that reason, the possibility of an amnesty must be given serious attention."
    As the right hon. Member for Devonport said, we should be making much greater progress to provide for the mentally sick in properly equipped regional secure units. It is a disgrace that the money that he provided, when he was the responsible Minister, was misused and that it has taken so long to provide such units. Parkhurst is a typical example of where there are many inmates who ought to be in such secure units. Those people are mentally sick.
    Unless action is taken now to remove from prison those who could just as well repay their debts to society in other more sensible ways, I am convinced that we shall have an explosion of unparalleled ferocity. It is the responsibility of the House to prevent that event from happening. The sooner we take action, the better.
    5.36 pm
    Mr. Tom Benyon: I welcome the opportunity to make a short contribution to this valuable debate.
    Our voters expect the Government to reduce the crime wave. From a Daily Telegraph poll, it is apparant that there is a wide gap of opinion between the majority of politicians and the public on precisely how to achieve that. The public want longer sentences to be imposed, the return of capital punishment and possibly corporal punishment. Such measures would not work, even if we could get them through the House of Commons. Therefore, what can the Goverment do? I feel that calls for more toughness on the part of the Government are chasing a mirage. It is not part of my job to sell mirages to my constituents. We must face the reality of the situation.
    The inability of the Government to reduce crime is not because they are wet or that they have lost the will. To reduce the crime wave dramatically is not in their gift within the life of this Parliament. Extra prisons, longer sentences and harsher methods would do more in terms of retribution, at high cost to the taxpayer, than achieve the result of less crime or at least contained crime.

    1031
    The causes of crime are elusive to identify and inevitably involve guesswork. The list is long. Many causes have been touched on in the debate. High unemployment makes a contribution to increasing the numbers of those tempted to follow a criminal life. Huge, soulless comprehensive schools, bad housing, bad or no recreation facilities, colour discrimination, lack of parental responsibility—which was touched on by my hon. Friend the Member for Warwick and Leamington (Mr. Smith)—television violence and increased prosperity, which has not been touched on in the debate, play a major part in the increase in crime.
    However, it is unlikely that a modified system of justice, stronger sentences or even a penal system that involved terror would reduce crime's, accelerating momentum. There is little that the Government can do to insulate the United Kingdom from an international trend other than to take steps which will comfort the voter that all that can be reasonably done is being done.
    Rising criminal activity has not suddenly occurred. It has been gathering pace for over 50 years. In 1903 the police recorded three crimes for every 1,000 people. In 1980 there were four crimes for every 100 people. In 1948 the Old Bailey operated four courts and now there are 24. Increased prosperity does not reduce crime. On the contrary, in all industrial societies crimes have surged as poverty has receded and relative prosperity has spread. The more possessions there are, the more policemen are needed to protect them.
    What effective steps can the Government take? We have recruited 7,000 more policemen than there were in May 1979 to correct undermanning. That was the right thing to do. I understand that we require further police recruitment in the Metropolitan Police district. However, it is doubtful whether further recruitment would be followed by a corresponding reduction in either the number of indictable offences committed or the number of criminals brought to justice, because the police rely on the public for their knowledge of most crimes. An increase in the number of policemen will not necessarily increase public co-operation, which is vital. That is illustrated by a survey at the Old Bailey, which showed that in 90 per cent. of cases the identity of the suspect was clear from the first report of the crime. Therefore, if reports are not made by the public it is unlikely that police detection will result in their apprehending more culprits.
    It is useful to consider foreign examples, from which we can learn. Recently in New York the police attempted to reduce the number of offences committed in the subway by flooding it with police officers. The number of thefts reduced dramatically, but unfortunately the thieves took to the buses. The costs of the operation were dramatic. It cost $35,000 for each successful capture against the average criminal's takings of $50.
    The Government are embarking upon a prison building programme. As there are no votes in such a programme, they are the first Government in memory to take such an initiative. They should be highly commended for so doing. The programme is designed to prop up prisons that are falling down and it is hoped to ease congestion. Currently our prisons are chronically overcrowded and insanitary. Those who wish for harsher conditions in prisons will be comforted by the fact that it is difficult to see how prison conditions could be made much more nasty for the inmates. Our prisons are now a national scandal. Future generations will look back at the 1980s and wonder how
    1032
    any civilised society could tolerate such prison conditions, let alone fool itself into believing that such a system had much identifiable value or reform, other than keeping 44,000 people away from the public for some time in accommodation designed for 35,000 people.
    Evidence from the United States of America shows that building more cells does not ease congestion. Fifteen states that increased their cell capacity by 50 per cent. increased their prison population by 57 per cent. Fifteen states that increased their capacity by 4 per cent. decreased their prison population by 9 per cent. The number of indictable offences committed in all 30 states remained constant. There is no evidence that longer sentences deter more successfully than shorter ones and at a cost of over £70,000 per cell built and £180 a week per prisoner, that matters. The major contributing factor towards a high prison population is not crime, unemployment, family breakdown or racial tension, but the availability of cells for the courts to fill with more people for longer sentences.
    Although there are many violent and dangerous criminals who should be incarcerated for long sentences to protect the public, thousands of people either should not be in prison at all or could be there for a shorter time without exposing the public to risk. However, it is difficult for any Government to institute liberal reforms without criticism that they are soft. I congratulate the Home Secretary on his courageous work. I believe that he is a liberal, reforming Home Secretary. May I say—before he becomes too depressed by the words of the right hon. Member for Plymouth, Devonport (Dr. Owen)—that I hope that he remains Home Secretary for many years?
    A precondition to the Government's ability to tackle constructively the deep-rooted problem is public recognition that there is no easily identifiable, hard-nosed solution to an easily quantified law and order problem, and public acceptance that we should send fewer people to prison for shorter sentences. However bleak the prospect of reducing the crime wave, the Home Office should undertake various reforms. The first is a review of offences that are currently imprisonable. Why are drunks, prostitutes, inadequates and vagrants gaoled? Why do we build more cells when the present accommodation is stuffed with many thousands of people who are no danger to society? Why is the number of people imprisoned for a month or less so different from the number in Holland? In Holland, half the prison population is there for periods of less than a month. In Britain only 18 per cent. are imprisoned for that short time. The crime wave in Holland is no worse or better than ours.
    I welcome the introduction of legislation that will oblige criminals to pay compensation directly to their victims. In no other country is that done comprehensively. Currently the number of offenders making restitution is less than 5 per cent., which we should try to increase as much as possible.
    The public can also play a part. To be realistic, they must stop asking the House to solve all problems. Crime is a problem for society as a whole. One of the better things that the public could do is to consider their own security. They can also help the police. That matter has been mentioned by many hon. Members, and the Scarman report contains many important recommendations about how the public can play a major part by assisting the police. Members of the public can also volunteer to become special constables. People have often written indignant letters to me complaining about how frightful

    1033
    everything is. I always write back to them saying that I am glad that they should express such a responsible view and that they should become special constables. I regret to inform the House that few people write back to tell me that they have become special constables. However, I commend it and it is certainly wished by police forces.
    All those matters would not dramatically reduce the crime wave, but they would enhance the vital links between the police and the public. Also, if people wish to reduce violent tendencies among the young, they should write to the heads of the broadcasting authorities to request increased vigilance in the monitoring of programmes that include gratuitous acts of violence. If the power of advertising is so potent, how can anyone argue that a continuous diet of television violence does not brutalise?
    5.47 pm
    Mr. George Cunningham: The House should be grateful to the Liberal Party for choosing this subject for a half day Supply day debate. It is fortuitous that it comes after the publication of the Scarman report yesterday, but it is useful for us to have a preliminary trot over the ground before we come to a more serious consideration of that report later. I agree with the Minister that it would have been useful to have had a Liberal presence in the debate last week on the Royal Commission report on criminal procedure. I hope that Liberal Members will join in those debates more often in the future.
    As to the motion on the Order Paper, the Opposition are happy to accept all the propositions in it. Before I come to other aspects of the problem, I wish to make one point to the Minister that is in rather a different category from the rest. Recently I was appalled to receive answers from the Minister in response to questions about the number of people remanded in custody awaiting trial for very long periods. That problem exists in England and Wales but does not exist north of the border to anything like the same extent, because north of the border a law says that if a man is not brought to trial within a specified period he must be let out of prison. If we had such a provision south of the border it would force us to avoid the totally unjust position of some people being in custody awaiting trial for over two years.
    I have asked the Minister a series of questions. The first was: how many people are in custody awaiting trial and have been for more than 12 months? The Minister's answer was that he could not say precisely. Then I asked him the same question with regard to 18 months and his answer was the same. So I asked the same question with regard to people who had been in prison for two years and more, and the answer was the same.
    Is there any period for which the Home Office feels an obligation to find out how many people are in prison still awaiting trial? The person is innocent because he has not been tried. Even if he is ultimately found guilty, he may have a sentence that is not even custodial or a custodial sentence that is less than the period that he has spent incarcerated. It is monstrously unjust that such a person should be in custody for a prolonged period. It is the job of the Home Office, in conjunction with the Lord Chancellor's department, to make sure that it knows how many people are so held for longer than, let us say, six months. I should like to say three months. That information should be regularly available to the House when anyone asks for it.
    1034
    The subject of law and order, including the public order aspects that have been touched on very much, has had a great deal of attention this year for the obvious reason of the riots but in other contexts as well. Many pieces of local legislation have been tidied up, which have brought to our attention the business of bans on marches—whether we should have selective bans and whether notice of marches should be given to the police.
    We have been waiting for some time for the Home Office to complete its review of the Public Order Act. It is understandable that in the past month or two the Home Office wanted to wait for the Scarman report before making an announcement, but we should have an announcement soon on the Home Office's attitude to the review of the Act, even separately from other aspects of the subjects covered by the report.
    A distinction is to be drawn between what I thought was the Secretary of State's reaction to the Scarman report and what I read in the newspapers this morning is his reaction. I read in some newspapers that he has accepted the recommendations in general, but what I heard the Home Secretary say yesterday—as has been pointed out by the leader of the Liberal Party and the right hon. Member for Plymouth, Devonport (Dr. Owen)—was that he accepted the philosophy stated by Lord Scarman but not necessarily all the specific recommendations.
    Mr. Mayhew: How could he?
    Mr. Cunningham: I am not suggesting that it is possible within 24 or 48 hours for the Home Secretary to say "Stamp", to every detailed recommendation that Lord Scarman made, but, having read the report, I believe that it is possible for him to say not only that he accepts the philosophy but that the package of specific recommendations is one that he accepts in general. By that I mean that he would be able to accept and recommend to the House, shall we say, 80 per cent. or 90 per cent. of the specific recommendations for changes of law and of procedure.
    The Scarman report is not like most other reports. It is not like the report of the Royal Commission on criminal procedure, although even that requires speedier action than some reports. The Scarman report has been produced in relation to a series of incidents of a desperate character. The response that it needs is a quick and specific one. If the Minister today, or the Secretary of State next week, were able to say that the Government expected to be able to recommend the House to implement 80 per cent. to 90 per cent.—or perhaps even 100 per cent.—of the specific proposals, that reaction would have a markedly different effect than simply saying that the Home Secretary accepted the philosophy behind the report.
    Mr. Eldon Griffiths: As one who supports 80 per cent. or 90 per cent. of what the Scarman report recommends and who knows so much about our constitutional practices, surely the hon. Gentleman welcomes the Home Secretary's statement that a debate should take place in the House first. Is it not at that stage that he would expect the Government to specify which areas of the report they could accept and proceed with?
    Mr. Cunningham: That is the kind of response that one would expect to most reports, but I am trying to distinguish between this and most other reports.
    I believe that most of us feel that Lord Scarman has struck a wise balance. He has not only put in general

    1035
    recommendations; he has chosen some specific recommendations. If people wish to have ages to think about them, they must do so, but I think that the recommendations are sufficiently sensible on the face of it for the Government, because of the public effect that it would have, to be prepared to say that, with perhaps only occasional exceptions, they are prepared to go for the package. The Opposition are prepared to say that, and my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) did so yesterday.
    There is nothing outrageous or very worrying about the recommendations. We all know that we shall not be making terrible errors if, for example, we were to make the machinery for community consultation by police authorities outside London based on statute, as Lord Scarman recommends, or not based on statute, as the Secretary of State thought of yesterday. There is no great difference of principle there.
    I am not suggesting that the Secretary of State should prejudge the decision of the House. I should be the last person to do that. But he needs to make it clear very quickly on the Government's part—just as we have made it clear on the Opposition's part—that they accept the package with only, at most, occasional exceptions.
    Mr. Geoffrey Dickens: As we have waited months for the Scarman report, why should a few days make all that much difference? It is common sense to wait a while, debate the matter in the House and then take action, just in case it might be desirable to implement one or two elements in the report.
    Mr. Cunningham: I hoped that I was covering the position of one or two elements within the report by saying that it would be unreasonable to ask the Secretary of State to say, "One hundred per cent. on every detail we will do exactly what Lord Scarman says". I am not asking that. I am saying that, given the nature of the report and the general consent that it has received in the past 24 hours, for its public effect, it should have a swifter, more positive and affirmative response than the Secretary of State has yet given it. Such a response is more justified in this case than it would be in the case of many other reports.
    We are dealing with public confidence and with proposals that constitute a kind of a balance. We are dealing with a report from someone who has great experience in the field. I hope that the Government will give the response that I recommend rather than the response that they have made so far.
    I come now to specific points covered in the report and reflected in the motion before the House. A significant paragraph, paragraph 5.62, deals with police authorities outside London. Lord Scarman states:
    "many Police Authorities are somewhat uncertain of themselves and do not always exercise the firmness which the statute envisages as necessary to the discharge of their awesome responsibility to secure the maintenance of an adequate and efficient police force for their respective areas."
    Some of us have argued for some time that the important thing to do first about police authorities outside London is to get them to exercise the power that they have and to press the frontiers of what that power really is in law. We cannot blame them altogether for not doing so, because, although Home Office Ministers in the past 12 months have made, so far as I have noticed, about three
    1036
    speeches saying that the police authorities outside London should take a more positive interest in the policing of their areas, that has not been the long-term orthodoxy of the Home Office and it most certainly has not been the long-term orthodoxy—and nor is it now—of chief constables.
    Chief constables, who could have been guided in the matter by the Home Office, have tended to say that the less that the police authorities do the better. Therefore, if members of police authorities outside London have tended not to push their powers as far as they should and not to test and to use them as much as they should, the Home Office and chief constables must take a share of the responsibility. What some of us said about the powers of the authorities has been emphatically backed up by Lord Scarman. I hope that there will be a different attitude in future and that the Government will support his recommendation that the obligation on authorities to act to improve community relations will be made a statutory one. I hope that the Minister of State will say that tonight.
    Lord Scarman said that in London the equivalent of the police authority should be the Home Secretary. The Opposition accept that proposal in the spirit I mentioned a few minutes ago, although there are some who would like to see a change in the arrangements of one sort or another. However, we accept what Lord Scarman has said. It is important, nevertheless, that the spasmodic and rather informal liaison arrangements, on many different bases, which exist in London boroughs should be formalised. There has been an informal police forum in Islington for a couple of years. I had difficulty in attempting to create that, but I have found, significantly, that the slight resistance by the police has been replaced by an enthusiasm and a desire to participate in discussions with the local councillors and Members of Parliament. The arrangements in Islington are adequate, but they could be greatly improved by being put on a formal and statutory basis.
    I plead with the Secretary of State that, when police forums are put on a statutory basis, they should not be a means of liaison between only the police and borough councils. Members of Parliament, certainly in London, must be part of that arrangement. Although it may be difficult to build them into the general London operation, that can be done. There is no reason why the Members of Parliament for particular areas should not be members of liaison forums established for the Metropolitan Police districts.
    The Home Secretary replied on the question of independent police complaints procedure during Question Time. He said that if there were a team of Ombudsman staff to investigate complaints against the police it might be better—if I understood him correctly—if it was not involved in investigating trivial complaints. That is exactly wrong. We cannot allow the police to reject a complaint as trivial—that has been the trouble. However, an independent organisation could be trusted to do that. One of the great advantages of an independent element in the investigation of complaints, as against their determination, is that it could reject the trivial complaints and not waste a great deal of time.
    I was surprised that Lord Scarman referred to an attitude in the police force suggesting that the home beat officer did not have the same status as the rest of the force and was regarded as a "hobby bobby". I have not come across that attitude, but if it is widespread it needs to be eradicated.

    1037
    When there is an ongoing community problem, the first thing we ask for is a home beat officer who will remain in the area for a long time. In London, such officers should be protected and not be whisked away to Trafalgar Square every time there is a demonstration. If the home beat officer has a low status within the overall police force, it is something that needs great attention.
    I do not want to say anything about prisons because they will he dealt with thoroughly in next week's debate.
    In conclusion, I hope that the Minister of State will give a more definite and forthcoming indication of agreeing with the Scarman report than has been given so far. I hope that he will take back to the Secretary of State the view that in order to get the Scarman recommendations strongly and quickly off the ground, it would be as well for him to come to the House not merely with specific proposals, as the Leader of the Liberal Party suggested, but with the specific proposals in the Scarman report and to say "We accept those almost entirely".
    6.7 pm
    Mr. Edward Gardner: We are dealing with two crises of extreme concern to all hon. Members and the country. One is the inner cities crisis, which is the subject of Lord Scarman's excellent report, and the other, which has been equally long-standing and is still with us in alarming proportions, is the prison crisis.
    As my hon. and learned Friend the Minister of State said, the crisis in our prisons is dangerous and scandalous. Clearly it must be solved at the peril of disorder in a dimension that none of us wants.
    I endorse what my hon. Friend the Member for Abingdon (Mr. Benyon) said about the high quality of my right hon. Friend the Home Secretary. I do not believe—this is said not in a party spirit—that in most hon. Members' assessment there has ever been a Home Secretary who has been so concerned about overcrowding in our prisons. I do not believe that anyone in history has done more to try to solve the problem. However, the problem is still with us and we must seek ways of overcoming the difficulties.
    I spent many years considering the prison system and trying to discover an answer to the simple and stark question: how can we reduce the prison population? Are there people in prison who ought not to be there and who can be removed? The obvious answer to that question is "Yes, there are".
    The people in prison who ought not to be there can be identified without difficulty. One does not have to spend years on the problem. Anyone who spends only an afternoon in a prison talking to prison officers and governors will soon discover their common sense and persuasive views on the persons who ought not to be there—the alcoholics and the mentally sick who deserve treatment and pity rather than custodial sentences by way of punishment.
    However, we must not let the easy identification of people who could safely be released from prison conceal or distort the fact that the public are in no mood to see lenient sentences imposed for crimes that they believe are harmful and dangerous to society. In the view of the public, for an offence that involves violence there is no alternative to prison. I share that view. The sentence is not just to punish; it is to protect the public.
    What can we do to reduce our prison population, which, after all, is the nub of the problem? One-third of
    1038
    that population consists of the most unpopular types of criminals in the country—burglars. No criminal incites the indignation of the public more than the burglar. Any suggestion that there should be a general amnesty or supervised release after serving one-third of the imposed sentence would rightly be met with a sense of outrage. The letting loose of people who should be kept in prison—certainly until they have been properly punished—would be an Executive decision. My firm belief, which is shared by most people in the country and by many of my right hon. and hon. Friends, is that the judiciary, not the Executive, should decide when and for how long a man or woman should be deprived of his or her liberty.
    Over the last few years the judiciary, in its sentencing policy, has recognised the gravity of the difficulties with which we are now having to cope in our prisons. The judiciary, from the Lord Chief Justice, Lord Lane, down—instanced by the directives and cases in the Court of Appeal criminal division—is doing everything possible to understand and co-operate in the solution of the problem.
    I was astonished when the noble Lord Longford in another place this week put forward the suggestion that the judiciary was thwarting the views of the Home Secretary and disregarding the will of Parliament. It was such a distortion of the truth that one can only hope and suppose that, as the years go by, the noble Lord's ability to mislead and to distort will be recognised for what it is.
    I am delighted that section 47 of the Criminal Law Act 1977 is to be incorporated into a new Criminal Justice Act, with possible amendment. I congratulate my hon. and learned Friend the Minister of State because, although he is too modest to say so, he was the author of section 47. He believed in it throughout the years, up to its incorporation in the 1977 Act. I believe that it will help to reduce the prison population and will be understood and applied wisely by the judiciary.
    Where there is a possibility or a danger of fire, it is prudent to have a fire brigade available. If there is a danger, or even a possibility, of the crisis in our prisons developing into a more serious crisis, it is prudent for the Government to have legislative provisions to enable them to deal with it as quickly as possible. The Government now have such powers under the Imprisonment (Temporary Provisions) Act 1980, but that is temporary legislation and can be activated only by an order, with the approval of the House. I do not think that many right hon. and hon. Members like temporary legislation of that sort. It usually gets on to the statute book in an emergency, and sometimes without the necessary thought that permanent legislation would undoubtedly attract.
    Is it not time for the Government to include in the Criminal Justice Bill that they will shortly introduce—I am prepared to make only a broad suggestion—a provision that would be of assistance to them and of comfort to the country if we ultimately—I pray that we shall nor—have to face the consequences of the present prison crisis getting out of hand?
    Mr. Deputy Speaker (Mr. Bryant Godman Irvine): It may help the House if I indicate that we hope to begin the winding up speeches at about 7.10 p.m. If hon. Members who are called to speak show some restraint, more will be able to contribute.
    6.17 pm
    Mr. William Pitt: I cannot agree more with the hon. Member for Abingdon (Mr. Benyon) or the hon. and learned Member for South Fylde (Mr. Gardner) who said that there are too many people in our prisons. The suggestion in Lord Scarman's report for positive action may be one way of keeping the numbers in our prisons down, not just the alcoholics and the mentally ill people who should not be there in the first place, but the many other people who go to prison largely because society creates the conditions in which they commit the offences. I support the positive action recommended by Lord Scarman in the form of investment in our inner city areas, especially the areas of South London where I work, which need much investment to bring them up to any degree of civilised living.
    I also agree with the hon. Member for Islington, South and Finsbury (Mr. Cunningham). I have always been puzzled as to why the Metropolitan Police should have been left out of the democratic process that is carried on in police districts outside the Metropolitan area—purely because of an historical accident—and why the Home Secretary should be the one person in charge of our police service. I welcome any suggestions for a liaison between the police and local authorities and I support the suggestion that Members of Parliament should form part of the liaison group.
    I hope that eventually—as Liberals in London have already suggested—we can organise a form of police committee that will be responsible on a democratic basis for the police in London, not for its day-to-day running, but on the same basis as police committees operate in other police districts.
    Mr. Wheeler: Does not the hon. Gentleman know that the Metropolitan Police is accountable to a police authority—my right hon. Friend the Home Secretary, who comes to the Chamber to account for the police in London? Does he not also know that in the 32 London boroughs there are liaison arrangements, with the possible exception of the London borough of Lambeth?
    Mr. Pitt: Of course I am well aware of that. I am also aware that the arrangements are informal. What the hon. Member for Islington, South and Finsbury proposed, and what I support, is that they should be more formal and put on a statutory basis so that the electors of the boroughs concerned can have a proper liaison with the police. I take the point that the Home Secretary is responsible to the House, but Liberal Members would rather that the police were accountable in a more direct and democratic way to the people for whom they have a responsibility and a charge.
    I intervened to draw attention once again to the Home Office report on racist attacks. Sadly, such attacks are a phenomenon of the so-called decay in law and order. Following a meeting with the Home Secretary in response to anxiety expressed by bodies concerned with the welfare of ethnic minorities and communities, including the Joint Committee against Racialism, of which I am co-vice-chairman, the Home Secretary was shown a report compiled by the joint committee listing a large number of racist attacks and estimating a large incidence of such attacks in this country. The Home Secretary immediately undertook to carry out a study of such attacks and to produce a report. I record my thanks to him and to his
    1040
    officials for having carried out a very demanding task in a very short time and produced a report, which I am sure those who have read it will agree is both comprehensive and fair.
    It will do the House no harm to be reminded of some of the figures that have led to the considerable concern in the House and elsewhere about racist attacks in this country. I quote briefly from the Police Review of 30 October this year:
    "Racialist attacks against Britain's ethnic minority communities, especially Asian communities, are now occurring on a massive scale … The Home Secretary told a fringe meeting"—
    a meeting organised by the joint committee—
    "at the recent Conservative Party conference that 2,500 interracial incidents had been recorded over a two-month period and that a significant number had been attacks of a racialist nature."
    I have with me a list of some of those attacks and a summary of the types of attack that have occurred in the United Kingdom in the past few years. For example, at Woolwich Arsenal railway station on 21 September 1980, 60 skinheads, all members or supporters of the British Movement, attacked a lone West Indian. They then attacked a police officer who intervened. Seven of them were later found guilty of offences at the Old Bailey. At Liverpool Street railway station on 25 May 1978, a gang of teenage British Movement members attacked a black family in the street. Three people were found guilty of affray and unlawful fighting.
    In Lancaster, in February this year, a 12-year-old Asian boy was kicked at a bus stop. The man later accused and convicted of the crime said that he was an active supporter of the National Front. For his attack on the boy, he was fined £300 and ordered to do two hours community service.
    There are also many incidents which it is considered could not have taken place spontaneously and must have involved some planning. At Thames polytechnic in Woolwich, in June 1979, a large group of young people disrupted an ethnic minority dance and left British Movement stickers. In Preston, in September 1980, National Front slogans and swastikas were daubed in bright blue paint on the eve of a major Right-wing demonstration in Chorley and Bolton.
    In my own constituency of Croydon, North-West on 12 October 1980, slogans saying "Hitler was right" and "Scum" as well as swastikas were daubed on the walls of Croydon synagogue. Seven days later, at Ruislip synagogue, a pigs's head was found in the doorway with Klu Klux Klan stickers in its ear.
    I am sure that the House will agree that these incidents must cause considerable concern. It is not merely that racist attacks are on the increase.
    Mr. Alan Clark: Why has the hon. Gentleman not mentioned all the attacks by black people against white people? Why does he not refer to the repeated mugging of elderly white people by blacks? Is he not aware that the blacks never mug their own race but only elderly and defenceless white people?
    Mr. Pitt: I am well aware that both blacks and whites mug people. That is not the point of my argument. My right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) mentioned that at the beginning of his speech. Having worked in Brixton for six years, I am well aware of the incidence of criminal violence by one person against another.

    1041
    I was making the point that, as my right hon. Friend said, there is a considerable element of political attack. The incidence of these attacks is not merely haphazard but heavily concerted and I suggest that there is great premeditation in the incidents that take place.
    The Home Office report states in paragraph 55 on page 23:
    "There was a widespread belief among the ethnic minorities that racial violence and harassment were being instigated or carried out by particular extremist organisations, but the police considered that there was rarely concrete evidence to substantiate this belief. Even the presence of slogans at the scene of an incident, does not necessarily prove that the offender belonged to a particular grouping."
    In paragraph 58 on page 24 the report states:
    "A number of local authorities, teachers and community relations councils, believe that racialist activity in schools is increasing."
    In my view, that shows that a considerable number of politically motivated people, either by concerted action or through the inspiration of their political affinities, are injecting poison into the minds of the young people and the voters of this country. In so doing, they are provoking—intentionally or unintentionally—the type of racist attack that I have described and the type of assault upon persons that my right hon. Friend described. They are also—intentionally—doing that for one purpose: to subvert the democratic process of this country.
    I am glad that the Home Secretary has said that he keeps an open mind on the subject, but I am sorry that he has not seen fit at this stage to investigate further the possibility of creating a special squad, in the first instance in the Metropolitan Police area, on the lines of the fraud squad or the drug squad. Such a force could investigate these matters, get to the root and inspiration of these attacks of mindless violence and calculated insult on members of ethnic minorities, and stamp out this canker in our society for ever. I am glad that the Home Secretary's mind is open. I hope that he will look again at that proposal and investigate the possible creation of such a squad more deeply. I hope that at least one squad will then be set up, if only on an experimental basis, so that we may begin to get to the root of this mindless political activity.
    6.28 pm
    Mr. Teddy Taylor: I shall be brief, in view of the time available. I was interested in the comments of the hon. Member for Croydon, North-West (Mr. Pitt) about the racist attacks carried out by those very nasty people. He wanted strong action to be taken. I suggest that it might have been more helpful if he had said what should be done. He complained that one person who was convicted was given a small fine and some community work. Is he suggesting that more of these offenders should be sent to prison for longer periods, or is he thinking of some other method of punishment?
    One of the problems is that there is a demand from many people that the prison population should be substantially reduced. On the other hand, as the hon. Member rightly said, there is evidence of a substantial increase in crime, not just by alcoholics or people with social problems but by real criminals engaged in activities that are making life a hell for many decent, law-abiding people. I accept that there is a serious problem of overcrowding in our prisons, but the House has an obligation to investigate ways in which to reduce the incidence of crime. The crime figures have increased
    1042
    sharply and substantially, and the report for the last quarter shows a further increase on last year's record figures. Table 2.2 in the recently published criminal statistics shows that the number of serious offences is about five times higher than it was 25 years ago. All the signs are that the increase will continue. I accept that minor changes could improve the situation. For example, the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) rightly said that England should seriously consider introducing Scotland's fiscal system of prosecution. More emphasis could be placed on investigating the link between alcohol abuse and crime. The Government are devoting much time and attention to the serious problem of smoking, but they could pay just as much attention to the problems of excessive drinking. Such drinking injures not only the drinker but the others involved. If we introduced a system of direct payment for supplementary benefit beneficiaries at all stages—and not only when those involved were in trouble with their rents, rates or electricity bills—much stress could be reduced.
    Mr. Tom Benyon: Good point.
    Mr. Taylor: I am grateful to my hon. Friend for that comment. In addition, we should promote a feeling of community. However, that has little relevance to those who live in areas of stress and whose main concern is to get out of them.
    I hope that the Minister will seriously consider one point. It has been argued that sentences do not have much effect on the number of crimes committed. It has been suggested by several of my hon. Friends—and it appears to be accepted by many people—that whether sentences are short or long, tough or soft, the incidence of crime is not greatly affected. There is an argument for saying that the same incidence of crime could be achieved by using a lucky draw method when imposing sentences or by abolishing sentences altogether. It has also been suggested that if two thirds of a sentence is not to be served, prison overcrowding will be relieved and there will not be any significant effect on the amount of crime.
    I wonder whether the Minister and his officials in the Home Office are prepared to consider the possibility that there has been a sharp increase in crime and a substantial increase in violence because we have eroded the deterrents. The erosion of deterrents may have made a substantial contribution to the increase in crime. Those who call themselves experts generally say that that is a load of rubbish. However, some of the specific instances in which deterrents have been removed and eroded show that a reasonable argument can be made for saying that their removal has a significant effect on the amount of crime.
    We all know the consequences of abolishing capital punishment. Few would argue that there have been more killings and murders since then, but some would argue that that would have been the situation anyway. The case cannot be absolutely proved. We do not know how much violence and how many killings there would have been if capital punishment had still been a deterrent. There is no conclusive way of proving the proposition. But the figures for the number of serious crimes involving the use of firearms show that there has been a dramatic rise since the abolition of capital punishment.
    It is generally accepted that when capital punishment existed as a deterrent, guns were not usually carried by

    1043
    criminals. When we consider the dramatic 500 per cent. rise in crime that has taken place in a short time and the number of serious crimes involving the use of firearms, we find that guns are being used for petty crimes, such as robberies in the home, robberies from shops and so on. There must be a good reason for the sharp and savage rise in the use of guns in such a short time. The implication is reasonably clear. The removal of the deterrent of capital punishment has led not only to more violence and more killings, but has contributed to a dramatic rise in the number of guns being carried.
    Another, more limited example can be given. Following the decision of the European Court, corporal punishment on the Isle of Man has been abolished. The crime figures for the Isle of Man are so small that it is difficult to draw general conclusions. However, in the annual report of the Chief Constable of the Isle of Man in the year following that decision there was a sharp rise reported in the number of crimes of violence and of assaults. There is a danger that if we substantially reduce prison sentences and thus reduce the deterrent effect of penalties, our prisons, instead of being less full, will become full and overcrowded again.
    Unless we have deterrents that strike fear into the heart of potential offenders, it is unlikely that we shall be able to curb or reduce crime. As a party, we have a special responsibility. Although many people supported the Conservative Party because they believed that we would try to bring public expenditure under control and ensure that our money supply did not go out of control, many of those who live in areas of stress are seriously perturbed—and often injured—as a result of the upsurge in crimes of violence and vandalism and they hoped and believed that a Conservative Government would give the containment of crime top priority.
    It worries me that hon. Members have suggested a reduction in prison sentences and in the prison population but have not seriously argued that that, in itself, will reduce crime. The evidence is that such measures could lead to a serious increase in crime. Although the Minister's view seems well formed and perhaps a little inflexible on the general issue, I hope that he will give serious consideration, at some stage, to this question, particularly in view of the dramatic rise in serious crime. I hope that he will consider that if we could reduce crime we could make the lives of the general public more tolerable and less frightful. That might be achieved if, instead of reducing sentences and eroding deterrents, we had more effective deterrents. They would reduce crime, and thereby, the number of those who suffer seriously as a result.
    6.37 pm
    Mr. James Wellbeloved: The hon. Member for Southend, East (Mr. Taylor) was a little unfair to my hon. Friend the Member for Croydon, North-West (Mr. Pitt), when he suggested that he had not put forward constructive proposals to deal with the serious problem of racist attacks and provocation in our great metropolitan areas.
    My hon. Friend the Member for Croydon, North-West suggested that a special squad should be established, similar to the fraud squad, with responsibiliy for catching and bringing those who have committed racist attacks before the courts. I fully support my hon. Friend, because
    1044
    the establishment of such a special squad would act as a great deterrent to those who have embarked on a course that can only be described as a deliberate political attempt to incite racial discord and hatred.
    Mr. Teddy Taylor: Does the hon. Gentleman believe that once such nasty racists have been caught, their prison sentences should be reduced by two thirds, or that they should be sentenced to longer terms of imprisonment?
    Mr. Wellbeloved: I shall turn later to the question of prisons and of the prison population. The view that we need, above all else, to get back to the good old, traditional, policing methods has united the House. That view holds that the police should be involved in the community, be recognised by the local community and that the local community should develop a feeling of confidence in their local police officers. There cannot be any substitute for returning to a closer concord between the public and the police. That is the foundation upon which our police force is established. It should be a co-operative effort. It should be the responsibility of the citizen and the police officer together to try to deal with the problems that occur from time to time.
    The Minister might also care to look at the growing practice of closing local police stations. I understand the reasons for it. He rightly drew our attention to the substantial increase in the number of Metropolitan Police officers. I make no bones about it. I congratulate the Government on implementing the Edmund-Davies pay awards, improving police morale and attracting more young men and women into the Metropolitan Police. Much humbug has been spoken on this subject. The Government did a good job and deserve our congratulation.
    Having said that, I have to say that if the process of closing police stations continues, it will detract from the feeling of confidence that we must re-establish among local communities. A police station in operation is an important factor in many communities, particularly in areas of great stress. As well as taking the credit for the increase in the number of police, the Government must also meet the costs of the additional stations and equipment that those extra police officers require.
    The idea of lay visitors to police stations is an excellent suggestion. That would be a tremendous advance. It would establish confidence, and, perhaps even more important, counter some of the alarming and sometimes untrue stories that we occasionally hear.
    If the Home Secretary is to take this idea seriously—I hope that he does—perhaps he will include Members of Parliament among the lay visitors. Nothing would be more beneficial to many of the absent Labour Members than to obtain a closer understanding of the problems that confront the police force. It would be no bad thing if they visited a local police station and saw constables struggling with a lunatic drunk who was creating havoc and perhaps assaulting police officers. That would do much to expand understanding and sympathy among Labour Members, because they would see for themselves just what goes on in police stations. The idea of lay visitors should be implemented, if only to improve confidence.
    Many hon. Members have referred extensively to Lord Scarman's report, and the House will not be surprised to learn that I have several comments to make. I regard as essential the proposal to amend the Public Order Act 1936.

    1045
    When we discuss the Scarman report, I hope that the Government will not merely indulge in a general debate. As my right hon. Friend the parliamentary leader of the SDP the right hon. Member for Plymouth, Devonport (Dr. Owen) has said, we shall expect positive proposals in response to Lord Scarman's report.
    I hope that the Government will pass through both houses with the utmost speed amendments to the Public Order Act, enabling the police to require advance notice of street processions, particularly political street processions. It is intolerable that such processions can be held without the requirement at least to notify the police that traffic problems could result. Advance notice of such processions is not an attack upon the liberty of the subject or on the right to demonstrate; it is merely a means of ensuring that demonstrations are carried out in a reasonable fashion.
    We should also consider an immediate amendment to the Public Order Act, introducing the power to ban a specific and named march without the necessity of using the blanket ban. Nothing would do more damage in parts of my constituency, which contains many ethnic minorities, than a provocative National Front or Fascist march. I and every other responsible citizen would be put in an intolerable position.
    When the British Movement last planned a march through the borough of Bexley, I appealed personally to people to stay away. I did so on the basis that the march should not be allowed through an area of racial tension. If such a provocative march was planned to go through such an area, and was not banned, an impossible burden would be placed on responsible local councillors to make the plea to stay away. It is vital that that amendment be made as a matter of considerable urgency. It would provide substantial assurance to the ethnic communities that the Government are alive to their problems and are taking positive action to solve them.
    Lord Scarman also suggested improvements in the consultative arrangements. I pay tribute to the police in my area, who have established fairly close links with the ethnic communities. It is now necessary to move further and to formalise the requirement for proper consultation. That can now be done. Lord Scarman takes the view that under existing powers chief police officers can move forward in that direction. I hope that the Government will make it clear that they want such consultative arrangements to extend beyond the local authorities. We should seek to involve representatives of the churches, the ethnic groups, Members of Parliament and chambers of trade. The consultations should be as representative as possible so that all sections of the community are aware of the problems faced by the police and the action that the police feel might be necessary to deal with those problems. I hope that widespread consultation will be introduced as a matter of urgency. Indeed, I hope that it will be announced by the Home Secretary during the debate on the Scarman report.
    Lord Scarman rightly calls for a review of the functions of community relations officers. I believe that he has got it right. It is time that there was a review. The job of the CRO is mediation. That should be his prime function. I fear that in many areas CROs have gone beyond that prime function. It is time that their role was redefined. Those who feel that they cannot work under any redefined system might well do better to try to solve the problems of racism by joining some other organisation.
    1046
    I shall refer briefly to prisons. Once again, I congratulate the Government without reservation on the programme of prison building and rehabilitation upon which they have embarked. The Minister was right to point out that this has not been done in any significant way for many years under either Labour or Conservative Governments. The Government therefore deserve our congratulations.
    I urge caution about shorter sentences and earlier parole. It would be monstrous if, by administrative decree, we took away from the courts the sole responsibility for hearing the case, evaluating the evidence and seeing the person in the dock. We must be very careful about that matter.
    As regards parole, it would be devastating to public opinion if the feeling spread that the Government would be making it easier for those convicted of crimes of violence to receive an early release from prison. I urge great caution.
    Despite the fact that I have congratulated the Government on their building programme, even in the present economic recession I believe that they ought to embark on a crash programme because providing places in prison would deal with many of the problems with which we are confronted without, perhaps, the necessity of using administrative means to interfere with the authority of the courts. This would also have a considerable impact upon unemployment, inasmuch as it would bring people back into constructive work. We must not let the word get around that the present Government and the House of Commons will be soft on thugs and people who have been convicted of acts of violence.
    My last point is important. I want to ask a question of those on the Opposition Front Bench representing the Official Opposition—who are unsupported by any of their Back Benchers, who believe, I take it, that Lord Scarman's report and all the problems of law and order that confront us are of little consequence. I am glad that a former Home Secretary is sitting there. I want to ask the right hon. Member for Leeds, South (Mr. Rees) a question. If he cannot answer it, I should like him to convey it to the Leader of the Opposition and to the Labour spokesman on home affairs.
    I have in my hand a report published in "London Briefing" and signed by Mr. Peter Tatchell. He is not only the secretary of the Bermondsey constituency Labour Party but also, I understand, the prospective Labour parliamentary candidate who is aiming to succeed that distinguished Member of this House, the right hon. Member for Bermondsey (Mr. Mellish). Mr. Peter Tatchell says in the report:
    "we must look to new more militant forms of extra-parliamentary opposition which involve mass popular participation and challenge the government's right to rule."
    Do the Official Opposition support that? Are they prepared to denounce Mr. Peter Tatchell and those who support him? If they cannot answer now, let the Leader of the Opposition or the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) answer that question. That is the question that the people of Bermondsey will ask when the right hon. Member for Bermondsey resigns his membership of the House, and it is the question that the British people as a whole will ask. Is the Labour Party soft? Will it support outside activity challenging the Government's right to rule?

    1047
    It is a fundamental question, not only on law and order but democracy itself. It demands an answer.
    6.53 pm
    Mr. Norman Miscampbell: I want to consider the last line in the motion, which deals with the "crisis in the prisons". Hon. Members on both sides of the House—notably my hon. Friend the Member for Abingdon (Mr. Benyon) and my hon. and learned Friend the Member for South Fylde (Mr. Gardner)—have noted that a great deal can be done to get out of our prisons the drunks, the disturbed and others. I am sure that my right hon. Friend the Home Secretary and my hon. and learned Friend the Minister of State are well aware of the problem and will do all that they can to help in that regard. Sadly, we need more accommodation. I congratulate the Government, as have many others, on the amount of effort that has been put into providing the new accommodation that is so urgently needed. The Minister of State told us that £360 million is involved.
    I agree with hon. Members who have said that there is still a grave need for more prison accommodation, unfortunately, because the public would not willingly countenance a situation in which they felt that those who had committed serious crimes were not being made. to serve their sentences for sheer lack of accommodation. That matter can be examined on other occasions. I do not want to deal with it now.
    I want to consider briefly the two proposals that have been made to see whether it is possible to reduce the numbers in prison.
    I am pleased that blanket parole no longer appears to feature as a priority in the Government's thinking. I am sure that my right hon. Friend, in his judgment—I emphasise that it must have been his judgment—was right to make that change. It is a question not of the judges influencing him or of undue pressure, but of a decision having been made, it seems, on purely common-sense lines.
    If those who sit in judgment and have the duty of imposing a sentence feel that it is certain that two thirds of that sentence will, one way or another, be removed, the only likely human reaction will be to increase the initial sentence. That point was dealt with by the right hon. Member for Plymouth, Devonport (Dr. Owen). I should have thought that such a step, rather than clearing the prisons, would be more likely to fill them.
    However, I sincerely welcome the proposals to implement section 47 of the 1977 Act. As has been noted, my hon. and learned Friend the Minister of State was the author of the amendment concerned. Over the years a number of us have hoped to see it activated as quickly as possible.
    The only point I make is that we should not provide another form of suspended sentence. The suspended sentence has probably led to more, rather than fewer, people being in prison. Often people commit other crimes, having been given suspended sentences, and naturally the courts say "You have had your chance. You are on a suspended sentence. Therefore, you will serve that sentence." The accused then ends up serving the old sentence and the new one. That is proper. We cannot give people a chance and then simply ignore it.
    1048
    What is being offered in this initiative is that judges will be able to say to convicted persons "You must learn what prison is like. You will go in for 28 days, and thereafter you will be released." So often in courts one knows all too well that if only the person concerned had a taste of prison, he would never offend again. Why give him the full six months if we can get away with one month which will teach him a lesson?
    The crime may be such that one could not, in all conscience, simply impose a sentence of one month in all. But if a person transgresses again, he must pay for his misdemeanour. I welcome that proposal.
    Lastly, I believe that judges can be trusted. Sometimes one feels that that view is not well received in the House. Judges do not send people to prison if they feel that they can keep them out. That certainly applies to the younger judges. The way forward is to trust judges and to give them this power. It is a creditable and important step.
    6.58 pm
    Mr. Richard Page: I am pleased that the motion and some of the contributions to the debate have tried to help to fight a view seemingly held by many citizens in this country—namely, "Do not worry if there is a problem, especially if it is nothing to do with us personally. Let the State fix it." For years I have been getting exactly the same feeling on the topic of law and order, especially concerning children's offences—"It is not the public's worry at all. It is a matter for the police and the courts to solve."
    A strikingly close parallel is found in the education complaints received by hon. Members relating to the fact that teachers do not seem to have the discipline or to keep the control that existed in former times. Discipline is the responsibility of schoolmasters and respect for the law a province for the police and the courts but it should not be forgotten that both are primarily the responsibility of every parent to instil into a child. Hon. Members must do everything in their power to stop the shift of that moral obligation on to the shoulders of the State.
    I echo the words of my hon. Friend the Member for Warwick and Leamington (Mr. Smith). I support warmly the idea of requiring parents to pay fines imposed on children under 17 years of age unless the court feels that the circumstances are unreasonable or unsuitable. The vast majority of parents realise their responsibilities for their children. There is a minority that does not. The proposal I have mentioned could act as a spur to concentrate in the minds of those parents the fact that they are responsible for the behaviour and discipline of their children.
    Many people, especially youngsters, drifting down the road towards crime would be dissuaded and redirected by an improvement in communications. The visible remoteness in the past of our police force, literally driven into panda cars to cover their patch, has produced a feeling among youngsters of alienation and a feeling that policemen are almost a separate species.
    It is my hope and belief that the support given by the Conservative Party—I also here pay tribute to my right hon. Friend the Home Secretary for his efforts—to the creation of an extra 7,500 jobs for police officers will put more bobbies back on the beat. I hope that this improvement will continue. I am glad to say that it is happening in the division that covers my constituency. Policemen are back on the beat, talking to and helping the

    1049
    general public. I hope that this leads not only to a reduction in crime but also to an increase in understanding and friendship.
    I shall not discuss tonight the reason behind man's behaviour patterns and his reaction to circumstances in certain ways. It is an extremely complex and difficult subject to analyse. I can only say from studying the Scarman report that phrases leap out of the pages time after time. I give these examples:
    "Distrust of police action on the streets was too common a phenomenon of life in Brixton";
    and
    "The worst construction was invariably put upon police action even when it was lawful, appropriate and sensible."
    Those phrases illustrate the need for a closer and personal contact between members of the public and our police force. I echo the plea of my hon. Friend the Member for Abingdon (Mr. Benyon) on behalf of the special police force. I recognise that hon. Members of the official Opposition have heeded his words and have probably rushed out to join the special police force tonight which explains why they are not present. Members of the special police force in my Division, which covers also the constituency of my hon. Friend the Member for Watford (Mr. Garel-Jones), have been addressed at the House of Commons by my hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths). Whether or not it was due to our influence I do not know, but there has since been increased recruitment into the special police force. I should like to think, when hon. Members take an interest in this area, that an improvement will be seen in the numbers that come forward.
    There is not sufficient time available for me to deal with the variety of sentences available to the courts. It must, however, be right to have available as wide a variety of sentences as possible. In this world of equality, there has been pressure to try to deal with every sentence and every crime as if it were a grade on a ladder. It is time to examine some of the minor offences to see whether they should be punishable by prison sentences or whether the attempt should be made to find more enlightened methods to try to help and reform. It is possible that the short, tough sentence at a detention centre, with the emphasis on hard and constructive activities, with discipline, inspection and drill, will deter youngsters from reappearing before the courts. The youngster might even be given a sense of responsibility, a sense of discipline and an appreciation of a framework of life in which to live, which might be lacking at the time in his personal circumstances.
    In some cases the parent should be much more involved in imposing discipline on children. Parents should not be able to opt out in the belief that the State will take responsibility. I welcome the idea that 16-year-olds should be made eligible for community service orders. A youngster will have far more respect for property and people if he is confronted by, and then has to rectify, the damage that he has caused. That changed attitude, I hope, will be transmitted to his friends and companions. I should like to see progress made towards an environment in which people can be discouraged from slipping deeper into more serious levels of crime—not only for the good of the individual and society but for the practical and economic reason of trying to keep down the horrific cost imposed on the State in running prisons.
    I should like to refer to the unfortunate victims of crime. There seems to be a feeling that, provided the State
    1050
    picks up the tab and pays for compensation, everything will be all right, and that if at the same time the person who has caused the damage or the personal injury suffers by some custodial sentence, justice will be seen to be done. I hope that more effort will be made to ensure that the individual offender is made to pay directly to the victim in some measure for the pain and suffering he or she has caused. I know that there are ways in which the individual offender can be made to pay. However, there is also a fairly widespread belief that it is not worth the financial trouble to enforce it in any depth. The criminal injuries compensation scheme has been revised. Grant aid has been provided to the National Association of Victim Support Schemes. The policy relating to compensation orders has been reversed. I should like to see vigorous implementation of a policy to ensure that the offender personally is confronted with, and pays for, his crime.
    In these comments, rushed and hurried as I have been obliged to make them, I wish to make clear my view that the community only as a united society will defeat crime. Only with its wholehearted support will society's agent, the police force, help to achieve that aim.
    7.07 pm
    Mr. John Wheeler: In the moments still available for my contribution to the debate, I can hardly do justice to the issues that have been raised. I merely say that the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) has done a great service in allowing many hon. Members to talk about the complex issues of law and order.
    I shall confine my remarks to Lord Scarman's report, which I regard as a watershed. The report is moderate, sensible and balanced in every possible way. Lord Scarman's reference to the work of the House and the Home Affairs Select Committee pleases me. He is right to draw attention to the social conditions that are such an important part of the problems in inner cities.
    I know that my right hon. Friend the Home Secretary, probably in the new year, will give a detailed response to the 57 recommendations made in the report of the Home Affairs Select Committee. The recommendations are important because they cover the whole range of Government, practically every Government Department, local authorities, commerce and the citizen. I look forward to debating those recommendations and the Home Secretary's response to the report early in the new year. The Select Committee's report, together with the Scarman report, will provide a programme of action and progress in the inner cities in future years that the whole House, I am sure, will welcome.
    We have been talking about crime and prisons. If we are sincere about wanting to reduce the prison population and to control crime, we have to develop, in consultation with the police and the citizens as a whole, a better method for preventing crime. One third of the prison population is composed of burglars. If we want to prevent them from going to prison, we must first prevent them from being burglars. That is the challenge that falls to us and to the constabulary. I hope that in the coming debates we may have an opportunity to explore some of these ideas in greater depth.
    7.10 pm
    Mr. David Steel: By leave of the House, Mr. Deputy Speaker, I should like to reply.

    1051
    I thank the hon Member for Paddington (Mr. Wheeler) for his remarks. I agree with him that this has been an extremely useful debate. In his short contribution he summed up the connection between the two themes that have been running through our debate this afternoon—the reduction of the prison population and the more effective policing of our communities. He was right to tie the two together.
    I was grateful for the Minister's response at the beginning of the debate. It was a positive one, except in one respect. He must have been a little taken aback at the sudden shouts that greeted him when he said that there was no need to say that community policing schemes were not some sort of madcap schemes thought up by a country bumpkin. But there is need to say that, because that is precisely what has been said, even by responsible figures in the Police Federation, in the course of the heated and lively debate on police methods.
    I thought that the Minister was slightly smug in that one section of his speech, when he said that the advantage of community policing was self-evident. It may be self-evident, but alas, it is not nearly sufficiently put into practice as a matter of general police policy. Why, otherwise, did Chief Superintendent Webb resign from the force in Birmingham when he felt frustrated at being unable to pursue his particular ideas?
    It is true, as the hon. Member for Erith and Crayford (Mr. Wellbeloved) said, that the Government are to be congratulated on the increase in police numbers. The Minister was right in saying that that flows from the implementation of the pay reports. The Minister gave us some welcome figures on the number of civilians who have taken over from the police, thus releasing more police for other work.
    What is needed is a commitment from the Government—if we can have it in the Minister's reply we shall have achieved something—that there will be a policy introduced generally throughout the police force in favour of a return to locally based community police stations and the man on the beat. That, more than anything else, is what we have been seeking in the debate.
    I welcomed some of the other items that the Minister mentioned, including the commitment to bring forward proposals to extend compensation to the victims of crime. To that extent the Minister's response was extremely valuable.
    My right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) the leader of the Social Democrats, in mentioning violence on television, must have been surprised by the chorus of unanimity with which his remarks were received. He was almost making a confession that, as a liberal, he thought it necessary to control some of the output of television. But I find that need, too, as a Liberal. I hope that the board of governors of the BBC and the board of the Independent Broadcasting Authority will note that it was a unanimous view in all parts of the House that the level of violence on television has become unacceptable and has, in our view, a contributory effect to the growth of violence in our society.
    My right hon. Friend the Member for Devonport was right also to warn the Government against giving generalised philosophical welcomes to the Scarman report without backing it with a commitment to the specific
    1052
    recommendations. The one criticism of the Scarman report which I shared with him was the sweeping reference that Lord Scarman made to there being no institutionalised racialism in this country. As my right hon. Friend showed, there is a good deal of unconscious institutionalised racialism that we ought to tackle.
    I was not entirely happy with my right hon. Friend's suggestion that the responsibility for race relations should be transferred from the Home Office to the Department of the Environment, which is, if anything, an even greater amalgam of Ministeries. I thought that my right hon. Friend was on sounder ground in recommending that there ought to be a Cabinet sub-committee of the various departmental Ministers, including an Education Minister——
    Mr. Wheeler: Will the right hon. Gentleman allow me to intervene?
    Mr. Steel: There simply is not time for me to give way, and I hope that the hon. Gentleman will understand. I want to reply to as many of the speeches as possible.
    The hon. Member for Warwick and Leamington (Mr. Smith) made a fairly standard speech calling for tougher sentencing and the building of far more prisons. Apart from that being a rather depressing counsel of despair, it seemed to omit one word that has not featured at all in the debate—recidivism. There is a good deal of evidence that the long-term crowding together of prisoners provides more breeding grounds for further crime. That is true not only of our prisons but of prisons everywhere in the world. The hon. Member seemed to overlook that aspect.
    The hon. Member's contribution was in marked contrast to the welcome remarks of the hon. Member for Abingdon (Mr. Benyon), who spoke of the very high cost to the taxpayer of the doctrine of retribution, instead of concentrating expenditure on the solving of crime. He gave us interesting evidence from different states in the United States on their prison sentencing policies.
    My hon. Friend the Member for Isle of Wight (Mr. Ross) stressed, as did other hon. Members, the responsibility of parents and aired his view—with a note of apology that I thought was unnecessary—that there was a case for considering some form of compulsory community youth service. It is a view that I share, even though not everyone in my party shares it.
    My hon. Friend pleaded for regionally secure units for the mentally sick. The hon. and learned Member for South Fylde (Mr. Gardner) also said that there are too many people in our prisons who ought to be catered for elsewhere. I am sure that the whole House would support what my right hon. Friend the Member for Devonport said in asking what had happened to the funds allocated to regional health authorities for this purpose and then not used.
    I was most grateful for the speech of the hon. Member for Islington, South and Finsbury (Mr. Cunnningham), because he was the only representative of the official Opposition present throughout the entire debate. I thought that was something of an achievement, especially at a time when even his own credentials as a member of the Labour Party seem to be a matter of some public speculation.
    I thought that the hon. Member for Erith and Crayford was right to take the hon. Member for Islington, South and Finsbury to task by asking whether the Labour Party will stand for the rule of law. If it does not stand for the rule

    1053
    of law against the increasingly lunatic pronouncements of its parliamentary candidates, we shall be in real trouble in trying to enforce the ordinary rule of law in our streets. Whatever we may think of the politics of any Government at any time, the idea that one should undermine the right of the Government to rule seems to me to be an extraordinary proposition to come from anyone seeking election to this House in the name of the Labour Party.
    None the less, the hon. Member for Islington, South and Finsbury, in speaking from the Opposition, made a constructive speech in which he drew attention to the better practice that we have in Scotland of placing a limit on the length of time for which persons can be detained in custody without trial. That practice could well be copied south of the border.
    The hon. Member pressed for more specific implementation of the Scarman report and made an interesting point about the development of local liaison committees in the London boroughs involving Members of Parliament—a point supported by my hon. Friend the Member for Croydon, North-West (Mr. Pitt). The hon. Gentleman's remark about the status of the bobby on the beat was important. I have never understood why we have continued to diminish the influence of the bobby on the beat, especially with the advent of personal radios and levels of communication which the former bobbies on the beat did not have. The hon. Gentleman made a sound point that ought to be pursued.
    I was delighted to hear the contribution of my hon. Friend the Member for Croydon, North-West, because I missed his maiden speech. I am delighted that he is taking such an active role in the work of the House at an early stage. He was right to draw our attention to the report of the Select Committee on racial attacks. I am sorry that he was so blatantly misunderstood or misrepresented by some Conservative Members who seem unable to distinguish between politically motivated racial attacks and attacks that merely happen to be by a member of one race on a member of another.
    The debate would not have been complete without the remarks of the hon. Member for Southend, East (Mr. Taylor), which seemed to come straight from the Conservative Party conference. I thought for a fleeting moment that the move to Cathcart from Southend, East had done the hon. Gentleman some good. He made some sensible remarks about excessive drinking being a cause of crime. Those remarks lasted for no more than a couple of minutes and the hon. Gentleman then took his usual path of deterrence, and capital and corporal punishment, which he admitted experts would describe as a load of rubbish. I have never known him allow any expert to deter his prejudices on any topic. He was in no danger of allowing that to happen this evening.
    The hon. and learned Member for Blackpool, North (Mr. Miscampbell) made some interesting observations about suspended sentences possibly leading to a larger prison population He welcomes the new initiative that my right hon. Friend has taken, as we all do.
    Finally, the hon. Member for Hertfordshire, South-West (Mr. Page) reminded us again of the need for parental and teaching discipline. He referred to what he described as "panda car alienation" and the need to bring the police nearer to, into and among the community.
    1054
    The message that has come from the debate and from both sides of the House to the Home Secretary is that the House will support a modern police force that works among and alongside those whom it serves.
    7.23 pm
    Mr. Mayhew: With the leave of the House, Mr. Deputy Speaker, I shall add my thanks to those that have already been expressed to the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), the leader of the Liberal Party, for the opportunity that he has given us to participate in an extremely interesting debate, which has been distinguished by hon. Members on both sides of the House finding a great deal of common ground. I have, alas, to omit from that compliment those who normally occupy the Opposition Back Benches, who have been absent throughout the debate, with the honourable exception for part of that time of the hon. Member for Newham, South (Mr. Spearing).
    The Government will always hold to two propositions: first, that there must always be prison sentences, and long prison sentences available for those who are convicted of violent offences so that for the duration of those sentences they will be unable to commit further offences against the public; secondly, that prison accommodation must always be available as a front line of defence for the public We owe it to the public, and especially, as my hon. Friend the Member for Southend, East (Mr. Taylor) said, to those who voted for the Conservative Party in the 1979 election in the belief that the containment of crime would be a Conservative Government's top priority, as it is, to ensure that those two policies remain unchanged.
    The right hon. Member for Plymouth, Devonport (Dr. Owen) asked whether the Scarman report would be neglected as have so many others. I take that rather hard when my right hon. Friend the Home Secretary expressed yesterday a degree of acceptance for proposals in the report. Such acceptance when making a statement on a report on behalf of the Government is almost without precedent. Those who have asked today—the hon. Member for Islington, South and Finsbury (Mr. Cunningham) is one—that the Government should say during the debate "Yes, we accept the whole thing lock, stock and barrel, give or take a few propositions", are not being realistic.
    My right hon. Friend has said that on the matters whose acceptance he announced yesterday he needs to take the opinion of the House that will be expressed in the debate that is shortly to take place in Government time. He has explained that he will consider what is said and then introduce his proposals. I cannot believe that it would be other than irresponsible when dealing with issues of such complexity and importance to take any different course.
    My hon. Friend the Member for Warwick and Leamington (Mr. Smith), who has kindly explained to me why he cannot be present, spoke of a constituent who recently was robbed in London. By that means he drew vivid attention to the fears of so many of our fellow citizens. He said that in many instances parents have not fulfilled the basic responsibility of parenthood. I entirely agree with that argument, which was taken up by my hon. Friend the Member for Hertfordshire, South-West (Mr. Page). Those who have not fulfilled that responsibility are in the minority. However, many of those who have taken part in the debate have welcomed our proposals for increasing the ability of the courts to bring home to parents

    1055
    their responsibilities. My hon. Friend claimed that suspended sentences had been a mockery but I do not think that that is quite fair. My hon. and learned Friend the Member for Blackpool, North (Mr. Miscampbell) observed that at present suspended sentences have to be wholly suspended. He said that in the early years following the introduction of suspended sentences they were imposed in cases where sentences of immediate imprisonment would not have been imposed, and that when subsequently there were further offences the earlier suspended sentences had to be activated. Lessons have been learnt by the judiciary at all levels from that.
    The hon. Member for Isle of Wight (Mr. Ross) said that suspended sentences may have increased the prison population. That is much the same argument. The great advantage of section 47 of the 1977 Act, which will be implemented if Parliament agrees, and whose scope will be wide, is, as has been stressed by the hon. Member for Erith and Crayford (Mr. Wellbeloved) in an important speech, that the decision will always rest with the court whether any part of the sentence should be suspended. The decision should be a judicial one. In the circumstances outlined by the hon. Gentleman the decision would be a judicial, not an Executive, one.
    I pay a special tribute to the speech of my hon. Friend the Member for Abingdon (Mr. Benyon), who said, fairly, that the public on the whole want longer sentences. He believes that they should not come about. He claimed that there is no evidence—this is true—that longer sentences have an effect in reducing the likelihood of reoffending. My hon. Friend has tabled a most helpful early-day motion and I draw the attention of the House to early-day motion No. 43. My hon. Friend congratulated my right hon. Friend the Home Secretary on his work in seeking to reduce the numbers of those in prison and in seeking shorter sentences. I am grateful for what he said. He raised a most important issue when he said that the public must play their part and that they must look after their own security. That issue was taken up by my hon. Friend the Member for Paddington (Mr. Wheeler). My hon. Friend made a special plea for more volunteers for the special constabulary, with which I am glad to associate the Government.
    The hon. Member for Islington, South and Finsbury said that my right hon. Friend should accept the Scarman report as a package. He asked for a statutory obligation for consultative arrangements. My right hon. Friend said yesterday that he would implement formal arrangements and that the introduction of statutory arrangements would depend on the progress that is made. Of course, statutory arrangements would need legislation. My hon. Friend the Minister of State, Home Office yesterday met the London
    1056
    boroughs and that has already been put in train. The door is not shut to statutory arrangements for consultation but we must wait and see how we get on.
    My hon. and learned Friend the Member for South Fylde (Mr. Gardner) referred in a helpful speech to the virtues of partially suspended sentences and said—I am sure that he is right—that the section would be understood and applied wisely by the judiciary. He added that there might be a future emergency during which the size of the prison population got out of hand, in which event there would be a case, as he argued, for a provision to be inserted in legislation and to be implemented by order.
    Others have spoken of the need for a crash prison building programme, especially the hon. Member for Erith and Crayford. There is no such animal. We cannot have a crash prison building programme. There are years between conception and completion. If we were to short-circuit the procedures, local consultation would suffer. One feature to emerge from the debate is the need for local consultation on these matters. Furthermore, leading the opposition to the proposed prison in Woolwich is his hon. Friend the Member for Woolwich, East (Mr. Cartwright) and that, perhaps, brings the matter a little nearer home.
    I thank the hon. Member for Croydon, North-West (Mr. Pitt) for his kind remarks about the Home Secretary and his officials in respect of the report on racialist attacks. That is a very important problem about which he knows much and about which he made an important speech.
    We have had a valuable and, to me, encouraging debate because of the wide agreement and the sharing of objectives that has become manifest through the speeches from all parts of the House. It is true, as my hon. Friend the Member for Southend, East reminded us, that the Government came into office committed to support the rule of law in an increasingly violent world. Our resolve has been demonstrated both in the programme of measures that I outlined when I first spoke, and which appeared to have generous support—for which I am grateful—and in our support for the police during the disturbances of this summer.
    Law and order remain a continuing and top priority commitment for the Government. Whatever the difficulty, we are determined to take all the steps open to us to ensure that law-abiding citizens are protected from criminals. I take heart from all that has been said in the House this afternoon, which shows that we have wide support for our resolve.
    Question put and agreed to.
    Resolved,
    That this House believes that the maintenance of law and order and preservation of liberty depend upon a relationship of confidence and co-operation between the police and local communities, and therefore draws particular attention to the need for community policing methods and an independent procedure by which complaints against the police can be examined; considers that inadequate help is given to the victims of violent crime; and further considers that urgent action is needed to deal with the crisis in the prisons.

  Interest Rates
  7.32 pm
  Mr. Richard Wainwright (Colne Valley): I beg to move,
  That this House recalls Mr. Chancellor of the Exchequer stating in his 1981 Budget speech that "the burden of income tax and excise duties has to rise in order to secure lower interest rates"; regrets that interest rates are now higher than after his Budget; and calls upon him to implement lower interest rates in order to assist enterprise to provide jobs, capital investment and better housing.
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): I have to announce that Mr. Speaker has selected the amendment standing in the name of the Prime Minister.
  Mr. Wainwright: The Chancellor of the Exchequer seems to have cast himself with frigid perfection in the role of Jack Frost because the first shy signs of a modest industrial recovery are being nipped by United Kingdom interest rates which are considerably higher than the average in the rest of the world. There have been many signs that a likely consequence will be a return to further recession in the first part of next year.
  In contrast to most previous periods of high interest rates, the present substantial margin over the going rate of inflation means that we now have a heavy real interest rate. For instance, the days have gone when a householder with a mortgage knew that the house was increasing in value at a rate roughly equivalent to his mortgage interest rate. The real rate of interest is now at a considerably higher level.
  For businesses, the days have ended when they could cheerfully divide the interest burden by half on the ground that the other half was being paid by the corporation tax man. Taxable profits in most industrial companies are now so low that corporation tax does not enter into their calculations.
  There is therefore a great deal of avoidable misery. There is also a threat of under-equipped, broken-backed industry when world recovery eventually comes. That may mean that a great part of British manufacturing industry will not be able to respond to that recovery and we shall reap the appalling consequences.
  For instance, only yesterday the CBI issued a statement that manufacturing investment, including leased assets, is 12½per cent. down on the previous year. That tells a grim story. The position is summed up well in an interesting and recently published report by the chairman of the Conservative Small Business Bureau, the hon. Member for Surrey, North-West (Mr. Grylls). The report, on page 7, states:
  "Current interest rate levels militate against medium to longterm investment, weaken the competitive position of our industry by increased costs and inevitably create greater unemployment."
  That is not controversial.
  The short-lived interest rate drop which occurred, to our relief, in the Budget Statement last March was said by the Chancellor of the Exchequer to be the result of higher taxation which he then imposed. The autumn return to high interest rates means that the country is still swallowing the tax medicine of the last Budget, although the promised cure has already disappeared. The Government still make a virtue of turning down all manner of useful capital spending projects. Some of these are essential. One thinks of the casualties to our sewerage systems and the miles of railway track that soon will be
  1058
  unusable because of lack of maintenance. The Government offer nothing on the other side of the account, by way of relief on interest rates. That must be because of the Government's obsession with a dubiously measured money stock and their high sterling policy which they believe supports their money supply policy.
  We are in the worst of all economic worlds, and our motion is aimed at that. We moved the motion for the sake of the future of British industry, for the sake of jobs and on behalf of people with house mortgages and other borrowings.
  I shall try to anticipate some of the criticisms that may be made. Of course, we accept that lower interest rates—and we are talking not of a mere half-point drop—are likely to have an effect on the international value of sterling. We accept that 6 cents off sterling and an equivalent drop against the other major currencies would be no disaster. It would bring benefits to our exporters whilst raising import costs slightly. We do not pretend that that consequence can be avoided, but we believe that it is well worth the benefits that substantially lower interest rates would bring.
  We are talking not about a half-point drop. I cannot imagine that it has ever entered the mind of the Financial Secretary to shoot a fox.
  The Financial Secretary to the Treasury (Mr. Nicholas Ridley): I do not know about that.
  Mr. Wainwright: Perhaps the hon. Gentleman will tell us about it. It was a gamble—some may say reckless—to have announced a week in advance that we wished to discuss the level of interest rates. Perhaps we hovered more than usual round the teleprinter in case a few hairs on the tail of our fox had been shot off by the banks in the last day or two. They have not been shot off, but, if they had, a half-point drop would be only a few hairs off the tail. We are aiming at a more substantial drop, of at least two points.
  The Financial Secretary has criticised, outside the Chamber, the interesting package of proposals by a recent member of the Cabinet, the right hon. Member for Chesham and Amersham (Sir I. Gilmour). The Financial Secretary said that reflation could not be combined with lowering interest rates. I do not agree with him. I believe that a carefully selective reflation, if protected by an incomes policy, need not prevent lower interest rates. However, we shall not have that carefully selective reflation, so the Government owe us a reduction in interest rates.
  Even if we were to have a sudden Pauline conversion of the Cabinet and carefully selective reflation, there would still be room for reducing interest rates. There is sound evidence in the financial market that a higher immediate public sector borrowing requirement for profitable capital projects would do no harm to lenders' confidence. It would help to relieve the well justified market fears of under-invested industry being unable to cope with recovery if there were signs that the Government were helping to get private sector investment going, as well as attending to urgent needs in public sector capital projects.
  There is clear evidence that a reduction of two points in interest rates would fairly soon relieve the PSBR substantially because it would relieve the cost of servicing the national debt. The Treasury model is in the care of

  1059
  Treasury Ministers, and although they ridicule it at times, at other times they have to rely on it. It shows that by 1984 a drop of two points in interest rates now could relieve the PSBR by as much as £2½ billion a year—partly by reducing the cost of servicing the national debt, but much more by increasing the buoyancy of the revenue as a result of increased activity.
  In saying that I am relying not purely on City gossip, still less on my own authority, but on a substantial interview in The Guardian on 6 November with a great authority in the City, Mr. Gordon Pepper of Greenwells, who must be held in considerable esteem in most sections of the Conservative Party. He categorically said:
  "I would also be prepared to see the PSBR rise provided the extra funds were put into genuine profitable investment: into public sector assets that earned or were likely to earn a real return."
  He went on in an interesting way from the depth of his experience to complain that there was still too much focusing on the demand for credit and not enough consideration being given to the enormous supply. There are many ways in which the Government could attack the credit that is available if they were to give their minds to it. The scope for extending the indexation of gilts is by no means exhausted. I hope that the Government will reveal that in the next few months. There is also scope for greatly increased borrowing by the European Community, which has been proposed in detail by the West German and French Governments.
  The Government's stubborn and static posture is adding to the loss of morale in industry and to the sufferings of the unemployed. If it continues in that way, the Government's strategy will be shown in the next Budget to have been self-defeating.
  My hon. Friend the Member for Truro (Mr. Penhaligon) will deal with the Government's amendment when he replies to the debate. However, the amendment is staggering in its arrogant complacency. Without a word of explanation it refers to the Government's economic strategy. It does not state whether it is referring to this Thursday's economic strategy or the economic strategy of a fortnight ago when we were told that the Chancellor of the Exchequer would resist any attempts to expand the PSBR for next year.
  To anyone of my vintage, the amendment has a sad ring of those old Conservative slogans "Trust us; give us a doctor's mandate; cling tight to nurse." The doctor has been shown to be a quack and the nurse to have no qualifications. At this hour the people of Crosby are probably showing that they have lost all confidence in the Government's economic strategy and want to get rid of them as soon as possible.
  7.45 pm
  The Financial Secretary to the Treasury (Mr. Nicholas Ridley): I beg to move, to leave out from "That" to the end of the Question and to add instead thereof:
  "this House expresses confidence that the Government's economic strategy is the best course for restoring this country to prosperity".
  It is a pleasure to have the opportunity to debate economic policy with the hon. Member for Colne Valley (Mr. Wainwright) and the Liberal Party. At least it is an improvement on the debates that we have had recently with the Labour Party. There is no need for us to debate
  1060
  the wilder notions of the Labour Party and of the right hon. Member for Stepney and Poplar (Mr. Shore), with their colossal spending plans, shopping lists of public expenditure proposals and tax reductions, for which they have no conceivable means of finding finance, disguised by their plans to turn Britain into an East European seige economy.
  That compliment to the hon. Gentleman does not imply that I shall be able to agree with everything that he said, as I shall make clear later. However, we can at least start from the shared premise that the world exists and that Britain is part of it. That means that the debate can take place within the realms of the possible and on the basis of certain shared assumptions.
  Whatever the Labour Party may believe, the Liberal Party will surely realise that we cannot insulate ourselves from developments abroad. We are, and will remain, members of the European Community. We cannot put a ring fence around that Community. High interest rates are currently a world-wide phenomenon; they are a product of excessive demand for credit from public and private sectors taken together throughout the world. Recent high interest rates stem from the realisation of Governments throughout the world that they must now restrain inflation and that that requires tight monetary policies.
  The realisation has also dawned that those countries must cease adding to the demand for credit through their PSBR. It does not make any difference whether Governments ask for credit for capital spending or for revenue spending. It is not the destination to which the spending is pledged that pleases or displeases markets, it is the supply of the funds. The hon. Gentleman said that the markets would be happy to provide that, if it was for a cause espoused by the Liberal Party. I do not believe that that is true.
  Mr. David Penhaligon: Is the hon. Gentleman aware that at the moment there is a Bill before the House to increase the borrowing ability of British Nuclear Fuels Limited to £3½ billion? That is to be done on a Government guarantee. We are told that that money will not count against the PSBR. When the Minister was challenged he said that that was because the Treasury says that it does not count. Could not we apply that attitude to a few other things?
  Mr. Ridley: That would not help if the question is how to borrow the money. What affects the PSBR depends on how much money has to be borrowed, as I intend to show.
  As a result of the prudent measures taken by my right hon. and learned Friend the Chancellor of the Exchequer in the Budget last March, we were able to reduce interest rates both absolutely and relatively. For several months we were able to hold our interest rates below those in other industrial countries. For a time short-term interest rates here were as much as two or three percentage points below the average for other industrial countries. The Liberal motion acknowledges that.
  During the summer, external pressures, particularly dollar interest rates, mounted to the point where they could no longer be ignored. Although bank base rates remained at 12 per cent. until mid-September, rates in the market had begun to rise, reaching about 14 per cent. in July and August. In that way the market was signalling the need for interest rates to rise. Meanwhile, the weakening exchange rate in conjunction with signs of an acceleration in bank

  1061
  lending made it necessary for us to respond, unless we were going to let good financial management go to the wind.
  The Liberal Party motion calls upon the Government to implement lower interest rates. How are we to do that? I ask the hon. Gentleman who criticises our policy on interest rates to come clean about what he would have done at that time. The alternatives—I was there so I experienced the options being put to me—were to accept the trend towards higher interest rates, which is what we did, or to resist that trend, which would surely have set off a potentially dangerous inflationary spiral, fuelled by excessive monetary expansion and a falling exchange rate. Were we wrong to take the former and more prudent course? What would the Liberal Party have done under those circumstances? How would it have implemented lower exchange rates?
  Mr. Robert Sheldon: If that is so, why did the Bank of England intervene last week to keep up interest rates, to the perplexity of all those who work in the City?
  Mr. Ridley: The right hon. Gentleman has had experience in the Treasury. He should understand the technical operations of the Bank of England, and it would be wrong of me to spell them out. Despite four years in the Treasury the right hon. Gentleman now says that he did not understand the Bank of England's action.
  Mr. Sheldon: The hon. Gentleman must not misquote me. I said that no one in the City understood it. If the hon. Gentleman would leave his brief for a moment, read the financial press and talk to people in the City, he would see that their incomprehension was as great as was possible.
  Mr. Ridley: The right hon. Gentleman has drawn the wrong conclusion from events at that time.
  Mr. Richard Wainwright: The Financial Secretary gave us an interesting history of the late summer and early autumn. Surely he will not try to conceal from the House that since then American interest rates have come down considerably. On his own logic, if he felt it necessary—I do not agree with him—to put up interest rates to follow America in the early autumn, why does not he or the Chancellor of the Exchequer bring interest rates down, as the storm has abated in the United States of America?
  Mr. Ridley: I hoped that the hon. Gentleman would answer my question, but he has not. I shall come to his point in a moment. He will not answer my question, because he would have done exactly the same as the Government if he had responsibility for those matters. He knows that. Others like the hon. Gentleman are aching to find a painless way whereby we can be protected from the turbulence of the real outside world. I am sure that the Liberal Party would reject the idea of a ring fence of exchange controls, whether it is round Britain or the European Community. Such ideas are not workable. They ignore the harsh reality that much of the capital that must be attracted or retained by the industrial countries belongs to people outside Britain and the Community and, as such, could not begin to be touched by proposals of that sort.
  For example, the surpluses of OPEC funds would continue to flow freely around the world in search of the best return. The recent history of exchange controls shows that those ideas do not work. Exchange controls did not protect Britain in 1976 and they are not protecting France
  1062
  and Italy now, both of which countries have higher interest rates than Britain. By contrast, in Germany and the Netherlands—which allow free capital movements—interest rates are lower than in Britain. The secret of lower exchange rates lies not in controls but in pursuing economic policies that will lead to lower, not higher, inflation rates. Liberal Party economic policy, with which I shall deal in a moment, inevitably leads to higher interest rates.
  I admit that external forces are only part of the story. Another part is high domestic borrowing by the Government and the private sector. While making allowance for the recession, the Budget of last March sought to reduce the public sector borrowing requirement from 6 per cent. to 4½ per cent. of gross domestic product. Recovery from the Civil Service strike is now proceeding well and the backlog of tax will probably be reduced from a peak of nearly £6 billion to nearly £4 billion by the end of November. We expect the outcome for the public sector borrowing requirement to be close to the forecast. 'The deficit has been met largely by sales of debt outside the banking system. While that is good news from the point of view of the long-term reduction of inflation rates, debt sales to the public of about £1 billion every month have been an undoubted extra cause of the high level of interest rates. The consequence of those factors is long-term rates of between 15 and 16 per cent.
  In addition, the rapid growth of bank lending to the private sector is worrying. Although it is difficult to be precise, the growth of sterling M3 in recent months has probably been above the target range. I am sure that the House will agree that we do not wish to make the position worse.
  In January 1981, the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel)—who is no longer in the Chamber—put forward a 10-point programme for economic recovery. He wished to spend more on energy conservation, nationalised industry investment, the infrastructure and training—much the same programme as that put forward by his hon. Friend the Member for Colne Valley. He wanted a lower pound and lower interest rates, as did the hon. Gentleman. These were to be achieved by an incomes policy. The policy of the Liberal-SDP alliance appears to be that lower interest rates should be implemented and that higher inflation will be avoided by a tax on employers who pay wages above the norm, which will result in a reduction in unemployment. No one could wish for that eventuality more than I. No hon. Member would be more pleased if we could get rid of all the unpleasant, distressing factors of the economic world in which we live.
  However, may I suggest gently to the hon. Member for Colne Valley that we cannot leave the matter there? We must also try to understand the world in which we live. We must ask ourselves why interest rates everywhere are high. We must draw on our experience and common sense. We must try to avoid the rhetorical gesture and resist the temptation to cobble together a set of ideas and call that a policy. The hon. Gentleman put forward a soporifically apolitical panacea of a policy. The Liberal Party imagines that, because it wishes to harm no one and do itself some good in the process, it can suddenly escape from the restraints under which the so-called political parties—such as the Conservative and Labour parties—have in the past had to operate. It should know better because it has been around for a long time.

  1063
  Successive Governments have had to apply a financial discipline. Whether through adherence to exchange rate policy or to monetary targets, successive Governments have had to restrain Government borrowing as part of their discipline and they have had to adopt a view of interest rates to rein back private sector credit.
  Mr. J. Grimond: Many of us have been following with great interest the round by round controversy between the hon. Gentleman and his right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour). The right hon. Member for Chesham and Amersham has put forward certain proposals, including lower interest rates. He has also made some other suggestions, which have been reiterated this evening. I understand that those proposals have been put through the Treasury model, which is under the hon. Gentleman's control. Does he accept that the results of the model are reliable, because they show that if the proposals were carried out the retail price index would fall, employment and productivity would rise and the world would be a much sunnier place? He controls the instrument. Does he accept that result?
  Mr. Ridley: I am grateful to the right hon. Gentleman, because he confirms what I say. My right hon. Friend fed into the model the same assumptions as were fed in by the hon. Member for Colne Valley—that everything would come out rosy. So of course he gets an answer that is pleasing. However, what one gets out depends on the assumptions that one feeds in.
  Mr. Richard Wainwright: I assure the hon. Gentleman—as would the Library staff—that I put no assumptions into the model. I do not have the power, certainly not the capability, to do so. I simply put a series of propositions to the Treasury model. Built as it is under the supervision of Treasury Ministers, it gave answers similar to those cited by my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond).
  Mr. Ridley: I do not have the skill to build computers or models. The model was not built under my guidance. However, if one puts in assumptions about what will happen, one gets the answer that one wants. That is what my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) did.
  If one wants to spend more of the taxpayers' money and borrow more, models show that that would exert upward pressure on interest rates. If the hon. Gentleman wants more money spent and raised in taxes, that would inevitably exert greater pressure on industry and destroy jobs. If, on the other hand—this is a policy that I expect he would decide to follow—one let loose the levers of monetary constraint and abandoned the fight against inflation, sterling would fall, inflation would rise, interest rates would follow inflation in an upward spiral and confidence, investment and jobs would be the casualties.
  The idea that the Government can borrow more, deceive their borrowers by paying less for what they borrow—and devalue the currency, or both, and then try to counter rising wages and prices with an incomes policy—which is the essence of the Liberal prescription—is not credible. It has been tried and failed too often for us to believe it.
  1064
  I do not know how the hon. Gentleman wants to implement his lower interest rate ideas. I do not know whether he wishes to give some groups more special help with interest rates than has already been given. We are pressed to provide lower interest rates for this or that category of borrower.
  I make only three points about that approach. First, by increasing Government borrowing to pay for special categories we should merely delay any fall in the general level of interest rates. Secondly, in a financial system as open and competitive as ours it is extremely difficult to ensure that the benefit of privileged interest rates goes where it is intended and that it does not leak into the wrong sector. Thirdly, there are ways in which companies and others can and do obtain the benefit of lower interest rates. There is the generous system of tax allowances. Through the mechanism of leasing, lower interest rates can be enjoyed even by tax-exhausted companies. The average rate of interest paid through leasing is about 9 per cent. Currently about £6 billion is lent to companies through leasing.
  In recent months companies have substantially improved their liquidity and profitability, and that trend shows sign of continuing. We must bear in mind that, compared with wages, interest charges are a relatively small element in the costs of most businesses.
  The hon. Member for Gateshead, West (Mr. Horam) wrote in the SDP economic policy paper that
  "to suppose the first requirement"—
  of industry—
  "is to lower interest rates is to totally misunderstand business psychology."
  It will be interesting to see whether the hon. Gentleman will be here to support the Liberal motion at 10 o'clock tonight.
  There is also help for individuals with mortgage interest relief. For a person with a mortgage, who is paying tax at the basic rate, the Exchequer bears 30 per cent. of the increase in interest rates. The individual is effectively paying only 10½ per cent. after tax relief at current interest rates. At the same time the borrower is exempt from capital gains or any tax on the imputed income from owner occupation. The result of that is, as one would expect, a heavy demand for mortgage finance, which shows that interest rates this year have not put house purchase beyond people's means. The building societies have been able to maintain a high level of lending, and the banks have also found ready takers for their mortgage lending. About £6½ billion has been advanced in mortgages in the first nine months of this year.
  In discussing interest rates we need to consider the position of lenders and borrowers through mortgages. Savers and depositors are much more numerous than borrowers. They have suffered in the past from a combination of low interest rates and high inflation. We must look at both sides of the equation.
  Even other forms of consumer credit that do not benefit from tax relief have shown great strength. Bank lending to persons other than for housing has grown by no less than 30 per cent. over the past year.
  To sum up, we have come through a difficult period in the world's economic history with less difficulty than many of our competitors. Our present interest rates have not stopped essential borrowing for industry or for house purchasing. It is ironic that, had we accepted the Liberal

  1065
  prescription, the result would probably have been to make both those successes unobtainable and, indeed, to have created even higher interest rates.
  8.6 pm
  Mr. Robert Sheldon: My first task is pleasing. I welcome the Financial Secretary once more to our debates. It is a pleasure to see him at the Dispatch Box for the time being. However, I wish to give him a little advice. He should not take too literally the Treasury slabs. Ministers may make use of them when they have nothing to say on an arcane subject, but I understand that the hon. Gentlemen knows quite a bit about the matters with which we are dealing in this debate, so it would be preferable for him to rely on his knowledge and understanding.
  The astonishing thing about the debate is not the motion but the amendment. I have seen the great divisions of political and economic opinion on the Government Benches. They have rightly been paraded, and they form an essential part of the economic debate. It is, therefore, incredible that, far from taking account of the divisions, the amendment merely "expresses confidence" in "the Government's economic strategy". That is totally inadequate.
  The Government inherited a minimum lending rate of 12 per cent. It shortly increased to 17 per cent., and it was between 14 and 16 per cent. for several months. We have come to associate that crippling level of interest rates with the Government.
  When the present Chancellor of the Exchequer spoke from the Opposition Benches on 30 November 1976 he talked of the "crippling rates of interest" that were then current. He called them "a tax" on "British industry". That phrase is not current, but I understand the point and I am surprised that present interest rates have not been thought of in that way.
  Earlier this year, in its bulletin, the CBI tried to quantify the extent of the tax. The Chancellor of the Exchequer agreed in his evidence to the Select Committee on the Treasury and Civil Service that a rise in interest rates of two percentage points cost industry about £700 million a year. As the hon. Member for Colne Valley (Mr. Wainwright) rightly stated, the reduction in interest rates at the beginning of this year from a very high level to a lower but still high level was assumed to be a benefit to industry and was accompanied by a failure to index allowances and, therefore, was paid for by increased taxation. It was argued that industry would benefit and the person in work, who was still earning and obtaining advantages from being part of the dwindling working population, would pay for the assistance given to industry.
  The benefit, if that is what it can be called, given to industry was not only withdrawn but a further impost was added to the shoulders of industry. Instead of the Government coming to the House and saying "Because industry will no longer get that advantage and the benefit is being replaced by a further tax, we will ensure that those who pay for the benefit will be recompensed", there has been silence from the Government. The Financial Secretary has taken refuge—it is a peculiar form of refuge—in other countries' level of interest rates.
  There is no question but that the United Kingdom has one of the highest interest rates in the world. If we consider France, Germany, Japan, the Netherlands, Switzerland, the United Kingdom and the United States, we discover
  1066
  that France, for reasons we know about, has the highest level of interest rates, but then comes the United Kingdom. The reason for that is not easy to understand unless we take into account what the Chancellor of the Exchequer said last week about interest rates. I put the same question to the Financial Secretary that I put to the Chancellor of the Exchequer, who gave a hopelessly inadequate response. Why did interest rates not come down last week when the United States' interest rates came down? The Chancellor of the Exchequer has been pleading that interest rates the world over have been high. However, they have not been as high as the United Kingdom's and other countries have not had the benefit of North Sea oil which is of enormous assistance to Britain's balance of payments. Even without that advantage, other countries' interest rates have not been as high and have been reducing.
  The Bank of England intervened to keep interest rates up. The Financial Secretary must be aware of that and he will need to consider what the City of London is saying and doing; part of his responsibilities must be to understand these types of movements and the way they are interpreted. Therefore, far from there being a simple interpretation, there was complexity—nobody understood the situation. The Chancellor of the Exchequer said that it was because of his monetary policy. I should like that monetary policy to be spelt out more fully. If it is still in operation, why should our interest rates rise when those in other countries are, relatively speaking, falling?
  Mr. John Browne: Does the right hon. Gentleman agree that it is the Government's legitimate role to iron out the wild fluctuations in interest rates which would occur if they responded to every change in the American rates which are linked to the monetary base system? The volatility of the American rates means that, although they were reduced a few days ago, they will increase again. Is it not a legitimate role for the Treasury and the Bank of England to smooth out the curves in the interests of the people at home to create less volatility?
  Mr. Sheldon: I wish that I saw the situation in the way that the hon. Member does. I do not see us "smoothing" at all. I see a great volatility in the United Kingdom. Between the 1979 election and November of the same year there was an increase from 12 to 17 per cent. in interest rates. What we were discussing last week was movements not of 1 per cent. but about ¼ per cent. in the wrong direction. We are perplexed by the movements in the rate and, of course, I understand that the Bank of England has a proper role in trying to take a view on the level of interest rates that the Government want—not just the markets. The Government dictate the markets as well, despite the ending of the minimum lending rate. We are not in the hands of the market because the market pays great attention to what the Bank of England does and the Bank of England is instructed by the Treasury in the time-honoured way.
  Although the United Kingdom's interest rates are said to be affected by events in other countries, they are higher than those in other parts of the world and higher than they need be. The argument frequently used—we have not heard it today but I expect that we shall if only in the reply—comes in connection with the crowding-out of the economy and the way in which money spent on increases in pubic expenditure needs to be offset by reductions in private investment. It is argued that, if the PSBR is

  1067
  increased by £100, private investment suffers by £100. We must deal with that argument fully. I question it. I hope that the Financial Secretary who, by implication, has assumed that relationship, will also question it. The two proposals do not go together, because the PSBR may be increased for many reasons. It is argued that if there is a demand for money, the greater the demand the greater the interest rates. An increase in public expenditure means more demand for more money.
  Mr. Ridley: I did not use the "crowding-out" argument which the right hon. Gentleman—he has a large slab, which is not even a Treasury briefing, which he is going to say to the House—referred to. The argument I used, which is different from the crowding-out argument, is that heavy borrowing results in heavy interest rates. That is the argument that the right hon. Gentleman must deal with.
  Mr. Sheldon: That is a matter of the greatest importance because, throughout most of last year, the Chancellor of the Exchequer placed primary emphasis on the crowding-out principle. Does not that principle govern the Treasury today? The Opposition must be entitled to an answer to that question because they understood that that was the main argument and why it was necessary to reduce public expenditure, so that the money that went into public expenditure could go into private industry and investment.
  It was the wilful use of money to finance the public sector that prevented the private sector from achieving the great things which were at one time predicted for it by the Government. Is the hon. Gentleman abandoning all that?
  Mr. Anthony Beaumont-Dark rose——
  Mr. Sheldon: No, I cannot give way.
  The Financial Secretary made a point of great importance because many people spent much time examining these matters, contradicting the Chancellor of the Exchequer and finding him maintaining what we and other people saw as nonsense and what the Financial Secretary is beginning to see as nonsense. The matter cannot end there. We must discover whether the Chancellor of the Exchequer supports the major argument which he has used on many occasions in the House and in evidence to the Select Committee on the Treasury and Civil Service. The hon. Gentleman does not move to dissociate himself from the remarks that he has made. We must take note of that and bring it to the attention of the Chancellor of the Exchequer at the earliest opportunity.
  If the crowding-out argument can be jettisoned, there are many other aspects of the Government's policy that can be jettisoned because there are other elements that are just as nonsensical. This piece of nonsense did not stand by itself on a pinnacle. There were many other similar peaks that are also worthy of demolition. I hope that the hon. Gentleman will look at some of these other aspects with his critical eye. He will find similar nonsenses and I hope that he will show an equal readiness to jettison them.
  The argument was posed that the demand for money led to a greater level of interest rates and that as public expenditure meant a demand for more money interest rates would be higher. That is more nonsense because it does not depend on the kind of public expenditure. We have
  1068
  heard a simplistic argument—that public expenditure is of a uniform kind: if we increase public expenditure—whether on the old-age pension, building a road or building a productive factory—we increase interest rates. It is all the same. We must move away from that premise and behave as adults. I hope that the hon. Gentleman will turn his attention to that sort of simplistic nonsense.
  Of course, some of those arguments lead to the fact that as we cannot afford so much public expenditure we had better close a productive capacity and put people on the dole and in that way reduce public expenditure and interest rates. Anyone with any understanding whatever of these matters will know how much that is costing in unemployment benefit, loss of taxation, and so on. When those costs are added together, there is not much saving of public expenditure. On the other hand, in some areas, if we cut public expenditure, we shall get a true saving. If we get rid of an official who has been doing nothing useful, that is a true saving of public expenditure. If capital expenditure is cut, we shall lose industry, put people out of work and lose the corporation tax and investment that comes from that industry. If we do that, we shall have not only the losses that I have described, but even more.
  We must also consider the expenditure that goes out of the country in the form of capital flows. It is interesting that, following the abolition of exchange controls, the Bank of England Quarterly Bulletin shows that outward portfolio investment has increased enormously. That money, if it had not been available for outward portfolio investment, would have been used for the purchase of gilts. It would be interesting to know whether the hon. Gentleman thinks that if the money had not been available for the purchase of portfolio investment overseas it would have brought interest rates down because some of the money would have been used in the purchase of gilts.
  The sums are large. From £146 million outflow in the first half of 1979, the figure increased to £309 million in the second half. In the first half of 1980, the figure was £424 million and in the second half £1,055 million. In the first quarter of 1981, the figure was £1,290 million and in the second quarter £1,180 million. Those figures are published in the Bank of England Quarterly Bulletin for September 1981. Those are enormous outflows. That money would have gone into private investment and into purchases of gilts. When the hon. Gentleman complains about there being insufficient money for investment, we must not accept fully his crocodile tears because we know that the Government's actions are responsible.
  There is a certain spiral in these matters. As interest rates move up, they cause unemployment by slowing down investment in this country. As unemployment rises, the PSBR automatically rises to take account of that public expenditure. As the PSBR rises, the hon. Gentleman will come to the House and say that interest rates are necessarily high because of the rising PSBR. As those interest rates rise and unemployment rises, the PSBR rises. This spiral of insanity leads to greater deflation.
  What damage is being caused to industry by the present levels of interest rates? I said that the CBI spoke of £700 million as being the benefit to industry of a two point reduction in interest rates, but we must see what is happening to investment.
  Mr. Keith Wickenden: Does the right hon. Gentleman accept that £700 million is approximately 0·28 per cent. of industry's total costs?
  Mr. Sheldon: I am interested to hear that the hon. Gentleman thinks that the figure is so small. The Chancellor boasted in page after page of his Financial Statement this year that the CBI said that that was one of the important measures that the Government could take. The Government responded, and then withdrew by increasing interest rates subsequently. The Government have the power to act on these matters, and when they act wrongly, as the CBI and the Opposition accept, we must condemn the Government accordingly.
  In the second quarter of 1979, investment in plant and machinery amounted to £761 million. I single out plant and machinery because that is the best way of ascertaining the level of investment. Industrial buildings can be erected for a variety of reasons, not all of which apply to an immediate need for investment. Plant and machinery are rarely bought, except when the economy is expanding or when the demand in industry is increasing or when industry sees prospects of increased demand in the months or years ahead.
  From a level of investment of £761 million in the second quarter of 1979, there has been a continual decline in the purchase of plant and machinery until it reached the abysmal level of £600 million in 1981. A further decrease is forecast. The problem, of course, is that a number of manufacturers are being forced out of business and are therefore selling their machinery overseas. Some of our best machinery and our most modern industries are suffering in this way, to the disadvantage of Britain as a whole.
  An important point must be established here. Will the Minister tell us what is now the major determinant of monetary policy? It used to be sterling M3, but many people in financial circles doubt whether that is now so. Is the major determinant now the exchange rate? Certainly some of the actions of the Governor of the Bank of England acting on behalf of the Treasury are unclear in this respect. Will the Minister therefore tell us whether the major determinant is sterling M3 or the exchange rate?
  Finally, I wish to consider the effect of interest rates on bank profits. In his Budget Statement on 10 March 1981, the Chancellor referred to taxation of bank profits.
  Mr. Beaumont-Dark: Will the right hon. Gentleman give way?
  Mr. Sheldon: I have given way to a number of Conservative Members. Perhaps the hon. Gentleman will allow me to continue my speech.
  In his Budget Statement, the Chancellor said:
  "bank profits in recent years have increased sharply, both absolutely and by contrast with the experience of most other businesses. A substantial part of these profits is the direct consequence of high interest rates in recent years".
  He continued:
  "the contrast with the sharply reduced profits of industrial companies is, if anything, more striking. In present difficult circumstances, I cannot avoid the conclusion that I should require the banks to make a special fiscal contribution."—[Official Report, 10 March 1981; Vol. 1000, c. 772.]
  Despite the hopes and intentions of the Government at that time, interest rates have remained high. We must therefore assume that bank profits will also be high. Will the Minister tell us today whether it is intended to include windfall tax measures in the next Finance Bill? Will he
  1070
  undertake to consider this in order to ensure that the burden is seen to be fairly shared by those in a position to obtain advantage from high interest rates as well as by industry generally?
  An interesting motion has been put forward by the Liberal party, but the Government amendment can only be described as fatuous. We must therefore treat the amendment with the scorn, contempt and derision that it deserves. I ask my hon. Friends to ensure that it is rejected.
  8.32 pm
  Mr. John Watson: I am grateful for the opportunity to participate in the debate. I am also somewhat surprised, as this is the eleventh occasion in two and a half years on which I have sought to participate in an economic debate, but the first on which I have been successful. I therefore express my gratitude to you, Mr. Deputy Speaker, for this opportunity to make my economic maiden speech.
  Today is a significant day in economic matters, as two items of economic news have been made known, not in the House but from the normally reliable source of the Treasury. Both items are significant.
  First, we have learnt that public spending next year is likely to be £4 billion to £5 billion higher than was originally intended. I confess that I regard that as good news, although I know that that feeling will not be shared universally by Conservative Members. I suppose I regret slightly that the extra demand will drift into the economy almost by default rather than being injected through a deliberate programme of capital works or national insurance surcharge reduction. Nevertheless, I welcome it.
  Secondly, and equally significantly, it appears that the increase is likely to be paid for. We have on the tapes the rumour—it is no more than that—that council rents may rise by £3 per week, that unemployment benefit may rise by 3 per cent. less than the rate of inflation and that the real value of students' grants may not keep pace with inflation to anything like the extent that would appear to be necessary. All that may not be bad if it does not constitute the whole package.
  I do not intend immediately to start fulminating about injustice to council tenants or the unemployed if plans for child benefit or supplementary benefit mean that the package as a whole will be acceptable; but the initial auguries are not good. On the information available so far, I have a nasty suspicion that the overall effect of the package may well be deflationary or that the burden of paying for unemployment may be unfairly placed upon those who are themselves unemployed. If that transpires, I shall have great difficulty in supporting such a package in the Lobby.
  I should like to see an increase in demand stimulated by the Government. That will no doubt lead many of my hon. Friends to say that there is no alternative. They say "If the Government are to spend more money, where will it come from? Are they to increase taxes, print it or borrow it?" I shall be deliberate in answering that question. It would be counter-productive to raise money by taxation. If we are to stimulate demand, it makes no sense to change cash from one pocket to another. I should be reluctant to increase the money supply by much more than the Treasury intends.
  Slightly more, perhaps, with 15 per cent. spare capacity in British industry, one is bound to question whether an

  1071
  increase in monetary demand will have the same inflationary consequences as it has had in the past when industry has been operating much nearer to full capacity. Therefore, I would borrow the cash, as necessary. Some of my hon. Friends say that would put up interest rates and drive Britain into deeper debt. I do not think it would. First, if we are talking of an increase in public expenditure of £4 billion or £5 billion, that is, in gross terms, some 5 per cent. of total current Government expenditure. In net terms, I guess it would be less than 2½ per cent. It must be possible to sell that amount of increased Government debt to the non-banking institutions without putting up interest rates, particularly when they are showing a declining inclination to invest their cash in equities. But significantly, the tale we were told in the spring was that it was Government borrowing alone that was responsible for putting up interest rates. That seems now to have evaporated like the morning mist. Now, so far as I can see, interest rates are high for a variety of reasons that are almost unrelated to our domestic borrowing requirement, but are very closely related to the need to protect the currency.
  In fundamental terms, the Government have two economic strategies available. They can have a relatively high £ sterling, protected by high interest rates. Those high interest rates will give them the liberty to borrow more money and it will be necessary to borrow that money to prevent the ramifications for industry, caused by high interest rates and a high currency, from being too serious. Or alternatively, the Government can refuse to defend the £ sterling. Interest rates will therefore not be too high but, at the same time, the Government must control borrowing for fear that that will have an effect on interest rates. What worries me is that the Government are not pursuing either economic policy at the moment. Either policy would be logical, but we have a system of a high currency and high interest rates and we are not availing ourselves of the opportunity to borrow the extra cash that those high interest rates would enable us to do.
  Some people say that the biggest problem is not interest rates but the fact that Britain is yearly, daily, getting deeper into debt as a nation. I know that many of my hon. Friends say that. There can be only one answer to that. I have tried to think of a more delicate way of putting it, but the answer is that it simply is not true. Britain is not more in debt now than at any time in the past. I shall draw attention to a comparison with a manufacturing company which, I think, bears some relevance. A business man in a manufacturing company is not normally too worried about the size of his overdraft in absolute terms. However, he is crucially worried about the ratio between that overdraft and what his company possesses or what it sells. That is called the debt equity ratio in normal City terms. For the Government, the nearest equivalent is the debt income ratio or the ratio of our national debt to our gross domestic product.
  I shall briefly present four facts. First, our national debt is now 49 per cent. of our gross domestic product. In 1960, it was 109 per cent. of our gross domestic product. Secondly, the public sector borrowing requirement, as an issue, did not figure anywhere in Budget debates throughout the 1960s. Thirdly, the proportion of Government income spent on interest charges has not changed significantly for 20 years. Fourthly, while we in
  1072
  Britain have slavishly reduced the real value of our national debt by 23 per cent. in the past 10 years, the United States of America has increased its national debt by 14 per cent., Germany has increased its national debt by 107 per cent., and Japan—our most feared industrial competitor—has increased its national debt by 350 per cent.
  When I hear some of my hon. Friends talking about the nation's indebtedness, I cannot but believe that they are reacting like a young housewife in a newly-mortgaged neo-Georgian house on an estate somewhere near Bishops Stortford. I can imagine a husband coming home and saying "My dear, I am sorry, but I have lost my job. I am unemployed." I can then imagine his wife saying "That is awful. That is the worst thing that could have happened. Obviously, the first thing we must do is to pay off the mortgage. To that end, we must sell the car and all the furniture." In saying that, the wife overlooks the fact that the husband may need the car to get another job and that the kids will scream their heads off if there is no furniture in the house. Above all, she overlooks the fact that the house has increased in value since they bought it while the mortgage is being gradually paid off.
  8.41 pm
  Mr. Russell Johnston: I am pleased to speak after the hon. Member for Skipton (Mr. Watson) and to congratulate him on the fact that his assiduous persistence has, on this occasion, been rewarded. His contribution was considerably damper than the and contribution made by the Financial Secretary to the Treasury.
  I hope that the hon. Member for Skipton will pardon me if I do not take up his remarks. As he probably knows, Liberals are already on his heels in Skipton. I shall concentrate my remarks not on the hon. Gentleman's reservations about Government policy but on Government policy. As he has done for many years, the Financial Secretary pleased us with his bland and languorous gentility. I probably disagree with him as much as I would disagree with Arthur Scargill, but I should think that an exchange with the Financial Secretary is considerably more civilised. That does not detract from the fact that, ultimately, he said nothing to defend the present interest rate, to deny that it can be reduced or to respond to the effects of the present level.
  I shall concentrate not on the mechanism for changing the interest rate—which my right hon. Friend the Member for Colne Valley (Mr. Wainwright) dealt with and to which my hon. Friend the Member for Truro (Mr. Penhaligon) will no doubt return in response to the Minister's remarks—but upon the effects of the savage rise in interest rates. It is important that the House should realise what they are. After all, the Government must consider what is happening within the realm. If the situation is serious, the Government must somehow find a way of doing something about it. The hon. Member for Winchester (Mr. Browne), who appears to have left the Chamber, said that. After all, politics is, above all else, about finding ways of solving impossible problems. If society's problems were not so difficult, we would not need politicians. As the Financial Secretary probably knows and appreciates, many business men would be happy if there were no politicians. Business men

  1073
  continually tell me that and say that the less interference there is, the better. However, we need politicians, because we need to mitigate many of the circumstances that arise.
  We operate in a mixed economy. One of the Liberal Party's complaints against the Government is that they do not recognise the public element of the mixture. Similarly in terms of their declared policy through the Labour Party conference, the Opposition apparently wish to dismiss in large part the private enterprise element of the mixture. At present, we inevitably pay heed to the cry of the market in the creation of such things as the National Enterprise Board, the Scottish Development Agency and the Highlands and Islands Development Board. We do so because we recognise that the mixed economy means an acceptance that fewer market forces require adjustment, both for social and economic reasons.
  The Minister told us that what he is doing has some sort of ineluctability about it. In effect, he is really saying that there is no alternative. Despite the fact that we are having a debate, the hon. Gentleman smoothly disregarded any arguments such as those made by my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond) in an intervention.
  We are not discussing the whole general economic spectrum, even though the right hon. Member for Ashton-under-Lyne (Mr. Sheldon) sought to widen the area of debate. It is undeniable that the concurrent establishment of a prices and incomes policy would have a profound effect. We may argue about what the effect might be but the Lib-Lab pact—much abused in those days—reduced inflation to 7 per cent. A view on the exchange rate different from that presently held by the Government would also have a profound effect.
  I am sure the Minister accepts what was said by the right hon. Member for Ashton-under-Lyne about Britain having one of the highest interest rates in the world. He should also recognise that he is now subject to a wide spectrum of criticism, but at no stage in his speech did he do so. That criticism is not confined to the Liberal Party or the SDP. It is clearly in evidence in the CBI, the chambers of commerce and, dare I mention it, in speeches of the right hon. Member for Sidcup (Mr. Heath) who, after all, was leader of the Conservative Party and Prime Minister. I would have thought that the Minister ought to pay some regard to this.
  Because of my responsibilities for foreign affairs and for Scotland in the Liberal Party, I tend to make general speeches, but for once I shall behave like a Back-Bencher and speak about the impact of national policies on the Highlands and Inverness-shire.
  I have spoken to a wide cross-section of people in my area about the interest rate problem, and although I am speaking about the Highlands, I suspect that the picture that emerged can be mirrored throughout the length and breadth of the United Kingdom. First, the industries most likely to be able to borrow in search of expansion are those that have capital assets. That is a simple and obvious statement. In the Highlands, and probably in many other areas, that means agriculture, where there is land and possibly buildings that are owned; it means tourism, where there is a hotel; it means fishing, where there is a boat. It is as simple as that. I shall deal with each section. All of those industries, although important to the Highlands, are also important to the country's general economy.
  First, as regards agriculture, this argument is probably more general than particular. What is fundamentally bad
  1074
  is that those most hit by interest rate increases are those who, for very valid reasons, have embarked on, or been encouraged to embark on, either land reclamation programmes or stock build-up programmes, both of which take a good deal of time. Many of these exercises in the Highlands have been undertaken with loan support from the Highlands and Islands Development Board. That is an organisation about which the Minister knows. I suspect that he does not basically approve of it, knowing the way in which he thinks.
  However, the HIDB is deeply concerned about this matter and is prepared to be quoted as being concerned about it. Hon. Gentlemen generally know that the HIDB is able to offer loans at fixed interest, grants, and interest-free holidays on loans up to three years. In a sense, that is a very flexible package for a development agency; but is has drawbacks. The fixed interest loans—this is often forgotten by hon. Members—are at a level about 3 per cent. below the going rate. While it is fair to say that an agricultural enterprise, in so far as it is able to peer into the future any more than the rest of us, should properly take this into account in deciding whether to embark on such a loan, there are three points which hon. Members ought to bear in mind this connection.
  First, it is very difficult for any enterprise—agricultural or otherwise; but I am talking about agriculture particularly—to forecast the sort of jumps in interest rates which we have encountered, and therefore it is not fair to say that it should have taken this into account when it took a loan.
  Secondly, the loan will continue to carry the going rate at the time it is made even if the going rate drops. I stress that point. If an enterprise gets a loan over 10 years at 15 per cent., the rate will be 15 per cent. to the end of the 10 years, come what may.
  Thirdly, the present going rate is a deterrent to engaging in any expansion. In the case of the HIDB, the result has been to divert money from the manufacturing and risk area into rescue operations. That means that while its total budget has been held up against inflation, it is less able to do what it is supposed to do—engage in manufacturing risk. I made that point last Thursday during the debate on the Scottish economy.
  The second section is tourism. It is an industry that earns us a great deal of foreign exchange. The last three years have been bad years. The tourist flow has diminished. That is not just my experience and that of others in the Highlands. It is the experience in Truro, in the West Country generally and in other areas of England. At present, in my part of the world, there are four hotels on sale in the small village of Newtonmore. A hotel in Inverness was sold for £80,000 the other day. Its owner had turned down an offer of £120,000 three years ago.
  The general picture is very serious. In that circumstance, the improvement of facilities to attract the tourist is vital. The basic thing is that hotel owners are not prepared to embark on any improvement of facilities because of present interest rates.
  Thirdly, fishing is severely affected by the continuing failure to reach agreement on a common fisheries policy. It is also affected by fuel prices and landing prices for fish. The position of fishermen is appalling. All are in serious debt but have to pay these interest rates.
  This brings me to my final point.—[interruption.] Conservative Members should stop grumbling. There are endless opportunities for them to dilate on the

  1075
  Government's policy or the lack of it. Liberal Members do not have many opportunities. It is not unreasonable sometimes for us to take advantage of any such opportunity.
  The Financial Secretary is not just a Treasury Minister. He is also a Conservative theorist. At the end of the day, if the wealth-producing group in this country is exceeded by the wealth-consuming group, we are in trouble. A great many existing companies cannot borrow at a level that enables them to continue. It is also true that a great many companies and people with ideas find it impossible to start for the same reason. To find 20 per cent. interest charges at a time of thin profits makes matters impossible. Times are particularly bad for companies engaged in exports, normally on a fixed contract. Those companies cannot build into the contract the effect of interest charges.
  The Government's economic policy is not succeeding. This is shown by the number of unemployed and in the views expressed by industry at every level. Liberals believe that some action on interest rates would perhaps not solve the problem but would greatly mitigate the damaging general effect of the Government's policies.
  8.56 pm
  Mr. Neil Thorne: I shall endeavour to keep my remarks short. A number of hon. Members still wish to speak. I listened carefully to my hon. Friend the Financial Secretary. I must confess that although I have a personal interest in this matter, without intending any pun, I do not think he is right in assuming that interest charges are necessarily of less significance to businesses than labour costs. This really depends on the industry and how capital intensive it is. Most of the small businesses in my constituency are capital intensive, or at least rely on customers who have capital intensive businesses. In the same way that the buying or selling of owner-occupied homes causes a chain reaction, so does stocking for business. The direct result of destocking on small businesses is, I fear, unemployment.
  It is my personal regret that the Government have not tackled the question of the public sector borrowing requirement as early as I felt they should have done. Both central and local government had a honeymoon period lasting between a year and 18 months under this Government whereas businesses, particularly small businesses, started to feel the effects of the screw within the first three to six months. This considerable gap has caused private industry to descend much faster and further because of the time it has taken to bring the public sector borrowing requirement under control through action on central and local government. This is a grave error. I hope that this will not be regretted by the Government in the months to come. The longer the matter is put off, the more difficult it is to resolve. It has to be put right to the benefit of the wealth-creating sector, which desperately needs more orders if it is to survive.
  In the same context, there are many areas in which the public sector borrowing requirement could have been brought under control. One of the issues that irritate business men possibly more than anything else is the index-linked pension. To a struggling business that is not sure whether this time next year—or even this time next month—it will be able to meet its daily costs, the knowledge that someone who retired a few years ago on
  1076
  a pension of £8,000 is now receiving a pension of £22,000 is a major irritant. I hope that the Government will fulfil in the near future their promise to review the matter. Indeed, I hope that it will be reviewed in such a way that those who expect to receive index-linked pensions will be invited to make a major contribution towards their cost. It is not fair that those who do not have the benefit should be expected to foot the bill. I hope that it will be dealt with as a matter of urgency.
  I fondly believed that when minimum lending rate was abolished the market would be left free. It was, therefore, with some surprise and concern that I noted a week or two ago that the Bank of England had intervened to keep up interest rates, at a time when industry is suffering badly. If the Government are to encourage businesses to take the kind of action that will sustain and increase employment, inevitably they must deal with interest rates. I hope that they will not intervene again in order to maintain interest rates at a high level.
  I assure the Financial Secretary that my constituents suffer very badly from high interest rates. They are longing to see them reduced so that they can take on additional employees. They have to look carefully at the sums they are paying to their banks by way of overdraft interest, and decide whether they can maintain employment at the present level. I know of several firms that have done just that in the last month and have been obliged to make further employees redundant because they found it impossible to maintain their interest payments in any other way. There is no question but that that is happening. The Government know that if every small business man were to take on one or two extra employees, unemployment would be far less severe than it is. I urge the Financial Secretary to consider the matter most carefully.
  I note the Government's amendment, that
  "this House expressed confidence that the Government's economic strategy is the best course for restoring this country to prosperity".
  I am concerned about the issues that I have mentioned. But I believe that the Government are the only body capable of taking the necessary action. I ask them to take it, and to take it quickly.
  9.03 pm
  Mr. Tom Ellis: I cannot resist the temptation to compliment and congratulate the hon. Member for Skipton (Mr. Watson) on making one of the few really intelligent speeches on economic affairs that I have heard from the Conservative Benches for a long time. If, as he said, it was his economic maiden speech, I hope that we shall hear more frequently from him in future on economic affairs, so that we may benefit from his sound views.
  The right hon. Member for Ashton-under-Lyne (Mr. Shelton) speaking for the official Opposition, described the Government's amendment as fatuous. He was right, but it has the advantage of broadening the debate away from interest rates. It would have been extremely difficult to discuss interest rates meaningfully in isolation from all the other interlocking economic parameters.
  To seek success in one of the parameters at the expense of failure in others is surely not a wise policy to follow. The obvious example is the policy of the 1930s when inflation was virtually zero. That hardly commends itself

  1077
  as an economic policy to be followed in the 1980s, although it appears that it is precisely that policy that is being followed.
  I have been struck by the deliberately civilised and moderate way in which our society has viewed the deepening crisis over many years. That remarkable feature is one of the parameters that will impinge more directly on our economic affairs than the Government appear to realise.
  Apart from parameters such as interest rates, inflation, investment, production and exchange rates, there are social and political parameters. There are the intermediate parameters, partly technical and partly economic, that include objectives that can be measured. There are parameters, partly social and partly political, that are less tangible but none the less real. It is in that area that the Government are coming unstuck.
  It is clear that the Government assume that only impersonal market forces determine the economic situation. Against that background the nature of the crisis that we are facing should be extremely surprising to them. I am referring not to the gravity or degree of the crisis but to its qualitative nature. It is unique. It is the first time that we have experienced such a crisis. Incomes and prices have been rising, yet the economy has been declining.
  In the 1930s we had low wages, low inflation and high unemployment. In the 1960s we had high wages, high incomes and a growing economy. We now have the apparent paradox of rising inflation and a stagnant economy. The reason for that lies in the second type of parameter that I have described. That is the halfway house between the technical-economic and the social-political. It is clear that firms, unions, and those in the industrial world have substantial market power. A great chunk of the economy is either monopolistic or oligopolistic. It is major error of judgment on the Government's part to rely solely, as they seem bent on doing—certainly this is the impression to be gained from the speech by the Financial Secretary to the Treasury—on the mechanistic approach. They are relying on a monetary squeeze to achieve their economic aims. They are putting pressure on the liquidity of firms and companies to squeeze out inflation.
  The Government's mistake is being compounded at the point of production. When firms go out of business, their employees become unemployed, but there is more to it than that. Firms need to invest. For a long time current incomes have been given priority at the expense of investment.
  The mistake is being compounded further, because unemployment is adding to inflation. A man who is unemployed still has some demand, but that demand is not met by the corresponding productive effort that he would otherwise make. The logical consequence—the hon. Member for Skipton referred to it in passing—of the mechanistic approach is to cut back the purchasing power of the unemployed. We have heard rumours that there is to be a cutback in real terms in unemployment benefit. Leaving aside subjective questions of equity, for sheer economic and technical reasons the policy of the Government is profoundly misguided.
  The point that, more than any other, must be put across to the Government is that inflation is an extremely complex problem. There is a supply side as well as a demand side. I shall quote from what I consider to be a profoundly wise broadsheet produced a few years ago by the Social Science Institute called "Reshaping Britain—A
  1078
  programme of economic and social reform". I re-read it recently and was struck by the prescience of the authors because what they spelt out can be checked now and their forecast and prognostications are remarkably accurate.
  Amongst other things, they said that:
  "For example, a credit squeeze as such is likely, on its own, to hold back production (through shortage of funds for work-in-progress and capital investment) more than It checks consumption spending."
  It is clear that there are all kinds of services such as those of a dentist or a policeman. If I ask for a standard of service for which, if I am on the dole, I cannot pay in output, I cause inflation. The position is quite obvious but the Government cannot quite grasp it.
  I worked in the coal industry and any colliery manager will tell hon. Members what anyone in industry would say. This sums up my argument. A good output will cover a multitude of sins. The Government are trying to eradicate all sins but there is no output and they could have done the whole thing much more easily if demand was really stimulated.
  The Government are trying to control inflation by acting on total demand through their money supply, interest rates, budgetary surpluses or deficits, exchange rates and so on. However, the plain fact is that the bargaining power of the industrial world is too strong for the Government, even with 3 million unemployed. The question was asked, and still has to be asked: at v, hat level will the total of unemployed be sufficiently large for the middle range, the partly technical-economic and partly social-political, parameters be met?
  The broadsheet states:
  "We think not only that the current crisis is now propelled by market and bargaining power, but also that such power has become strong enough in Britain to render the existing form of economic management, that is to say, broadly, global demand management, insufficient to maintain stability without the support of income restraint, at least for the medium term "
  Those words are profoundly wise and as appropriate today as when they were written six years ago.
  I make one final point to illustrate the difficulties arising at the point of production as a consequence of the squeeze on liquidity. There are some dynamic firms of which the Government frequently boast. Their growth in productivity is reasonably adequate and fast. However, unions in these companies insist on having incomes increased in relation to the increase in productivity. Other companies do not have that productivity and the less efficient industries do not have that investment. The rate of inflation is being built into the system. It is tending towards the substantial difference between the growth of productivity in the more dynamic industries and the average growth of productivity throughout the economy as a whole.
  It is difficult to know how to advise the Government, because they are rigidly and mechanistically committed to their policies. Mr. Roy Jenkins described a carefully thought-out and excellent package at Warrington. It is significant that four days later, although there was plenty of opportunity to consider it, the Chancellor of the Exchequer went to Warrington and did not even refer to it. It was a major issue in that by-election, yet he did not refer to it. That was extraordinary.
  There is no point in advising the Government to go ahead on that basis. The Government must change their policy. If they want not to make a U-turn but to change surreptitiously, there is a route that could prevent the

  1079
  disaster—lowering interest rates. Their policies will not work. That is clear. They will bring us all down. They will sink the ship.
  9.15 pm
  Mr. Anthony Beaumont-Dark: We must be brief in what is a short debate.
  I am amazed that people who talk about statistics say that 2 per cent. off the interest rate for industry represents only 0·48 per cent. of its costs. I am a business man and I talk to many business men in the Midlands. The figure is not 0·48 per cent. when £700 million is involved. The amount is often the difference between life and death for business. I wish that people would not talk so casually about percentages.
  I am told that the average motorist drives about 1 million miles without an accident. To those involved in the carnage on the roads that is a small consolation. Percentages are not what matter. To industry £700 million is a huge sum. If one is heavily overdrawn and making a nil profit, interest rates matter and they should be considered.
  The only genuine criticism that I have about the Government's economic policy—because the main thrust of what is being done is difficult but necessary—is that the Government are placing too much reliance on the view that if we can keep a strong foreign exchange, that will somehow have a tremendous effect upon inflation.
  The most important thing that we can do is to restore the confidence of people involved in business that interest rates are going in' the right direction. Business must be confident that it is safe to borrow money to restore and make fruitful their businesses.
  One of the problems is that Britain's tax system encourages the diversion of savings into housing, Government securities and debentures. We should try to discriminate in favour of direct investment in industry. Many people who invest money ask "Why take the risk? It is not worth it." The House must decide that we cannot be a service industry country and that we must invest in enterprise. Enterprise made the country grow.
  I believe that the banks do an honest task. They are prepared to help companies, particularly those that have the assets to more than cover what they are willing to lend. Although I do not go all the way with continental banks, the British banking system should be more prepared to take risks. Investment means risks and some losses are necessary for profits to be hewn from enterprise. I have mentioned to bankers more than once—and although bankers have banked on me for many years I am still willing to risk that overdraft to say it—that there must be a greater commitment and a greater sense of involvement. They must be more prepared to use their interest rate profits to help the genuine and necessary growth of this country.
  Crowding out is a doubtful argument. It is used by economists. We all know that if there are 10 economists there are 11 opinions. On the Treasury Seclect Committee, if there are 10 economists, there will be 12 opinions. Crowding out to me and to business people means not that one cannot get the money, but that the cost of the money is at a level at which one cannot make a reasonable profit
  1080
  if it is borrowed. That is what Government borrowing is doing. It is forcing up the cost of money to the level at which industry cannot make a profit.
  I give one word of advice to Government and to those who urge Governments to spend money. A sum of £1 million left in the hands of private industry and private individuals is worth £5 million of State spending. What happens in the State sector is clear. Water workers say that an 8 per cent. increase is not enough. There are factories in my constituency where workers are lucky to get a 1 or 2 per cent. increase. I would tell the water workers that if the sewage came out on to the streets, we would send their addresses to the people who suffer.
  The miners say that a 9 per cent. increase is not enough, whereas my constituents are lucky to get 1 per cent. Let us buy the coal from Belgium or Australia where it is cheaper. We should not be blackmailed by those who are involved in State enterprise. If they do not wish to do the job at a decent price, so be it. The country cannot place itself continually in a situation where because the State pays, the people have to pay an exorbitant sum. It is a difficult world that we live in.
  There are many thousands of people who this year will receive over £1,000 million of taxpayers' and ratepayers' money to subsidise inflation-proof pensions. They will receive that because at one time a Government thought that that was sensible. That £1,000 million, which will give double the increase at least of what anyone who is earning will receive, could, if it were used productively, create about 100,000 jobs, which would create further prosperity. In other words, we must tell the banks what we expect of them. We must tell the Government that if they can leave in private industry's hands £1 million, it will become more than £5 million in its hands.
  We should say to those who are lucky enough to work for the public sector that they are lucky to receive a genuine increase and to have a good and steady job, and they should be willing to accept what is offered to them. We will not be blackmailed. We should say to those who are on secure pensions that this is the time for a sacrifice from all. This is not the time when we say that a bargain that was struck in the past when 3 per cent. seemed sensible must be kept for ever. There is no Eldorado. However, we face problems.
  Interest rates are one problem. I hope that the Government will see the sense in the view that interest rates affect inflation and confidence. In the end, as on any journey, we must have the confidence to set out. If we are willing to set interest rates free, money would be cheaper and business would be stronger.
  9.25 pm
  Mr. John Browne: I wish to thank the hon. Member for Truro (Mr. Penhaligon) and my hon. Friend the Financial Secretary for allowing me time to speak.
  I agree with my hon. Friend the Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) and the hon. Member for Colne Valley (Mr. Wainwright) that high interest rates hurt industry badly. Although the wages bill of a company may be larger than its interest rate bill, the interest rate bill is at the margin. That, as has been said, can be the difference between profit and loss.
  Unlike any other time in our economic history, when most of the debt of corporations was at fixed rates, today most corporation debt is at floating rates. When rates rise,

  1081
  they hit the company viciously at all its debt maturity dates, whereas before they may have hurt only the overdraft. That is an important point, which I hope will be noted by the Financial Secretary.
  Secondly, we must realise that we live in an international world in relation to both interest rates and currency parities. Where people used to focus on the balance of payments, then on the money supply figures and then on relative inflation rates discounted by interest rates, now, increasingly, the world's money markets focus merely on interest rates, especially with the growth of privately held petrodollars.
  Therefore we must consider closely our interest rate policy if we wish to have a sound currency. We must also consider the major influences, the most important being the United States. I am sad to say that it looks as if American interest rates will again rise. The public deficit stands at $63 billion. But if we add to that the off-balance sheet items, the total is over $100 billion, so massive funding must be carried out. The American Administration have lifted the usury laws and moved to a monetary-based system, which increases the volatility of interest rates. Just as trading in stocks or bonds in volatile times widens the prices, so volatile interest rates tend to increase the rate. There is probably a 1 per cent. or 2 per cent. premium due to volatility in American interest rates at the moment. Therefore, because American Government expenditure effectively is almost 40 per cent. index-linked, the outlook is that American interest rates will rise during the next few months.
  How can we mitigate the effects of that? The first thing that we must do is to reduce inflation. To do that, we require much stronger privatisation and we must break the grip of the monopoly employment cartels. We are spending £6,000 million this year on the nationalised industries, and that must have a major impact on interest rates. We must also eradicate indexation.
  My third point—here I slightly disagree with my hon. Friend—is that the quality of Government spending is vital. In any bond issue, the use of proceeds is of critical importance. the amount of Government spending is secondary to the quality. We must roll back current expenditure and return it to long term capital investment. That is the key to investor confidence and expectations about future interest rates, which both dictate today's market interest rates.
  We must also dramatically increase profitability through a technological revolution. For it is that alone in the long term will allow us to achieve the standard of living of a developed nation.
  9.30 pm
  Mr. David Penhaligon: This has been an unusual occasion—a Liberal Supply Day. We welcome the opportunity to have this debate, although in the odd second our minds may have been elsewhere. I have been through moments of elation and of depression. It appears that the entire parliamentary Labour Party is out canvassing. We shall reflect on that tomorrow when the result of the Crosby by-election is announced, when we shall see whether my optimism was justified.
  One point stuck in my mind during the speech of my hon. Friend the Member for Colne Valley (Mr. Wainwright). Manufacturing investment has fallen by 12½ per cent. this year. We may forget, certainly in my part of the country, that our economic success, which gives us
  1082
  the ability to provide people with hospitals, universities and better education generally, has more to do with our manufacturing base than with any other single part of our economy. In my constituency the manufacturing component is not large, but we are a manufacturing country, and I know of no alternative to building up our manufacturing base that would provide us with a reasonable economic future. The Government's economic policy has reduced investment in the basis of our economy and our survival—our lifeline. That is why we appreciate the opportunity of having this debate.
  The Minister spoke interestingly, although I enjoyed the products of his speech writer more when he spoke from the Opposition Benches. We may not agree with all that he says, but we enjoy the way in which he says it. However, today it appeared that he was redundant. What is happening has nothing to do with him or with the Treasury. It is due to American interest rates—but they have come down while ours have not, so I do not understand the connection
  I suspect that the hon. Gentleman was right to criticise the Treasury computer. I am a technologist and know enough about computers to be careful about the faith that I have in them.
  The Minister said that interest rates do not play a large part in manufacturing costs. However, in the high technology enterprises, which we must encourage if we are to get out of the ludicrous spiral that we have been in over the past 15 years, an investment of about £50,000 or £60,000 is required for each job. The current interest rate on borrowing money is about 18 per cent. as opposed to the advertised rate in the Financial Times, and on those figures the interest would amount to £9,000 a year for each job. Even in high technology, many would be pleased to earn that sum. It is a substantial part of giving a man the opportunity to produce things that we all wish him to produce. In some cases the interest could be as much as 50 per cent. of the cost.
  The Minister challenged us to say how we would handle the situation. He said that we would allow the exchange rate of the pound to slide. That factor is important, although we do not believe that it is as important as the hon. Gentleman makes out. We do not deny that it would happen if we pursued a strategy of lower interest rates.
  Mr. Ridley: By how much?
  Mr. Penhaligon: It is difficult to say. I have already expressed my view about the computer in the Library and I am not sure that we know the exact relationship between interest rates and the value of the pound. I do not deny that a strategy for lower interest rates would lead to a reduction in the value of the pound, I would welcome that, because one reason why we have lost so many manufacturing jobs in the past two years is that in investment and technology our manufacturing industry has been forced to compete on terms that the present value of the pound puts beyond its reach. I have no fear about some reduction in the value of the pound.
  The follow-on is that such a strategy would bring some inflation into the economy. I do not deny that a freer economy may lead to a wage explosion, but that is where the alliance can make a contribution to British politics that no one else has been in a position to make for as long as I can remember. Because the alliance is free from vested interests in the economy and is not paid for by any sectional interest, it could get a pay policy to work.

  1083
  I tell the Financial Secretary honestly and truthfully that the bases of the alliance's economic opinions are likely to revolve around the development of a more humane and satisfactory method of resolving the question of pay in the economy. We believe that we can achieve that. We shall have to be honest and tell the people at a general election that that is our intention. No one has ever had the courage to defend a pay policy while seeking office, but we believe that if such a policy is publicly endorsed and the alliance is the success that we expect it to be we shall get a pay policy that will work. The Government could certainly not do that. They were elected on a policy 180 degrees to our aim. I do not pretend anything but that our policy has some coherence only if we accept an incomes policy as part of the general strategy.
  The right hon. Member for Ashton-under-Lyne (Mr. Sheldon) spoke of a spiral of deflation. I like that expression, because it explains the situation well—cuts lead to unemployment, which leads to more cuts. It is a spiral of disaster and, if we are not careful, it will become a spiral of bankruptcy.
  Many Members have spoken about the reduction in investment in plant and machinery. The hon. Member for Skipton (Mr. Watson) referred to that in his maiden speech on the subject. The hon. Gentleman has already had more congratulations than I got for my maiden speech. The hon. Gentleman's speech was probably better than mine.
  If we had the present PSBR and no inflation, our debt in real terms would be increasing substantially, but as long as inflation is higher than the percentage increase in the level of GNP represented by the PSBR the total debt burden is reducing in real terms. I should not like to use that as an excuse for generating inflation, but it is a fact.
  Mr. Ridley: Is the hon. Gentleman spelling out Liberal economic policy? It sounds very like it to me.
  Mr. Penhaligon: It is an economic fact. It is not one on which to base an entire policy and I dread to think how far the point could be stretched, but it is nonsense not to recognise the economic fact. If the Government are trying to run the country with no PSBR when we have 3 million—or probably 4 million—unemployed, what do they think would be the level of the PSBR if everyone were employed? One of the criteria is that we allow the PSBR to rise a little in order to try to combat massive unemployment at its present level.
  My hon. Friend the Member for Inverness (Mr. Johnston) told us about the Highlands. As one of his most distant colleagues, I cannot comment much on his remarks except to say that the Highlands and Islands Development Board would be more effective if Cornwall also had such a board. Perhaps I can coax the alliance into that view at a suitable opportunity.
  The hon. Member for Ilford, South (Mr. Thorne) spoke about index-linked pensions. I do not accept his argument. I accept that there is a case for ending index-linked pensions although I do not agree with it. The trouble with the argument is that, from the day that people retire to the day that the good Lord takes them away, all that they have to look forward to is a steadily decreasing living standard in their declining years. The scandal of index-linked pensions is that people retire and they can only look forward to a steady and dramatic decline in their standard of living. The Government should examine that point. If
  1084
  we cannot control inflation better than we are, we should ask ourselves whether we are protecting people as well as we should. I believe that we have fundamentally failed to do so. My hon. Friend the Member for Wrexham (Mr. Ellis) talked about the complexity of the issue, and eventually he agreed that an incomes policy is necessary. The alliance will not duck that issue.
  The hon. Member for Birmingham, Selly Oak (Mr. Beaumont-Dark) spoke about the amount of interest paid by industry—£8 billion a year. He said that some companies are not making a profit because of the amount of interest that they have to pay. Indeed, many have gone bankrupt because they have been unable to pay the interest demanded.
  There is an alternative economic strategy that reduces interest rates. We give it high priority, because if we do not we shall produce and develop a ludicrous economy for our industrial base. If a person wants to start as a secondhand car salesman he can borrow £100,000 and it will cost him no more than £60 a day. That capital could be earning money for him within hours.
  If a person invests money in the deep capital areas—I think of mines in my area—at the current levels of interest he would hope to be able to make a profit of one sixth of the value of his investment within 12 months. But whether it is mining or long-term investment in engineering plant, we all know that that cannot be done. The potential investor then makes one of two decisions. Either he does not make the investment, which happens only too often, or he is forced to borrow money in order to cover the money that he borrowed the previous year. Although it may be said that in the long term his asset is increasing—Mark Twain once said that in the long run we are all dead—many are not prepared to take that risk. We need a lower interest strategy that enables people to put more money into long-term investment and high technology. I do not believe that there is a great deal of hope of that in our great country.
  I hope that the Minister will pay particular attention in his reply to a point that I raised in an intervention. The Government are paranoid about the PSBR and believe that the maintenance of a particular figure for it is important beyond all else. In another guise I am Liberal spokesman on energy and therefore I attend energy debates. As I mentioned in a question, there is a Bill currently before the House—I am not keen on it, but I leave that aside for the moment—under which a Government guarantee is to be given to British Nuclear Fuels Ltd. to raise £3½ billion. Beside such a sum the Government's sponsorship of small businesses is mere confetti. Yet apparently, because it is a Government guarantee rather than the Government actually producing the money, that £31½ billion is not part of the PSBR. Had a different decision been taken—as it is for virtually every other nationalised industry except perhaps Rolls-Royce, which came into Government hands in a rather different way—I presume that the £300 million per year that BNFL is to invest would be included in the PSBR and expenditure cuts would be required to cover that.
  If it is all right to produce money for BNFL in that way, why cannot this be done on a much broader front for a number of other nationalised industries when the investment in question is likely to be profitable in itself and to make a reasonable return on capital? If the Minister can answer even that one question, the debate will have been worth while.

  1085
  What enraged me and my colleagues most was the Government amendment. We have always enjoyed the Minister's sense of humour. He is a man of enormous humour and great dedication to the sport hinted at in the amendment. He was clearly determined to demonstrate it to the House once again by asking hon. Members to agree that
  "this House expresses confidence that the Government's economic strategy is the best course for restoring this country to prosperity".
  We are all aware that there is no majority in the House for that proposition. We shall divide the House tonight, but the real division will come in another part of the country in 13 minutes' time. That is where the real voting has taken place today, and the result will be the thumbs down sign for the Government's economic policy.
  9.48 pm
  Mr. Ridley: With the leave of the House, I shall try to reply to some of the many points raised in this interesting and affable debate. I do not know what leads the Liberal Members to be in such good spirits, tossing out economic promises and idealistic hopes for the future. Indeed, they have widened the debate into all manner of areas, from the Highlands and Islands to investment of every kind.
  The question of public investment was dealt with by many hon. Members, including the hon. Member for Come Valley (Mr. Wainwright) and the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) as well as by my hon. Friend the Member for Winchester (Mr. Browne). Hon. Members have stressed the importance of public capital investment. On that I think that there is no difference between us. I merely point out that whenever the proposition has been put to the House that public investment might be increased if revenue could be reduced in any particular public programme, it has run into the stiffest opposition. I say that with some feeling, having had the unenviable task of persuading the House to accept a small cut in the revenues of the BBC's external services in order to make a major investment in its capital equipment. It was not an easy transformation to put to the House. Therefore, there is that difficulty.
  I disagree with Liberal Members because they seem to suggest that it is somehow cheaper and easier for the Government to borrow if the object of that borrowing is a particular industrial investment. That is not true. If one issued a gilt edged stock, marked "Government investment in high technology", or "Investment in the future of the coal industry" one would be asked only what the coupon and the date was. The stocks would be classified alongside all the other Government stocks. Therefore, by having a worthy objective in mind, the Government cannot borrow more cheaply. If private industry seeks to borrow for an investment that the market considers attractive and good, it can borrow more cheaply than if it seeks to borrow for a purpose that is clearly not well thought out. That is not the case as far as the Government are concerned.
  Mr. Richard Wainwright: Is the hon. Gentleman asking the House to accept that when the financial markets consider the rate of return they want on a Government security they pay no attention to the Government's policy, to the drift of their economic policy or to the quality of the purpose for which they are trying to raise the loan? Does that count for nothing?
  Mr. Ridley: I should not have given way to the hon. Gentleman, because that is not what I said. I should love to take up his remarks, but I must answer more of the points raised during the debate.
  It is asked whether large Government borrowing crowds out private sector investment. The answer to that question is different at different times. The proposition is not a constant one to which it is possible to say "Yes" or "No". However, I should tell the right hon. Member for Roxburgh, Selkirk and Peebles that in the next breath one cannot complain about the outflow of funds for profitable investment overseas. If the right hon. Gentleman believes that there is no such thing as crowding out by Government borrowing so much that they leave very little for the private sector, he must believe that there is an infinite source of funds, which, if they go overseas, in no way diminish the funds available for investment. I did not express an opinion about that argument, but the right hon. Gentleman cannot have it both ways.
  In addition, the right hon. Gentleman cannot get away with a proposition that many Liberal Members advanced. They said that investment in Britain was falling. That is not true. I accept that manufacturing investment fell from £761 million in the second quarter of 1979 to £600 million in the third quarter of 1981, but those figures do not include leasing, which accounted for £6 billion this year. If the leasing figures are added to those for direct borrowing, the figure increases by about 10 per cent. between the second quarter of 1979 and the second quarter of 1981. Indeed, investment in manufacturing industry is rising, because the interest rate is lower through investment. That proves only how valuable such investment is by sections of British industry.
  My hon. Friend the Member for Ilford, South (Mr. Thorne) fairly pointed out that for some companies, interest rates are more important than other costs. For some companies, labour, or the national insurance surcharge, represent heavy burdens that they would like to reduce. To other companies, interest rate charges are the most serious factor. I cannot say with any certainty that either policy will be universally popular with industry. Some businesses are capital intensive and care more about the reduction of interest rates than about the taxation of their work force. Therefore, the answer varies according to particular circumstances.
  There is always a trade-off between the two. If we were to alter the fiscal balance on companies, that would also have an effect on the interest rate. This House must decide whether its priority is to reduce interest rates or to be looser fiscally, because the tighter we are fiscally, the lower interest rates will be.
  I cannot quantify exactly the effect of the extra borrowing that has been called for, but I am certain of one thing. If there was extra borrowing it would almost certainly push up interest rates. There seemed to be a bland and hopeful feeling among Liberal Members that they did not believe it. Their view was that we could borrow £5 billion more and that it would have no effect on interest rates. When asked "Why?", they say, "Because we hope so and because we think it would be cosier and nicer".
  Mr. Robert Sheldon: What about windfall tax?
  Mr. Ridley: I congratulate my hon. Friend the Member for Skipton (Mr. Watson) on his maiden economic speech. If there were another £4 billion or £5 billion of borrowing,

  1087
  it might be that in a couple of years some of that would come back in increased revenue and reduced expenditure, but there would be a definite time lag of perhaps a year or two. That would adversely affect the figures in the short term.
  Mr. Robert Sheldon: Windfall tax.
  Mr. Ridley: But whatever the time lag, it would make it more expensive to borrow, which would place an extra load, not only on the Government but on industry.
  Mr. Robert Sheldon: Windfall tax.
  Mr. Ridley: The Liberal party wants to find ways of reducing interest rates. That is also what the Government want.
  Mr. Robert Sheldon: Will the hon. Gentleman say something about windfall tax, because he was asked a question about it?
  Mr. Ridley: The right hon. Gentleman must read Hansard. He knows perfectly well that my right hon. and learned Friend answered that question. He can look up the reply in Hansard. Perhaps he will have the manners not to shout "windfall tax" like a parrot all the way through my speech.
  The flaw in the Liberal party argument is that it has tried to make out that we can have extra spending and borrowing without any ill effects. Liberal Members say that the exchange rate might go down slightly. They would not mind that. If the exchange rate went down, import costs would go up. That would increase inflation, and in turn interest rates would go up, because interest rates are the rate of inflation plus or minus a small amount for real negative or positive return.
  Liberal Members must realise that the effect of their idealistic but well-meaning ideas—adjectives that characterise the Liberal Party—would be to make the situation worse. I therefore hope that the House will accept my right hon. Friend's extremely sensible amendment.
  Question, That the original words stand part of the Question, put and negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 32 (Questions on amendments):—
  The House divided: Ayes 125, Noes 31.

  Division No. 12]

  [9.59 pm

  AYES

  Alexander, Richard

  Cadbury, Jocelyn

  Alison, Rt Hon Michael

  Carlisle, John (LutonWest)

  Ancram, Michael

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

  Arnold, Tom

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

  Atkins, Rt Hon H. (S'thorne)

  Cope, John

  Baker, Nicholas (N Dorset)

  Costain, Sir Albert

  Beaumont-Dark, Anthony

  Dean, Paul (North Somerset)

  Benyon, Thomas (A'don)

  Douglas-Hamilton, Lord J.

  Berry, Hon Anthony

  Dover, Denshore

  Best, Keith

  Elliott, Sir William

  Biggs-Davison, Sir John

  Emery, Peter

  Blackburn, John

  Fairbairn, Nicholas

  Boscawen, Hon Robert

  Fairgrieve, Sir Russell

  Boyson, Dr Rhodes

  Faith, Mrs Sheila

  Bright, Graham

  Fenner, Mrs Peggy

  Brinton, Tim

  Finsberg, Geoffrey

  Brotherton, Michael

  Fisher, Sir Nigel

  Brown, Michael (Brigg & Sc'n)

  Fletcher-Cooke, Sir Charles

  Browne, John (Winchester)

  Fookes, Miss Janet

  Buck, Antony

  Forman, Nigel

  Budgen, Nick

  Garel-Jones, Tristan

  1088

  Gow, Ian

  Page, Richard (SW Herts)

  Greenway, Harry

  Parris, Matthew

  Griffiths, Peter Portsm'th N)

  Patten, Christopher (Bath)

  Gummer, John Selwyn

  Percival, Sir Ian

  Hamilton, Hon A.

  Pollock, Alexander

  Heddle, John

  Prentice, Rt Hon Reg

  Henderson, Barry

  Proctor, K, Harvey

  Hill, James

  Rees-Davies, W. R.

  Hogg, Hon Douglas (Gr'th'm)

  Rhodes James, Robert

  Hunt, David (Wirral)

  Rhys Williams, Sir Brandon

  Hunt, John (Ravonsbourne)

  Ridley, Hon Nicholas

  Hunt, Hon Douglas

  Sainsbury, Hon Timothy

  Jopling, Rt Hon Michael

  Shaw, Giles (Pudsey)

  Lang, Ian

  Shaw, Michael (Scarborough)

  Lester, Jim (Beeston)

  Sims, Roger

  Lloyd, Ian (Havant & W'loo)

  Speed, Keith

  Lloyd, Peter (Fareham)

  Speller, Tony

  Loveridge, John

  Spicer, Jim (West Dorset)

  Lyell, Nicholas

  Spicer, Michael (S Worcs)

  McCrindle, Robert

  Sproat, Iain

  Macfarlane, Neil

  Stainton, Keith

  MacGregor, John

  Stanbrook, Ivor

  McNair-Wilson. M. (N'bury)

  Stradling Thomas, J.

  Major, John

  Taylor, Teddy (S'end E)

  Marland, Paul

  Tebbit, Rt Hon Norman

  Marlow, Antony

  Temple-Morris, Peter

  Marten, Rt Hon Neil

  Thomas, Rt Hon Peter

  Mates, Michael

  Thompson, Donald

  Mather, Carol

  Thorne, Neil (Ilford South)

  Maxwell-Hyslop, Robin

  Trippier, David

  Mellor, David

  van Straubenzee, Sir W.

  Miller, Hal (B'grove)

  Viggers, Peter

  Mills, Iain (Meriden)

  Waddington, David

  Mills, Peter (West Devon)

  Waller, Gary

  Mitchell, David (Basingstoke)

  Warren, Kenneth

  Moate, Roger

  Watson, John

  Montgomery, Fergus

  Wells, Bowen

  Morris, M. (N'hampton S)

  Wheeler, John

  Murphy, Christopher

  Wickenden, Keith

  Neale, Gerrard

  Wolfson, Mark

  Needham, Richard

  Neubert, Michael

  Tellers for the Ayes:

  Newton, Tony

  Mr. Peter Brooke and Mr. Alastair Goodlad.

  Osborn, John

  Page, John (Harrow, West)

  NOES

  Atkinson, N.(H'gey,)

  Pavitt, Laurie

  Booth, Rt Hon Albert

  Penhaligon, David

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

  Pitt, William Henry

  Cryer, Bob

  Richardson, Jo

  Dean, Joseph (Leeds West)

  Roper, John

  Dewar, Donald

  Ross, Ernest (Dundee West)

  Ellis, Tom (Wrexham)

  Sheldon, Rt Hon R.

  Evans, John (Newton)

  Skinner, Dennis

  Grimond, Rt Hon J.

  Steel, Rt Hon David

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

  Stoddart, David

  Harrison, Rt Hon Walter

  Wainwright, R.(Colne V)

  Haynes, Frank

  Wellbeloved, James

  Johnston, Russell (Inverness)

  Wrigglesworth, Ian

  McKay, Allen (Penistone)

  McNamara, Kevin

  Tellers for the Noes:

  Maynard, Miss Joan

  Mr. A. J. Beith and Mr. Stephen Ross.

  Miller, Dr M.S. (E Kilbride)

  Owen, Rt Hon Dr David

  MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House expresses confidence that the Government's economic strategy is the best course for restoring this country to prosperity.

  Interest Rates

    HOUSING (AMENDMENT) (SCOTLAND) BILL
    Order for Second Reading read.
    Motion made, and Question put forthwith pursuant to Standing Order No. 67 (Public Bills relating exclusively to Scotland), That the Bill be committed to a Scottish Standing Committee.—[Mr. David Hunt.]
    Question agreed to.

    HOUSING (AMENDMENT) (SCOTLAND) [MONEY]
    Queen's Recommendation having been signified—
    Resolved,
    That, for the purposes of any Act of the present Session to amend subsection (1) of section 25 of the Housing (Financial Provisions) (Scotland) Act 1968 it is expedient to authorise—

    (1) any increase not exceeding £250 million in the sums which may be issued out of the National Loans Fund by virtue of the said section 25 which is attributable to the provisions of the said Act of the present Session;

    (2) the payment out of money provided by Parliament of any increase in the sums payable out of money so provided under Pan 1 of the Housing (Financial Provisions) (Scotland) Act 1972 or the Housing (Financial Provisions) (Scotland) Act 1978 which is so attributable; and

    (3) the payment into the National Loans Fund of any increase in the sums received by the Secretary of State by virtue of the said section 25 which is so attributable.—[Mr. David Hunt.]

  Employment (Work Experience Schemes)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. David Hunt.]
  10.12 pm
  Mr. David Stoddart: I am grateful for the opportunity to bring the case of my constituent, Mr. Eric Donnelly, to the attention of the House, since I believe that his case is not only important to him and his future but has national implications.
  Mr. Donnelly wrote to me on 3 October saying that he had been employed by Milletts in Swindon from 8 October 1979 until 26 September 1981, when he was made redundant, just a few days before completion of two years' service and thereby disqualified from receiving redundancy pay. However, on the day that he received his notice of dismissal he learnt that a young person was being interviewed by the firm under the youth opportunities programme. He found that situation curious, to say the least.
  The reason given by Milletts for Mr. Donnelly's dismissal was that the company was experiencing adverse trading conditions. It is clear that Mr. Donnelly was a satisfactory employee, since the letter from Milletts informing him that he was redundant thanked him for his services and indicated that he would be considered for reemployment if trading conditions improved. Furthermore, Mr. Donnelly had gained a certificate from Milletts, following training in Reading, to show that he had completed the course satisfactorily.
  I was naturally concerned about his case, especially as fears have been expressed by individual trade unions, the TUC and young people in my constituency and elsewhere that the youth opportunities programme is being abused by some employers who are sacking full-time employees and replacing them with YOP trainees.
  I referred the case in the first instance to the Secretary of State, who passed it on to the Manpower Services Commission for investigation. The commission, to its great credit, carried out a thorough investigation. The chairman, Sir Richard O'Brien, wrote to me on 16 November to confirm that the work experience trainee who had been taken on by Milletts was displacing a permanent employee, contrary to the terms of the agreement between the commission and the scheme's sponsor.
  Sir Richard's letter is as follows:
  "Dear Mr. Stoddart,
  Thank you for your letter of 6 October to Norman Tebbit enclosing correspondence from your constituent, Mr. E. Donnelly of 37 Elmina Road, Swindon who had been made redundant from Milletts in Swindon. Mr. Donnelly believed he had been replaced by a young person on a work experience scheme under the youth opportunities programme. As you know, your letter has been passed to me for reply, since the Manpower Services Commission is responsible for the programme.
  I am sorry for the delay in answering your letter but in view of the seriousness of the allegation, I asked my staff to make a thorough investigation. As a result of this investigation it seems clear that the work experience trainee was"——
  and "was" is underlined—
  "displacing a permanent employee contrary to the terms of the agreement between the MSC and the scheme sponsor. As a result, we have had to give the sponsor a month's notice of closure of the scheme during which time another placement will be found for the young person at present on the scheme.
  I am grateful to you for writing to me on this matter. As a result of this enquiry we are looking carefully into the position

  1091
  of schemes operating in Millett shops in other areas. I realise that this does not help Mr. Donnelly but at least he will know that the MSC takes a very serious view of such substitution and will not allow schemes to continue where there is sufficient evidence that substitution is taking place. I hope it will not be long before he is able to find alternative employment."
  When I read that letter from Sir Richard I was appalled and angry to find that the youth opportunities programme, which I support absolutely, had been abused by an employer of some national repute to the serious detriment of my constituent.
  Naturally, I wrote to Mr. Donnelly informing him of the outcome of the investigation into his complaint. I advised him that he could be successful if he decided to proceed with a case against Milletts on the ground of unfair dismissal. That is a course of action that he has decided to consider together with his legal advisers. In the meantime he is still unemployed, in spite of the fact that he searches day by day for new employment and spends his evenings studying art and design.
  I am sure that all hon. Members will sympathise with Mr. Donnelly for the shabby and disgraceful way in which he has been treated by his former employer, who deprived him of his job and ensured that he should receive no compensation through redundancy payments.
  The case has even wider implications. In the debate on the young persons' scheme on 16 November my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said:
  "it is believed that in too many places youngsters are being used in a productive capacity. I say 'believed' because the truth is hard to find."—[Official Report, 16 November 1981; Vol. 13, c. 126.]
  Due to the diligence of the commission, the truth has been found in Mr. Donnelly's case. It seems that Milletts was prepared to abuse the scheme for its own profit at the expense of a full-time worker and at significant cost to the taxpayer.
  Mr. Donnelly was paid a gross wage of £62 a week, on top of which is the employers' national insurance contribution. The saving to Milletts is £70 a week or £3,640 a year. The cost to the taxpayer, even at the present inadequate rate of £23·50 a week paid to YOP trainees, amounts to £1,222 a year. To provide the firm with an additional profit of £3,640 a year an adult worker has been sacrificed to the dole queue and the taxpayer is being milked of £1,222 a year.
  Mr. Frank Haynes: In addition to the debate to which my hon. Friend referred, there was another debate on the YOP scheme in which I participated. I named firms in the high street that were abusing the scheme. The Minister denied it. Since that debate, I have received letters of support from all over the country confirming what is going on. What are the Government planning to do about it? Will they stop the abuse or allow it to continue?
  Mr. Stoddart: I have heard of that useful debate. It brought abuses to light. I understand that my hon. Friend the Member for Ashfield (Mr. Haynes) received a letter from one of my constituents naming another firm in my constituency. Perhaps my hon. Friend will send me a copy of that letter. I shall ask the Minister what he intends to do about the case that I have described and other abuses of the scheme.
  1092
  I was referring to Milletts and the milking of the taxpayer. That milking can only be described as fraud. It is nothing less than fraud. If a claimant of supplementary benefit, unemployment benefit or any other State benefit cheated the taxpayer out of a similar amount, he or she would be clapped in gaol. I know of a case in my constituency where the amount involved was much less than £1,222 and the person concerned has been gaoled.
  The fraudulent conversion of taxpayers' money is bad enough, but it is only one aspect. If the youth opportunities programme is to succeed in its objectives, everybody must have confidence in it and be certain that it is not abused by unscrupulous employers. I am sure that the Minister will agree.
  There is a widespread feeling among young people that they are being used as cheap labour and that they might be doing their older brethren out of jobs. There is a growing suspicion among older workers who fear that their jobs are in peril. The honest and public-spirited employer must think that the abuse of the scheme by rogue employers will result in unfair competition. Unless the fears can be allayed by Government action, the work experience scheme is bound to run into trouble. We all wish to avoid that.
  I appreciate and accept that the huge majority of firms co-operating in the scheme are entirely honest and are participating solely to assist young unemployed people. I emphasise that and make it clear that that is my view. It is important to them that the black sheep in their ranks should be rooted out and dealt with.
  It is also necessary to deter firms that wish to take part in the scheme for their own profit in a similar manner to Milletts. I hope that the Minister will outline the additional measures that he intends to introduce to prevent such abuses in future.
  I realise that this is a voluntary scheme, but I hope that consideration will be given to the possibility of prosecuting firms that convert moneys allocated under the scheme to their own profit. That is one of my suggestions to the Minister.
  The Minister might also consider whether victims of abuses of the scheme might be awarded levels of compensation for unfair dismissal that would be penal for the employers. After all, the Secretary of State announced on Monday of this week that he would introduce substantially increased compensation in other areas of unfair dismissal. Therefore, that should be possible. I sincerely hope that the right hon. Gentleman will consider that aspect seriously.
  I hope that the trade unions and individual employees will be given a greater say in the monitoring of schemes not only on a national or regional basis but on a local firm-by-firm basis. I expect, too, that local offices of the Manpower Services Commission will be asked to ensure, when agreeing to schemes with sponsors, that there is no possibility of a full-time employee being displaced by a YOP trainee. The right hon. Gentleman and his right hon. Friend the Secretary of State should ensure that adequate staff are available to the MSC for that task.
  I urge the right hon. Gentleman to bear in mind Mr. Donnelly's case when putting the new young workers' scheme into operation. I hope that he will heed the warning sounded by my hon. Friend the Member for Flint, East (Mr. Jones) in the debate on the scheme on 16 November when he drew attention to the possibility of similar abuses being perpetrated.

  1093
  I pay tribute to Sir Richard O'Brien and his staff at the MSC for the speed and depth of their investigation and for the directness with which the results were reported to me. It is important that the MSC should be seen to be open and even-handed in its operations. It has come up to my expectations in this case.
  I repeat, Mr. Donnelly's case has angered me considerably. One cannot help feeling uneasy at the thought that, but for the youth opportunities programme, he would still be in a full-time job. That should worry us all. Therefore, I sincerely trust that the Minister will join me tonight in forthright condemnation of Milletts for its duplicity and action in bringing into disrepute the YOP, which he and I and the whole House support. I also hope that he will do everything through his Department to find Mr. Donnelly other employment and to obtain redress for the shameful manner in which he has been treated.
  10.28 pm
  The Minister of State, Department of Employment (Mr. Michael Alison): I am glad that the hon. Member for Swindon (Mr. Stoddart) has found an opportunity of raising this important matter this evening. The Government are well aware of the considerable concern that is being expressed by trade unionists and others about substitution in YOP, and I welcome the opportunity of discussing the matter and of hearing what the hon. Gentleman has had to say about this particularly unpleasant and regrettable case. In fact, I hope to show that the case confirms the correctness of the action that everyone has subsequently taken. The Government naturally have nothing to hide on this issue, but we all have something to learn from it.
  I want to, deal first with the general question of displacement, of which this case is an example and then move on to look at this particular case the hon. Member raises, the case of Mr. Donnelly.
  First, I shall define displacement. Displacement is one facet of a larger question, which can be described as the replacement of normal employees in a business by YOP trainees. That replacement can be one of two types. First, there is a factor that is sometimes called "deadweight". That is the extent to which an employer recruits YOP trainees instead of permanent recruits in the YOP age range of the under-18s. Secondly, there is the use of YOP trainees instead of permanent recruits aged 18 and over, which is termed substitution. Both facets of displacement can, of course, occur at the point of recruitment, without obvious or verifiable breach of YOP rules.
  There is also the form of substitution that occurs—of which Mr. Donnelly's case is an unhappy example—when a full-time employee is dismissed to make way for the subsequent recruitment of a YOP trainee.
  Those are the two components of a problem that can arise where YOP schemes are sponsored. The next job is to assess the extent of the problem. A survey of YOP work sponsors in 1980 showed that the level of deadweight was 24 per cent. and that the level of substitution of both kinds was 5 per cent. giving a total of 29 per cent. in that part of the programme. Those are the proportions in the work experience element of the YOP scheme.
  Displacement is not considered by the Manpower Services Commission to be a problem in other sectors of the programme, and we can see why. Community projects and training workshops are usually set up specifically in the YOP context and there are no pre-existing employees
  1094
  for whom they might be substituted. In view of the amount of work experience in the programme, we can say that displacement over the programme as a whole is about 20 per cent.
  That was in 1980. A more recent survey, held in May this year, has found that the levels of substitution had not changed significantly, although the programme has more than doubled in size.
  So we find that about 20 per cent. of YOP places may be displacing someone else from more permanent employment. But that does not necessarily imply that that is the proportion of jobs lost. Sponsors may be substituting, not by having a YOP trainee instead of one permanent employee, but by using the period on work experience as an induction period, with training paid by the Government, before offering suitable young people permanent jobs. In short, there is no simple way to define the problem of substitution, nor can we arrive at really accurate estimates of its level. It is as well to remember that YOP can also lead to the creation of new job openings for trainees and has real employment advantages for those taking part. In dealing with a negative aspect of the programme this evening, we must not lose sight of its positive advantages—which are considerable—and which were endorsed by the hon. Gentleman.
  However, we accept that substitution exists, and that it is a valid cause for concern. Indeed, I share that concern. The credibility of the programme as a whole is put at risk by employers who abuse it in that way, and I value the YOP too highly to see it being damaged.
  One reason why I am not anxious to pursue the course of action recommended by the hon. Gentleman to deal with the recalcitrant and unrepresentative minority—that of strong penal sanctions—is that it would deter the majority of bona fide and honest potential sponsors from running the risk and coming forward.
  Against that background, I turn to the practical steps that we are taking to combat substitution, about which the hon. Gentleman wished to have some advice. The first action that we take comes when a potential sponsor first approaches the MSC with an inquiry or application for sponsorship. The commission's staff draw to the employer's attention the rule that YOP trainees must be supernumerary—addition to normal staffing requirements. The sponsor is visited by MSC staff and the opportunity is taken to explain how the programme works and what its aims are. Inquiries are made at local jobcentres and careers offices to check the sponsor's normal pattern of vacancies and to see whether there has been a change in the recent past.
  Finally, it is required that relevant trade unions should be consulted by the sponsor and their views taken into account before he proceeds with his application. In the case of establishments where there are no trade unions, the MSC is in the process of agreeing a procedure whereby scheme proposals are notified to its area boards, which can ask for more information if board members have any doubts about the application. In some sectors, for example, agriculture, special arrangements also exist whereby the relevant trade union and the employers' organisation are consulted locally about applications.
  So much for the launching of new schemes. The MSC also takes action to prevent abuse on existing schemes. They are monitored by MSC staff to ensure that the sponsor is operating them correctly. The hon. Gentleman may like to know that in October no fewer than 9,500

  1095
  schemes had monitoring visits from MSC staff. That is the highest monthly total ever—it is substantial—and is strong evidence of our desire to prevent such abuse. Furthermore, our monitoring procedures were reviewed and amended as recently as September to concentrate on those schemes that seemed to be most at risk or most in need of advice.
  If it is established that abuse of a particular scheme is occurring, the commission will immediately withdraw the scheme in accordance with the terms of the legal agreement between the sponsor and the MSC. However, allegations of displacement are, alas, easier to make than prove, and a lot of work is involved in establishing misuse of the YOP. We are particularly grateful to those who draw doubtful schemes to the MSC's attention and to hon. members like the hon. Gentleman who bring matters to our attention.
  I have just mentioned some ways in which substitution can be controlled, but we have also felt the need for a thorough investigation of the MSC's operating procedures of the YOP to see whether we can identify new ways to tackle the problem and to intensify our present efforts. I am glad to say that such a review has recently been carried out and a report on it prepared. The report has now been submitted by the authors to the MSC, which is studying the recommendations; indeed I am advised that action on some recommendations is already being taken.
  Of course, this is a report on operational matters, and it is, therefore, of concern mostly to the MSC, but my colleagues and I expect to learn something of what it has to say shortly. However, I know that among the wide range of areas tackled, the problem of displacement and how to curtail it has received careful and specific attention. The key here, I am advised, is monitoring schemes once they have been set up, because it is when they are running that we can most clearly assess the use the sponsor is making of the trainee. I look forward to seeing the details of how the MSC propose to improve its efforts, but for the present I can assure the hon. Gentleman that that aspect has been thoroughly investigated.
  However, in the longer term there is another very most important way in which abuse of the YOP can be tackled, and here the efforts that the MSC is making to improve the training quality of the programme are particularly relevant. As the degree to training improves—as release to off-the-job training increases and as the progression from one element of the programme to another or from one small works experience scheme to another increases—the chances of an employer being able to abuse the programme by using a work experience trainee for full-time, substitutionary work will diminish, because he will be, in a sense, a bird of passage, moving from one part of the scheme to another.
  Hon. Members will know that in a statement to the House on 27 July the Prime Minister said that we were looking at an improved training programme that would eventually replace the existing YOP. In fact, I think that
  1096
  the YOP is already developing towards that programme and control of displacement—substitution is part of the present process of qualitative improvement. Our aim is a training programme, with the accent on training first and last, and my right hon. Friend the Secretary of State will be making an announcement about that shortly.
  I turn to the case raised by the hon. Gentleman on behalf of Mr. E. Donnelly of Swindon. Mr. Donnelly, as the hon. Member already told us, was employed by Milletts, the camping goods shop in Swindon. On 8 September he was told that he was to be made redundant, and he finished work on 26 September. On 29 September, a YOP trainee started on a work experience scheme at Milletts. The scheme had been approved earlier, on 12 August. Mr. Donnelly wrote to the hon. Gentleman who wrote to my right hon. Friend the Secretary of State.
  A full investigation was made by MSC staff of the Bristol area office, and it became clear that substitution of the worst sort had indeed occurred. Accordingly, the sponsor was given one month's notice of termination of the scheme, during which time efforts would be made to place the trainee on another scheme. I am pleased to say that the scheme at Milletts has closed and the trainee in question has moved to another.
  I do not think that it would be proper for me to say any more about Mr. Donnelly's position, as I understand he may be taking his case to an industrial tribunal.
  What lessons can we learn from what has happened? I think that there are several. First, there is a need for that continual monitoring and checking both of existing and proposed schemes which I have already referred to. I must emphasise that this is no easy task—there are about 160,000 schemes in existence and proper oversight of them calls for the very best use of inescapably scarce staff and resources. The recently completed review of the management of the YOP indicates the importance the MSC and the Government attach to the monitoring.
  Secondly, it is clear that when cases of suspected abuse are raised, the review procedure does work and the abuse in this instance has been identified and stopped.
  Thirdly, YOP is a collaborative venture. The Government provide the money, the MSC provides organisational support and operating guidelines, and the sponsors, the trainees and the community at large provide the programme. It is in all our best interests if the YOP is not discredited by misuse such as substitution and displacement, and, although the MSC is quick to respond, it is also the duty of all concerned with the programme to help it operate in the way intended.
  I have no doubt that the publicity attending the debate, and the hon. Gentleman's representations, will assist in achieving a wider awareness of the potential for abuse and the way it can be nipped in the bud—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, MR. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at eighteen minutes to Eleven o'clock.

TRADE
  Estate Agents Act 1979
  Estate Agents Act 1979
  Eady Levy
  Eady Levy
  Companies (Incorporation and Closure)
  Companies (Incorporation and Closure)
  Make-up Kits (Importation)
  Make-up Kits (Importation)
  "A National Strategy for Quality"
  "A National Strategy for Quality"
SOLICITOR-GENERAL FOR SCOTLAND
  Victoria Hospital Nurses' Home (Fire)
  Victoria Hospital Nurses' Home (Fire)
NATIONAL FINANCE
  Building Societies
  Building Societies
  Motor Vehicle Imports
  Motor Vehicle Imports
  Income Tax
  Income Tax
  Money Supply (Definition)
  Money Supply (Definition)
  Treasury (Manpower)
  Treasury (Manpower)
  Public Sector Borrowing Requirement (Public Expenditure)
  Public Sector Borrowing Requirement (Public Expenditure)
  National Economic Development Council
  National Economic Development Council
  Oil (Revenue Yield)
  Oil (Revenue Yield)
  Total Revenue
  Total Revenue
  Income Tax Liabilities
  Income Tax Liabilities
  Taxpayers (Statistics)
  Taxpayers (Statistics)
  Inland Revenue Statistics
  Inland Revenue Statistics
  Capital Gains Tax
  Capital Gains Tax
  Capital Transfer Tax
  Capital Transfer Tax
  Small Units (Tax Allowances)
  Small Units (Tax Allowances)
  Construction Industry (Group of Eight)
  Construction Industry (Group of Eight)
  Private Health Sector
  Private Health Sector
  Company Residence
  Company Residence
  Oil and Gas (Tax Revenue)
  Oil and Gas (Tax Revenue)
OVERSEAS DEVELOPMENT
  Cultural Property (Conservation and Restoration)
  Cultural Property (Conservation and Restoration)
HOUSE OF COMMONS
  Charles Barker Watney and Powell
  Charles Barker Watney and Powell
AGRICULTURE, FISHERIES AND FOOD
  Ice Plant (Amble)
  Ice Plant (Amble)
  Forestry Commission
  Forestry Commission
ENERGY
  Electricity
  Electricity
PRIME MINISTER
  Engagements
  Engagements
  Trades Union Congress
  Trades Union Congress
  Supplementary Benefit
  Supplementary Benefit
  President Reagan
  President Reagan
  Persons on Remand
  Persons on Remand
  Middle East
  Middle East
  Minister of State, Home Office
  Minister of State, Home Office
  Job Training (Departmental Responsibility)
  Job Training (Departmental Responsibility)
  Sinai Peacekeeping Force
  Sinai Peacekeeping Force
  Palestine Liberation Organisation
  Palestine Liberation Organisation
HOME DEPARTMENT
  Citizenship
  Citizenship
  Immigration
  Immigration
  Policing Policy
  Policing Policy
  Riots (Damage Claims)
  Riots (Damage Claims)
  Prisons (Construction)
  Prisons (Construction)
  Metropolitan Police Force
  Metropolitan Police Force
  Short, Sharp Shock Sentences
  Short, Sharp Shock Sentences
  Prisons (Overcrowding)
  Prisons (Overcrowding)
  West Yorkshire Police Authority (Byford Report)
  West Yorkshire Police Authority (Byford Report)
  Obscene Publications
  Obscene Publications
  Gartree Prison
  Gartree Prison
  Boundary Commissions (Reports)
  Boundary Commissions (Reports)
  Television Licence Fee
  Television Licence Fee
  Broadcasting Wavelengths
  Broadcasting Wavelengths
  Police (Complaints)
  Police (Complaints)
  Prisons
  Prisons
  British Nationality Act
  British Nationality Act
  Anti-racial Legislation
  Anti-racial Legislation
  Elections (Voting Rights)
  Elections (Voting Rights)
  Citizens Band Radio
  Citizens Band Radio
  Racial Equality
  Racial Equality
  Civil Disturbances (Serious Offences)
  Civil Disturbances (Serious Offences)
  Laurence Scott and Electromotors Ltd. (Helicopters)
  Laurence Scott and Electromotors Ltd. (Helicopters)
  Anti-racist Police Squads
  Anti-racist Police Squads
  Criminal Justice Bill (Sleeping Rough)
  Criminal Justice Bill (Sleeping Rough)
  Television Licence (Physically and Mentally Handicapped Persons)
  Television Licence (Physically and Mentally Handicapped Persons)
  Satellite Broadcasts
  Satellite Broadcasts
  West Yorkshire Police
  West Yorkshire Police
  Merseyside Community Relations Council
  Merseyside Community Relations Council
  Motor Accident, Park Lane
  Motor Accident, Park Lane
  Marches and Processions
  Marches and Processions
INDUSTRY
  Loan Guarantee Scheme
  Loan Guarantee Scheme
  Assisted Area Status
  Assisted Area Status
  European Community (Regional Policy)
  European Community (Regional Policy)
  Non-assisted Areas (Review)
  Non-assisted Areas (Review)
  Barnsley
  Barnsley
  British Leyland (Tractor Interests)
  British Leyland (Tractor Interests)
  Woollen Textiles
  Woollen Textiles
  Co-operative Ventures
  Co-operative Ventures
EMPLOYMENT
  Printing Industry
  Printing Industry
  Wolverhampon (Male Unemployment)
  Wolverhampon (Male Unemployment)
  Barnsley (Unemployment Statistics)
  Barnsley (Unemployment Statistics)
  Keighley
  Keighley
WALES
  Cystic Fibrosis
  Cystic Fibrosis
  Council for the Deaf (Aid)
  Council for the Deaf (Aid)
  Health Education (Staff)
  Health Education (Staff)
  Health Education (Welsh Language)
  Health Education (Welsh Language)
FOREIGN AND COMMONWEALTH AFFAIRS
  The Gambia and Senegal
  The Gambia and Senegal
  IRA (Arms Supplies)
  IRA (Arms Supplies)
  European Convention on Human Rights
  European Convention on Human Rights
  Entry Certificates
  Entry Certificates
  Palestine Liberation Organisation
  Palestine Liberation Organisation
  Fahd Plan
  Fahd Plan
  Israel (Visit)
  Israel (Visit)
  Camp David Agreement
  Camp David Agreement
SOCIAL SERVICES
  Unemployed Persons
  Unemployed Persons
  Professions Supplementary to Medicine Act 1960
  Professions Supplementary to Medicine Act 1960
  Benefits
  Benefits
  Pharmacists
  Pharmacists
  Industrial Compensation Schemes
  Industrial Compensation Schemes
  Child Benefit
  Child Benefit
  Human Pituitary Glands (Collection)
  Human Pituitary Glands (Collection)
  Electric Nerve Stimulator
  Electric Nerve Stimulator
  Schizophrenia
  Schizophrenia
  Drugs (Cost)
  Drugs (Cost)
  Growth Hormone
  Growth Hormone
  Social Workers' Services (Charges)
  Social Workers' Services (Charges)
  Working Days Lost (Backache)
  Working Days Lost (Backache)
  Foetal Alcohol Syndrome
  Foetal Alcohol Syndrome
  Maternity Services Committee
  Maternity Services Committee
  Female Alcoholics
  Female Alcoholics
  Terrorism (Pensions)
  Terrorism (Pensions)
  Marconi Radar Systems Ltd. (Compensation)
  Marconi Radar Systems Ltd. (Compensation)
  Kirkby Office (Cost)
  Kirkby Office (Cost)
DEFENCE
  Royal Military College of Science
  Royal Military College of Science
  Armed Forces (Statistics)
  Armed Forces (Statistics)
  Trident Base (Contracts)
  Trident Base (Contracts)
  Territorial Army (Training)
  Territorial Army (Training)
  HMS "Raleigh"
  HMS "Raleigh"
  Civilian Apprentices
  Civilian Apprentices
  Royal Navy (Recruitment)
  Royal Navy (Recruitment)
  "Project Destiny"
  "Project Destiny"
  Technician Apprentice Course
  Technician Apprentice Course
  Holy Loch (Nuclear Safety)
  Holy Loch (Nuclear Safety)
  Surplus Firearms (Disposal)
  Surplus Firearms (Disposal)
NORTHERN IRELAND
  Law, Order and Protective Services (Cash Limit)
  Law, Order and Protective Services (Cash Limit)
ENVIRONMENT
  Local Government Expenditure
  Local Government Expenditure
  Statistical Returns
  Statistical Returns
  Rate Support Grant
  Rate Support Grant
  Airey Houses
  Airey Houses
  Papal Visit
  Papal Visit
  Council House Sales
  Council House Sales
  Liverpool (Development)
  Liverpool (Development)
  Housing (Homeless Persons) Act 1977
  Housing (Homeless Persons) Act 1977
  Merseyside (Ministerial Meeting)
  Merseyside (Ministerial Meeting)
TRANSPORT
  Okehampton Bypass
  Okehampton Bypass
  Nuclear-free Zones
  Nuclear-free Zones
  Motorways (Service Areas)
  Motorways (Service Areas)
  M4 (Closure)
  M4 (Closure)
  Leeds-Nottingham-Glasgow Services
  Leeds-Nottingham-Glasgow Services
EDUCATION AND SCIENCE
  Press and Public Relations Officers
  Press and Public Relations Officers
  Liverpool (Ministerial Visit)
  Liverpool (Ministerial Visit)
  Pupil Numbers
  Pupil Numbers
SCOTLAND
  Government Expenditure (Outturn)
  Government Expenditure (Outturn)
  Rate Support Grant Expenditure
  Rate Support Grant Expenditure
  Nuclear War (West of Scotland)
  Nuclear War (West of Scotland)
  Unemployment Statistics
  Unemployment Statistics
  Victoria Hospital (Nurses' Home)
  Victoria Hospital (Nurses' Home)
  Tayside Health Board (Planning Officer)
  Tayside Health Board (Planning Officer)
Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Liverpool): The CHAIRMAN OF COMMITTEES on the Woolsack.

Air Fares: Discounts
The Earl of Kinnoull: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will confirm reports that the Dutch Government are providing a 35 per cent. discount for air travellers flying from Schiphol Airport to the Far East with the national airline KLM and whether the Government would consider similar action for British airlines.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, fares between the Netherlands and other countries are a matter for the Governments concerned and we have no role in their approval. They are, of course, of interest to United Kingdom airlines who operate in parallel markets. I am advised that there have been changes in fares from Amsterdam to Far East destinations and in some cases significant reductions. We have been assured by the Dutch Government that these changes have come about as a result of the commercial judgment of the KLM management related to the competitive market position. The Dutch Government have also assured us that no subsidy to KLM is in any way involved.
The Earl of Kinnoull: My Lords, may I thank my noble friend for that assurance and information. Would my noble friend comment on how serious Her Majesty's Government take the obvious competitive threat that Schiphol Airport offers to future interlining traffic of the London airports?
Lord Trefgarne: My Lords, this is a matter for the managements of the airports concerned. The general position of Her Majesty's Government in these matters is that we seek to achieve a competitive environment in these things and the arrangements at Schiphol are clearly part of that.
Baroness Burton of Coventry: My Lords, is the noble Lord the Minister aware that the Dutch Government are now supporting a wide range of low-cost fares? Is he further aware that many of these discounted fares which formerly were available only in the "bucket shops" are now available at all travel agents in Holland? Can he, finally, tell the House whether the Dutch Government have legislation similar to ours saying that such action is illegal, or whether they have not?
Lord Trefgarne: My Lords, as I have explained I think on numerous occasions to the noble Baroness, this is not a question of national legislation but a question of agreement between the Governments concerned. I am not in a position to comment upon the agreements between the Government of Holland and the other Governments with which they do business.
Baroness Burton of Coventry: My Lords, I am sorry; that is not the question I asked the noble Lord. I asked him whether the Dutch Government had legislation similar to ours which made such action illegal or whether they did not.
Lord Trefgarne: My Lords, I am quite certain that there is no provision in Dutch law to allow things which are contrary to international agreements.
Baroness Trumpington: My Lords, may I ask the Minister whether the 35 per cent. discount means that it is cheaper for British travellers to fly to Schiphol and then take KLM aircraft to the Far East?
Lord Trefgarne: My Lords, I do not think I can do that arithmetic in my head, but certainly the economy fares offered by British Caledonian and British Airways between London and Hong Kong, for example, are between 30 per cent. and 9 per cent, lower than the economy fares from Schiphol.
Lord Beswick: My Lords, while I appreciate what the noble Lord said about the position of the Government in these matters, he has defined their role, he said, to ensure a competitive position. But is it not necessary to ensure that the competition is fair? Is there not a case now—again I appreciate the difficulties—for saying that we could have regulation of fares or we could have a situation where there is no regulation of fares? Surely, it is quite absurd to have the present nonsense. Can the Government not do something more to get sense into this matter?
Lord Trefgarne: My Lords, I agree with the noble Lord. Unfair competition is certainly not part of our policy and is not something we seek to achieve. That is why we were at pains to ascertain from the Dutch Government that there was no question of any subsidy so far as KLM were concerned.
Lord Davies of Leek: My Lords, is the noble Lord aware that some of us should be wary of over-competitiveness in the use of aviation machines, and that many of us would prefer the security of flying with cool-headed British aviators and aeroplanes to running all round the world looking for cheap fares?
Lord Trefgarne: My Lords, as a former pilot, I welcome what the noble Lord says.

British Airports Authority: Financing
3.5 p.m.
The Earl of Kinnoull: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they consider the present capital financing of the British Airports Authority for the development of their airports is satisfactory in view of the fact that 80 per cent. of such developments need to be financed from revenue and whether this constraint on the BAA is in the interests of airlines and the consumer.
Lord Trefgarne: My Lords, there is no formal requirement that the BAA should finance any given percentage of its capital investment from revenue. As with other similar nationalised industries, the authority is expected to earn the required rate of return on new investment and this will substantially determine the internal revenue of the authority. Its external financing requirement will vary from year to year according to the difference between its capital requirements and its internally generated resources.
The Earl of Kinnoull: My Lords, while thanking my noble friend for that reply, may I ask him this: In view of the recent reports that the British Airports Authority intends to increase its charges by 12 per cent. this year to the now very harassed airlines, is it not time that this monopolistic body should look to increased efficiency of service rather than increasing charges in isolation of market difficulties?
Lord Trefgarne: My Lords, I certainly agree that the BAA ought to be operated as efficiently as is possible, and although I would not claim that the authority is perfect in that respect it has a very creditable and defensible record. But what I think my noble friend is really asking for is some amelioration for the airlines which goes wider than mere internal efficiency in the authority. That would mean a subsidy from public funds which I cannot countenance.
Lord Taylor of Gryfe: My Lords, in view of the desire of the Government to introduce private capital into the nationalised sector, have they looked at the possibility of financing the airport developments by private capital and leasing to the Civil Aviation Authority? Is there any reason why such arrangements should be brought within the external finance limit of the PSBR?
Lord Trefgarne: My Lords, that is one of the possibilities that we examine from time to time. However, it would have no effect upon the costs of the British Airports Authority and thus its ultimate charges.
Lord Harvey of Prestbury: My Lords, is my noble friend aware that the British Airport Authority's charges are just about the highest in the world? Would he look into this matter and see that we are really competitive and encourage airlines and private operators to come to Britain?
Lord Trefgarne: My Lords, I am aware that the fees of the British Airports Authority are among the higher charges for their type of services in the world. On the other hand, it is one of the few airport authorities which operates without a subsidy.
Earl Amherst: My Lords, would the noble Lord not agree that the high tariffs charged by the CAA to the airlines are largely responsible for the very high fares now charged by the operators?
Lord Trefgarne: No, my Lords, I would not agree with that. The terminal charges—as they are called—at British airports, which relate to the total cost of course of British airlines, represent something less than 5 per cent. of their total costs.
Lord Jenkins of Putney: My Lords, in considering what help we should give to the British Airports Authority, would the noble Lord consider that it is desirable that further increases of flights into Heathrow should be discouraged? Would he therefore encourage the airports authority to allow for cheaper landing charges at Stansted and Gatwick rather than Heathrow?
Lord Trefgarne: My Lords, that is already the case.
Baroness Burton of Coventry: My Lords, is the noble Lord the Minister aware that these very high charges, whether they are justified or not, of the British Airports Authority are one of the main reasons for the high passengers fares, particularly to Europe? Could he not take that into account in looking at the proposed 12 per cent. increase?
Lord Trefgarne: My Lords, as I have just explained to the noble Earl, Lord Amherst, the noble Baroness is not correct.

The Office of Manpower Economics
3.9 p.m.
Lord Boyd-Carpenter: 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 people are employed in the Office of Manpower Economics; what plans have been made to reduce this; and what is the estimated cost of the office in the current year.
The Ministry of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, the current staff is 44. This follows a reduction of one-third from a total of 65 as a result of the abolition of the Standing Commission on Pay Comparability and an efficiency review of the Office of Manpower Economics. No further reductions are planned. The cost this financial year will be about £857,000.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that reply. Does his statement that no further reductions are planned exclude the possibility of nonetheless making them? Does my noble friend recall that it was this organisation which last year was responsible for the extremely expensive error in calculation which resulted in greatly increased public expenditure on teachers' salaries?
Earl Ferrers: My Lords, I was aware of the latter fact. The fact that no more reductions are planned does not of course mean that they are excluded; it means merely that they are not planned.
The Earl of Halsbury: My Lords, would the noble Earl agree that, in view of the very large number of review bodies, ad hoc committees of inquiry, and so on which the Government set up to act as honest brokers between themselves and spheres of administration for which they have responsibility, the advice that they receive would be incoherent and chaotic unless all those bodies shared a common secretariat?
Earl Ferrers: My Lords, I am very grateful to the noble Earl, Lord Halsbury. I think that that is largely so, and I would add that the Office of Manpower Economics is totally independent.
Lord Orr-Ewing: My Lords, is my noble friend aware that the figures that he gave us mean that each of the 44 persons serving in the office is costing nearly £20,000 a year? If it is not possible to make economies in numbers, would it be possible at least to make economies in the seniority of people serving in the office, in order that the taxpayer should not have to meet a cost which will probably amount to £1 million next year?
Earl Ferrers: My Lords, simple mental arithmetics are not always the best guides to efficiency. All I would tell my noble friend is that the estimated costs for 1981–82 are in fact 34 per cent. below last year's in money terms, which presumably is more than in real terms.

Northern Ireland Job Creation: Financial Aid
3.12 p.m.
Baroness Ewart-Biggs: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government why there is a lower level of financial assistance given to job creation schemes in Northern Ireland than to those operating in the rest of the United Kingdom, and whether they have reconsidered their attitude towards this discrimination since the Written Answer given to Lord Melchett on 24th July 1981.
The Minister of State, Northern Ireland (The Earl of Gowrie): My Lords, in general, the financial assistance available for job creation in Northern Ireland is at a higher level than in Great Britain. There are, however, necessary differences between the financial assistance provided in Northern Ireland under the Action for Community Employment Scheme and that available in Great Britain under the broadly comparable Community Enterprise Programme. These differences are designed to provide as many jobs as possible within the resources available, as well as to help to ensure that the sponsors make a genuine contribution themselves.
Baroness Ewart-Biggs: My Lords, I wish to thank the Minister very much for that Answer, but I still do not think that he has quite explained the anomaly. Would he not agree that it is quite extraordinary that in Northern Ireland, where economic conditions are worse and unemployment figures are higher than in other parts of the United Kingdom, employing bodies using the job creation schemes are generally benefiting less than are their counterparts who are benefiting from similar schemes in the rest of the United Kingdom? Surely the Minister should give a commitment that community organisations in Northern Ireland engaged in this essential work of social benefit should be brought into line with the rest of the United Kingdom by being given 100 per cent. gross wage cost per employee and the equivalent administration grant of £400?
The Earl of Gowrie: My Lords, I would agree that economic conditions in Northern Ireland are worse than they are in the rest of the United Kingdom, which is one of the reasons why it is so important to restore stability, both politically and in terms of security, in the Province. But I would not agree with the further points made by the noble Baroness. The evidence does not support her contentions. I am glad to report that the Northern Ireland scheme is proving very successful in providing worthwhile employment for the longer term unemployed, and the planned number of places has been not only fulfilled but exceeded.
Lord Reay: My Lords, has my noble friend seen the terms of an attack reportedly made today on the Secretary of State for Northern Ireland by the Member for Macclesfield, Mr. Nicholas Winterton? If so, would my noble friend care to take this opportunity to repudiate the attack, in regard to both its substance and its insulting terms?
The Earl of Gowrie: My Lords, I have seen a report of the attack. I think it is widely felt that for many years people both within and outside political groupings have been bipartisan about the Northern Ireland issue, and it is very unhelpful not to be so. But I think that all political parties have their mavericks, and Mr. Winterton is perhaps the Dennis Skinner of the Tory Party; he is full of sound and fury, but he signifies very little.
Lord Blease: My Lords, may I ask the noble Earl whether he has noted that since his appointment as a Minister of State for Northern Ireland this is my first opportunity to face him across the Floor of the House? Will the noble Earl the Minister accept that this side of the House sincerely appreciates and understands the acute and testing difficulties of his new position and his parliamentary brief? May I further ask the Minister whether he is aware of the great concern among community organisations about the financial aspects of the Action for Community Employment Scheme, and whether he will consider the position so as to allow some flexibility to enable community organisations, as well as statutory bodies and local government bodies, to compete in the scheme?
The Earl of Gowrie: My Lords, I am grateful for the remarks directed to me by the noble Lord, Lord Blease, and I am even more grateful for all the work that he is doing outside Parliament, as well as in Parliament, for the Province. I believe that the Action for Community Employment Scheme is sufficiently flexible to cater for a very wide variety of projects, such as those involving building, environmental improvement, community service, research, exhibitions and the rest. We have found not only voluntary bodies coming forward, but private organisations as well.
Lord Underhill: My Lords, may I ask the noble Earl why in the previous Written Answer, to which reference is made in my noble friend's Question, it was stated that the sponsors receive a lower percentage because it was desired that they should show a genuine commitment? Why should that be asked of organisations in Northern Ireland when it does not apply to organisations in the rest of the United Kingdom? Does it imply a feeling that the organisations in Northern Ireland do not have the same sincerity as those in other parts of the United Kingdom?
The Earl of Gowrie: No, my Lords, it does not. The noble Lord will be aware not only of some differences between the system in Northern Ireland and that in the rest of the United Kingdom, but also of the fact that very many organisations and businesses there receive very high existing United Kingdom central subsidy and subvention. Therefore it was felt that it would be effective if some contribution of this kind were made by private sponsorship.
Lord Campbell of Alloway: My Lords, will my noble friend agree that perhaps the difference to which reference has just been made could be attributed to the remarkable co-operation and help from the trade unions in Northern Ireland?
The Earl of Gowrie: My Lords, I am very glad to agree with that remark, and I have had many meetings with trade unions in Northern Ireland which certainly confirm my noble friend's point of view. My noble friend the Leader of the House points out that I should not have mentioned a Member of another place by name. I apologise for doing that, but I in no way retract anything else that I said.
Lord Brockway: My Lords, reverting to the supplementary question of my noble friend Lady Ewart-Biggs, may I ask the noble Earl whether he would not agree that some action towards ending unemployment in Northern Ireland—the highest in the United Kingdom—and rectifying the appalling housing conditions would be a real contribution to a settlement of the conflict there? Is the noble Earl aware that recently I met a trade union official who had met a Protestant shop steward in the shipbuilding works in Belfast and the shop steward of a Catholic factory in Londonderry, and that they were both completely united in their social and economic demands? Is it not those social issues on which we should be concentrating?
The Earl of Gowrie: My Lords, not only should we be concentrating on those issues: we are concentrating on them. My right honourable friend the Secretary of State, as well as myself and other Ministers, have constantly reiterated the danger facing the economy of Northern Ireland and the necessity to restore political stability there in order to encourage inward investment, and to encourage, too, the British taxpayer, who pays so much of the subvention to Northern Ireland. We are pleased that this message is getting through.
Baroness Ewart-Biggs: My Lords, would the Minister not agree that the work being done by the community groups in Northern Ireland is essential to the policy that we have had in Northern Ireland, and that they themselves feel that there is an unfair discrimination in this case? Would he therefore not agree that we should give them all the help and encouragement that we possibly can?
The Earl of Gowrie: My Lords, I certainly agree with the latter point, but the simple fact is that there is not unfair discrimination in the case of Northern Ireland. There is discrimination: the discrimination is that Northern Ireland gets more money comparably than any other part of the United Kingdom.
Lord Elwyn-Jones: My Lords, in regard to the earlier reference to two honourable gentlemen in another place, would it not have been more appropriate and in accordance with custom for the noble Earl to have withdrawn the criticism of those named Members of another place? Would that not have been in accordance with the custom of this House?
The Earl of Gowrie: My Lords, I am delighted to do that, but, of course, I had to answer a question put to me by my noble friend.

Farm and Horticulture Development Regulations 1981
3.21 p.m.
Earl Ferrers Earl Ferrers rose to move, That the draft regulations laid before the House on 4th November be approved.
The noble Earl said: My Lords, I beg to move that the Agriculture and Horticulture Grant (Variation) Scheme 1981, which was laid before this House on 4th November, be approved. It might be convenient if, at the same time as we deal with the Agriculture and Horticulture Grant (Variation) Scheme 1981, we consider the Farm and Horticulture Development Regulations 1981, the Agriculture and Horticulture Development (Amendment) Regulations 1981 and the Farm Structure (Payments to Outgoers) (Variation) Scheme 1981, which were also laid before the House on 4th November.
Three of the statutory instruments before your Lordships introduce in the United Kingdom the restrictions on investment aids for milk and pig production. The remaining statutory instrument, the Farm Structure (Payments to Outgoers) (Variation) Scheme, is concerned with payments of grants to ageing farmers. This is the simplest statutory instrument, so I will deal with it first and, so to speak, get it out of the way.
As long ago as 1967 we introduced a scheme to encourage older farmers to retire and to allow their farms to be amalgamated to form larger units. Soon after we joined the European Community, similar arrangements were adopted which we had to implement. Because farms in the United Kingdom are generally significantly larger and more economically viable than elsewhere in the European Community, there has been no great interest in these arrangements. But under the terms of European Community Directive 72/160 we are obliged to operate a scheme of incentives to older farmers who want to give up their farms for amalgamation. The statutory instrument which we have before us today makes very minor amendments to the principal scheme which Parliament approved in 1976, and will have no practical effect on the farmers involved in the scheme. They will still be able to qualify for the grants on the same conditions as before.
I would now come to the other three statutory instruments. Many of your Lordships will recall that the price package which was agreed by the Council of Ministers in April of this year included a number of amendments to European Communities Directive 72/159 on the modernisation of farms. This is the directive which requires us to have the Agriculture and Horticulture Development Scheme, which is the EEC scheme, and permits us to have the Agriculture and Horticulture Grant (Variation) Scheme, which is our national scheme. The changes, which were agreed by Ministers, are introduced partly by new European Community regulations and partly by a new directive which amends Directive 72/159. European Community regulations, as opposed to directives, are directly applicable in all members states, and so, technically, they need not be incorporated into our domestic legislation. But if we did not amend our own legislation it would be misleading and incomplete. We also wanted to clarify certain points. In addition, we had to implement the amendments which have been introduced by means of a European Community directive which does not have effect in member states without national legislation. These are the main purposes of the remaining three statutory instruments which are before your Lordships.
As many of your Lordships know, for some years there have been certain limitations on the extent to which investment in pig production could be grant-aided. These limits were on a financial basis, and they were complicated to administer. The Council of Ministers decided last April to replace them with new physical restrictions which we believe will have much the same effect in the United Kingdom as those they replace.
Another important decision, which was also made last April by the Council of Ministers, was to limit assistance to dairy enterprises. In future, grant under the Agriculture and Horticulture Development Scheme and the Farm and Horticulture Development Scheme will be paid only on that part of the investment which is needed for a maximum of 40 cows per labour unit in the case of businesses with up to one and a half labour units (in other words, up to 60 cows). For businesses which already have more than one and a half labour units, an increase in the herd size of not more than 15 per cent. is permitted. Businesses which
858
expand beyond these limits will be eligible for aid on the relevant proportion of their investment.
However, under the Agriculture and Horticulture Grant Scheme aid will be limited to businesses with not more than 40 cows. Any business which is expanding above, or which already exceeds, this limit will not receive any aid under this scheme. The sort of investments which will be covered by these restrictions are milking parlours, dairies, buildings which house dairy cows (including fixtures and fittings) and so on. We shall not be excluding from grant-aid items like buildings for young stock or general purpose investments such as fencing, drainage, machinery sheds, et cetera, even if they are on specialist dairy farms. We shall continue to exclude aid for the purchase of dairy cows.
There are other changes which were agreed by the agriculture Ministers and which are incorporated in amendments to Directive 72/159, and which we have to implement by means of domestic legislation. The principal objective of the Agriculture and Horticulture Development Scheme is to help farmers increase their income through a programme of planned investment. Farmers whose incomes are already well above the average non-agricultural income cannot qualify, but those whose incomes are only just above that level may do so. One of the amendments in the statutory instruments sets out more precisely which of these farmers may qualify and stipulates that they may receive only two-thirds of the normal grant.
At present there are two types of investment limit on which grant may be paid. One is a limit per labour unit—per person on the farm—and this is being significantly increased. The other is an overall limit per farm business. The present ones we introduced ourselves last year. The one applying to the Agriculture and Horticulture Development Scheme is now being imposed, at a very slightly lower level, by the European Community. The one applying to the Agriculture and Horticulture Grant Scheme is unchanged. The statutory instruments implement these changes. A small alteration to the Agriculture and Horticulture Development Scheme will be the inclusion of forestry income in the provisions relating to the achievement of what is known as the comparable income.
The three statutory instruments which are before your Lordships implement these changes, but, with one exception, they do not amend the coverage of the schemes or the rates of grant. The exception is, I am glad to say, the extension of grant aid to the provision of permanently-sited durable structures cladded with plastic which are to be used for agricultural purposes. We already pay grant on such structures to horticultural enterprises; but plastic-clad structures are now being used for housing animals, particularly sheep, and we considered it only right to aid them on the same basis as for horticultural purposes.
Most of the changes to these grant schemes are technical, and I have done my best to describe them to your Lordships. They will, however, come as no surprise to the farmers who will be affected by them. The decisions which were taken by my right honourable friend the Minister and his colleagues in the Council of Ministers earlier this year were fully publicised at the time, and the farming unions in the United Kingdom

859
have been kept informed of progress. My Lords, I commend these schemes to your Lordships House, and I beg to move.
Moved, That the draft regulations laid before the House on 4th November be approved.—(Earl Ferrers.)
3.30 p.m.
Lord Bishopston: My Lords, the House will be grateful to the Minister for the information that he has provided in moving these four orders. He said at the end of his speech that in many ways these are technical matters. But they go beyond that; they concern matters of principle with regard to our relationship with the Community itself and the CAP. I am not sure that the House will appreciate the reasons for the orders being brought forward, because there has been criticism from all sides in the industry and from the National Farmers' Union about the possible effects. With regard to the dairy sector, the National Farmers' Union say that they "deeply regret" the decision implemented by these orders of restrictions on capital grant aid for dairy farming. The main aid will be limited to smaller dairy herds and to an amount which will not increase the herd size beyond 60 cows for the Agriculture and Horticulture Development Schemes (AHDS) and 40 cows for national investment grants (AHGS).
It seems extraordinary, as we have the most efficient and productive dairy sector, that measures should be taken by the EEC to restrain our output—and that is what these orders are all about—and, at the same time, to encourage the smaller, less efficient farmers and producers in other parts of the Community. I am sure that there will be no disagreement on those comments. As the Minister has said, last year a European Community document set out proposals to restrict investment aid in milk and pig production and these proposals form part of the larger package of structural resources agreed with the Council of Ministers in April of this year.
These three orders before us today implement the measures in the United Kingdom; for, of course, we have to comply with their terms. But I agree with the Minister that it is helpful that, although we may not have to do so, we are amending the legislation accordingly. The main changes include the restrictions, as the Minister has mentioned, in respect of milk and pig production. Under the AHGS, it seems, aid will be limited to businesses with not more than 40 cows. It is well known that we have larger dairy herds, and we shall be at a disadvantage because of it. We are efficient producers of milk, not only with the larger dairy herds but with regard to the average output per animal. These are important points because they mean that we can have a much higher output generally.
For this reason the Community wants to restrain us because there is a surplus in the Community. But the surplus is not of our making. We produce just about enough of our liquid needs, as noble Lords will know, and less than our needs for manufacturing purposes. So there is scope for even higher productivity in this country at the expense of the less efficient production elsewhere. I think that many will ask why the British farmers and producers should be
860
restrained and the less efficient in the Community not only be protected but encouraged by the restraints of the EEC directives and by the effect of these orders on our industry. It would be interesting to hear from the Minister a few facts about our average herd size and our production per animal compared with other member states and the effect of these orders. There has been over a period of time a number of restraints to reduce or eliminate surplus milk production and no one would argue about that; but what I am saying is that, although this order is not too serious, it is a step in the wrong direction.
Some recognition of the efficiency of British milk production and the distribution scheme was shown by the Community's acceptance that the Milk Marketing Board should continue to operate. This is a rare tribute to our producers, distributors and consumers. It was an achievement to have got that continuation made possible.
With regard to pig production, the curtailment of grants in the pig sector is also a cause for concern to the pig industry and to the National Farmers' Union for it removes the existing financial limits on pig investment and enables future grants to be determined on the basis of pig numbers. Here again the United Kingdom industry is discriminated against more strongly, our pig herd size, like the dairy herd size, being higher than in the rest of the Community, as grant aid will be available only up to 85 breeding pig herds or 550 fattening pig places per farm. The Government, I think, should have sought to apply to the EEC for the discretionary investment exemption of up to 1,000 fattening pig places under the AHDS. Maybe the Minister of State will comment on that assertion.
As we all know, the pig industry has for many years been beset with problems. I recall in my days in the Ministry with successive Ministers, the efforts we made from time to time (sometimes regarded as being marginally legal within the Community) to help the industry. Investment overall has not been high enough. These orders do not encourage investment and may indeed inhibit progress in a sector of our industry where we are only 75 per cent. self-sufficient in pig meat and therefore we are capable of much greater production. Instead, there are these limits which will discourage high productivity.
Although the outlook is more hopeful generally for the pig sector, I think we can do without this latest dose of cold water from the Government and the EEC. I appreciate that there are some aspects which are still open to grant aid. I am thinking of the general purpose items such as the Minister has mentioned: the cladding of buildings, for instance, and the requirement for 35 per cent. of feedingstuffs to be produced by the business. Will the Minister comment on the position of farmers who, following the dropping of the Government's former requirement of prior approval, may be caught out by the changes, not yet having got approval of their development plan involving investment in pigs?
We are all proud of the efficiency and productivity of our agricultural industry. Most of us would agree that if the productivity and efficiency of agriculture were seen in other parts of the economy and in other industries this country would be facing fewer problems

861
than we face today. It is essential that in our dealings with Brussels our Ministers continue to stress the point that, if changes are necessary within the Community as a whole, they should take an example from our producers and, as I said last week on another item concerning the Community, accept changes which are related to the highest common denominator and not otherwise. I hope the Minister can assure the House that in future dealings the Government will stand firm and look after British interests, although we recognise the progress towards that interest which the Government have made in the past.
3.38 p.m.
Lord Lloyd of Kilgerran: My Lords, may I join in thanking the Minister for so carefully and well describing the content of these many regulations. I do not propose to enter into the technical matters in the way that was done so eloquently by the noble Lord who has just sat down. I should, however, like to refer to one theme which, it seems to me, formed the basis of the Minister's account of these regulations. He said that these regulations before the House were intended to help farmers to increase their income by planned investment. He also said that these regulations will come as no surprise to farmers. I am wondering about the farmers who come from the parts of Wales with which I am familiar, and whether these regulations are sufficiently understood and have been made clear by the Department of which he is the Minister, to the small farmer whom it is intended to help.
Can the noble Earl say whether there are easily available pamphlets in simple form to summarise the regulations in such rural areas as those parts of West Wales? I can understand that the large organisations, the farmers' unions, have no doubt sent round to all their members accounts of these regulations before they were published, and also the EEC regulation 72/159 to which he referred. This is not a simple document to understand. May I, therefore, ask the Minister to give an assurance that the widest publicity will be given to these regulations, particularly in Wales, to help farmers, as he said, to increase their income by planned investment?
Baroness Elliot of Harwood: My Lords, I should like to say one or two words very briefly. I appreciate entirely the problem facing our Minister of Agriculture when he has to go to Brussels and argue our case, because our case is a simple one. We farmers in this country have tried—and tried very successfully, as the noble Lord, Lord Bishopston, said—for a number of years to improve the techniques and the production, to lower costs, employ fewer people and at the same time increase the amount of land under cultivation and the amount produced. In this case we are referring to dairy and pigs. We have been extremely successful.
If the one task you are asked to do—and it is not easy, as we all know—is successful, and you do it, it is a bit hard to find that these regulations from Brussels penalise the very thing that has been done; in other words, to enlarge the amount of production and the areas under cultivation, to reduce the numbers employed
862
and to produce everything as efficiently and cheaply as possible. I know that in Europe they are struggling with a peasant agriculture. Whether in Germany, France, Belgium, Holland or wherever it is, there is tremendous pressure from their farmers, who are saying: "We are only small farmers; we have not got the equipment or the means of production that they have in other parts, and particularly in the United Kingdom. Therefore, we want help to keep small and to get as much money as possible." That is exactly the opposite of what we have tried to do and what we have done very successfully.
It is hard on the dairy farmers. An enormous number of people have gone out of dairying in this country, as any farmer in your Lordships' House knows very well. Yet our production is first class; it has not gone down and we have been able to get as much milk on to the market as we did when we had certainly at least another third more people in the dairy industry. So, as I say, I think it is a little hard on people and while I do understand the Minister's probems—and I am a strong supporter of the Common Market, so I must not be too critical—I realise that he is facing a difficulty. But if this has to happen and if it hits our dairy and pig industries badly, then our Ministry has to make some sort of gesture towards those people which will compensate them for what they have had to do because of the CAP or the Brussels regulations.
Speaking as a farmer, I am grateful to the Government for the many ways in which they do help us and for the many ways in which they fight our battles in Brussels. I am confident that they will go on doing so, but these particular orders for the time being are just a little harsh on two sections of our dairy industry.
Lord John-Mackie: My Lords, I should like to say a few words on the Farm Structure (Variation) Scheme which the noble Earl, Lord Ferrers, thought could be got out of the way fairly quickly. If the other three are to be a help for we farmers, as the noble Baroness, Lady Elliot, has just said, I will accept with gratitude. But as the noble Earl, Lord Ferrers, will know, I have been in correspondence with him on the question of farm structure.
This order is to vary the payment to farmers for amalgamating farms. I farm 22 miles from your Lordships' House and round our village in less than 10 years we have had three nice farms fragmented, mainly for reasons of finance and getting the most out of them. The most recent example was a very nice 150-acre farm with a nice farmhouse, two cottages and a beautiful set of buildings: that was sold piecemeal recently and broken up completely. I think this is a very bad thing indeed.
I understand the attitude of the noble Earl and I can fully appreciate his difficulties, but the Ministry have a very negative attitude towards this. If we can pay grants for amalgamating farms, would it not be possible to give some help towards preventing the fragmentation of farms? It is quite tragic to see this farm at the foot of my road broken up and bought by developers and such people, the farm buildings and house sold to one person, with no land at all, or very little—perhaps a few acres to keep horses—and they will go completely out of use in spite of recent grants having been given, as I happen to know, for the buildings,

863
for a grain store and another store on the farm. I think this is quite ridiculous. The Minister should take a much more positive attitude and see if something can be done to stop the fragmentation of farms.
Lord Houghton of Sowerby: My Lords, I wish the noble Lord, Lord Boyd-Carpenter, had remained behind to ask a few questions about the economics of agriculture. What he was talking about with the Office of Manpower Economics is surely chicken-feed compared with the intricate administration behind these regulations. The Minister of State introduced these regulations, I thought, in a spirit of resignation. I can quite understand, on this of all days, that there is a spirit of resignation in the minds of Ministers and of noble Lords on the Benches opposite.
I think that aid to agriculture has become one of the most intricate mysteries of public administration in modern times. How can the public grasp—how indeed can noble Lords in this House grasp—the real significance of regulations of this kind? I would say in passing that if industry generally had had the cosseting, the care and the public money which agriculture has had over the last 30 years probably our industry might be more efficient than it is. There is no doubt that we have treated agriculture as a special case almost to the exclusion of real necessity for industrial need elsewhere.
However, since we are so conscious both of manpower considerations and of public expenditure, I would welcome any information that the Minister can give us about the background to these regulations. Will they save money, or do they mean spending more money? If they are largely technical, as the Minister of State said, are we then having a complex exchange of one form of regulations for another, to little purpose other than to comply with the regulations of the Economic Community? Do all the forms have to be changed? Does there have to be much more explanation given, as the noble Lord on the Liberal Benches said a moment ago? Do the farmers understand this? Have we here another problem of people not taking up their claims and not knowing what they are entitled to? Should there be an advisory service to farmers to stimulate them to ask for the public money they do not know they are entitled to?
This is a mystery world and, as a layman. I am anxious to know more about it. The only interest I have to declare is that on several occasions I was chairman of the Agriculture Farm Price Review in a Labour Government. I was the arbiter between the Minister of Agriculture on the one hand and the Treasury watchdogs and those in control of the purse, on the other. That was an interesting experience in arbitration.
Quite seriously, does it take more clerical officers or executive officers to bring about the administrative changes that are needed to implement the paragraph which I see here? It reads:
"For the purposes of this regulation 'pig place' means the facilities necessary to house one fattening pig; save that where the herd includes breeding sows, the facilities necessary to house one such sow shall be taken to be the equivalent of 6·5 pig places.".
There is a sum for you. I am sure that there has to be a clerical officer, with an executive officer to make
864
sure that the clerical officer gets his fractions right, and we have an interesting study in the economics of agriculture. I shall not bore the House with other quotations from these regulations.
What I noticed at the beginning of this debate—and I am in a rather playful mood this afternoon—was the exodus of noble Lords from the Chamber when these regulations came forward. Was it the farmers leaving, because they felt too embarrassed to remain behind, or have all the non-farmers gone and left all the farmers behind? It is an interesting study in manpower in this Chamber. At the present moment, who represents what on these regulations? I claim to represent the public interest, which is always a good alibi when you are poking your nose into other people's business.
But, seriously, this is an astonishing set of documents and if they are only to comply with the directives of the EEC one might ask for an exemption clause. If the changes are technical and will lead to unnecessary administrative expense, could we be excused from making them? Is that impossible? I think that I have said enough. Probably, laymen should not remain behind when regulations on agriculture are under discussion, because this is more complicated than taxation which everybody grumbles about. After all, it has been said that anybody who can fill up a football pool coupon can do anything that public administrations can ever require them to do.
Lord John-Mackie: My Lords, before the noble Lord sits down, may I say this: We were warned about making off-the-cuff calculations, but I have the feeling that in one year British Leyland has had three times what agriculture gets.
Lord Houghton of Sowerby: My Lords, I would not know the grand total of public money that has gone into British Leyland. On the whole, there is not the equivalent of British Leyland in the agricultural industry. They are mostly small businesses, and we are all interested in small businesses and in giving aid to them now. All right, then. Those who want aid for small businesses might take up all the grants given to agriculture at the present time and see whether there is any precedent there that might help.
I ask your Lordships to look at paragraph 4 of the Agriculture and Horticulture Development (Amendment) Regulations, which reads:
"(b) that the nature or structure of the business is such as to place at risk the maintenance of an earned income at the level of the said comparable income, and that the earned income per labour unit reasonably required under the existing system of production is not greater than 120 per cent. of the said comparable income.".
I am sure that small businesses would like to claim under that paragraph. There is probably money there, if they only knew where to find it. I really should like to see how farmers can cope with all the questionnaires that have to be sent out, and answered in order to qualify for these grants. I wonder whether agriculture ought to be asked to simplify its claims upon the public purse, so that the public understand rather more clearly what farmers get out of the state for all the things which they do, and which they should be doing, in the ordinary course of their business.

865
My personal observation is that, on the whole, agriculture is a pretty prosperous industry.
Lord John-Mackie: My Lords, I must apologise for rising a second time—
Several noble Lords: Order!
3.55 p.m.
Earl Ferrers: My Lords, the noble Lord, Lord Houghton, is always fun to listen to. He said that he was in a playful mood. He began by saying that I got up in a spirit of resignation. I assure the noble Lord that I have no intention of resigning. It may be that others will dispose of one, but, in that respect, I do not think the noble Lord will have much joy. I think he really meant a spirit of resignation that—for some extraordinary reason in his eyes—things are not as pleasant as they might be. But I assure the noble Lord that the Government are entirely happy with the state of affairs in which they are trying to improve matters.
I was sorry that the noble Lord referred to the exodus which happened as soon as I got up. I noticed that, and I assure the noble Lord that it was not the farmers who were leaving, nor, indeed, the non-farmers specifically. I thought that, because it was I who was rising, that indicated to others that it would be more agreeable to leave the Chamber.
I thought that the noble Lord opened up his soul a little when he said that the only thing he had done was to be chairman of the Agricultural Farm Price Review. Just before he said that, he asked whether there should be an Agricultural Development Advisory Service. That is one of the most extraordinary things for anyone in the noble Lord's position to ask, because the Agricultural Development Advisory Service has been going for, I think, about 40 years, certainly under a different name. It is one of the most remarkable organisations, which spends its time advising farmers on how to improve their land, how to improve their work and how to get better productivity. But the contribution of the noble Lord, Lord Houghton, is to produce Bills the whole time, and he is producing another one today to stop the export of agricultural produce in one form or another.
The noble Lord, Lord Houghton, asked whether this matter would involve more civil servants. I can tell the noble Lord that there were 15,000 civil servants in the Ministry of Agriculture in 1978, when the party of which he is a distinguished member was in power, and there are 13,000 now, in 1981. So the number of civil servants has gone down, and I do not think that that is a cause for anxiety.
Then the noble Lord said that he wondered whether small businesses had the advantage of funds such as are available to agriculture. I would only tell him that, since 1979, the present Government have introduced 70 different measures to increase the capacity of small businesses. So they have not been left out. If the noble Lord asks whether all the small businessmen know what kind of grants are available to them, I can only say that I do not know whether each one knows of the 70 that are available to him.
But as regards the burden of the noble Lord's remarks, I would only say this. Of course these
866
subjects and these documents are complicated. If he finds difficulty in understanding them, I think we shall all find difficulty. But that is the nature of the legality of the system. Any form of agricultural support always was complicated. I remember, before we entered the European Community, finding great difficulty in understanding the ways in which some of the deficiency payments operated. So there is nothing new in that.
To come to the slightly more serious remarks which were directed to me about these amendments, I was quite glad when the noble Lord, Lord Lloyd of Kilgerran, said that he would not go into the technical detail which the noble Lord, Lord Bishopston, had gone into. For that, I am very grateful and I much appreciate his co-operation. I would put him straight on one point. He asked what effect this would have on the small farmers of Wales, for whom he said I am responsible. I assure him that it is, in fact, the Secretary of State for Wales who is responsible and not the Minister of Agriculture. But I can also assure him that the Agricultural Development Advisory Service, of which he will know a great deal, even if the noble Lord, Lord Houghton, does not, is there to advise the farmers of Wales—and will do so—as to their rights and as to the possibilities under these schemes. Explanatory leaflets will be available to farmers from the Ministry's divisional offices, and they will explain the details of the schemes.
The noble Lord, Lord John-Mackie, said it was a pity that in some places farms were being broken up. I can understand his feelings over that. Of course, the usual complaint is that farms are being amalgamated and being made too big. It is quite interesting to hear that the noble Lord, Lord John-Mackie, now complains when farms are being made smaller. I think it would be wrong for the Government to take individual action over anything like that; indeed, we do not have any powers to do so. Inevitably, it is a case for the market. There are occasions when farms will be amalgamated, as well as occasions when farms will be made smaller. That is the nature of the agricultural scene.
The noble Lord, Lord Bishopston, as well as my noble friend Lady Elliot of Harwood, said that these statutory instruments were hard on dairying. There is no doubt that they will have an effect on dairying. The noble Lord, Lord Bishopston, quite rightly said that they will affect the output of British dairy farms and that this was not fair. I sympathise with his viewpoint, but one has to accept the fact that as a member of the European Community we have a collective responsibility for surpluses which arise. We have a collective responsibility so far as we have to pay for the surpluses, or subscribe very substantially towards them. We have a collective responsibility for how to dispose of the surpluses.
What my right honourable friend has always said is that the European Community, if there is to be penalising, should penalise those people who create the surpluses—and the increasing surpluses. That is why he has always been against the co-responsibility levy, as it has been suggested it should be applied, because it would discriminate against certain of the larger farms. But I can tell the noble Lord that the average dairy herd on the continent is about 13 whereas the average dairy

867
herd in the United Kingdom is 51. But over 40 per cent. of the dairy farms in England have fewer than 40 cows. Therefore they will be able to qualify for the national grant. The corresponding figure for Northern Ireland is 70 per cent., for Wales 60 per cent. and for Scotland 37 per cent. In the United Kingdom as a whole, 25 per cent. of herds have fewer than 20 cows. So this is trying to avoid an increase in yields of milk produced by farms which are of larger size. I know that it is inevitable that where there is a surplus of milk something has to be done to restrict it totally. Inevitably, also, in a package of this nature one has to agree within the Council of Ministers various items which may affect countries differently. It is an agreement, and it is an agreement of a package. I think the noble Lord, Lord Bishopston, will realise from that that a number of the smaller farms will still be able to obtain grant for this and that the larger farms will not. But there is nothing to stop the larger farms from making their own improvements without grant.
Lord Bishopston: My Lords, I am grateful to the Minister for giving way. I am sure he will realise that if we are to overcome some of the problems of surpluses and high costs, and many of the criticisms of the Community itself, we have to ensure that agriculture and food production take place in those areas where they are most efficient, otherwise the growing concern and criticism of the Community will continue.
Earl Ferrers: My Lords, the noble Lord is of course perfectly right, and he opens up a wide discussion which it would be inappropriate to start upon now. All I would say to him is that those who are the most efficient are, in a way, those whose existence can be justified on financial grounds, but that there are other factors which have to be taken into account. The noble Lord, Lord Bishopston, referred to discrimination against the United Kingdom in pig places. In 1979. about 75 per cent. of United Kingdom holdings had fewer than 400 pigs and less than 9 per cent. had between 400 and 1,000 pigs. The average pig herd in the United Kingdom consists of fewer than 200 pigs and most pig farmers therefore will still be able to qualify for grant.
The noble Lord also referred to pig and dairy enterprises which will be caught by the new restrictions. Farmers who already have an approved development plan, which includes investments in these various sectors, will be exempt, but anyone who wishes to vary an approved plan to include investments of this kind will have to comply with the new restrictions. Under the agriculture and horticulture grant scheme, farmers who have started work or incurred expenditure on dairy or pig investments will be exempt from the new restrictions, provided that they can produce evidence that they had entered into a legally binding commitment to incur the expenditure before 30th November.
I hope that I have answered most of the questions which were put to me. I realise that in some ways certain noble Lords would have preferred a different set of statutory instruments. I would merely repeat what I said earlier: that we are part of the Community and that to effect a price package which has to
868
allow for a reasonable return for the farmers without permitting an over-production and a surplus it is necessary to come to corporate decisions. If I may once more refer to the noble Lord, Lord Houghton of Sowerby, I would say that the success of the common agricultural policy, despite all its difficulties and complexities, is that ever since its inception we in the European Community have been able to have an abundance of food at reasonably cheap prices and of a total variety. That is a small price to pay for these statutory instruments.
Lord Vernon: My Lords, before the noble Earl sits down, may I put this point to him? He said that there is a surplus (which is true) of milk products in the Community as a whole. It is also true that there is not a surplus within the United Kingdom and that we have to import quite a large proportion of our dairy products. So this particular order will discriminate against the United Kingdom dairy industry.
Earl Ferrers: My Lords, I do not think it will discriminate against the United Kingdom. It will cover each state equally, in so far as the grant which may be payable refers to the same size of farms, whatever state one is in. In that respect, therefore, it is uniform. Of course I accept that it does not apply to the larger farms and that in that way it is discriminatory. But it does not apply to the larger farms in any other country, either.
Viscount Massereene and Ferrard: My Lords, before my noble friend sits down, may I ask him whether this means that the Government are asking the larger dairy and pig farmers to reduce their numbers of cows and pigs to the numbers kept by the small farmer who will get the grant? We in this county have a most efficient agricultural industry which equals the record of Denmark. One man on the land in England produces food for 27 people, whereas one man on the land in France produces food for only 8 people and one man on the land in Germany produces food for only 9 people. This is, without doubt, discriminatory. It will affect the great efficiency of agriculture in this country. I agree that we do not want surpluses, but why should we pander to the desire of the French Government for the agricultural vote, which is very big in France?
Earl Ferrers: My Lords, I have a remarkable respect for my noble friend's mental acrobatics. He asked whether this means that the large dairy farms have got to reduce the numbers of dairy cows down to the size at which they can claim the grant. I never said anything of the kind. The statutory instruments do not say anything of the kind. I cannot understand how my noble friend could have begun to think such a thing. If, however, he thought it—and he clearly did—I can tell him that he is wrong. Indeed, I went further than that. I said that it does not stop larger farmers from expanding their dairy herds; they can do so. But they will do so without the benefit of the Government grant or without the benefit of a European Community grant, simply because there is a surplus of this product and it is considered unwise to encourage those who are already big producers to get even bigger. But if they

869
wish to do so out of their own funds, they are entitled to do so.
On Question, Motion agreed to.

Farm Structure (Payments to Outgoers) (Variation) Scheme 1981
Earl Ferrers Earl Ferrers rose to move, That the draft scheme laid before the House on 4th November be approved.
The noble Earl said: My Lords, I beg to move.
Moved, That the draft scheme laid before the House on 4th November be approved.—(Earl Ferrers.)
On Question, Motion agreed to.

Agriculture and Horticulture Development (Amendment) Regulations 1981
Earl Ferrers Earl Ferrers rose to move, That the draft regulations laid before the House on 4th November be approved.
The noble Earl said: My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 4th November be approved.—(Earl Ferrers.)
On Question, Motion agreed to.

Agriculture and Horticulture Grant (Variation) Scheme 1981
Earl Ferrers Earl Ferrers rose to move, That the scheme laid before the House on 4th November be approved.
The noble Earl said: My Lords, I beg to move.
Moved, That the scheme laid before the House on 4th November be approved.—(Earl Ferrers.)
On Question, Motion agreed to.

London Docklands Development Corporation (Vesting of Land) (Tower Hamlets London Borough Council) Order 1981
4.12 p.m.
The Earl of Avon The Earl of Avon rose to move, That the order laid before the House on 10th July be approved.
The noble Earl said: My Lords, 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 in July, be approved. With the leave of the House, I should like at the same time to speak to the next order, the London Docklands Development Corporation (Vesting of Land) (Greater London Council No. 2) Order 1981.
On 1st 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 this House on 31st July vesting in the corporation lands owned by the London boroughs of Southwark and Newham. In the debate on those latter orders, I told the House that
870
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 with those two orders that we are concerned 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 affirmation orders in both Houses of Parliament. 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 developments. 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 are 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.
Your Lordships may recall that a Government proposal to set up a development corporation was considered by a Select Committee of this House. That committee heard evidence and sat for 50 days, producing a unanimous report which endorsed the Government's proposals with the exception of the proposed change in the boundary. Although that committee did not consider the specific proposals for vesting land, they clearly accepted the need to vest land in the corporation.
The two orders before us today were laid on the 10th July and were open to petitions for a period of 14 days. One petition against the GLC order by the Greater London Council was received; two petitions were received against the Tower Hamlets Order, from Tower Hamlets Borough Council and the Association of Wapping Organisations, which is a local community group. In their petition, the Greater London Council argued that the vesting order would deprive the council of potential sites for public sector housing and that the inclusion of various plots would prejudice the implementation of various development proposals which were envisaged. Tower Hamlets argued that the vesting order would deprive them of land which they proposed to use for public sector housing; that the corporation already had sufficient land for its purpose; that the order would frustrate a civil engineering contract for the reclamation of various parts of the London Docks complex; and, finally, that in any event the order made no provision to indemnify 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 the

871
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 had 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 a vesting order in accordance with the provisions of the compensation code.
The three petitions and the Secretary of State's representations we considered by a Hybrid Instruments Committee of your Lordships' House. The committee's report was published and is available in the Library. In it, the committee took the view that, so 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 assurance given by the Secretary of State and the corporation adequately met the remaining points raised by the petitioners and that therefore no substantial ground of complaint remained.
The way is therefore open for both orders to be considered by the House this afternoon. 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 this afternoon. I beg to move.
Moved, That the order laid before the House on 10th July be approved.—(The Earl of Avon.)
Lord Bishopston: My Lords, having just finished in the previous debate as a spokesman on agriculture and horticulture and rural subjects, I might have said that I was going to shake the rural mud off my boots to enter our capital city, but, as the noble Earl has said, the area with which we are concerned is one of great regeneration, and I suspect that there may be just as much mud there as anywhere else.
I am sure that noble Lords will be grateful for the detailed way in which the noble Earl has introduced these two orders. The orders provide the means by which areas of land now under the control of the elected local authorities are transferred to a UDC appointed to carry out the task given to it. The areas concerned may not be small, especially when the remaining acreage is borne in mind. As we know, a number of orders have come before this House, and indeed another place, since the Secretary of State laid the London Docklands Development Corporation Area and Constitution Order 1980 in November of last year. The noble Earl has been good enough to detail some of the background of the orders affecting the corporation, and your Lordships will know that we discussed an order on 1st July, last when the matter was given detailed consideration after the Select Committee set up by this House had spent 10 weeks going into the aspects of concern. Indeed, I think 42 days were spent
872
taking evidence and seeing the area before reporting to this House on 5th June.
I mention these brief factors because they indicate that general concern was expressed about the way in which the UDC was conceived and born, and, indeed—and this is most important—how it might proceed. The case for the setting up of the UDC was that the scale and the severity of the decline of the Docklands was such as to create a national rather than a local problem. I will not go into some of the steps taken earlier about the Docklands Joint Committee—a body with representative members and in partnership with Government and other agencies. Indeed, I do not need to detail the objections raised by local authorities and others who feared that an appointed UDC was less desirable than having, the work done by the co-ordinated action of democratically elected local authorities. I refer to these aspects of the scheme's history only because it is important, I think, to note that when progress reports are made to your Lordships' House we are aware not only of the controversy surrounding the birth of the UDC but of those aspects which give cause for concern.
The fact is that the UDC has been established and it will be the vehicle, whether we like it or not, whereby change and improvement and new life will be brought into this blighted area. The LDDC has already put forward proposals for the early acquisition of publicly owned land in Southwark and Newham. I think this was the subject of the last two orders in which I was involved. Other land relates to that of the PLA, the British Gas Corporation, the CEGB and British Rail. While it is essential that enough land is acquired for there to be co-ordinated preparation, I think it is essential also that the plans and the proposals of the LDDC are not looked at in isolation but with regard to the problems and the policies of the surrounding areas under the control of the local councils, who also have statutory rights and obligations.
With this in mind, I would ask the Minister if he can say, with regard to the areas and the use of the land covered in these orders, not only how much land is to be taken from Tower Hamlets and the GLC but what areas are left to them. Can he say with regard to the proposed area how it fits in with the needs of the local councils, recognising that housing is a very important responsibility of councils which they can often best meet? Would he say, if the land is being vested for private and public purposes, what are those purposes? Would it be better for the local councils to do the job, and. with regard to housing, will it be for sale or to let? If for sale, can the noble Earl say something about the price range, and if for letting—or, indeed, for either—will the range be commensurate with the incomes of those on the council's list? I understand that in Tower Hamlets only about 8 acres are left for housing and something like 8,000 people are on the housing list. So there questions are relevant to these orders.
I would also ask the Minister what close consultations took place. I think he has mentioned to some extent the objections put, and I would like to know what area of agreement was arrived at when those suggestions were considered. I think it was helpful that the Minister referred to the hybrid instruments and the consideration of the committee, but there are

873
one or two points there on which it would be helpful if the Minister were to comment.
Finally, I believe this is of great importance to the corporation's progress and indeed in regard to the concern which is felt by the councils concerned, not only the members but also the officials, as I think the Minister knows. I think there is a need for a feeling of involvement by local councils and other agencies so that they feel they are doing the job best suited to the overall needs of the local community. Speaking on two previous London dockland development orders for the vesting of land not long ago, I said that it was most important that the LDDC was sensitive about the powers taken over from the local authorities because accountability also is involved. I urged that there should be close consultation with the interests concerned, and where possible local knowledge and expertise of the local authorities and their members and officers should be used.
That is important not only because of the local know-how that we know exists in local areas but because it is important that local authorities and others should feel involved in the work which is essential to the future of the docklands area. I believe this is the best way of getting the teamwork. I believe that in all these matters, including the question of housing, we have to have regard to the human factors as well as the other considerations, because people identify with an area over a period of many years and they wish to stay in the area, and their needs must be accommodated in relation to housing, how much they can afford to pay to buy houses and how much they can afford to pay for rents and so on. I believe there is no great cause for concern at the moment about the progress made by the LDDC, but I think we should all be sensitive to the needs and feelings of the local people in order that greater progress may be made in the vital regeneration of this particular area.
4.25 p.m.
The Earl of Avon: My Lords, I am grateful for the noble Lord's remarks. I also appreciate, with him, that the duties we take are very broad. I am delighted that he can switch from cows and pigs to Tower Hamlets and the Isle of Dogs with such facility. The noble Lord asked me some specific questions. He asked about the private and public sectors. The London Dockland Development Corporation will concentrate on providing service sites for private sector and housing association development, and the boroughs will remain responsible for the provision of public sector housing. He also asked whether it would not be better for local authorities to do the job. Noble Lords will recall that it was on this very issue that the Select Committee recommended that the urban development corporation should be established and agreed that the LDDC is more likely to engender the confidence that generates private sector investment.
The noble Lord asked about prices. I understand that the corporation is aiming for an overall split of 50 per cent. owner-occupation, 25 per cent. shared ownership and 25 per cent. housing associations. The dwellings at present being constructed on LDDC land in Newham will be marketed at prices from £18,000 It might be useful if I quote from the Hansard of the other place for Tuesday of this week, when the right
874
honourable Member for Bermondsey, Mr. Robert Mellish, who is, I believe, a vice-chairman, said:
"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–£25,000".—[Col. 857.]
At col. 858 of Hansard he continues:
"We have started building the sort of houses that ordinary people can afford"
The noble Lord went on to talk about consultation. The chief executive designate of the corporation discussed land acquisition with the various public authorities in October 1980. In December of that year and on subsequent occasions my department wrote to the public authorities setting out the vesting proposals. These proposals were subsequently discussed in general in the Select Committee here. The committee accepted the principle that land should be vested in the corporation, though they did not consider the actual merits of individual plots. The Government fully accept that the LDDC must work closely with the boroughs to achieve the success we are aiming for. I am happy to tell the House that the leaders of each of the three boroughs have now been appointed to the board of the LDDC and are playing a full part in the corporation's activities. Here again, with the leave of the House, I would like to quote the right honourable Member for Bermondsey, who in col. 859 of Hansard sets this out in some detail:
"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 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".
I understand that the corporation is this afternoon discussing this proposal, and I am sure they will look on it favourably.
The noble Lord also mentioned Tower Hamlets. We believe the figure to be about 10½acres, of which 2½acres only will remain within the urban development areas. This is how much will remain within Tower Hamlets' ownership. Most of the GLC housing land has been transferred to the boroughs, and it is not possible straight off to give a figure for the GLC housing land.
Tower Hamlets have an extraordinary record in housing in that 80 per cent. of their housing is council houses. They have, indeed, a waiting list of 8,000 people, which I think the noble Lord mentioned, and the London Docklands Development Corporation has said that it will give nomination rights to those people. Again, I should like to stress that the development corporation is going forward on those lines, with both shared ownership and housing association development very much in view. My Lords, I hope that, with those assurances, the noble Lord and other noble Lords will be pleased to accept the order.
On Question, Motion agreed to.

London Docklands Development Corporation (Vesting of Land) (Greater London Council No. 2) Order 1981
The Earl of Avon: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That the order laid before the House on 10th July be approved—(The Earl of Avon.)
On Question, Motion agreed to.

Boxing Bill [H.L.]
4.32 p.m.
Lord Taylor of Gryfe: My Lords, I beg to move that this Bill be now read a second time. While I speak from these Benches, I should emphasise that this is a Private Member's Bill and does not represent any party commitment so far as the Social Democratic Party is concerned. It is a Bill to prohibit professional boxing, and I suppose that the first question that will be asked is why I should revive this debate which seemed to die with the passing of the late Lady Summerskill.
What stimulated my interest in this matter was the report I read a year ago of a young Welshman who died in a Los Angeles hospital of respiratory complications due to a prolonged coma. He never regained consciousness after being knocked out 26 days earlier. Johnny Owen had fought for a world title and to earn enough money for his working-class family to buy a pub in Merthyr Tydfil. As he was carried comatosed from the ring on that night the fans of his opponent cheered and shouted obscenities. A few weeks later a likeable West Indian from London's East End—Maurice Hope—lay on the canvas unconscious for almost 10 minutes, his body shaking in convulsive shudders. Thousands who witnessed this sad sight whistled their approval and support—support for a "victory"—while millions watched it on television.
I know that it will be said that those two events took place outside of the United Kingdom, but it is the route that British boxers must take in order to attain fame or a European championship or a world championship. It was those events that sent me searching through the records of this House to find the details of the last debate on a Boxing Bill. It was, of course—and perhaps this is in the memory of some Members of this House who are present today—introduced by Lady Summerskill. Some may remember her: she was a very courageous and formidable lady who made a great contribution to the deliberations of the House of Lords during her presence here. I am proud to carry on, albeit inadequately, the mission which she initiated at that time, for everything that she said on 10th May 1962 has been borne out by the passing of time. On that day there was a Division in the House. There voted: Contents, 22, and Not-Contents, 29. I am hoping today that there will be an even more generous response and support for this Bill.
I confine my justification for the Bill to three basic propositions. First, I believe that the perpetration of violence is evil and anything which encourages it or glorifies it damages the fabric of a civilised society. Secondly, I believe that boxing frequently results in brain damage and sometimes in death. Thirdly, I believe that we have no moral justification for organising for profit a public spectacle in which the main object of the spectacle is for one human being to knock another human being unconscious.
With regard to the first of those propositions, this House has frequently expressed concern about the
876
extension of violence in our community. I am not suggesting that boxing alone is responsible for the growth of violence but it does nothing to diminish it. We are all convinced that frequent exposure to the sight of men inflicting injury on others is harmful and degrading, and so we complain and we try in legislation affecting television, for example, to limit these things, sometimes unsuccessfully, so far as our television companies—BBC and ITV—are concerned. But boxing apparently escapes from those constraints. The sight of two superbly trained athletes fighting in a ring, each seeking to knock the other unconscious can now be brought into our homes regularly at peak-viewing times. The hero is the man who achieves this in the most devastating manner. In my view, this glamourises violence and reduces our sensitivity to violence.
The second proposition concerns the physical damage which results from boxing. Ingemar Johansson, the former heavyweight champion of the world, in whose native Sweden boxing is now banned, happened to be in London last month and commenting on boxing today he said:
"With fighters getting faster and stronger, maybe they will now be able to kill with one punch".
Some Members of the House were present on the occasion of the last debate on this subject and may recall Lady Summerskill's references to a quotation from Billy Walker. He was the blonde bomber from West Ham. He was the great white hope of the time, a heavyweight with a punch. He had just won a gold medal, I believe, at the Olympics, and turned professional. This is what he said on turning professional:
"I'm no longer a sportsman. How can you call professional boxing a sport, with all the villains and rogues who are part and parcel of the game? It's a business. A hard business all the time, a cruel business some of the time. I've no illusions about the noble art of self-defence or any of that kid stuff. That's all right for the amateurs. But from now I'm paid to hurt. The more I hurt, the more I'm paid".
I was in the Library yesterday and I picked out from one of the newspapers there a report of a fight that had taken place in Wembley Stadium the night before. It was headed "Bloodbath". The report simply stated:
"Tony Sibson retained European middleweight title at Wembley last night with a breathtaking, awe-inspiring display of primeval savagery".
I believe that that fight was projected in the sports programme of the BBC last night.
The medical evidence in this matter is overwhelming. Professor Corsellis who published The Aftermath of Boxing in 1973, carried out a retrospective study on the lives of 15 boxers and concluded that many "had ended up in psychiatric hospitals". He further reported that the examination revealed serious and often horrendous destruction of cerebral tissue in most of the 15 cases. The noble Lord, Lord Winstanley, who unfortunately had to leave the Chamber for another meeting, told me of his experience as a medical man and of the research that is carried out in Manchester University, where apparently they do their best to retain the brains and the skulls of boxers over the years, and they carry out examinations on the consequences of boxing on their brains. According to the noble Lord, Lord Winstanley, this is totally consistent with the findings of Professor Corsellis,

877
to which I have referred. He goes on to say that there is now solid foundation for the view that some experienced boxers develop a clinical disorder, the greater part of which has a neuro-pathological basis; the severity of the condition varies greatly, ranging from a mild clumsiness of speech and movement, with or without memory loss. I am sure that we are all familiar with boxers being interviewed who have shown evidence of these results. Incidentally, I notice that Mohammed Ali is no longer as fluent as he once was.
Next to serious brain damage, eye damage is the greatest indictment of boxing. The detached retina and other serious eye injuries have left many boxers blind or with sight seriously impaired. Recently the British lightweight boxer, Dave Williams, was operated on for a detached retina. Maurice Hope, who took such a serious beating a few months ago, only last year had his eyesight saved by the technological miracle of laser beam surgery carried out by the eye specialists at Moorfields. I am sure that the eye specialists at Moorfields would have something to say about the number of cases in which they have been involved where there have been similar casualities.
I recall another of our heroes, another winner of a gold medal. The last gold medal won by a British boxer at the Olympics was won by a man called Chris Finnegan. Where is Chris Finnegan now? I will tell you. He is almost blind. Following a detached retina, he lost the sight of his right eye and his left eye is now deteriorating badly. To compound Finnegan's problems, he is now unemployed and reputedly broke.
Such extremes of fortunes are by no means rare in this game. Among the boxing fraternity there is an adage: First the timing goes; then the legs; then the money; and then the friends. That is certainly the history of many of the people who have sought, through boxing, to achieve an easy way to riches. For working-class boys from the East End of Glasgow, London, Liverpool and Belfast it offered the illusion of a quick way of escaping from poverty. Where are the heroes of the past? Did they escape? How many made it? Today it is the turn of the impoverished blacks to provide this entertainment for those who can afford to watch them.
This House has frequently shown its concern for the sanctity of human life, and I hope that there is agreement that it should never deliberately be put at risk. Yet 335 deaths have occurred since the war as a result of injuries sustained in the ring. We in this House have supported legislation designed to avoid pain and suffering. We have in a number of cases been prepared to limit the freedom of the individual if the interests of society as a whole are adjudged to be paramount.
I know it will be said in this debate, "If people want to box, let them", and "If people want to go and watch it, let them". The same argument might have been adduced when we banned cockfighting. I am sure that there were people who wanted to watch it and who would provide the animals, but we decided that it was a degrading spectacle to see animals suffering for the enjoyment of spectators and for the benefit of bookmakers. Is it any less degrading and
878
any less brutalising in its effect to witness and hear the commentator at the ringside say:
"He has a cut over his right eye and this will be the target. There is blood coming from the other and his opponent can now go in and finish him. His corner has done a wonderful job on his cut face and he is coming up for more. He is still standing and is being hit savagely about the head"?
Of course, the referees have duties to intervene at some stage, but only after a great deal of damage has been done.
I live in the West of Scotland and I know a number of boxers. One of the nicest young men I have ever met is Jim Watt, who recently lost his world lightweight title and who is being tempted to enter the ring again. I hope that that decent young man will not change his mind. Here is a description of his last fight, which was published in the Scottish Sunday newspaper, the Sunday Standard. It said:
"Jim Watt lost honourably at a cruel cost to his body. There was no sanctuary and only an hour of continuous pain was inflicted on this proud Scot whose purse … now in the stillness of the arena, seems almost a miserly obscenity for the wounds he endured but from which he would not run away.
Out of this fight will come much admiration from all those who saw a champion lose like a champion to the better man. By the end his face was a grizzly tattoo of scars, his jaw swollen, his mouth and nose awash with blood, his eyes staring blindly through the cuts and bruises which encircled his eyes so angrily".
The fight went a full 15 rounds and at the end this decent young man said:
"I didn't quit. I gave what I had but it was an uphill struggle throughout and I hope no one was ashamed of me".
That bloody spectacle took place in an English ring at Wembley and was witnessed by millions on their television screens. If such violence were to take place outside the ring, we would demand immediate police intervention. Yet in a ring, and organised for profit, it is encouraged. I do not believe that that is the mark of a civilised society.
Of course it will be said in this debate that rugby football is often violent, and mountaineering is dangerous, but in both cases violence is not the object of the sport. In rugby football, violence is punished—although sometimes I feel that the Welsh have not heard of that—but nevertheless violence in rugby football is punished by the referee.
The Earl of Longford: My Lords, that cannot be true. A strong tackle in rugby football is violent, and it is not punished if it is a legitimate tackle.
Lord Taylor of Gryfe: My Lords, it is punishable. There are certain rules in rugby football which are designed to prevent the inflicting of injury by one man on another. That is the distinction between rugby football and boxing. In mountaineering, steps are taken to minimise the risks to human life.
I hope that there will be no opposition to this Bill on account of the details contained in the Bill. I believe that the strongest argument in favour of the Bill is a moral argument. I believe that we have no moral justification for organising this kind of spectacle. As a Christian, I believe that our bodies and our brains and our intellect are God-given to use in God's service, and I believe that, to the extent that we inflict punishment on these bodies and these faculties, and impair these faculties, we are doing something that is not consistent with Christian conduct.

879
Therefore, my Lords, I hope that there will be no Division on the basis of the details. These can be discussed at Committee stage. The Bill is aimed at the prohibition of professional boxing organised for profit as we know it, and the decision should be made on that principle. The Bill will not prohibit boxing in schools, or amateur three-round contests. Why? Because statistics demonstrate that the damage done by these events is very limited compared to the professional game. I believe that the so-called noble art has no place in a good society. It is degrading and it encourages the wrong motives. The spectacle at Wembley of the last Alan Minter fight is a justification for that claim.
There are greater evils in our society, but there are some laws which we have passed, and some gestures which we observe—for example, the abolition of capital punishment—which in themselves are not significant in their total impact yet which occasionally make us proud, for they mark adherence to more civilised standards. I believe that the abolition of professional boxing would be one such gesture. Norway and Sweden have already taken this course, and I ask your Lordships to follow that lead, and beg to move that this Bill be given a Second Reading.
Moved, That the Bill be now read 2a.—(Lord Taylor of Gryfe.)
4.54 p.m.
Lord Morris: My Lords, I believe that your Lordships should be grateful to the noble Lord, Lord Taylor of Gryfe, for the obvious sincerity with which he has used this Bill as a vehicle to demonstrate his personal indignation at a spectacle which horrifies him. But, with the greatest respect to him, I put to him three simple points. Nobody ever forced anyone to box. Nobody ever forced the noble Lord, or any noble Lord, to watch boxing if it offends them. In addition, has he ever investigated the lengths to which the British Boxing Board of Control go before issuing licences and before renewing licences? The position today is very different from what it was between the wars, and indeed from what it was even 15 years ago. At this very moment, the British Boxing Board of Control is fighting hard to obtain an international standard with regard to licensing, and, indeed, to bring in the thumbless glove. The noble Lord referred in detail to the serious injuries that can obtain as a result of the thumb on the glove.
Notwithstanding those points, I sincerely believe that this Bill is a joyless, politically naive, miserable little measure which is devoid of any merit whatsoever. The major reason why this is so is that, if this Bill were to proceed further, it would bring this noble House into serious disrepute. As your Lordships are well aware, at the present time in history there is a strong movement against paternalism in politics: a movement away from Government decree on how people should best run their lives. This Bill, I suggest, is a classic example of the "nanny" approach by Parliament; an example of the well-intentioned eroding the freedom of the individual to live and to learn from life, and enjoy all that life has to offer.
I cannot believe that the noble Lord, Lord Taylor of Gryfe, really understands what the effect of this
880
measure would be. Other than making this noble House a laughing stock in the eyes of the people for whom we presume to legislate, it will break one of the glasses through which our young men learn, for professional boxing is the base upon which all amateur boxing depends. It is the expression of the highest skills in an ancient sport. Prize-fighting, as your Lordships are aware, goes back to Graeco-Roman days. It is a far older institution even than the SDP!
The real value of professional boxing lies in the fact that it encourages the grass-roots efforts in the amateur field. If professional boxing were to be proscribed, which would be the effect of this Bill, amateur boxing would die, and this I believe would be a tragedy. The owlish academics so often forget the young. They forget the fact of the nature of the beast, man; they forget that little boys love, literally love, to fight. All the lessons of life in fighting, and indeed in not fighting, can be learnt to great effect in the ring, and indeed from the youngest age.
I believe that I speak from a certain position of strength, for I fought as an amateur from the age of eight until nearly 19. My first lesson in the ring was at that very age of eight, and it was this: if you are locked in a corral with someone who is determined to do you injury, it concentrates the mind wonderfully. The second lesson is to get to your opponent before he gets to you. This lesson is important, because not only do you learn but your opponent learns. He learns the measure of himself.
The first fight I fought was purely so that the gym master of my preparatory school could learn who had any particular aptitude, or indeed taste, for this particular endeavour. Whether it was his acknowledgment of the virtue of the alphabet, or whether he had a sense of humour, he happened to put me in the ring with my twin brother, who happened to be a head shorter than I was. One thing I did know was that it was vitally important to get to him beforehand, because, when I made it absolutely plain to him that I was looking forward to knocking seven bells out of him, it put him off the subject very quickly indeed.
He learned, as everybody knew, not so much that he was physically incompetent but that he was physically incoherent, and that he infinitely preferred the more leisurely pursuits of the academic world, like scripture and geography. It is in this particular demonstration to the very young—I do not mean just at eight but right the way through one's school years—that boxing has its immense value. It teaches you never—that it is a disaster—to lose your temper, that there can be great nobility in losing, that fear lies in the heart and mind and that skill will always beat might. Noble Lords need not take my word for it; the lessons are contained in the literature of boxing. Rather like cricket, though to nothing like the same extent, boxing has a very rich literature. It is one of the few sports that has moved men to write of it like angels. It is a classic demonstration of men, their heroes and the games they play.
I wonder whether the noble Lord, Lord Taylor, has ever visited any of the clubs affiliated to the London Federation of Boys' Clubs, and whether he has ever spoken to the young men who box and has asked them the simple question, "What has boxing given you?" In their own individual ways, those who indulge in this

881
sport always come up with the same answer, "Boxing has given me so much". When asked in what way, they invariably reply, "It has taught me so much of myself and of other men".
Many noble Lords will recall their own experience of bespectacled swots at school who brought self-respect and the admiration of their fellows upon themselves as a result of their ability and courage in the ring, despite their incompetence in team and individual ball sports, which of course require a different type of skill. Does the noble Lord really wish to throw away a great and ancient learning process?
Any who might have even for a moment considered flirting with that political virgin the SDP must have had their ardour cruelly cooled by this tawdry Bill. The SDP, coyly hiding, as well they might, behind their ugly acronim, might claim no authorship. However, they cannot escape the scandal of the company they keep. At best, the Bill shows a low taste in bedside reading. At worst, the SDP cannot deny that they are in bed with the author. I humbly suggest that your Lordships should, not for the first time, demonstrate your eminent commonsense by allowing this tawdry little Bill to proceed no further, to save this noble House from falling into disrepute and to state loudly and clearly in the Lobby that this measure is nothing other than a governessy irrelevance and a waste of valuable parliamentary time.
5.3 p.m.
Lord Belhaven and Stenton: My Lords, I do not intend to follow my noble friend Lord Morris in referring to this as a tawdry little Bill; that is not really the way to refer to any Bill which the noble Lord, Lord Taylor of Gryfe, has in good faith brought before your Lordships' House. Before leaving my noble friend's speech, I would tell him that I was forced to box as a boy, and certainly that used to happen in schools. I was not directly forced, but I was in the sense that my courage was challenged by an older boy. I went into the ring and boxed and, thank God, I was bad at it. That is not to say that had I been good at it I would have finished up punch-drunk, because with my background, I would not have been drawn into professional boxing, and I remind the House that the Bill is about professional, not amateur, boxing. Amateur boxing would still be legal and in my view it should remain legal because, however stupid it may be, the citizen should be allowed to do what he likes.
In 1970 I raised this matter in the House in the form of an Unstarred Question, which was answered for the Government by my noble friend Lord Aberdare, who gave me a courteous "No". Since then, so far as I am aware, this subject has not been raised in your Lordships' House and I congratulate the noble Lord, Lord Taylor, for his courage in bringing it up. I hope he sticks to the subject, but not with the same total enthusiasm as the late Lady Summerskill, whose passing we all lament; she was a little too enthusiastic about the subject, including when I asked my Question in 1970, because she wanted to abolish amateur boxing as well.
As for professional boxing, my feeling is that the human body was not made to be a punch-bag. That is certainly so of the human brain. It is an abuse of the creation of God continually to pummel the brain
882
until, if it goes on long enough, a man becomes an idiot. I am not against manly and dangerous sports, not even the most dangerous of them—mountaineering, rugger or what have you—because if a man conies out at the end of it he is usually perfectly sane, able to think and follow an avocation. He is not made into a fool.
I have seen people who are punch-drunk and I know what it does to them. They do not know they are punch-drunk and they think they are all right, but if you know their history and the fights they have had, the reason is clear. I spoke to one chap who told me he had been in 50 fights, and he was against professional boxing because of his experience in it. He talked to me about punch-drunk people without realising that he himself was punch-drunk, but I realised that.
Young men who get drawn into this game are the finest and bravest of our youngsters and it is quite wrong that they should be drawn by sleazy commercial interests into losing their intelligence, sometimes the use of their eyes, heart and any other sort of damage. Imagine going 15 three-minute rounds! I did some Army and school boxing. That was three three-minute rounds and that was tough enough. To ask a man to go 15 rounds is, in my view, absolutely monstrous. At least we might reduce the number of rounds, even if we do not make boxing illegal.
My only doubts about the Bill are my natural distrust of legislation. I have often thought that both Houses might profitably take a five-year holiday and pass no legislation at all. But the subject before us is not often raised in either House. Again I congratulate the noble Lord, Lord Taylor, for raising it, and if he presses it to a Division, I shall support him.
5.8 p.m.
Lord Nunburnholme: My Lords, perhaps I should begin by declaring a slight interest in that I too have put gloves on and gone into the ring, but that was many years ago. Perhaps it would be a good idea when regarding the Bill if we retained a sense of balance, proportion and logic and looked at the legal aspects a little more closely. The Bill refers to any person who organises boxing for profit. I do not know the legal definition of "profit", but the dictionary says it means "for gain". If a charity organises, say, a dinner at the National Sporting Club or the Grosvenor House and two professional boxers agree to give an exhibition bout in aid of the charity, it is undoubtedly being run for profit. Would that be illegal? Personally, I think it might not be legal. There is also the question of whether or not it affects amateurs, because the word "profit" does not necessarily mean monetary gain. It means gain, something to your benefit, and perhaps "benefit and gain" could include not only a cup or a shield, but also the prestige that you bring to your school when one school is boxing against another, or if there are two institutions boxing against each other.
I have seen many amateur fights and it is certainly true that on most occasions young boys, 15 or under, do not punch hard enough to inflict any great damage on each other. But when one school boxes against another there might be one young man of 17 rising 18 who is a very, very fine boxer indeed and has a tremend

883
punch, who is up against another young boy of 16 who, although a good boxer, is immature for his age and can easily be put on the floor.
One of the things that causes brain damage is not necessarily the punch itself but the fact that the boxer goes over backwards and is in either an unconscious or semi-conscious state and the back of his head hits the floor. In many amateur boxing rings the floors are not properly padded—they are almost bare boards. Ask any old professional boxer about this and he will say, "As I went over it was my head that hit the ground, and that put me out". Very often that is what does the damage.
Perhaps amateur boxing for any form of profit, not necessarily money—the Bill just says "profit"—may be illegal; I do not know. All I suggest to your Lordships is that if anybody makes a profit out of this it will be the lawyers. I think that they are going to have a field day over this Bill because of the way that it is worded.
There is one other small matter that I should like to draw to your Lordships' attention; that is, that if this Bill goes through it will put a lot of people out of work. I suggest to your Lordships that we have enough unemployment as it is. What may very easily happen as a result of this Bill is that the young fighters that we have, instead of fighting in this country will train in this country but fight abroad.
There is an element of risk and danger in every sport. The noble Lord, Lord Taylor of Gryfe, has referred greatly and at length to brain damage. As I say, I am no lawyer; but there is a legal expression, volenti non fit injuria, which simply means the willing party accepts the risk. We have something called free will. There is an element of risk in many activities, as the noble Lord, Lord Taylor, said, such as rugger. Many rugger players are carried off the field unconscious and it has not been unknown for a rugger player to receive a blow or a kick at the beginning of a game, play the whole game, come off and remember nothing about it from then onwards. In fact, he has been semi-conscious or concussed throughout the game. This is brain damage.
Riding is exactly the same. If you fall from a horse, the blow, the hard object, is not propelled towards you: you fall off the horse, down towards it. The result is the same. If we are going to ban boxing, should we not logically ban any sport such as rugger or riding? Very often at a race meeting the ground or the going is described officially as "soft". But if you ask any jockey that day who has had a fall he will tell you that the ground was very hard. I am sure that many of your Lordships will agree with me that as you get older the ground gets harder. But we do not have to go hunting. Lord Birkenhead once said he was finished with hunting. He said: "Henceforth this furry animal may proceed upon its way unmolested by me." In other words, volenti non fit injuria.
Car racing is a very dangerous sport. Many people have been killed, not only drivers but the public. There is the classic example of free will. Mr. Jackie Stewart put it in good parliamentary language and has made it perfectly clear that in no circumstances and under no inducement of any monetary gain whatsoever
884
will he return to the sport. He has made known his own free will.
Many times we have heard in this House, particularly from the noble Lord, Lord Brockway, about the evils of the atom bomb. Gunpowder has killed millions of people. We can only roughly estimate the number in millions. We do not ban gunpowder—and by that I mean all high explosives, nitro, dynamite and even the atom bomb. The evil lies in the man and what use he makes of it. Gunpowder gives a lot of pleasure to a lot of people who use it for shooting. Also it is very important in our industrial mining enterprises so we do not ban it.
What was interesting was that when President Reagan came out of hospital after he had been shot, a member of the press asked him whether or not he would tighten the control on firearms as a result of being shot. His answer was very interesting; it was one which I would commend all chief constables and senior police officers in this country to study. He said: "No. In the cities of New York and Washington we have the tightest gun controls of probably anywhere in the world and it did not prevent me being shot. What I suggest is that there should be a tightening up of the penalties and an increase in the penalties for the improper use of firearms." Here was the President of the United States saying that. This really comes back to free will and what use we make of it. We all agree to ban war.
This leads me on to the internal combustion engine. Although millions of people have been killed by gunpowder, I am told that almost as many, or if not more, have been killed by the internal combustion engine, and particularly the motor car. Most of the deaths and very serious injuries in a motor-car have been due to injuries to the head; in other words, brain damage. If we ban boxing for this reason, ought we not logically to ban the use of the motor-car? That would be absurd.
The noble Lord, Lord Taylor, touched on the way boxing works. There is a need to clean up boxing; here he has a very good point. There is a lot of money in boxing now, and particularly in the televising of boxing. Boxing is getting into the hands of a few men. I go to America often and I have many American friends. I do not think that one of them would disagree with me that boxing in America leaves much to be desired in that it is in the hands of the syndicate, and that indeed the Mafia have a finger in it.
The professional boxers whom I know in this country refer to something called the syndicate operating here. Boxing is in the hands of a few men, one or two of whom perhaps are too greedy. I know of one lightweight boxer, whose name I shall not mention, who was told—and I think I can quote the words:
"You remain a big fish in a little bowl, or you join me and go places—otherwise you stay where you are".
He joined, and he did very well.
There are plenty of good fighters in this country. There is no need to bring over third-rate ones from America to build up a fighter to world standard, which he is not. Then we talk about a fighter having a glass jaw, because when he gets to the world title stage he has to get into the ring with someone who really is good, and he does not deserve to win. There are plenty of good fighters up in the North.

885
The noble Lord, Lord Taylor, referred to cock-fighting and said that it was abolished as an ignoble and horrible sport. I do not think that those were his exact words, but that was the effect of what he said. I may be wrong, but from what I have studied I gather that cockfighting was abolished because people gambled on it too much.
The British Boxing Board of Control probably does not exercise the control that it might do, and here your Lordships could perhaps consider some action. I do not want to go too much into this point, but I know that professional boxers past and present are not completely satisfied in this regard. They feel that perhaps the board does not realise to the exact extent which way boxing in England is now going.
I have known one or two boxers. It is a great sport. As they say themselves, it is a tremendous game. It has a tremendous thrill to it. When the heavyweight champion of the world climbs into the ring there is a magic about it which is equalled only by Derby Day and the Grand National. There is something to it, and I am proud to have shaken the hand of men such as Teddy Haynes, the ex-middleweight champion. They were great men in boxing and they were absolutely straight.
The Bill reminds me rather of a little paragraph in one of the early chapters of the autobiobraphy of the late Lord Montgomery of Alamein. He described how his mother used to say to one of his brothers or sisters:
"Go and see what Bernard is doing, and tell him to stop it"
There is always someone trying to nibble away at the British heritage. I for one will have no part of it. I ask your Lordships to support our national way of life and our national sports.
5.23 p.m.
The Earl of Longford: My Lords, I believe that Sir Winston Churchill was once asked which side he was on in the Spanish Civil War, and he replied, "Both sides". I can imagine that anyone coming fresh to the debate this afternoon and listening to the arguments so cogently put, might feel to be in that position. But in my mind I come down, at any rate at this stage—the Second Reading; I suppose that there might be amendments later—on the side of the noble Lord, Lord Taylor of Gryfe, who moved the Second Reading of the Bill so eloquently and with such deep feeling. I thought that he rather overstated his case, though he did not overstate it half as much as the noble Lord, Lord Morris, overstated his case. The argument that we could not have amateur without professional boxing is to me fantastic. We do not say that about any other sport, and so I am afraid that I dismiss that particular argument.
However, leaving that aside for the moment, I must say that when the noble Lord, Lord Taylor, implied that at rugger violence was forbidden by the referee I felt that he could not watch a great deal of rugger. Obviously rugger is a violent sport. So is even the form of football practised at the school which the noble Lord, Lord Home of the Hirsel, and I attended. He was very much better than I at it, and therefore more violent, but at any rate no one pretended
886
that he suffered brain damage, or even perhaps that I did—
Lord Home of the Hirsel: The noble Earl kicked pretty hard!
The Earl of Longford: I think that it was the noble Lord, Lord Hailsham, but I had better be careful about that; but the Duke of Montrose actually bit him at the Eton Ball game. I remember that that was mentioned in a debate on Rhodesia; it was supopsed to prove some important point one way or the other. At any rate these contact sports are violent, and I am certainly not even going to begin to discuss the question of banning them.
However, let us agree that the noble Lord brought out two aspects of the horrors of the lives of many professional boxers, and he spoke with great respect of the young boxing champion whom he mentioned. He pointed out that many people suffer brain damage if they continue in the sport as a vocation and that horrible passions are aroused. I am perfectly ready to agree, though I do not go to see many boxing matches now. I used to go to see them when I was young. But sometimes I see them on television, and I must admit that the audience are not a pretty sight. So I am entirely with the noble Lord on that aspect. I am inclined, so to speak, to remove the occasion of sin from these audiences.
Therefore at this stage I agree that we should try to ban this kind of commercial boxing. If people are to be paid, the money has to come from somewhere, presumably out of the pocket of the public. At this stage I am with the noble Lord. The noble Lord was quite careful, but I am not sure that he was careful enough, and I must say that some of the things that he said would reflect on boxing generally. I cannot agree that boxing at school is in itself more dangerous than, say, rugger, or even the school game played by the noble Lord, Lord Home, and myself. So if we are not going to ban violent games at school altogether, I do not think we should ban boxing.
I quite agree that some boys dislike boxing. But of course many boys dislike football, and perhaps nowadays at schools they are excused—rightly excused, I think—from it. If a parent says that his son does not fancy being knocked about in any shape or form, the boy should be excused. There is much more liberty of that kind nowadays than there used to be, and that is all to the good. But I do not think that so far as boys are concerned boxing is in any special category as compared with football. However, when we come to the professional sport, bearing in mind the evil passions that can be aroused in the audience and the damage done, which might last a lifetime, then at any rate at this stage I go along with the noble Lord.
5.28 p.m.
Lord Noel-Baker: My Lords, I want to support my noble friend Lord Taylor of Gryfe and to thank him for what I thought was a very remarkable speech which he made this afternoon. I find it difficult to believe that any noble Lord would not be converted in favour of the Bill by what my noble friend said. I have taken part in many sports, including two which

887
require physical courage of a kind and physical endurance, and which perhaps involve danger. I took part in track athletics for many years, and I engaged in mountaineering until I was 79. At the age of 79 I was twice over 14,000 feet in Switzerland. I have done a great deal of mountaineering.
I have had many friends who have been amateur boxers, and I have watched much amateur boxing in the Olympic Games. I confess that I experienced a feeling of genuine jubilation when I saw a British boxer, with extreme skill, defeat a Russian opponent, who was much larger and looked much stronger than the British boxer, in the final of an Olympic contest. I remember that the founder of the Olympic Games, Baron Pierre de Coubertin, who I regard as one of the great statesmen of the century, with a record of success in his work achieved by few statesmen in any realm of human activity, was ardently in favour of boxing and boxed himself until he was over 50.
I confess that I have often had doubts about amateur boxing. I am not sure. While at a school, no doubt, it is open to very little objection and there is much to be said in its favour, some amateur boxing can in my view involve danger of an unacceptable kind. But if I am a little ambivalent about amateur boxing I am not ambivalent at all about professional boxing. When I was in another place there was a man, a constitutent who became a close friend, who had himself been a rather eminent professional boxer. With his earnings he bought a public-house, which he kept and managed himself. He insisted, as our freindship developed, on taking me to witness professional boxing—big fights, as he called them—from a ringside seat. I could not disguise from him that I disliked the whole thing. I disliked the fight and I disliked the attitude and emotions of the crowd. It seemed to me to arouse a feeling of sadism among the spectators. I am perfectly certain that that very frequently happens, and that it is a most undesirable phenomenon. I believe there is everything to be said against professional boxing. I believe it is a social abuse, and I hope we shall follow Sweden and Norway in banning it here.
Lord Hunt of Fawley: My Lords, I just want to add a very few words about punch-drunkenness, which is a terrible affliction. It can come on many years after a person's boxing career is over; it does not need a number of knock-outs—a number of small injuries can produce it—and it is a terrible affliction to have in your family. It is a sort of pre-senile dementia: you lose your memory, you lose your sense. I myself would do anything to prevent even the dozen cases of punch-drunkenness that now occur.
5.34 p.m.
Lord Shinwell: My Lords, I apologise for my intervention but my reason for not putting my name on the list is because I doubted very much when I read about the possibility of this debate whether there would be any interest displayed by Members of your Lordships' House. Another reason why I failed to intervene in that fashion is because I have to declare
888
an interest. I happen to be the President of the London Branch of the World Sporting Club. I have been so for many years, and my predecessor was a Member of your Lordships' House—the Earl of Derby. In all my experience of that club, I have never witnessed anything which was improper. I have never observed that in the course of the contests no medical assistance was available; there was always a doctor there in case he was required to render some assistance.
I declare another interest, and that is that I happen to be an honorary member of the Brighton Branch and also the London Branch of the Ex-Boxers Association. I am bound to say, having attended some of their functions and looked at some of the older people who were also attending, there was hardly a sign that they had ever been involved in a contest. Certainly they were the most amiable, delightful and civilised people I have ever met—as civilised as anybody in your Lordships' House. That reminds me that British boxers of the past, going back to the days of Dutch Sam, Mendoza and the various prize-fighters who fought with bare knuckles instead of using gloves, were invariably supported by Members of your Lordships' House. It was the aristocracy of Britain which supported them and attended those illegal contests which took place in various parts of the country despite the surveillance of the police.
I only want to take advantage of a three-minute round—I have already occupied two minutes, so I have not much time—before we have a technical knock-out, as I hope will happen at the end of this debate. I was unable to hear much of the speech of my noble friend Lord Taylor of Gryfe. I was not present at the beginning, and when I came in I had not something available so that I could hear more easily, but I wish he had devoted his efforts on this occasion to trying to deal with preventing this monopoly which exists at present in professional boxing. There are too few people operating, and undoubtedly they are in the business to make a profit. I am not afraid to say this. I am not afraid of them anyhow; they cannot hurt me, and they had better not try. I cannot understand why Lord Taylor of Gryfe should bother about their making a profit. He is connected with various businesses, and I am quite satisfied that he does not mind making a profit now and again. There is nothing wrong with profit; I like a little myself sometimes.
Let us try to understand this. Occasionally there is something improper in professional boxing. There is something quite improper sometimes in amateur boxing—and here I would say this. Of the two, I prefer professional boxing, because if a man is to go into the ring he must seek to acquire some skill in the business. After all, it is skill that counts more often than hard punching, though hard punching nowadays, I have observed, does carry an opponent out of the contest quite easily. But amateur boxing is sometimes conducted in a fashion which savours of professionalism, and I do not care for that at all. If we are going to have amateurism, let it be honest amateurism and make no bones about it.
As regards the effects on the professional boxer, of course there are Members of your Lordships' House who can quote instances where somebody has suffered or somebody has died because of boxing, or has

889
suffered brain damage. I accept that at once. But that applies to professional wrestling. I wonder whether Members of your Lordships' House ever watch professional wrestling on Saturday afternoons. How horrible it is, how brutal it is, how bestial it is!
The Earl of Longford: That is just a sham.
Lord Shinwell: One becomes furious—so furious that one would like to go in and punch them on the jaw and settle the matter; a real knock-out. The same applies to motorcar racing; and with great respect to my noble friend Lord Noel-Baker, who was once a famous half-miler (although I have observed that ever since he has always come late for a meeting; he always came 10 minutes late, and I used to direct his attention to it; I never could understand how he had won the half-mile when he was younger) I am bound to say that even in sprinting or in hurdling, as we have observed many times in Olympic and other contests, accidents occur—of course they do. I remember an incident at a boxing contest in Dunfermline in Scotland many years ago. It was a contest of 10 three-minute rounds. One of the contestants did not turn up so that they had to get somebody to take his place. Someone in the audience offered his services. He was a rather stout, portly, pot-bellied man and he said that he was ready to fight anybody and had done some fighting in his time. So he appeared in the ring. He did not last for very long. The other fellow knocked him down at once and he lay on the floor, completely knocked out. They had to get an ambulance to take him away and someone in the audience, looking at him on the floor, ugly, grotesque, said, "Well, if he is going to hospital, take him to the maternity hospital".
That is how to deal with this subject and I suggest that there ought to be a technical knock-out—not wholly to the disadvantage of the noble Lord, Lord Taylor of Gryfe. But he has had his say, as have others. I hope that the noble Earl, Lord Avon, who looks like a professional boxer, will not indulge in any knock-outs this evening, but will say that the Government have lots of other business to deal with. There is unemployment—shall I go on?—and the rates are going up. Shall I go on? Let us have no politics in this business, just commonsense; and let us have that technical knock-out.
5.42 p.m.
The Earl of Avon: My Lords, after that round of seven minutes I feel slightly punch drunk myself. I think I ought to start by saying what is the purpose of this Bill. It is to stop any boxing match, either professional or amateur, from being arranged for profit. That would include charitable or sponsorship events for profit. Some noble Lords were slightly awry in their descriptions. Another thing I noted is that my noble friend Lord Belhaven and Stenton twice mentioned a five-minute round. In fact, no round ever goes more than three minutes, I understand.
The effect of this one-clause Bill on boxing could be catastrophic and its effect on other sports could equally be enormous. We have all listened with great interest to what the noble Lord, Lord Taylor of Gryfe, has said and I appreciate, as, I am sure, does the
890
House, the deep commitment which lies behind his thinking. I do not think that any of us would have thought his presentation in any way inadequate. I found it extremely comprehensive. However, I believe that we should be reminded of the consequences that this type of legislation would engender.
The democratic society that we all believe in and applaud gives an individual the fundamental right to choose the sport in which he wishes to participate. By legislating against one particular sport, we would withdraw that right. This Government, indeed successive Governments, have never considered such measures, whether individuals compete against each other, in sport, for payment, for charitable purposes or under the promotion or sponsorship of a third party. The Government believe that to do so would be a step in the wrong direction. The noble art (if I may so call it in this House) of boxing has long been a recognised, worthy, sport in the United Kingdom. I use the word "sport" intentionally because the noble Lord, Lord Taylor of Gryfe, played a little too much, I thought. on the word "violence". This should be a sport where skill and self-defence are part of the training. The noble Earl, Lord Longford, said that the audiences in this sport were not a pretty sight. I wonder at what sport audiences are a particularly pretty sight. But the noble Lord, Lord Shinwell, then corrected me slightly, because, obviously in his club, the audience would be an extremely pretty sight.
The Earl of Longford: My Lords, I attended the noble Lord's club. I found the atmosphere there specially civilised. The referee stopped the fight as soon as it got brutal. It must have been due to the influence of the noble Lord.
The Earl of Avon: My Lords, I take the noble Earl's point, but I think he was talking also about audiences generally. I should like to refer to audiences generally in all sport and I do not think there are any that are particularly nice except, perhaps, the Royal Box at Wimbledon which is always very attractive.
The original "Queensbury Rules" first formulated in 1867 are the basis upon which boxing is practised by both professionals and amateurs. It is here that I believe the medical profession has played such a major part in formulating a medical discipline within those rules which all boxers must satisfy before they are licensed to take part in a boxing match. As many noble Lords mentioned the risk values, I should like to say a few words on that. I acknowledge that it is the personal injury to individuals that is of most concern to those who object to boxing as a sport. What I believe we must accept is that those entering the boxing arena do so in the full knowledge that an injury may occur, Individuals enter boxing from their own interest in the sport, but, having elected to do so, they are subject to the most stringent medical discipline before they are allowed to compete. Having been licensed, following a full medical examination, to compete in either professional or amateur boxing, a person's medical welfare is carefully monitored. Indeed, a recent requirement in the professional arena, where matches are over a longer duration, is that when an individual applies for a licence his medical examination

891
form must include a skull X-ray with a full report accompanying such an X-ray.
Much has been said in the press about a brain scan. It is the considered opinion of the chief medical officer of the British Boxing Board of Control, a man highly respected in his profession, that the value of a brain scan is in establishing the diagnosis of acute or chronic intracerebral damage, and is already used in this context in professional boxing. It is of little if any value in anticipating when such damage would or could occur. I would not profess to understand the intricacies of such medical science, but I believe we must acknowledge the opinion of a person so highly respected in his profession.
The medical welfare of any person is a matter of concern for us all, whatever way of life is chosen. Boxing administrators at both amateur and professional level are as aware of this basic requirement of human understanding as any other governing body of sport. Their medical regulations are consistently reviewed to ensure, so far as is practicable, that injury can be detected, treated and cured if such injury is sustained. More importantly their regulations are so framed that a person who is not physically capable cannot partake in the sport. Such regulations have caused disappointment to a number of young boxing hopefuls who, because of some minor defect in their fitness, have been refused permission to participate.
I hope that, albeit briefly, I have allayed some of the fears concerning the medical welfare of those who wish to enter the sport of boxing. The many other sports that were mentioned today—mountaineering, rugby, motor sport, horse racing and various aviational activities—all contain a considerable degree of personal risk. There have been some personal reminiscences. As someone who has always played cricket, I always told all the oarsmen in my house that the most dangerous thing to do was to row because it strains the heart. We can all argue against the sport that we do not particularly like.
As I say, like all these sports boxing is supported by the personal decision of an individual to participate. The Bill before the House today could, if enacted, be taken as a precedent by others to seek to control sports similar to those I have mentioned. This Government cannot support proposals which impinge so drastically on the individual freedom of our citizens to compete against each other in the sport of their choice and therefore could not support the Bill as legislation.
5.49 p.m.
Lord Taylor of Gryfe: My Lords. I do not wish to detain the House in replying to the debate, but I should like to say a word in connection with the statement of the Government. With regard to the purpose of the Bill, it is not the intention of the Bill, as I made abundantly clear in my speech, that amateur boxing should be prohibited. This is a Bill designed to prohibit professional boxing, and if there is any doubt in the wording or the terms of the Bill in distinguishing amateur from professional boxing, that can be amended and made clear at the Committee stage. Therefore, today's debate on the Second Reading is about the prohibition of professional boxing.
892
The noble Earl, Lord Avon, said that the effect of this on other sports would be enormous. I am not sure that that is so. In my opening speech I tried to distinguish between boxing and other sports. The distinction is quite simple: boxing is designed for one person to knock another person unconscious and inflict injury. There is no other sport where that is the basic purpose of the exercise. To that extent it is quite distinct from rugby football, mountaineering and the other sports that were mentioned—
The Earl of Longford: My Lords, as one of the noble Lord's supporters, I hope he will not press that point unduly because an ordinary boxing match is decided on points. So I think that idea of knocking another person out is very rare in amateur boxing.
Lord Taylor of Gryfe: My Lords, an ordinary boxing match is not always decided on points. I quoted the spectacle the other night in Wembley Stadium of a man who—I forget the actual phrase—inflicted brutality and punishment on a man in the 9th or 10th round and knocked him out. That is the history of boxing: and the victims of that are people who are wandering about poor, wandering about punch-drunk, mumbling and blind. That is the difference between boxing and some of the other sports that were mentioned. That should be kept in mind.
We take deliberate decisions in this House when we weigh the liberty of the individual against the total interests of society, and we pass laws accordingly. We did so years ago in relation to cockfighting. Why did we do that in this country? Because we believed it was a brutalising and demoralising thing for people to foregather in crowds and cheer and applaud two animals inflicting damage and death on each other. We are very sensitive in this House about danger and suffering to animals, and I suggest that we should show the same sensitivity when we are talking about a sport which organises two people to enter a ring for the express purpose of inflicting damage on a fellow human being.
The professional sport does not depend on two people going into a ring in privacy to do that. It depends on organising a great spectacle and bringing it into millions of homes, because the TV fees are important to sustain it. Does anyone believe that these sights that we see in the boxing ring do not reduce our sensitivity to violence? I believe they do, and for that reason we build into the IBA and BBC laws restrictions on the amount of violence that is to be shown. Why do we do that? Because we believe that the sight of violence and the continual exposure to violence of people in their homes reduces their sensitivity to violence and has a brutalising effect. It is for that reason that I suggest that boxing is rather different from the other sports that were enumerated by noble Lords opposite.
The noble Lord, Lord Morris, made a great play with the word "tawdry". I have tried to look it up in the dictionary in reference to this debate. I believe that what is tawdry is offering young working-class people, and now the blacks, the opportunity of escaping by this route quickly out of poverty by a public spectacle—fighting with one another in the ring to the plaudits of thousands. At the end of the day they

893
suffer and frequently end up in the poverty they hoped to escape from. That is tawdry, and I do not believe the word can be applied to any Bill which is designed as this Bill is, for the three reasons that I quoted at the outset.
First the perpetration of violence is evil in itself, and anything which encourages it or glorifies it damages the fabric of our society. Secondly, as to the results of boxing, there is evidence here, and the noble Earl, Lord Avon, quoted some of it, but if I may say so he ought to have gone to a much more objective source. He quotes simply in support of his case the medical officer of the British Boxing Board of Control. I appreciate that steps are taken by the board to minimise damage, but the damage is frequently done before the referee's intervention on medical examination between the rounds. He might have gone to the Royal College of Surgeons, for example, or to any of the objective authorities on this subject to get his evidence—it is there in abundance—that boxing does disturb the brain and frequently results in blindness and damage to the eyes.
Finally, this is not a tawdry Bill: neither is it an attempt to interfere with the freedom of the individual in any cheeseparing way. This is a Bill that says that we in a democratic society stand for certain moral values, and it is not within our category of moral values to organise for public spectacle a boxing match in which one human being seeks to knock another unconscious. I cannot find it in my Christian conscience to believe that it is part of a Christian society. It encourages the wrong motives, and for that reason this House will not be diminishing itself if it accords this Bill a Second Reading. It will have shown a respect for civilised standards and done something of which we can be proud. For that reason, I beg to commend that the Bill he now read a second time.
5.57 p.m.
On Question, Whether the Bill shall now be read 2a?
Their Lordships divided: Contents, 47; Not-Contents, 77.

DIVISION NO. 1

CONTENTS

Amherst, E.

Jenkins of Putney, L.

Amulree, L.

Kennet, L.

Aylestone, L.

Killearn, L.

Banks, L.

Lawrence, L.

Bathurst, E.

Longford, E.

Beaumont of Whitley, L.

McCarthy, L.

Belhaven and Stenton, L. [Teller.]

McGregor of Durris, L.

Melchett, L.

Blease, L.

Noel-Baker, L.

Boothby, L.

Ogmore, L.

Brockway, L.

Phillips, B.

Byers, L.

Rathcreedan, L.

Caccia, L.

St. Davids, V.

Collison, L.

Seear, B.

Cooper of Stockton Heath, L.

Simon, V.

Craigavon, V.

Stedman, B.

Crowther-Hunt, L.

Stone, L.

David, B.

Swansea, L.

Diamond, L.

Taylor of Gryfe, L. [Teller.]

Fisher of Rednal, B.

Gladwyn, L.

Vernon, L.

Hampton, L.

Wilson of Langside, L.

Houghton of Sowerby, L.

Wootton of Abinger, B.

Hunt of Fawley, L.

Wynne-Jones, L.

Jacobson, L.

894

NOT-CONTENTS

Ailesbury, M.

Hylton-Foster, B.

Airey of Abingdon, B.

Lane-Fox, B.

Alexander of Tunis, E.

Lindsey and Abingdon, E.

Alport, L.

Long, V.

Ardwick, L.

Lucas of Chilworth, L.

Avon, E.

Lyell, L.

Belstead, L.

McAlpine of Moffat, L.

Bishopston, L.

McFadzean, L.

Bledisloe, V.

Mancroft, L.

Bruce of Donington, L.

Marley, L.

Campbell of Croy, L.

Mersey, V.

Cockfleld, L.

Molloy, L.

Colville of Culross, V.

Monson, L.

Colwyn, L.

Morris, L. [Teller.]

Cork and Orrery, E.

Northchurch, B.

Cowley, E.

Nugent of Guildford, L.

Craigmyle, L.

Nunburnholme, L.

Croft, L.

Orkney, E.

Cudlipp, L.

Peart, L.

Cullen of Ashbourne, L.

Pender, L.

Daventry, V.

Rankeillour, L.

de Clifford, L. [Teller.]

Robbins, L.

Denham, L.

Sandys, L.

Dilhorne, V.

Shannon, E.

Eccles, V.

Shinwell, L.

Elliot of Harwood, B.

Skelmersdale, L.

Elton, L.

Spens, L.

Faithfull, B.

Strabolgi, L.

Falkland, V.

Strathspey, L.

Fortescue, E.

Terrington, L.

Fraser of Kilmorack, L.

Thomas of Swynnerton, L.

Gainford, L.

Trefgarne, L.

Gormanston, V.

Vaizey, L.

Grey, E.

Vaux of Harrowden, L.

Gridlev, L.

Vivian, L.

Henley, L.

Wallace of Coslany, L.

Hill of Luton, L.

Westbury, L.

Holderness, L.

Willoughby de Broke, L.

Hornsby-Smith, B.

Resolved in the negative, and Motion for Second Reading disagreed to accordingly.

BBC External Services
6.5 p.m.
Lord Byers Lord Byers rose to ask Her Majesty's Government why, in view of the opinions expressed in this House on 30th July, they decided to proceed with damaging cuts in the output of the BBC's External Services, including the complete abandonment of direct broadcasts in Italian and Spanish to Europe at a time when accurate reports of British policies and news to EEC members are vital importance.
The noble Lord said: My Lords, I rise to ask the Unstarred Question in my name, and I would remind the House that we last debated this question of the cuts in the External Services of the BBC on a Motion which I put down for 30th July, when we asked the Government to reconsider these proposed cuts. The House will remember that the Government were defeated on that occasion by a 2 to 1 vote—82 in favour of my Motion and 45 against.
The reason why I put down this Unstarred Question is that I consider the response to the advice tendered to the Government by this House on 30th July seems to be devoid of rhyme or reason, except in terms of horse trading or of window dressing. As I see it, they have decided to reduce these cuts from £3 million to £1½ million and they seem to think that honour will be satisfied. I do not think that that really makes sense.
On 30th July we were told by the Foreign Secretary, first, that the External Services of the BBC were an important arm of Government foreign policy, that external broadcasting has a most important part to play in the influence that Britain can exert throughout the world, and then he said:
"it is I think reasonable to suggest that the Foreign Office, the Government and Parliament—I repeat, and Parliament—should make decisions as to the priorities and importance of the various aspects of external broadcasting".—[official Report; col. 812.]
Now the decision has been made to reprieve the Burmese and Somali services, for which we are very grateful, to halve the output of the Brazilian and French for Europe services, to halve the subvention to the transcription service and to close on 31st December the direct services to Spain, Italy and Malta. I fail to see what part Parliament was allowed to play in these decisions. Perhaps the noble Lord, Lord Trefgarne, will inform us as to what part we really did play in this. I simply do not understand the thinking or the philosophy behind the decisions.
On 30th July, I was told by the Foreign Secretary that I was asking for more money for the External Services of the BBC, when it was quite clear—patently clear—that all of us in that debate were demanding not more money, but the maintenance of the services which it was proposed to cut. Now we are told that the Government do not need to save £3 million a year; they now need a saving of only £1½ million. I would ask: how has that come about? I believe that it is another of those conjuring tricks which are a speciality of the Treasury—
Lord Trefgarne: Oh!
Lord Byers: My Lords, I think it is true. I hope that the noble Lord will explain. Let me put this to the noble Lord. In fact, the Government have cut operating expenditure on these programmes by £1½, million a year in the next three years, and they have decided to cut the capital expenditure programme by another £1½ million in 1983–84 and 1984–85. The reason why they have not cut the capital programme by £1½ million next year is that it has been cut so much already. There is nothing more to cut. I want to ask whether the noble Lord will confirm that this arithmetic is correct and answer the question: what happens from 1985 onwards? What is there in the long-term programme which will give reassurance to the BBC about its External Services?
On 30th July, the Foreign Secretary ignored the views expressed in the Fourth Report of the Foreign Affairs Committee in another place, when they said:
"Your Committee is of the opinion that influencing the population of countries and their leaders is very important for the United Kingdom. Diverting funds from other projects in the capital expenditure programme, all of which are essential, is not feasible and in any case would be self-defeating"
They went on:
"Nor is it realistic to suggest cuts in other activities of the Foreign and Commonwealth Office or the BBC to find a sum of this magnitude. Accordingly, we have concluded that the money should rightly come from the contingency reserve".
That is what I proposed to the Foreign Secretary in the last debate. The contingency reserve, I understand, now stands at £1·2 billion. I should have thought that
896
it could carry this particularly small sum. I do not believe the problem can be money. I think the truth is that the Foreign Office pays lip service to the importance of the external vernacular services but at the same time proceeds, perhaps unwittingly, to undermine them.
For these services to have maximum impact they must be credible. To be credible they must be consistent and must not be subject to contraction, expansion or extinction on short-term considerations. This is what in fact is at stake. That sort of action gives the impression abroad that these services are vehicles for propaganda whereas their proper reputation, earned over a long time, is that of vehicles for telling the truth to the world.
I believe that this displays a poverty of political judgment. Can you imagine the British Foreign and Commonwealth Office insisting on these cuts at a time when the Japanese have decided to make substantial increases in their overseas broadcasts? That must be the right answer: not to reduce but to maintain. or even to increase. I think that all this emphasises that the Foreign Office is unable to get this matter into perspective and is prepared to inflict damage on overseas broadcasting services out of all proportion to the savings which would be achieved: £1½ million savings out of a defence budget now running at £12 billion. The perspective must be wrong.
Moreover, just to lend point to the importance of the external services, I would remind the House that there is a standard clause in this excellent book, called Hints to Exporters, which is issued by the British Overseas Trade Board. Every one of these, for each country in which we are interested, has a particular standard clause which reads:
"The BBC External Services broadcast throughout the world in English and 39 other languages. An important part of their output deals with developments in British industry, science and technology. New products and processes developed by firms in this country are featured prominently in news and other programmes, with the name of the manufacturer mentioned, where appropriate. All inquiries reaching the BBC as a result of these broadcasts are passed on to the firms concerned. The BBC External Services welcome as much information as possible from industry. They are interested in new processes, new products, export successes, contracts and exhibits at trade fairs abroad. Information should be sent to the Export Liaison Unit at Bush House …".
In my view, this is no time to diminish in any way a service which is part of our export trade promotion—part of the British way of life. We need to retain everything that can help trade overseas and jobs at home. I think we are entitled to ask the Government to think once again before it is too late and to reassure the House about the long-term future of these services.
6.14 p.m.
Lord Strabolgi: My Lords, I am very glad that the noble Lord, Lord Byers, has tabled this Question for debate. In spite of the concessions announced by the Government in another place on 26th October, following their defeat by a substantial majority in your Lordships' House last July, the situation is still most unsatisfactory, as the noble Lord has said. I should like to support everything that he has said.
Operating expenditure is now to be cut by £1·5 million instead of the original sum of £3 million first planned by the Government. But the Government,

897
I understand, will still make up the £1·5 million that remains by cuts in capital expenditure. There will he cuts of £1·5 million in 1983–84 and in 1984–85.I am not clear whether these cuts are to be continued beyond 1984–85.
The Government have said that they still intend to spend the original total of £102 million within the next 10 years, but clearly more of it is now scheduled to be spent outside the period covered by current spending plans. I should therefore like to ask the Government whether they still intend to spend the original total of £102 million during the next 10 years, since much more of this capital expenditure will now lie beyond the lifetime of this Parliament.
Will the noble Lord, Lord Trefgarne, also confirm that there are to be no further cuts in this area and no further undermining of Britain's voice abroad for short-term financial considerations? The Government spokesman said during the debate in another place on 23rd July that he did not believe that the importance of these broadcasts to our overseas markets was a big consideration and that the Japanese, as the noble Lord, Lord Byers, has said, do not consider that their commercial interests would be served by a massive increase in external broadcasting. I am paraphrasing what the Government spokesman said in that debate. Fri actual fact, Japan, since that debate, is now planning a very large increase. The Japanese Broadcasting Corporation announced in September that they were planning increases from 21 to 40 languages, and a major expansion of ours. Perhaps the noble Lord when he comes to reply will say whether the Government are prepared to review their attitude in the light of the Japanese decision.
The journal The New Civil Engineer in its September issue commented that it is a great help to our overseas trade and industry for programmes to be transmitted in the language of the country concerned. I understand that the European Parliament are to examine the possibility of reforming the European Broadcasting Service which foundered in 1979. This service, known as Euro Radio, would include external broadcasting. Are the Government aware that without any direct Italian or Spanish services the British contribution to Euro Radio will be much limited?
I welcome the decision to retain half the French for Europe service and the Portuguese language broadcasts to Brazil. This at least is something to be thankful for. However, the BBC will have much difficulty in meeting the required operational saving, since reducing the hours of Brazilian and French broadcasts does not halve the cost of running these services.
Perhaps the noble Lord will tell the House what effect these cuts will have on the BBC's French language broadcasts to Francophone Africa'? Will the noble Lord also let the House know why the Spanish and Italian services to Europe are to be closed at the end of the year and replaced by what the Government described in another place as "a modest recorded tape service", financed of course by the BBC? Do they not think that this is rather a hasty decision? And what are the Foreign and Commonwealth Office to do if compelling reasons arise, when they wish to start up these direct broadcasts again? There could be a change of policy, as there was in the case of the
898
Turkish service which was to have been cut in 1979, if plans had gone ahead, and then was increased by half as much again as the political situation in Turkey changed.
Then there is the question of the transcription services, mentioned by the noble Lord, Lord Byers, where it is the Government's intention to halve the subsidy. The Government want the BBC in future to move towards becoming self-financing in this field. These again are words used by the Government spokesman in another place. This was made clear in the debate on 26th October by the Minister of State at the Foreign and Commonwealth Office. Are the Government aware that the BBC have asked their overseas customers whether they would be prepared to pay an increase that would be sufficient to remove the dependence on subsidy and that the overwhelming response from the corporation's customers, both large and small, has been, No? Why should it be otherwise, my Lords, when the BBC's competitors provide their products at prices below the market rate'? It is clear that the BBC's customers are not prepared to pay a price that would enable the corporation's transcription service to become self-financing. At present the BBC charge the maximum fee that the market can bear. There is a limit as to what the corporation can charge. What is to be the future of this service with a reduced subsidy—and one day presumably without a subsidy at all—acting in competition with a subsidised service provided by other nations'?
I must ask the Government whether they attach importance to Britain's transcription service. They say that they do, but by their actions it seems otherwise. If they do—as I hope they do—I must ask them whether they will reconsider their decision to halve the subsidy, because if the transcription service goes one day then all its marketing and distribution facilities will go too. That seems to be something that has not occurred to them. The overseas regional services, whose grant the Government are continuing, for example, depend on the transcription service for these facilities. This is just another example of the muddle into which the Government have got themselves by this hasty and ill-conceived decision in order to save the comparatively small annual sum of £1·5 million. It is a small budget saving but it is one that will be to the great detriment of Britain's voice and influence abroad.
6.22 p.m.
Lord Ferrier: My Lords, I too am grateful to the noble Lord, Lord Byers, for raising this question again and I look forward to hearing the Minister's reply in the face of the facts which this debate is laying before him. I suggest that he will require all the ingenuity with which he is undoubtedly blessed to deal with it as he would wish.
I am surprised at the Government's rejection of the message which was clearly represented by the Division here in your Lordships' House on 30th July. I am slow to wrath but there is at least some measure of disillusionment in my mind at what has happened. Indeed, it could be said that it might be construed as a slap in the eye for this House, although it is fair to confess that the Tories who voted with the noble Lord, Lord Byers, on that occasion were outnumbered by the

899
Tories who voted with the Government, despite the tremendous figures. But what about the Cross-Benches? We shall hear from them, I suggest, and from the noble Lord, Lord Hill of Luton, for one, I am sure.
I have looked back at contributions that I have made on this subject in this House over a number of years, but they appear now as water under the bridge if the present programme is to continue. Even when I said:
"It is not that we cannot afford to; my Lords, we cannot afford not to",
I said that on the occasion when I was urging the increase of—and I quote:
"the advantage which the BBC Service, thank goodness, still holds and has worked at for so long".
That was in a debate in October 1979.
Of course, I have taken many soundings from friends and acquaintances, nearly all of whom support my view and the view expressed by the previous two speakers. One contary voice said that the BBC's present attitude is so biased against Government and so slanted to the Left that their overseas services consequently must be most misleading, and that the fewer of them there are, the better it would be. That was a new angle to me but it struck me as being worth recounting to your Lordships.
However, looking back at the debate on 30th July, I thought that, on the other hand, the content of the Overseas Services was accepted as being thoroughly reliable as they stand. Nevertheless, there is no doubt in my mind that in recent times the BBC has become increasingly anti-Government and anti-Tory and leans to the Left whenever possible, or at least conceals the Government party's achievements or damns them with faint praise.
Be that as it may, there is no need to emphasise the paeons of praise for the Overseas Service contributions from all over the world. Curiously enough, I had one from China only this morning when I met a cousin fresh back from that country. An old friend from India lunching with me here the other day said how in one of his undertakings in Saudi Arabia the premises are absolutely vacated on the dot of five o'clock because everybody rushes to their car radios to get the one o'clock news in Arabic from London, which comes through good and clear. I seem to recall that the Government's case was that it was more important to increase the strength, but there is one area in which it comes through good and clear. He said that the Iranian broadcasts are utterly unreliable and the beams from India are not powerful enough.
Other speakers will be more specific about the actual cuts which remain. I am speaking of the Spanish, Italian and Maltese ones in Spanish. I am not personally conversant with them but the broad principle seems to be perfectly clear, as I shall show in the next few words. I am one who agrees with what the chairman, Mr. Howard, said in his Wentworth lecture in June. He asked:
"Why do they listen so regularly? Because of the quality of our programmes and the accuracy of our news. Because they know that we broadcast without fear and without favour, and as professionally as possible. And yet we are crippled in the External Services for the lack of a paltry few million a year.
900
When a thousand million a year is poured into British Leyland, it seems pretty absurd not to put three or four million a year more into the External Services".
That was in his lecture in June. As I said when I began my speech, I look forward to my noble friend's reply to the Question and if it is not to be a full restoration of the threatened cuts I trust that the Government will think yet again. I beg them to do so.
Before I sit down, the one question which crosses my mind is this: what did the Commons vote about this? Were they ever asked to vote? The Foreign Secretary spoke of the opinion of Parliament, but the only expression of the opinion of Parliament that was actually taken in the Division Lobby was in this House.
Lord Boothby: My Lords, before the noble Lord sits down, may I ask him one question? Does he realise that at the moment Italy is the main target of the Communist radio and that the dangers arising from that are very considerable for all of us, and does he not think it absolutely scandalous to withdraw our service to Italy?
6.30 p.m.
Lord Hill of Luton: My Lords, as has been said already, the House is doubly indebted to the noble Lord, Lord Byers, first for raising the matter as he did at the end of July and, secondly, for convincing the House to pass his Motion with a two to one majority: and again today in trenchant terms he has dealt with the modified cuts that remain. I do not propose to follow him in that, for I think it was superbly done and does not need repetition or support.
I want, if I may, to raise three questions. The first is the reason behind this. Why, in heaven's name, for a paltry sum of £1½ million is damage risked to our External Services? I just do not understand it. Why? And associated with that is the other question: Why, over the years, have there been six re-examinations in eight years with a view to a reduction of expenditure? Why, to take other figures, have there been nine thorough-going reviews in 20 years, and in two years there have been nine cuts in individual services? Why? This is not a rhetorical question, for I just do not understand what has led the Foreign Office—to take one set of figures as an example—to make six cuts in eight years. Why?
Of course, I know that in general governments do not much like information services, apart from their own. This applies of course to all Governments. Ministers, when they listen to broadcasting or read newspapers, if they find something which is flattering to themselves, that is beautifully impartial; but if they find something which is genuinely impartial it is slanted against them. Do not let us be too superior about this. This is a failing of politicians of all parties generally. But surely that cannot of itself be the explanation.
Government nowadays, of course, seem to dislike the media generally. That is another story. But I find it really rather disturbing when criticism is made of news and pictures of what has actually taken place, suggesting that there is a form of prejudice, a sort of bias, that is embedded in the press and broadcasting. Prime Ministers—and this applies, I suppose, to most,

901
if not all, Prime Ministers—do not like broadcasting; indeed, they particularly dislike the BBC. They do not like information services over which they have no control. They do not like the autonomy of the BBC in programme content. I suspect that the Foreign Office, which has its own information services, resents the existence of an information service which it does not control, which is autonomous in its content. And yet none of these seems to be an adequate explanation for these repeated scrutinies of the Overseas Services of the BBC.
So what is the explanation? Frankly, I do not know, and I think we ought to be very suspicious of this technique over the years, of taking up the plants by the roots with a view to modifications, and in particular cuts. There seems to be an animus in the Foreign Office against the External Services. That has led in large part to a loss of morale, to bring me to my second point, in the External Services. You can understand the feeling of those who for years have been running a very important service, for example, the Italian service, to find that it disappears at the end of the year. They are bound to ask themselves: Why is it that this fine service, so valuable in war as well as in peace, so valuable yesterday and valuable today, will be of no value after 31st December? You can understand that question.
But there is another aspect, and it is this. These repeated re-examinations of the service have, of course, had an effect on those who have not suffered cuts. How must they feel, those who work in services which have escaped this phase? What must they feel about their prospects of escaping it next time, in a year or 18 months, judging by the experience of recent years? The morale of those in this well-nigh anonymous service is desperately important to its quality. If they are anxious, if they are looking over their shoulders, if they are thinking of other posts and other activities, one cannot wonder that in fact their work is in danger of suffering by that very anxiety.
So I am led to make one new suggestion. I hope in fact the Government will withdraw the lot. After all, they were compelled by the arguments put forward to make this change to half the cuts that they formerly proposed. I hope they will go the whole hog and withdraw them all, as the noble Lord, Lord Byers, so powerfully argued. But I would ask them, in respect of the frequency of examinations, to think of those who are still there, those who remain. They are bound to have doubts about their future. There is bound to be an unease. In other words, cuts may be defended as minor—and, goodness knows! it is the easiest thing in the world to defend these cuts as minor in terms of money saved—but if they are still insisting on these cuts, would ask for one other thing to happen: that we give up this six times in eight years review; that in fact when the pattern is laid down, as it is now or will be, we hope in its earlier form, there is a requirement that that pattern remains in existence for a period of years, say five years, subject of course to the Foreign Office being fully entitled to start new services, to require the BBC to start new services in the light of world conditions.
It would give a certain rigidity, it might be argued, but those who are devoting their lives to this specialist form of work are entitled to see some prospect ahead, and not the danger that every year or 18 months, for
902
some reasons they do not understand their jobs are destroyed and their services are destroyed. Why should they not have, why should the service not have, a certain sense of security for a few years, on the understanding that additions may be necessary as conditions change? I would put that suggestion to the Government, not because I believe it is the whole solution to the problem, but because I believe that whatever is done about this particular set of cuts it seems to me that this kind of change is necessary for the general good health of a service which, as we all freely admit, must be adjusted from time to time in relation to the world situation. It will give them a measure of security and so remove the very real danger of a loss of morale, loss of security, which I am certain is to be found now among those who work for services which have escaped this time.
So I would say to your Lordships that we really must get away from this almost annual examination of the services. But still we are left, as I am left, with a failure to understand what it is all about. I very nearly said that it is a "fiddling" sum of money, but perhaps I should say a trifling sum of money, in national terms, that has come forward—£1·5 million. We have had two debates in your Lordships' House with a great deal of anxiety aroused. Surely it is a nonsense that we have been going through in recent years. It is time there were some order, some stability and sense behind the Foreign Office as regards how it manages this service. In any case, let us get away from the assumption that the service is so trivial and so unimportant that every 18 months or so we can re-examine it, abolishing this and adding that. That is the wrong attitude towards this service. It has suffered as much from that loss of morale as it has from the loss of certain individual services.
Therefore, I would urge the Government to consider the suggestion of some period of stability of the kind I have put forward in order not to encourage, whether it wants to or not, the fall in morale that is necessarily associated with this method of regular, almost annual, re-examination of a service that needs to be left alone to get on with its work and not always be considering what the Foreign Office wants to do and is inclined to do by way of cutting the service.
6.42 p.m.
Lord Kilmarnock: My Lords, I must apologise in advance for having to leave the Chamber temporarily when I sit down because we are discussing upstairs in your Lordships' unemployment committee some clauses to which I have proposed some amendments. I hope that I may crave your Lordships' indulgence for that. I come once again, quite openly and unashamedly, into the lists on behalf of the BBC's vernacular service in Spanish. I am not speaking simply because I have been briefed or lobbied but because of my personal knowledge of the country and what the BBC means to it.
The first matter that springs to my mind is the glaring discrepancy between the proposed cut and the whole thrust of British foreign policy which has been firmly and rightly in support of democracy in Spain and of that country's application to enter the European Community despite the still unresolved difficulties of the Gibraltar question. It might be argued: Why do

903
we need to spend money broadcasting to an ally? But Spain is not yet in the European Community or NATO and there are signs of very considerable unrest in the country, which make it highly questionable to assume that democracy is "in the bag" in Spain or that that country is firmly and finally a member of the Western Alliance.
In the debate on Lord Byers' last Motion in July I mentioned a possible parallel with Turkey. Eighteen months ago it was proposed to close the Turkish service. Who would contemplate such a thing now? There is also the case of Portugal where the service was closed in 1957 because it was felt superflous to broadcast to our "oldest ally". The service was re-opened in 1962 because it was recognised at official level that the shut-down had been short-sighted and a mistake. Spain is by no means an old ally. She is only precariously a new one.
In the last debate on this subject on 30th July the noble Lord, Lord Trefgarne, said at cols. 870 and 871 of the Official Report:
"Naturally, we should continue all services to Eastern Europe, where the media are not free".
But they are not free in Spain either, in the sense that we understand freedom. In Italy I understand that there is some degree of pluralism with the different parties controlling different channels, but in Spain Radio Nacional de Espana is state controlled as is the television network. Obviously there are forces in Spain attempting to rectify this, but they have not been successful. And it is a curious fact that the BBC Spanish service's audience has not decreased—as might have been expected—with the coming of constitutional democracy. There is no evidence that the BBC broadcasts are now felt to be superflous in that country.
That brings me to consumer reaction which I spoke a little about last time. I cannot help reverting to it. cannot possibly, in the time which I have, quote from more than a tiny fraction of the hundreds of individual protest letters so far received. However, I shall give a very brief selection. A listener in Madrid wrote:
"From my earliest childhood the BBC has been my companion through those moments of an uncertain future (I am 52 years old). For the first time I did not want to believe the news I heard tonight. Impossible!".
Again I quote from a listener in the troubled province of Vizcaya who says:
"Nobody can doubt that it has been a sentence of death. For me the BBC is like a human being because for 39 years … it has brought true and impartial information to us Spaniards who only with difficulty obtained news from other sources".
Again a listener in, I think, Salamanca writes:
"The savings will be minimal compared with the enormous influence of these services, even in the aspect of economic propaganda, for instance in the news about the latest developments in British industry".
And the same listener writes:
"I am not going to get used easily to this suppression. I think it has been a disgraceful decision by the British Government and Parliament".
Finally, from a listener in Lerida:
"They leave us in a tunnel without light".
I repeat, "a tunnel without light".
This decision was presented as a fait accompli to the managing director of the External Services at noon on
904
the day the announcement was to be made in the Commons. Given a freer hand the BBC could, I understand, have found other ways of making £1·5 million worth of savings on current expenditure without cutting any service. But they were not given the choice. This is surely against the Government's often stated principle of not interfering with the management, even of state-controlled corporations and letting them get on with the job within certain guidelines. Could the noble Lord explain why this principle does not apply in the case of the BBC's External Services? Will he not undertake to return at least this area of decision to the External Services management?
What is the extent of the savings in the Spanish case? The current annual cost is calculated at £190,000—less than the cost of a family house in Hampstead as I pointed out on the last occasion that we debated this matter in your Lordships' House. The residual line and tape service which is contemplated will cost £44,000, reducing the saving to approximately £146,000 without allowing for redundancies and, of course, whether a "line and tape" service would be taken up is entirely at the whim of the customer, in this case a state-controlled monopoly. I am told on good authority that it is most unlikely in the present climate that material either critical of the Spanish Government or supportive of British attitudes in areas such as the Common Market or Gibraltar would be acceptable.
I cannot believe that it is this minuscule financial saving that the Government are really after, although the noble Lord, Lord Byers, has already raised this point as well as the noble Lord, Lord Hill of Luton. So what are the Government trying to save? Is it just face? Is it the face of the Foreign Office with the Treasury? Of course I understand that there must be some give and take between the spending departments and the Treasury and that some thing; we should like to do may have to be sacrificed. But this is something we are already doing pretty well at very marginal cost, the suspension of which will make only a minuscule saving. And such inter-departmental manoeuvres will certainly be lost on the Spanish people who will see it—witness the letters I have quoted from, and there are many others—as a breach of faith.
I should like to end on a personal note. Some 15 or 16 years ago I was riding through the mountains north of Almeria in the South of Spain and I came to a decaying mining town, where all hope appeared to have been abandoned. It was a most God-forsaken place. In the evenings a few of the remaining inhabitants would cluster together to listen almost religiously to the BBC in their own language, from which they appeared to derive the necessary strength to continue the uphill struggle for the redress of their grievances. It was not that the BBC was inciting them to subversion; just that it gave them the smell of a country in which we ordered things better—or so they fondly believed. We must of course all hope that the present attempt at democracy in Spain survives. It will not be the King's fault if it does not. But we must also face the fact that it may fail. In that case by suppressing this service we should be depriving hundreds of thousands of Spaniards of the opportunity of listening to objective news and balanced views in their own language. If the people I mentioned are still alive,

905
they would think, not without some justification, that we had betrayed their faith. I wonder whether the Government have really taken this into account. I strongly urge them to think again.
6.50 p.m.
Lord Crowther-Hunt: My Lords, we are all grateful to the noble Lord, Lord Byers, for putting down this Unstarred Question and, like him and other noble Lords, who have spoken in this debate so far, I am disappointed at the Government's response to the clear majority view expressed in your Lordships' House in that debate on 30th July. However, quickly and briefly, I want just to make two points. The first of these is about the Spanish service. It is at least something that the Government are ready to maintain a recorded tape service. But, of course, as the noble Lord, Lord Kilmarnock, has pointed out, this does not get us very far. At most, as I understand it, this might produce some three hours of material a week. But, as the noble Lord, Lord Kilmarnock, also pointed out, whether any of it ever gets broadcast in Spain will depend entirely on the decisions of the two main broadcasting services in Spain—the state-controlled radio service and Spain's main private commercial network.
As regards the state-controlled radio service, I understand that a recent purge in the management there has resulted in the reinstallation of Right-wing Government nominees and this, given the present political climate in Spain, makes it highly unlikely that any tape material supporting and explaining British views and attitudes on such matters as Gibraltar or even the Common Market, would be acceptable. So the tape service leaves us entirely at the mercy of Spanish broadcasting stations and the pressures that might be brought to bear on them.
It is in this general context that I would make one plea to the Government, and I make this against the background of last Sunday's demonstration in Madrid, where some quarter of a million people gathered to mark the sixth anniversary of General Franco's death—the biggest demonstration of disaffection with democracy yet mounted by Spain's extreme right.
Given that Spanish democracy is still in such a pre carious state, would the Government at least agree to consider reinstating the full Spanish service of the BBC should there be continuing evidence of a growing threat to Spanish democracy? I assume, of course, that should there by a successful Right-wing coup in Spain, the Government will wish to reinstate the full Spanish service forthwith, and, naturally, I would welcome an assurance on that particular point as well.
My second point is a more general one. When your Lordships' House debated the BBC's External Services on 30th July, the noble Lord the Foreign Secretary emphasised that the External Services of the BBC are financed entirely by the Government and that it was for the Government to decide:
"…how best the money we give them should be allocated between the different External Services and between current and capital expenditure".—[Official Report, 30/7/81; col. 812.]
At the same time the noble Lord the Foreign Secretary made it clear that the Foreign and Commonwealth Office does not exercise any editorial authority over the content of the BBC's programmes. That the BBC has complete editorial freedom and independence is,
906
of course, undoubtedly so, and certainly the BBC would not operate on any other basis. That is why the BBC, operating with complete editorial independence, has established an unrivalled world reputation for the unbiased and independent reporting of world news and British news.
However, there will always be those who believe that he who pays the piper must inevitably have at least some influence on the piper's tune. It is to ensure that no such charges can ever be validly made that I put forward a modest little proposal which, if the Government will consider it, might well act as a sort of buffer to assure the continued independence of the BBC's External Services.
I start with the view that the Government of the day must, of course, have the final decision on the amount of money to be allocated to the BBC's External Services. But if the Government could create what I shall call a BBC External Services financial advisory board, it could act as a sort of buffer between the BBC and the Government. What I have in mind here is a board that might consist of, say, one or two Members of your Lordships' House, one or two Members of another place, one or two industrialists and one or two trade unionists, and perhaps even a couple of academics might be added to such a body. If such a body were set up, after appropriate consultations with the Foreign Office and with the BBC, and perhaps also after carrying out appropriate investigations into the efficiency of the BBC's External Services, in my view it would be its job to recommend an appropriate allocation of Government money to the External Services of the BBC. It could do this each year on a rolling five-year basis, taking into account each year—after consultations with the Foreign and Commonwealth Office and also with the Treasury—the Government's overall economic strategy and also the financial requirements of the BBC's External Services.
If such a body were set up, in my view the Government would not be obliged to accept the recommendations of the sort of body I have in mind. Indeed, I do not think that any such imposition could ever he made on a Government. In the end the Government themselves must be able to decide what allocation of money to make to the External Services. The Government must always have the right to go against any recommendations that such a financial advisory board might make. But the existence of such a board would act as a sort of independent buffer between the Government and the BBC.
It would perhaps be a sort of University Grants Committee, though I am not sure that this is a particularly happy analogy in current circumstances. But the fact that the University Grants Committee might not be operating particularly happily at the moment is no reason for believing that this particular body would be struck, or might be struck, with the same sort of blight, because its composition would, of course, be very different.
Be that as it may, such a financial advisory board would, in my view, reinforce the editorial independence of the BBC, and on the world stage it would dispel any suspicion that he who pays the piper must have some influence on the tune. May I ask, therefore, that the Government should at least agree to consider this. It would obviously be wrong to expect a "Yes" or

907
"No" answer to the idea of such a board from the noble Lord, Lord Trefgarne, this evening because, in my view, it is too important a matter for an off-the-cuff reaction. But l hope that at least the noble Lord would agree to take away and consider this idea and perhaps, when he has considered it, come back and report to your Lordships' House.
6.59 p.m.
Lord Morris: My Lords, I know that this has been said before, but I believe not only that noble Lords should be grateful to the noble Lord, Lord Byers, for tabling this Unstarred Question; but that the whole nation should be grateful to him. As your Lordships are well aware, he does not speak often, but when he does and as the noble Leader of the Liberal Party in your Lordships' House, I believe that every word he says should be listened to with the greatest care. Indeed, that is very easy to do because he speaks so beautifully and argues so very cogently. I would never dream of even trying to compete with what he says. I think the mirth from my own Front Bench is totally and completely out of place, if I may say so.
There are points that I am going to repeat, but they desperately need stressing. The question of consultation, which I believe the noble Lord, Lord Hill of Luton, brought up, is very important. I would remind your Lordships that between 25th June, the date of the last round of Nanny's announcements from Whitehall, and 22nd October, when the decision to hold a debate was announced, during the four-month period when both Houses made their distaste of the proposed cuts quite clear by a fine debate in your Lordships' House and by a vote of a very large majority, and by no less than 160 at least, if my memory serves me correctly, of Members of the other place tabling their names to a Motion, the Government did not even discuss the proposals with the BBC in detail, and the BBC was given no opportunity to indicate other possible ways of saving the sums involved. I find that totally astonishing, and it is quite wrong that a Government should behave in this way. We are not talking about a narrow interest of Bush House. We can almost forget the qualitative arguments. What we are talking about is the national interest.
If one bothers to read foreign newspapers—and it is worth recalling that very few people in the world read newspapers, but a hell of a lot of people listen to the radio—the lineage that this country gets in French newspapers, German newspapers, Italian newspapers, in Belgian and Dutch newspapers, is minimal; only when there is bad news does it strike. But there is an enormous audience for the BBC.
What does Nanny, our unholy mother, the Treasury —I suspect they arc behind it—want to do? They want to cut out the voice of the United Kingdom. I know this is past history but I want to set the record straight. It remains important because it raises a vitally important point in the relationship between Government, Parliament and the BBC. It is this point which the noble Lord, Lord Byers, raised so importantly.
One should never forget that in the last nine years no less than seven cuts have been imposed on the External Services, almost invariably accompanied by references to a great national asset. When I say
908
"cuts", my noble friend keeps on looking at me and saying "not true". We are talking specifically about cuts in the services which the BBC can put out. This is where the Foreign Office have the whip hand. It is well known—my noble friend Lord Trefgarne knows—they have the right to say that you can broadcast to this country, or to that country, so many hours here and so many hours there, and it is the whittling away by virtue of that particular power by which they have the BBC by what are called in the vernacular, "the short and curlies"
The odd thing is that when they make these cuts they always refer to "this great national asset". It is an odd thing too, I have always believed, to say that it is a great national asset and then to pare it: and to pare it insidiously. Under the BBC's charter of licence, Parliament gives the Government of the day the right to prescribe the languages in which the BBC External Services shall broadcast and the duration of such broadcasts. The BBC External Services are enjoined by Parliament, I remind the Government, to broadcast in the national interest.
We then come to the question raised by the noble Lord, Lord Byers: Why have Her Majesty's Government chosen to ignore the expressed will of Parliament? I completely fail to understand this. Are we just a rubber stamp? Are we nothing at all? If Her Majesty's Government seriously believe that the BBC External Services have not broadcast in the national interest, let me just serve this up to your Lordships: In 1982, the BBC World Services celebrate their 50th anniversary. They were celebrating the latest audience survey in which it was shown that world-wide 100 million people were listening regularly to the BBC. Of this 100 million, the highest in the BBC's history and the highest in the world, three-quarters listen to the various vernacular services rather than the English broadcasts of the World Service.
This, I believe, puts paid to the observations made by my noble friend the Secretary of State for Foreign and Commonwealth Affairs, who suggested on an earlier occasion this year that everyone in the world really should learn English. He did this none too indirectly, and with the greatest respect to him—
Lord Trefgarne: My Lords, I should be glad to know when my noble friend said that.
Lord Morris: My Lords, I am sorry, would my noble friend repeat that? I did not catch his words.
Lord Trefgarne: My Lords, I said that I should be glad to know when my noble friend Lord Carrington made the observation which my noble friend Lord Morris has ascribed to him.
Lord Morris: My Lords, I cannot recall that. I did not say that he made the observation. I suggested that that was the implication of his observation, which is not the same thing at all. It was quite clear from what he said, and I am not reading between the lines too deeply; I assure my noble friend on that point.
The point that the noble Lord, Lord Hill of Luton, made is absolutely fundamental: the continual paring at the BBC External Services has an appalling effect

909
on the services that are extant. It is not only in terms of staff morale but also in terms of the listeners. It gives a fragility, a feeling of fear, to all those who listen to this particular service: Are they a temporary thing? Are they going to be further eroded. But to tamper with the foundations of the External Services in this way cannot be in the national interest. The BBC, given a duty of broadcasting overseas in the national interest by Parliament, does not think so, and it is never given the chance to suggest alternative ways in which these damaging cuts might be less damaging.
The lack of consultation over the future of the External Services is in marked contrast to the close consultation which the BBC and the Government have over the licence fee which funds domestic BBC radio and television. If consultation is possible over the licence fee without threatening the Government's constitutional position, one wonders why it is not possible over the External Services. If Bush House is indeed a national asset, then the national interest demands some better way of securing for the External Services a secure financial position; an agreement on the need to preserve the vernacular services in the interests of Bush House and the nation as a whole.
7.8 p.m.
Lord Ardwick: My Lords, I should like to follow the noble Lord, Lord Morris, when he calls attention to the gap between the Government's professed admiration for the External Services and their financial provisions. It is rather like a man who tells his wife how much he loves her every time he cuts the housekeeping allowance. I should also like to thank the noble Lord, Lord Byers, who gives us another opportunity of expressing our scorn at the Government's attitude in these matters.
I am not going to say very much tonight. All that could be said about the subject was said in the last debate. All the indignation that could be felt was expressed, and the Government at the end of it found themselves in a miserable minority. Of all the troubles that the Government have brought upon themselves by their cuts, there has been no trouble so large for a cut so small. But, of course, the Government as a result of the decision in this House, as a result of the universal displeasure that was felt at their action, had to do something, and so an act of parsimony has, thank heaven, been abandoned. But the amende we have is not an amende honorable; it is a grudging amende; an amende minimal and ungenerous. If it can be accepted, that is simply because half a loaf taken away is better than the whole loaf taken away.
If the saving had any real significance it could easily he accepted, but it seems to be a mere token cut in the name, one supposes, of equality of suffering, and when the noble Lord, Lord Hill, spoke of his suspicion, which I felt in the last debate, of the jealousy, envy, dislike perhaps, of the BBC by the Foreign Office, I must say that he is not the first eminent former high officer of the BBC to express that sentiment.
A few days before our last debate I asked the Government whether they would try to rescue the transcription services which were threatened with closure by the prescribed economies in the BBC's Overseas Services. I received a little encouragement from the Minister, the
910
noble Lord, Lord Skelmersdale. They wanted the services to go on, he said. They just wanted to chop off the £1 million grant in aid. Then it was further explained that the services included cultural affairs, and of course the Foreign and Commonwealth Office has no truck with culture. Goering reached for his gun when the word "kultur" was mentioned. The Foreign Office reaches for its pruning knife.
Lord Trefgarne: My Lords, has the noble Lord heard of the British Council and is he aware what that costs the Foreign Office?
Lord Ardwick: My Lords, not only have I heard of the British Council but I have spoken in your Lordships' House of the struggles of the British Council, because of the meanness and parsimony of the British Government, to continue on course and of the terrible effect that has had on the morale of the employees of the British Council, just as it is having on the morale of the External Services.
I was told that the other part of the services, the Topical Tapes, would continue to receive £350,000 a year grant in aid, and the Minister—I have warned the noble Lord, Lord Skelmersdale, that I would raise this matter—said the Government could see no reason why the really important part of the whole service should cease. But the subsidy to the transcription services, running at over £1 million, is to be halved, as announced by the Government in another place on 23rd October. The transcription services must apparently have its subsidy cut in two, yet the Government still hope that, within that very large cut, the Topical Tapes could be fully preserved. That does not make sense. The Topical Tapes cost £350,000 a year. That would leave only £150,000 for the rest of the services, which up to now have been absorbing £650,000. They would receive less than one-quarter of what they had been receiving.
I must therefore ask what is happening. What is happening to the Topical Tapes service which the Government hold in such high esteem and which they do not want cut? Is it true that one-third of the staff will have to be unloaded and that the output will be reduced by an even greater proportion? Have the Government really lived up to their promise and their professed hope that the Topical Tapes service will continue unimpaired? Is that realistic in view of the size of the cuts now imposed? I hope that in his reply the Minister will be able to give me a convincing reassurance.
7.14 p.m.
Baroness Airey of Abingdon: My Lords, I apologise for not having added my name to the list of speakers, but I shall not speak for more than a minute or two. While sharing in the concern of so many noble Lords that the external broadcasts are to be discontinued to Spain, Italy and Malta, I congratulate Her Majesty's Government on keeping the external broadcasts to Somalia, particularly since the recent alliance between Libya, Ethiopia and the South Yemen. It has always been a dangerous part of the world, but I believe that that alliance has made it a very much more dangerous part. I am therefore particularly thankful that we shall continue our external broadcasts there. This

911
may serve as an example of how particularly thankful we should be that, when a danger like this appears on the horizon, we have the comfort of the external broadcasts there.
7.15 p.m.
Lord Gladwyn: My Lords, during his speech the noble Lord, Lord Morris, who I am afraid is no longer in his place, made some reference to what he understood the Foreign Secretary had said regarding the great importance of broadcasting in the English language in the overseas programmes of the BBC. I understood the noble Lord, Lord Trefgarne, to say that he would like the passage verified, and I think I have found it. The Foreign Secretary said:
"First, we believe that the World Service of the BBC is by far and away the most important. The English language, despite the misgivings of the noble Lord, Lord Strabolgi, is a world-wide language. It is becoming almost the world-wide language. More and more people are speaking it every year. It is the World Service in English on which the reputation of the BBC largely depends".
If the figures for the world audience for the overseas programmes given by the noble Lord, Lord Morris, are correct—was it three-quarters of 100 million who listen to the BBC in their vernacular languages?— then the observations of the Foreign Secretary read a little strangely; and, when he replies to the debate I hope that the noble Lord, Lord Trefgarne, will say whether that impression is in any way correct.
I also wish to refer to a point made by the noble Lord, Lord Ferrier, about the impression which I gather he said some people had that the BBC overseas programmes are largely dominated by what might be called Left-wing philosophies and ideas. I am a devoted listener to the overseas programmes in English on the BBC. I listen to them quite often, indeed usually in the mornings, in preference to Radio 4. I also listen to their programmes to a certain extent in French, and even in German, and over the years I have never myself derived the impression that those broadcasts are unduly influenced by the Left. I find them to be extremely impartial and I particularly enjoy the reports they have from their special correspondents throughout the world, which I have never found to be completely dominated by the Left-wing ideas. I do not know if any other noble Lords have discovered such tendencies, but I never have and I therefore believe, as I think the noble Lord, Lord Ferrier, agrees, that such accusations are malicious and completely unfounded.
Lord Ferrier: My Lords, when I referred to bias to the Left I was not referring to the overseas services at all. I too listen to them in English. I was referring to the general trend in this country.
Lord Gladwyn: Is the noble Lord referring to Radio 4, my Lords?
Lord Byers: Or Jimmy Young?
Lord Gladwyn: My Lords, I have not myself experienced such a tendency in the BBC's programmes, and in any event we are this evening talking about the overseas programmes. In respect of those, I have
912
heard people say they are unduly influenced by the Left. Perhaps it was not the noble Lord, Lord Ferrier, who said that, but certainly other people have said it.
The Government's reason for cutting down, for the seventh time, on the overseas programmes of the BBC has always been that it is necessary to save money and that all Government agencies that spend money should bear their proportionate share of the general cuts, the only exception of course being, so far as I understand it, defence and, if I am not wrong, the police. There is no doubt that all departments and agencies, when faced with cuts, tend to make out that their own is a special case, and it is obviously far simpler for the Treasury to impose a uniform cut rather than have to argue with a large number of vested interests all intent on proving, for one reason or another, that they are special cases. I admit that.
Nevertheless, there are surely instances of cuts which really are self-defeating; that is by the infliction of which you patently lose more than you gain. So insisting on a strict, what might be called, "equality of misery"—which I think is the policy pursued by the Treasury—might occasionally land you in what is, frankly, an absurd situation, which is what has happened, as we think, in the overseas programme of the BBC. Besides, if you really are in a bad way financially, the last thing that you want to do is to give the impression to the outside world that you are broke. Nor, if defence is to be exempted, does it make much sense to undermine what in effect constitutes our first line of defence; namely, the impression that we create on the not always very sympathetic, to say nothing of the hostile, foreigner. All this has been said before, but I believe that it bears saying again, even though, as we all know, the dye has now been cast and the corporation has received its irrevocable marching orders —at least for the next year.
But in the remaining minutes at my disposal I should like for a moment to dwell on something which, to some small extent, might mitigate the effects of the latest cuts. I believe that even now we do not fully appreciate both the immense advantage which the English language confers on us and how important it is that students, for instance, should continue to communicate with each other in, so to speak, an English atmosphere, employing what has now become, as indeed the Foreign Secretary rightly said, a kind of world lingua franca.
Happily, my old department, the Foreign Office—in the ability of which I have great faith, and which, I need hardly say, I do not myself blame for what are obviously the follies of the Treasury—is, so the noble Lord, Lord Trefgarne, tells me, now taking the lead in promoting that student mobility, as it is called, which in a free world it is so important to maintain. I think that the audio-visual methods of teaching, such as the transcription of the External Services undoubtedly offers, will be seen as one of the main instruments in furthering the recommendations of the Commonwealth Consultative Group (I think it is called) which were endorsed in paragraph 84 of the communiqué of the recent Melbourne Conference.
I refer more particularly to the conception of what are called regional "centres of excellence", which might be established throughout the Commonwealth as a long overdue decentralisation of the present one

913
way system whereby nearly all Commonwealth overseas students, when they go abroad, come to this country. What is called "distance teaching" (broadcasts and cassettes) is now a recognised means of education and is something that has come to stay, as witness the very considerable adoption of such methods in the United States, and indeed in the Soviet Union, where it has been adopted with the greatest success. It could certainly also be adopted with profit in the British Commonwealth.
I sincerely trust, therefore, that the powers-that-be will keep our existing expertise, and in particular our excellent BBC library of programmes, up to strength and continue to exploit all the opportunities which these offer for the spread of British techniques, British trade, and British interests generally. I need hardly add that I also sincerely trust, together with other noble Lords, that in a year's time the Treasury, having arrived at the conclusion that we no longer have any money to spend on anything, will not insist on yet further cuts, which would no doubt result in a real crippling of the entire overseas programme structure.
Lord Ferrier: My Lords, before the noble Lord sits down, I wonder whether, with his wide knowledge of Europe and his multilingual gifts, he can tell us to what extent an audience such as that referred to by the noble Lord, Lord Kilmarnock, listening to a vernacular programme, are capable also of listening to the same thing in English and comprehending it—either in Spain or in Italy.
Lord Gladwyn: My Lords, I should say that the majority of those who listen in the vernacular are not capable of listening to and understanding it in English, more particularly in Spain, where there is very little English spoken, and likewise in Italy, which I know very well. I think that the great majority of those listening, while they might be able to speak a little English, would not be able to follow the details and implications of an argument conducted very quickly in English. Yes, I should say that the immense majority of those who listen in the vernacular would not be able to understand the World Service in English.
7.26 p.m.
Lord Trefgarne: My Lords, at the outset I wish to apologise for the inadequacy of my vocal chords this evening. I recall once before, a year or so ago, when in a similar predicament saying to your Lordships that if I "conked out", my noble friend Lord Long, sitting beside me, would jump up and continue with the speech that I had prepared, and I hope that my noble friend will feel able to do that again this evening should the need arise.
I well recall the very useful debate about the BBC External Services in your Lordships' House on 30th July. In winding up that debate I tried to answer many of the points that had been made. Although some noble Lords welcomed the Government's emphasis on a capital programme to improve the BBC's audibility, a majority laid greater stress on current services. On that same day in July my noble friend the then Lord President of the Council, I think, said that the Government would take into account the views expressed, as well as those expressed in a debate in another
914
place on 23rd July. I think, on reflection, that it was my right honourable friend Mr. Francis Pym, who was then Chancellor of the Duchy of Lancaster, not the Lord President of the Council, as he now is. We have indeed taken into account most fully all those views, and as a result we put forward fresh proposals which were endorsed in another place on 26th October.
The question before us is based on what I think is the false impression that we are making what are called "damaging cuts". We are in fact substantially increasing expenditure on the External Services. There is thus no net cut. Our aim is to finance a major and sorely needed capital programme to improve audibility. The Government have all along been prepared to contribute the lion's share towards the audibility programme. But we believe that it is right that the BBC should make some contribution by switching resources from current operations to investment. We are now asking the BBC to switch only half the amount that we originally proposed in June.
The only services to be ended will be Maltese, Spanish to Spain, and Italian. In the case of Spanish to Spain and Italian, I am happy to announce that new services of recorded programmes for rebroadcasting by radio stations in those countries will begin on 1st January 1982. The BBC will thus continue to have audiences in both Italy and Spain, albeit indirectly. As regards direct broadcasts from London, Italians and Spaniards will of course still receive the World Service in English, and the growing interest in the English language—whatever some noble Lords might have said—combined with better audibility, suggests that listenership will increase. Thus the only service that will end completely is the one to Malta. That service is for only 35 minutes a week, to a population of 320,000, who mainly speak English.
I greatly regret the ending of direct broadcasts in the vernacular, but it is essential to draw up priorities on foreign policy grounds. At a time when economies have to be made it is reasonable to reduce services to friendly neighbouring countries where the media are free and where we have other opportunities to make our voice heard. We reluctantly chose the services to Spain and Italy because each goes to one country only, by contrast with the French service to Europe, which goes to four countries.
We have many contacts with Spain and Italy through our embassies and consulates general, the constant interchange of businessmen, journalists, tourists and students, and, of course, the BBC's World Service in English, which broadcasts for 24 hours a day compared to the one hour a day in Spanish and Italian. The United States, for example, does not broadcast in the vernacular to Spain or Italy. In spite of one petition from journalists in Spain, which may not have been entirely spontaneous, reactions in the printed press to our proposals have been negligible in that country. A BBC press conference in Italy was reported only on the inside pages.
As regards the services we are reducing as opposed to ending, we have agreed with the BBC that rather than mathematically halving the hours of the French service to Europe and the Portuguese service to Brazil, as we originally requested, they should continue to broadcast 12¼ and 8¾ hours a week respectively, which makes a combined total of nearly three hours

915
a week more than we initially proposed. Both these services will still be much larger than several other BBC services, but the savings achieved will enable the BBC to devote more funds towards the capital programme. Perhaps I could add in parenthesis here that the French service to West Africa will in fact continue untouched.
Turning to the transcription service—
Lord Morris: My Lords, would my noble friend allow me to interrupt him before he leaves entirely the Spanish services? May I ask him what effect he thinks this increased expenditure on the capital programme, on audibility, is going to have on the Spanish and Italian services? He has referred particularly to the free media in Spain. My understanding is that the strongest objection that came out of Spain as to the excising of the Spanish service was from the Spanish broadcasters themselves, and, indeed, from journalists. Could my noble friend expand on his implication that the journalistic response to the Spanish cuts was not entirely of their own volition, or was not entirely free?
Lord Trefgarne: My Lords, on the latter point that the noble Lord has made on the petition which was presented to the embassy in Madrid, I am not certain how far some of the people who subscribed to that petition had in fact been asked to do so by sources outside Spain. Turning now to the transcription service, our intention was to halve the subsidy, which at current prices is running at well over £1 million per annum. This is a matter which greatly worried the noble Lord, Lord Ardwick, and I think, indeed, the noble Lord, Lord Strabolgi. In fact, thanks to the BBC finding savings from overheads we have been able to agree that the subsidy need not be reduced by as much as a half. I was happy to see that the managing director of the External Services was reported in the BBC house journal Ariel as saying that, despite the reduction of the grant-in-aid subsidy, it may only be necessary to reduce the transcription services' output, at present about 500 hours a year, to around 350; that is, by about 30 per cent.
Lord Ardwick: My Lords, I am sorry to interrupt the noble Lord but could he particularise between the tapes service and the general transcription service? As I understand it, about seven of the 22 members of the tapes service are having to be unloaded, and their output is being reduced by almost 50 per cent.
Lord Trefgarne: My Lords, I am coming to that now, and I think that in a moment I will cover the point that the noble Lord has raised. We are confident that a respectable service will continue based on an existing library of 30,000 hours of recorded material and continuing current production made in the ordinary course of events for both the domestic and overseas programmes of the BBC from which it should be possible to make sales. Again, this is a question of priorities, and we consider that some of the money previously available to the transcription services would be better employed in the capital programme. Within the remaining half of the transcription services
916
subsidy we hope that the excellent topical tapes services can be fully preserved. I hope that meets the point raised by the noble Lord.
Lord Ardwick: It does not, my Lords, if the noble Lord will forgive me. If the staff is being cut by about seven of the 22 members of the operational staff, and if the output is reduced by almost a half—if those figures are correct figures—how can one say that the service is being fully maintained?
Lord Trefgarne: My Lords, I am talking about the topical tapes service within the transcsription service. The total output of the transcription service, including the topical tapes services, is to be reduced by about 30 per cent., as I said —not 50 per cent. Naturally, there will be some reduction in staff following the reduction in subsidy, but we are satisfied that the output which I have described will be possible with the remaining staff having regard to some productivity and other considerations which can be brought to bear.
Lord Strabolgi: My Lords, before the noble Lord leaves the transcription service, in view of what he said would he confirm that it is now no longer the Government's policy that this transcription service should move towards becoming self-financing? Because as I explained in my speech, this is just not on, and they are having to compete with the subsidised services provided by other countries.
Lord Trefgarne: My Lords, as I said, we are proposing to reduce the subsidy by about 50 per cent. That is not the same as was originally proposed. As for the service moving to a self-financing position, we certainly hope that the service will in certain instances be able to increase the revenue it earns; perhaps in some cases, though doubtless not in all, by, for example, raising the charges they make for their services. But I do not think that I can go further than say what I have already said, which is that we are reducing the subsidy by half, and from that it must follow that we are not for the moment proposing that it should proceed to a totally self-financing basis.
Our top priority remains the capital programme. The Government have approved the programme as a whole and intend that it shall be implemented as planned within the decade. It is our firm intention to complete all the projects, valued at £102 million at 1981 prices, which have already been announced in Parliament. There will have to be some slowing down in the years of the present PESC period up to 1984–85, but much of this would have been inevitable anyway because of planning permission delays for the main transmitter projects in the United Kingdom. We are still providing £13 million new money in the next three years, and broadly similar amounts in future.
It has been said that the proposed new money merely restores cuts announced in 1979 and that the External Services have been subject to a series of cuts in recent years. This was the theme of, particularly, the noble Lord, Lord Hill of Luton. But the reductions we announced in 1979 were only reductions in planned increases. The other so-called "cuts" were mainly

917
small ones, and there have also been at least two increases in the grant-in-aid. The latest plans include far greater expenditure on Bush House modernisation, for example, than previously foreshadowed, as well as a completely new relay station for the Far East. Our proposals are not dissimilar from those which were under consideration by the previous Administration. In their White Paper on Overseas Representation, published in August 1978, they said:
"Cuts can however be made in some of the vernacular services. The pattern of vernacular services should not be regarded as immutable".
We agree with these sentiments. For too long current services have benefited at the expense of the audibility programme. In every organisation it is necessary to decide how much within a finite total of resources should be spent on investment and how much on current operations. I would suggest to those who may still harbour the impression that the External Services have suffered "cuts" that they should rather see the reductions which we have asked the BBC to make as judicious pruning to concentrate resources where they are most needed to promote the healthy growth of a sturdy tree. I am confident that now that the protracted doubts over our proposals have at last been resolved the tree will grow from strength to strength. Over the past two years we have regularly consulted with the top management of the External Services to keep them abreast of our thinking. Detailed consultations are now taking place at working levels to obtain the optimum and earliest realisation of our plans.
My Lords, perhaps I could now deal with some of the other points that were made, and possibly in slightly greater detail with one or two of those to which I have already referred, in particular the points made by both the noble Lord, Lord Byers, and the noble Lord, Lord Strabolgi, about the details of the new money which the Government will contribute. The figures have been discussed in general terms with the BBC, but I cannot go into details because public expenditure figures are not normally made available until the publication of the White Paper at the time of the Budget. The Government will contribute over £13 million of new money in 1983–84 and 1984–85 combined and broadly similar amounts in future years. Also I would refer in a little more detail to the costs of the capital programme which will amount to about £102 million in the decade. New transmitter facilities will account for £54 million of that; Bush House modernisation for £17 million, replacements and minor works, £31 million—all at 1981 survey prices.
The noble Lord, Lord Strabolgi, also referred to the position of the Turkish service and drew comparisons between the circumstances which surrounded the cuts to that service in 1979 which have now been reversed; but we must be flexible in our priorities. The international situation has changed in that part of the world and, in particular, with the Soviet invasion of Afghanistan. Following the invasion of Afghanistan we increased the vernacular services to countries on the USSR's southern border. Had Turkish been cut, we are confident that the BBC's ingenuity would have been able to restore it, just as they are now restoring the Pushtu service to Afghanistan.
918
The noble Lord also referred to the Japanese external broadcasting service. I understand that they are actively considering expansion of their present 259 hours a week in 29 languages to roughly the same level as the BBC; namely, about 700 hours in 40 languages. But contrary to what the noble Lord has said—but I would not want to be dogmatic about this—no final decision has been taken. Japan has a much higher gross national product than the United Kingdom and perhaps is more in need of disseminating its image.
The noble Lord, Lord Kilmarnock, and my noble friend Lord Morris, referred to the Spanish service to Spain. It was said—not tonight, and not in these terms; but it was the tenor of what the noble Lord, Lord Kilmarnock, was saying—that during the attempted coup in Spain in February many Spaniards were only able to rely upon the BBC Spanish service for their news. That is a flattering view since the state radio went off the air for about two hours—
Lord Kilmarnock: My Lords, that was a point I made in the last debate, but not this evening.
Lord Trefgarne: My Lords, the points made by the noble Lord were on the same theme but I accept that that was not the precise point he made on this occasion. But it was the theme of my noble friend Lord Morris and at least one other noble Lord; so that I thought that an answer would satisfy three noble Lords rather than delay each of them with separate replies. Since the BBC Spanish service broadcasts for only one hour a day, it is just as likely that the Spaniards turned to the BBC 24-hour world service in English when their own service was off the air at that time.
The noble Lord, Lord Gladwyn, and others referred to the criteria for choosing vernaculars to be cut. This is a general point which ran through the speeches of almost every noble Lord. We have to draw up our priorities for these services on foreign policy grounds. In 1980 and 1981 we prescribed 17 hours a week of increases in Russian, Parsee, Turkish and the new Pushtu service to Afghanistan. The last decrease which we prescribed, the service to Sri Lanka in 1976, was under the previous Administration. We base ourselves on several criteria, in particular whether there are other channels of getting across the British point of view. We have not thought it necessary to have vernacular language services to the Netherlands, Denmark, Norway or Sweden.
My noble friend Lord Morris also raised the question of consultation with the BBC. Foreign Office Ministers have held regular discussions with the BBC management since the 1979 reductions were announced. The general outline of our thinking, including the stress on audibility, was made clear in January 1981 when a table of further expenditure plans was drawn up as a basis for discussion. The BBC were informally warned then of all the services to be reduced, except for the one to Brazil, about which they were told two days before the announcement. The Government had only two working days' notice of the Opposition Motion in another place on 26th October, which meant that it was only possible to inform the BBC of our revised plans on the morning of the debate. We would have wished then to have consulted the BBC more fully and to have informed your Lordships in parallel. It

919
was a Supply day debate in the other place initiated by the Opposition and the Government have no control over that.
Lord Morris: My Lords, I referred specifically in my speech to the period between June and 22nd October. Were the whole Government and Whitehall on holiday then?
Lord Trefgarne: No, my Lords, but we had not finally reached our conclusions and thus it was premature to offer a new plan to the BBC while still considering what that plan should be. Our consideration had to be accelerated when the Opposition in another place put down a Supply Day Motion for debate. I am the junior Minister in the Foreign Office responsible for the External Services and I was informed of the upcoming debate in the other place on the Friday; and I was in New York at the time. The noble Lord will not be surprised to know that it was difficult for me to reach an immediate conclusion in conjunction with my colleagues on the new plan until my return from the USA.
Lord Strabolgi: My Lords, would it not be true to say that the Government made their concessions because they knew that they were facing a defeat in another place?
Lord Trefgarne: My Lords, that is not the correct interpretation of our actions. As my right honourable friend the then-Chancellor of the Duchy of Lancaster said, we took into consideration the views of both Houses of Parliament.
Lord Ferrier: My Lords, I hesitate to interrupt the noble Lord on this, but I asked whether there was a vote in another place and what the figures were. gather there was no vote.
Lord Trefgarne: There was a vote in another place on 26th October. I have not got the figures. The Government won easily.
Lord Ferrier: But on the 23rd July!
Lord Trefgarne: My noble friend asks what happened on the 23rd July. I have not got those figures. I will find out and convey them to him.
My Lords, now that the Government have given a clear directive for the future financing of the External Services, I hope that we can all concentrate our minds on carrying out our plans to the best advantage of this country in the spirit of co-operation which, I know, exists with the BBC. As I said in the debate on 30th July:
"The External Services are a national asset of the highest importance".
Their staff, who will number some 2,750, provide a high quality product universally admired throughout the world. They will still be broadcasting over 700 hours a week of direct broadcasts in 37 different language services and will still be in fifth place in the world league. With the increased financial resources which the Government are providing to improve audibility,
920
involving the construction of 16 new transmitters in the United Kingdom and 10 overseas, their regular audience of 100 million may well double by the end of the decade. I hope your Lordships will be inclined to agree now that the Government have fully and properly taken account of your Lordships' views and the views of the other place in this matter.
Lord Crowther-Hunt: My Lords—
Lord Hill of Luton: My Lords, would not the noble Lord—
Lord Trefgarne: My Lords, I think it is permissible—and the Clerk will no doubt gesticulate if I am wrong—for noble Lords to intervene just as the Minister sits down, claiming that he has not yet done so.
Lord Byers: My Lords, I think it has been explained by the Procedure or another Committee that it is undesirable, when a Minister has sat down after answering an Unstarred Question, for the debate to be continued by a series of noble Lords asking him questions.
Lord Trefgarne: My Lords, I accept the guidance of the noble Lord on this matter, who I think sits on that committee. I will therefore sit down.
Lord Boothby: My Lords, I hesitate to interrupt the Minister, but perhaps I might just ask before he sits down—
Lord Skelmersdale: My Lords, if the noble Lord, Lord Boothby, will forgive me, I think that the House, by general consent, has come to a conclusion on this matter on the advice of the noble Lord, Lord Byers.
I therefore beg to move that this House do now adjourn.
Moved accordingly, and, on Question, Motion agreed to.

  WAGES COUNCILS
  WAGES COUNCILS
  INHOLMES WOOD, STOUGHTON
  INHOLMES WOOD, STOUGHTON
  MALAYSIAN GOVERNMENT ECONOMIC POLICY
  MALAYSIAN GOVERNMENT ECONOMIC POLICY
  THE GAMBIA/SENEGAL CONFEDERATION
  THE GAMBIA/SENEGAL CONFEDERATION
  WAR WIDOWS: PENSION RECIPIENTS
  WAR WIDOWS: PENSION RECIPIENTS
  WIDOWS: RETIREMENT PENSION RECIPIENTS
  WIDOWS: RETIREMENT PENSION RECIPIENTS
  WAR WIDOWS AND OVER 80 STATE PENSION
  WAR WIDOWS AND OVER 80 STATE PENSION