Sitting of 21 October 1981

Preamble
The House met at half-past Two o'clock
Orders of the Day
  Matrimonial Homes (Family Protection) (Scotland) Bill [Lords]
  A Lords amendment to a Commons amendment and a Reason for disagreeing to a Commons amendment, considered.
  Matrimonial Homes (Family Protection) (Scotland) Bill [Lords]
    Clause 7

      DISPENSATION BY COURT WITH SPOUSE'S CONSENT TO DEALING
      The Lords have agreed to the Amendment made by the Commons in page 10, line 19, leave out from 'where' to end ofline 26 and insert
      'it appears to the court—

      that the non-entitled spouse has led the entitled spouse to believe that he or she would consent to the dealing and that the non-entitled spouse would not be prejudiced by any change in the circumstance of the case since such apparent consent was given; or

      that the entitled spouse has, having taken all reasonable steps to do so, been unable to obtain an answer to a request for consent.'.

      with the following Amendment:
      In line 5, leave out 'circumstance' and insert 'circumstances'.
      4.2 pm
      The Under-Secretary of State for Scotland (Mr. Alexander Fletcher)I beg to move, That this House doth agree with the Lords in the said Amendment.
      A mistake in the drafting of Commons amendment No. 68 was fortunately spotted before it was considered by another place. It will be readily apparent that the addition of "s" to the word "circumstance" improves the sense of the amendment.
      Question put and agreed to.
      Lords amendment to Commons amendment agreed to.

      Clause 16

        OCCUPANCY RIGHTS OF COHABITING COUPLES
        The Lords have disagreed with the Commons in their Amendment to page 19, line 26, at end insert—
        "in section 6, subsections (1) to (3); in section 7, subsections (1) to (4), but only where both partners of a cohabiting couple are entitled, or permitted by a third party, to occupy the house where they are cohabiting; sections (Interests of heritable creditor) and 8;".
        for the following Reason—
        Because the Amendment would unnecessarily complicate and unjustifiably increase the cost of conveyancing practice in Scotland.
        Mr. Alexander FletcherI beg to move, That this House doth not insist on this Amendment to which the Lords have disagreed.
        Although this was a Government amendment on Report, I would recommend that the view of the other place should be accepted. Indeed, it was my colleague the Minister of State who moved that the amendment should be disagreed in the other place. Our second thoughts on the matter are not prompted by any change of heart on the basic policy intention behind the amendment, but rather

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        because it has become evident that the amendment would cause unforeseen and unintended consequences which put its value in a quite different light.
        The aim of the amendment—essentially in response to concern expressed in Committee by the hon. Member for Glasgow, Garscadden (Mr. Dewar)—was to give a more meaningful security to a non-entitled cohabiting partner for the duration of a court order giving that partner a right of occupancy in the cohabiting couple's house. Because the consent of a non-entitled spouse is not relevant to a cohabiting—rather than married—situation, without such an amendment there is nothing in the Bill to prevent a clandestine sale of the house by the entitled partner—notwithstanding the existence of a court order expressly intended to give security of occupancy to the other partner. Once the house is sold, no right of occupancy would exist.
        The case for preventing such a sale is a strong one. Despite the practical reservations about meeting this point within the framework of the Bill expressed in Committee by my hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), it was therefore decided that amendment of the Bill was desirable. Unfortunately, at that stage in the Bill's progress time was not on our side and there was not the time for the usual careful consideration of the point which we would have liked.
        In the event it became clear shortly after Report that amendment No. 43 moved at that stage had significant consequences for conveyancing which outweighed the added protection it provided for non-entitled cohabiting partners. The principal difficulty is that the amendment would lead to a requirement in relation to all house sales that the seller would need to provide an affidavit that he—or she—had no cohabiting partner. In other words, the gentleman in question would have to swear an oath that he had no mistress.
        That would be required, as well as the spouse's consent or renunciation, or an affidavit of no non-entitled spouse—one of which will be needed normally as a result of the Bill. Many sellers would be embarrassed or offended by such an additional requirement; all sellers would be faced with a further expense in disposing of their house. Obviously the Government would wish to spare the blushes and protect the purses of people selling their houses; the amendment is essentially unacceptable becuse of the repercussions it would have in many house purchase transactions. I am sure that hon. Members on both sides of the Chamber would wish to avoid such unintended consequences.
        A further, more technical difficulty caused by the amendment is that to be effective against a clandestine sale by the entitled partner, the court order granting the right of occupancy would have to be registered in the Land Register, because it is not defined elsewhere in the Bill as an overriding interest, as is a spouse's occupancy right in the matrimonial home. That would cause more expense to the partner needing her occupancy protected.
        As my hon. Friend the Member for Pentlands explained in a letter to the hon. Member for Garscadden, it is for these reasons that the Government would prefer the amendment to fall. The number of occasions when such clandestine sales will occur is unlikely to be substantial. Moreover, it will still be open to a non-entitled partner who suspects that a sale is afoot to go back to the court to seek a separate order under clause 3(1)(e) to protect her occupancy rights. Because conveyancing law is something
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        of a minefield, I am afraid that it has not been possible to devise another way of meeting the amendment's objectives without some unfortunate consequences. Only a radical reshaping of the Bill could achieve that and obviously at this late stage such a step is not feasible.
        I trust that hon. Members—and especially the hon. Member for Garscadden—will appreciate why the Government, though supporting the aims of the amendment, must accept the view of the other place that it should not form part of the Bill.
        Mr. Donald DewarI listened with pleasure to the delicate phrasing with which the Under-Secretary sought to cover his retreat. For all that, it is a retreat in some disorder. I am also glad to note that he has told the House that the Government are trying to spare people's blushes. They spare little else in their general activities, so I suppose that we should be grateful for that.
        This amendment is not something about which we would wish to disagree with another place. Looking through the reports of the debate in another place, I notice that the Earl of Mansfield said that he did not expect a constitutional clash between the two Houses. In that he is totally safe.
        I refer those with energy and much time on their hands to column 167 of the Official Report of the proceedings in Committee. When this matter first arose in a speech that I made, I drew attention to a problem that I understand the Secretary of State accepts as real, although limited. Neither I nor any of my hon. Friends was trying to insist on the necessity of incorporating clauses 6 and 7 into clause 16 of the Bill as it then was. I suggested to the Under-Secretary that a simple statutory statement that an order protecting the occupancy of a cohabitee under clause 16 should take precedence over any sale of the house might be a better way of achieving the desired end than that which was ultimately imported into the Bill by the Government on Report.
        Therefore, I was not standing on any absolute formula. I was suggesting that there was a problem and that the Government had a duty to find a solution. I was happy when they came back on Report and said that the original amendment was acceptable and that they would take it into the Bill. The fact that they have recanted for technical reasons in another place is a matter for regret, although I understand the difficulties.
        I shall ask one or two technical questions with which the Minister will be able to deal shortly. First, there are the technical difficulties which have arisen and which were rehearsed by the Earl of Mansfield in column 401 of the report in another place. This argument was repeated by the Under-Secretary. I understand that if the amendment stood, the seller would have to provide an affidavit that he was not cohabiting, and that, if he was married, this would be in addition to the consent in terms of clause 6(3)(e), necessary from any spouse who might be extant.
        I accept that that might give cause for some embarrassment. I should have thought that one would not have to swear an affidavit to the effect that one was not cohabiting, but merely that no order had been sought and obtained by a cohabitee under the Matrimonial Homes (Family Protection) (Scotland) Act. I should have thought that the affidavit would be a formality and would have the

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        same effect for the buyer who was purchasing in good faith as an affidavit under clause 6(3)(e) which deals with a spouse as distinct from a cohabitee.
        Another complaint is that apparently it would be necessary to register an order under clause 16 or such an order would not take precedence over any dealing affecting the house in question. It was for exactly that reason that I wanted such a statement of precedence in the Bill.
        Although I do not disagree basically with their Lordships, I notice that the reason they give for refusing the amendment is that it would unnecessarily complicate and unjustifiably increase the cost of conveyancing practice. I do not think that the Government have shown any great inclination to reduce the cost of conveyancing practice or to deal with conveyancing law reform with any great energy.
        It is clear that the problem remains. If the amendment falls, we are left with the difficulty with which it was meant to deal. If there is a sale of a property while there is an order under clause 16 in favour of a cohabitee, what will be the effect of that order on the sale?
        Is the Minister's understanding that if, for example, an extension is sought for six months by the cohabitee, it would be relevant to plead the buyer's interest against the interest of the non-entitled cohabitee who might want that extension? Would the buyer in those circumstances have a right to enter an objection to such an extension? Would the non-entitled cohabitee be able to ask for the extension at all? The difficulty is that by that time the sale would have been completed and the entitled cohabitee would no longer be the owner of the property. I should have thought, therefore, that the right to apply to the courts for a six months' extension would fly off and be defeated by the fact that the sale had taken place.
        The effect would appear to be that the right to extend and to continue in the property, in pressing social circumstances—for example, a cohabitee of long standing with young children—might inevitably be defeated by a sale during the period in which the order was running.
        In Committee, at column 170, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) specifically suggested—in relation to a point raised by the Minister this afternoon—that one answer would be an interdict under clause 3(1)(e). Clause 3(1)(e) refers to a situation in which an order can be asked for protecting the occupancy in relation to the other spouse. The other spouse becomes the other cohabitee in the context of the almost private argument that the Minister and I are having. Will it still be open to a party to get an interdict under clause 3(1)(e) if the sale has been completed? I take the point that the Minister carefully used the words "if a sale is anticipated", and said that it might then be possible to get an interdict under clause 3(1)(e). But we are presupposing a situation in which relationships have broken down and there may be no reason for the cohabitee to anticipate the sale. The sale may be completed without her knowledge. She will then look at Hansard and see the Under-Secretary of State's advice to go for an interdict under clause 3(1)(e), and discover that that right does not exist, I suspect, because it is a right as against the entitled spouse or cohabitee, and the cohabitee is no longer entitled because the sale has been completed and he no longer owns the property.
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        These are points not only of detail, but of some substance. If I may recapitulate my argument, my suspicion is that the sale of the property during the currency of an occupancy order under clause 16 will seriously prejudice the position of a cohabitee, because it will destroy the right of renewal, and it will not take precedence over the sale, so that presumably eviction could take place before the occupancy order expires.
        If I am right in these suppositions, it would seem to me that the Government have a duty—whether they can do it at this stage or not—to consider the matter clearly and to say whether there is some way of getting round the difficulty. These are dry and somewhat technical Committee points, but clause 16 is a difficult matter of balance when we are considering the right of cohabitees in the context of legislation which is designed basically to protect the right of a spouse.
        In the deliberations on our amendments in the other place, Lord Selkirk at column 402 of the Official Report, said that we were in danger of putting cohabitees in very nearly the same position as a married couple. We are not trying to do that. We were giving them no rights to a capital claim or to any of the legal bulwarks which protect married people. We are attempting to give them occupancy rights under clause 16 in circumstances where it is just and socially equitable to do so and is seen to be so by the courts.
        My fear is that the failure to produce a proper and adequate way of getting round the particular conveyancing difficulty to which the Minister referred will result in clause 16 becoming an extremely inadequate and ineffective protection, and that this part of the measure will be seriously damaged. That would be a pity. I hope that the Minister, even if he cannot do anything about the matter at this stage, will consider whether there is a way at some future date in which the matter can be remedied.
        Mr. Alexander FletcherI suppose that it depends on the circles in which one moves, but I was surprised when the hon. Member for Glasgow, Garscadden (Mr. Dewar) suggested that it would be something of a formality for a seller of a home to provide an affidavit to say that he was not keeping a mistress. I should have thought that it would be something of an embarrassment to most people. It was for that reason that I said in my opening remarks that it might be wise to spare the blushes.
        It is no part of our task to increase the cost of the sale of houses in Scotland, and I would not suggest for a moment that, because the hon. Gentleman is a member of the legal profession and a practising solicitor, he would see any advantage in increasing the costs of conveyancing or anything else in Scotland.
        In agreeing with the Lords that the amendment should not remain in the Bill, we have given very careful consideration to how the position of the cohabiting partner can best be protected. I do not think that I can agree with the hon. Gentleman when he says that we are left with the problem. I do not think that we are left with precisely the problem that existed before the Bill came before this House. Admittedly, it gives complete protection to a married partner, but only interim protection, through the court, to a cohabiting partner.
        Under clause 3(7), a cohabiting partner is entitled to claim compensation, and that in itself must be some improvement in the situation with which the hon. Gentleman is concerned. Most provisions in the Bill apply

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        to a cohabiting partner, but in this case, as I explained in my opening remarks, it was just not practical to bring the matter into the Bill itself.
        The hon. Gentleman raised a number of other points of a more technical nature which we have considered most carefully but, rather than apply my accountancy knowledge to the hon. Gentleman's legal knowledge, it might be more advisable that my hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind), who took the Bill in Committee, should write to the hon. Gentleman on these detailed and more technical points as soon as possible.
        Question put and agreed to.

      Education (Scotland) Bill
      Lords amendments considered.
      Clause 1

        DUTY OF EDUCATION AUTHORITY TO COMPLY WITH PARENTS' REQUESTS AS TO SCHOOLS
        Lords amendment: No. 1, in page 7, line 25, after "section" insert "—(a)".
        4.20 pm
        (Mr. Alexander Fletcher)I beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy SpeakerWith this it will be convenient to take Lords amendments Nos. 2 and 3.
        Mr. FletcherThe amendments concern the case where a parent makes an appeal to the sheriff, under new section 28F of clause 1, against the refusal of his placing a request. In such a case considerable concern has been expressed that where sheriff court proceedings are held in public there may be harmful effects for the child concerned and his parents. I am sure that hon. Members will agree that the welfare of the children concerned is the most important consideration in this matter. The amendments accordingly provide that any hearing that the sheriff might decide to conduct in consideration of an appeal on a placing request shall be heard in private.
        Mr. Martin J. O'NeillWe are pleased to support the amendment, as the matter was first raised by Lord Ross of Marnock on Report. We are certainly anxious that children should not be dragged through the courts and that no additional anxiety should be caused by what I think we all consider to be a most unsatisfactory outcome to any parental appeal in respect of zoning arrangements and the like. If the courts are to be involved, it is desirable that that involvement should be, as it were, in camera. We are therefore very pleased that the Minister has now seen fit to accede to the request of our noble Friends in another place.
        Question put and agreed to.
        Lords amendments Nos. 2 and 3 agreed to.
        Lords amendment:No. 4, in page 9, line 25, after first "the" insert "appeal".
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        This is clearly a drafting amendment to put beyond doubt that the reference to "the committee" in new section 28H(5)(a) is to an appeal committee.
        Question put and agreed to.

      Clause 2

        PROVISIONS SUPPLEMENTARY TO SECTION I
        Lords amendment: No. 5, in page 11, line 40, at end insert
        "or of a local education authority in England and Wales".
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy SpeakerWith this it will be convenient to take Lords amendment No. 6
        Mr. FletcherThe amendments are designed for the removal of doubt. Clause 2 determines that an authority which accedes to a placing request is not duty bound to provide transport or board and lodging for children from outside its area. The disapplication of such duties did not, in terms, apply to children from England and Wales attending schools in Scotland. The amendments make it clear that children from over the border are to be treated on the same footing as their Scottish counterparts, and that education authorities are under no duty to provide transport or other services for children from England and Wales.
        Question put and agreed to.
        Lords amendment No. 6 agreed to.

      Clause 4

        CHILDREN AND YOUNG PERSONS WITH CERTAIN SPECIAL EDUCATIONAL NEEDS
        Lords amendment: No. 7, in page 14, line 13 leave out "in their area" and insert
        "belonging to their area (in accordance with section 23(3) of this Act)".
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy SpeakerWith this it will be convenient to take Lords amendments Nos. 8, 13, 15, and 16.
        Mr. FletcherThese amendments, which are of a technical nature, were moved in another place by my noble Friend the Minister of State to rectify a deficiency in wording.
        The changes now written into the Bill take account of the fact that a fair number of handicapped pupils are placed in schools, especially residential schools, outside their own areas. The amendments make it clear that the powers and duties of an education authority relating to the assessment and recording of children and young persons and to the review of their special educational needs extend to pupils belonging to the area of the authority. In other words, recorded pupils, wherever they are placed for the purposes of their education, remain the responsibility of the home authority. The phrase "in the area" was open to the unintended interpretation that responsibility in all cases was determined by the pupil's actual location. We believe that the amendments clarify the matter.
        Question put and agreed to.
        Lords amendment No. 8 agreed to.
        Lords amendment: No. 9, in page 14, line 22, after "Record" insert "of Needs
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy SpeakerWith this it will be convenient to take Lords amendment No. 10.
        Mr. FletcherThese amendments were moved in another place by the Minister of State in response to Opposition amendments which had broadly the same intention but which could not be accepted for technical and drafting reasons.
        The amendments seek to avoid the unfortunate connotations attached by some to the term "Record". We had a useful debate in Standing Committee as to the choice of terminology for the record of a child with special educational needs. I hope that those who took part in that
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        debate will find the new extended title, "Record of Needs", acceptable. They will be interested to know that this was suggested in another place by the noble Lord, Lord Ross of Marnock. We are extremely happy to agree with his choice of terminology.
        Mr. O'NeillWe appreciate this move, as this was one of the most vexatious points that we encountered, not in the sense of party difference but inasmuch as it was felt by all members of the Committee that the term "Record" had unhappy connotations and that for those who are severely disadvantaged any attempt that could be made to alleviate the problem would be of assistance. The phrase "Record of Needs" is probably the happiest compromise. I should point out that the hon. Member for Aberdeenshire, East (Mr. McQuarrie) was of some assistance on this point. I am sorry, it was the hon. Member for Aberdeenshire, West (Sir R. Fairgrieve). As I recall, the hon. Member for Aberdeenshire, East was not of any great assistance. Unfortunately, the hon. Member for Aberdeenshire, West is not at present with us, and is unfortunately no longer on the Front Bench. Nor is his replacement present. If the hon. Gentleman had any part in devising the amendment when he was the Minister in charge of this, we put our thanks to him on record.
        We are grateful that the word "Record" will no longer appear in such a bald fashion and that a perhaps slightly less offensive expression has been found to cover the special circumstances of those with special educational needs.
        Question put and agreed to.
        Lords amendment No. 10 agreed to.
        Lords amendment: No. 11, in page 15, line 8, after "fails" insert "without reasonable excuse".
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        This Government amendment was tabled to improve the drafting of new section 61 by making explicit our intention that arrangements to require parents to bring forward their children for assessment should come into play only as a last resort.
        I am sure that all hon. Members will agree that our primary interest in this area should be to encourage the common purpose of education authorities and parents. The sanctions will remain on the statute book, but I would expect them to be invoked, as at present, only in the extreme case of a child's claimant needs and a parent's intransigence.
        Mr. O'NeillAlthough we would not wish to oppose the amendment, we should like to put it on record that all strenuous efforts should be made by the local education authority to ensure that an official makes contact with the parents within the reasonable period and that a personal approach would be attempted before having recourse to the law. My noble Friend Lord Ross of Marnock made this point elsewhere. It would be useful if the Minister would confirm that the Government feel that there is a responsibility upon the local authority to ensure that personal contact is made with the parents in question and that every possible attempt is made to persuade the family concerned by non-legal methods, to ensure that they do not have to go to court, which I am sure would be a very painful experience.
        4.30 pm
        Mr. Alexander FletcherI appreciate the sensitivity on this point, and I agree with what the hon. Gentleman said. We reconsidered this matter when the Bill was in the other place. Obviously, this is an area in which every effort should be made to persuade parents of the need to make use of the provision. When a child requires special educational needs, the last thing one wants is recourse to the courts to take action. But, bearing in mind the sensitivity of the matter, we still felt that there could be an occasional case where for reasons of one kind or another the parents might simply refuse to recognise that their child had some special educational requirement.
        We have left this very much as a last resort so that the local authority, having tried every other kind of persuasion, knows that it has the eventual power to ensure that the needs of the child are given first priority in such cases.
        Question put and agreed to.
        Lords amendment: No. 12, in page 15, line 32, leave out "14" and insert "21".
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        Opposition amendments were tabled in Committee and on Report in another place seeking to increase to 29 days and 28 days respectively the minimum time to be given to parents to submit written views on their children's special educational needs during the assessment process. This Government amendment, which substitutes a minimum 21-day period for the 14 days originally stipulated in new section 61, was accepted as a compromise reflecting the need to avoid unduly prolonging the assessment process while ensuring for parents adequate time to contribute to it.
        I remind the House that in submitting written views the parent has the help of the named person. It is therefore felt that an increase from 14 days to 21 days is in all respects reasonable and in the interests of all concerned.
        Question put and agreed to.
        Lords amendment No. 13 agreed to.
        Lords amendment: No. 14, in page 17, leave out lines 37 to 39 and insert—
        "(3) An education authority shall ensure that the provision made by them under this Act for a recorded child or a recorded".
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        This Government amendment was tabled in another place to improve the drafting of this subsection by clarifying the responsibility of an education authority towards a recorded child or young person. That responsibility is not to be restricted to those whom the education authority has itself recorded or for whom it provides education in its own schools. The revised wording places beyond doubt the right of the recorded child or young person to provision for his special educational needs. Where, for instance, he moves from one education authority area to another, the responsibility to provide for him will transfer to the authority of the area to which he now belongs. But, on the other hand, where he is placed outside his home area in a grant-aided or independent school, his home authority which made the placing is still clearly responsible for him.
        Question put and agreed to.
        Lords amendments Nos. 15 and 16 agreed to.
        Lords amendment: No. 17, in page 27, line 13, leave out "may" and insert "shall".
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy SpeakerWith this we may also discuss Lords amendment No. 19.
        Mr. Fletcher: The first amendment is an Opposition amendment that was accepted by the Government. The second is the necessary consequential amendment tabled by my noble Friend the Minister of State in another place which incorporates a technical improvement in drafting.
        The primary effect of the change is to place an absolute requirement on the Secretary of State to make regulations prescribing the form and content of the record of needs and matters relating to its handling and preservation. In practice, of course, as evinced in the recent consultative paper, my right hon. Friend's commitment to making the regulations has never been in doubt. As the provisions in the Bill concerning the record would clearly be unworkable in the absence of such regulations, however, it is appropriate to make the Secretary of State's duty in the matter explicit.
        Apart from this, the Government amendment secures that the regulation-making power is now expressed in terms which ensure that all necessary information can be included in the record of needs. The original wording was found to be restrictive, and the additional flexibility provided by the amendment is essential.
        Question put and agreed to.
        No. 18, in page 27, line 34, after "may" insert—
        "—

        under paragraph (c) of this subsection, prescribe different procedures in different circumstances;

        under paragraph (d) of this subsection, prescribe different periods in different circumstances; and

        (iii)".

        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        This Government amendment is technical. It is designed to improve the drafting of new section 65D by clarifying the Secretary of State's power to make different provision in regulations to meet differing circumstances arising in connection with the handling and preservation of the record of needs.
        Question put and agreed to.
        Lords amendment No. 19 agreed to.

      Clause 5

        ASSISTED PLACES AT GRANT-AIDED AND INDEPENDENT SCHOOLS
        No. 20, in page 28, line 24, leave out "to benefit from" and insert "to attend and receive"
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        This amendment was moved by the Opposition in another place and the Government were happy to accept it. It does not, of course, alter the substance of the scheme but it helps to make two important points which we have taken great trouble to make during the Bill's passage and which Labour Members have stubbornly declined to accept.

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        The scheme's detractors have sought to portray it as elitist and only for the academically bright. We have consistently refuted that claim in the House and in another place. That cannot be disputed or distorted, and any reference to our proceedings in Committee will assure the right hon. Member for Glasgow, Craigton (Mr. Millan).
        The object of the scheme is primarily to widen parental choice of schools for families with lower incomes.
        Mr. Russell JohnstonI appreciate that the hon. Gentleman is about to develop his argument, but this seems an appropriate moment to ask a straight question, as it will avoid my making a separate speech. The Minister has just said that the object is to widen parental choice. That seems to be in conflict with the object as set out by the Minister in England, which is to make provision for the brighter child. How can the Government justify spending money in the independent sector simply to widen the number of schools to which a child can go when the public sector is already starved of funds?
        Mr. FletcherI refute the claim that the public sector is starved of funds. I certainly have no evidence that educational provision in the public sector in the Highland region, for example, is starved of funds. If the hon. Gentleman has any evidence to support his statement, I hope that he will waste no time in making sure that it gets into my hands.
        There has always been a long tradition in Scotland of giving a small amount of Government financial support to the independent sector in a way which allows children from less well-off families to attend certain schools. By using the same sums of money, we have extended the scheme to bring in other schools.
        I assure the hon. Gentleman that not in every case are the schools looking for the academically bright children. For example, there are many denominational reasons why a parent whose area has no denominational schools may wish to take advantage of a scheme of this kind. The alterations that we have made to the old grant-aided system now enable parents in Scotland, for whatever reason they think best, to apply to a school for admission of their children.
        The schools continue with their existing practices, be they denominational, academic or otherwise. During the past five or 10 years, many schools which previously insisted only on academic ability have broadened the selective process which they use to admit children.
        In this part of the Bill we are simply trying to ensure that a low income family is not debarred from having a wider choice. If a family needs it, it will be able to receive direct financial assistance from the taxpayer rather than the system under the old grant aid scheme in Scotland, whereby funds were made available to the schools to use as they wished, either to reduce the general level of fees regardless of family income for some other educational purpose.
        Mr. O'NeillWe were surprised to learn of the Government's willingness to accept this Opposition amendment in the other place. First, I should be interested to know whether the Minister proposes to amend the regulations that govern the working of the scheme. Regulation 5 of part II states:
        "The provisions to be met in so far as relevant in the case of a person to whom these regulations shall apply shall be as follows:
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        (d)that he shall, if admitted to an assisted place be, in the opinion of the school, capable of benefiting from the education provided at that school."
        I trust, therefore, that the Minister will seek to change the regulations to ensure that the word "benefiting" disappears from them. In the other place, the Opposition wanted to make it clear that there is no assumption that any individual pupil necessarily benefits from being in school. We take the view that most children would not benefit from attending schools that will operate under the assisted places scheme. It was for that reason more than any other that we wanted the word "benefiting" removed.
        I note that the hon. Member for Inverness (Mr. Johnston) has left the Chamber. Had he been here I should have drawn to his attention the Conservative Party's manifesto at the last election, which made it clear that provision would be made to enable bright children from poorer backgrounds—I think that was the expression—to benefit from the private sector of education. The acceptance of this amendment may be a departure from the manifesto.
        However, the Minister has started to clarify the matter, because when we pursued him on it on Second Reading and asked him on what basis the youngsters who would enter the schools under this scheme would be selected he was at a loss to make it clear what method would be used. I am not very much clearer even now about how many female Highland Catholics, for example, will benefit from the assisted places scheme.
        Perhaps the Minister could clarify the position on denominational schools. How many places will be available? How many places will be available in the peripheral areas of Scotland where most of these schools will be located? Have there been any requests from local authorities to make places available at denominational schools under the assisted places scheme? His argument, which I find novel, was never advanced in Committee and I should like some further information.
        I appreciate what the Government are trying to do in changing from direct grant schools to the new assisted places scheme. Rather than one group, they seek to subsidise another. Instead of all students at direct grant schools being subsidised, a group of students will now be subsidised under the assisted places scheme, but the assumption is that they will no longer necessarily benefit from the subsidy.
        4.45 pm
        We are not unhappy about the amendment being accepted, but perhaps we are at variance with the Minister on some of the reasons that he put forward. The fact still remains that if a school has to make a choice between one young person and another, at the end of the day, if there is a tremendous demand for the scheme, the simplest and easiest way to select a child will be on the basis of academic ability. As yet, we do not know how many young people will be successful in applying for a place under the scheme.
        We have been told that a certain proportion of young people will come from less well-off homes, but as yet there has been no undertaking by the Government to provide statistics of the profile of the take-up that would enable us to see the income distribution of those families. As far as we can ascertain, it can be about £10,000 a year for a family with one child.

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        What reason can the Minister give for retaining the word "benefiting" in the regulations? If he does not change them, the acceptance of this amendment will be a hollow act by the Government.
        Mr. FletcherI am happy to advise the hon. Gentleman that we shall change the regulations. Unlike the Labour Party, we are happy to listen to all views and to change our opinion from time to time in the light of discussions. The hostility of the Labour Party to the assisted places scheme shows a completely closed mind. I was particularly interested in the hon. Gentleman's comment—I think that he also made it in Committee—that in his view, and presumably in his party's view, children will not benefit from independent schools that are part of the assisted places scheme.
        With respect, it is not for the hon. Gentleman or any other member of his party to decide whether children will benefit, despite the recent Opposition pamphlet in which I believe the hon. Member for Glasgow, Cathcart (Mr. Maxton) was involved, which suggests that politicians know best. The whole point of choice and the whole message of the Bill—not just the assisted places scheme, but the sections on parental choice—is that the Government believe that it is for parents to choose and to decide what education—whether in the public or private sector—is right for their children. I would put my trust in the decisions of parents on this matter any day before I would put my trust in the decisions of Opposition Members.
        Our scheme gives a much wider geographical spread of denominational schools. In particular, it includes denominational schools in rural areas that were not previously able to take advantage of the scheme, and I am sure that that will meet the requirements of many families who were previously debarred from the scheme. I freely admit that the old grant-aided schools were concentrated not only in the central belt of Scotland, but especially in Edinburgh—my area. I wish to use every means at our disposal to ensure that these benefits are spread more evenly throughout Scotland. That is why we have introduced more schools into the scheme than those covered by the old system.
        The hon. Gentleman mentioned the Conservative Party manifesto commitment. We are ignoring the blindness of the Opposition and their arguments and improving the way in which we implement our manifesto where we believe that that will bring greater benefit.
        Mr. John Maxton (Glasgow, Cathcart)What I actually said concerned politicians having to take decisions on education. The Minister's remarks were surprising, especially on this part of the Bill. It is one part of the Bill on which politicians have clearly taken decisions against the advice of practically every educational organisation in Scotland, with the exception of the independent and fee-paying schools. Every public sector education authority—95 per cent. of the total—has condemned the scheme. Yet the politicians have gone ahead.
        In reply to the hon. Member for Inverness (Mr. Johnston) the Minister said that parents might wish to make a choice for denominational reasons. He talked of the peripheral areas. One assumes that he meant Roman Catholic schools. He made a clear point in support of his case. How many Roman Catholic independent boarding
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        schools are there in Scotland? How many students can they take? How many are they prepared to take on the assisted places scheme? I am aware of only one such school, which is comparatively small. The Minister's argument is bogus.
        Mr. Alexander Fletcher Mr. Alexander Fletcher rose—
        Mr. Deputy SpeakerI remind the Minister that these are Lords amendments and that he needs the leave of the House to speak for a third time.
        Mr. FletcherWith the leave of the House. I tell the hon. Member for Cathcart that I do not have at my fingertips the number of Roman Catholic boarding schools in Scotland.
        Mr. MaxtonThe Minister should have.
        Mr. FletcherHowever, just under 10 per cent. of the places given in the first year of the scheme have been in Roman Catholic schools in Scotland. Since the assisted places scheme was introduced earlier this year, 776 places have been granted, 69 of which are in Roman Catholic schools.
        Question put and agreed to.
        No. 21, in page 29, line 41, at end insert—
        "( ) the information which participating schools, on a written request from a parent of a pupil who is eligible for an assisted place, shall supply to that parent;".
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        This amendment was made for the removal of doubt and to allay the fears of Opposition Members in another place over the Government's intention with regard to the provision of information by schools participating in the assisted places scheme. The Bill contains a general power enabling regulations to be made about
        "such other matters as appear to the Secretary of State to be requisite for the purposes of the scheme."
        However, to confirm that there is to be no difference of treatment between the private and public sectors of education in this respect a specific requirement, as already exists in clause 1 of the Bill, new section 28B(1), for education authority schools, has been inserted to make the obligations of schools participating in the assisted places scheme clearer.
        Mr. O'NeillIt would have saved a great deal of time had the Minister acceded to our request in Committee. That remark also applies to other points that the other place has seen fit to accept.
        Although we are unhappy about the assisted places scheme, we feel that schools within the scheme and in the local authority sector should be accountable.
        Question put and agreed to.

      Clause 6

        CONSULTATION ON, AND CONSENT FOR, CHANGES IN CERTAIN EDUCATIONAL MATTERS
        No. 22, in page 32, line 30, leave out
        "or any part of such a school"
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        The amendment clears up a point raised by the Convention of Scottish Local Authorities, which indicated that new section 22A(2), which requires the Secretary of

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        State to prescribe proposals for closure or change of site of a part of a school, could be interpreted to mean a physical part such as a hut or annex. It is not our intention that such proposals must be the subject of consultation. Under the present legislation, education authorities are required to submit to my right hon. Friend for approval any proposals to alter the stages of education in a school such as the removal of S5 or S6 in secondary schools; but the removal of a part of a school in the physical sense, such as a hut or annex, is entirely a matter for the education authority. We do not consider, therefore, that it would be appropriate to prescribe in regulations made under new section 22A(2), which in part replace the Secretary of State's present controls over proposed changes in educational arrangements, that consultations must be held on the removal of a hut or annex from a school.
        Question put and agreed to.

      New Clause A

        INSPECTION OF RELIGIOUS INSTRUCTION
        No. 23, after clause 15, insert the following new Clause A—
        "A. Subsection (2) of section 66 of the principal Act (exclusion of religious instruction from inspection under section 66(1)) shall cease to have effect."
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy SpeakerWith this we may take Lords amendment No. 31.
        Mr. FletcherThe effect of the new clause is to remove the prohibition on the inspection of religious subjects in schools by Her Majesty's Inspectorate. It arises from the Government's wish to ensure that religious education is not placed at a disadvantage in relation to the other subjects in the curriculum whose development is aided by the fact that they are all subject to review by Her Majesty's Inspectorate.
        Since taking office, the Government have sought in various ways to foster the place of religious education in the curriculum. In the summer of 1979 my right hon. Friend established a joint committee of the Consultative Committee on the Curriculum and the Scottish Certificate of Education Examination Board to consider non-examinable courses in religious education and the need for SCE examinations in religious studies. On the basis of the joint committee's work, my right hon. Friend announced in September his agreement to the introduction of an SCE O-grade in religious studies, for which the board envisages examinations being set from 1984.
        On the teacher training front, the Government asked colleges of education to treat religious education, from 1980, as a priority subject for the intake of students to pre-service training courses. For the primary schools, my right hon. Friend authorised the committee on primary education of the Consultative Committee on the Curriculum to set up a study of the contribution of home, school and community, including religious aspects, to the education of primary school children. In August, the Consultative Committee on the Curriculum published guidelines for general courses in religious education in the secondary schools intended to mesh with the SCE O-grade syllabus on which the examination board is now working.
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        Parallel with these developments, the Government have been conscious of a view, well established even before we took office, but expressed with increasing emphasis by Church and educational interests since, that the development of religious education would continue to be held back unless the prohibition on inspection by Her Majesty's inspectors contained in section 66(2) of the 1980 Act was removed. In announcing to both Houses of Parliament on 28 July our proposal to repeal section 66(2) and in seeking simultaneously the views of various Churches and educational bodies about the principle of removing the statutory prohibition on inspection, the Government affirmed that they shared the widely held view about the disadvantage under which religious education labours.
        5 pm
        The bodies which my right hon. friend consulted were asked to express a view on the principle of repeal on the basis that the practical implications would be discussed fully with them before the repeal was brought into effect. The educational bodies, including the teacher associations and the Convention of Scottish Local Authorities, wholly approved the principle while touching on various practical aspects which would need to be covered in the further consultation—for example, that the religious education to be inspected should be taught by properly qualified teachers and that suitably qualified inspectors should be recruited. Of the major Church interests approached, both the Church of Scotland education committee and Catholic education commission welcomed the proposal. Again, practical difficulties were referred to, particularly concerning the need to maintain the safegaurds for the special position of religious education in denominational schools, provided for in section 21 of the 1980 Act.
        These practical considerations are for later discussion with the interests concerned. I merely wish to reiterate at this stage that my right hon. Friend intends to pursue them carefully and in detail in the consultations which will follow enactment of the Bill. The Government have no intention of bringing the repeal provided for in the new clause into effect until there has been full consultation on the practical issues with religious and educational bodies.
        There was a complaint in another place when the amendment to repeal section 66(2) was introduced that a measure of such significance should have been introduced earlier in the passage of the Bill. The implication was that the Government's action had been hasty and ill-conceived. That is not true. The measure is of considerable significance, and it would have been wrong to have introduced it without adequate consultation. The Government concluded that the prohibition on inspection should be repealed only after serious consideration in the light of a continuing dialogue that my right hon. Friend has had with Church representatives since the Government look office in 1979 and following the consultation during the summer to which I have referred. The new clause is the culmination of a lengthy period of discussion and consultation with all the parties concerned.
        Mr. O'NeillIt would appear that everyone except the House has been consulted on this matter. The announcement was made in the form of a written answer on the eve of the Royal Wedding, a day when it was designed to catch maximum publicity for an educational innovation described by the Minister as being of considerable significance. I am concerned because the

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        Minister talks blithely about deleting from the 1980 Act a section containing three elements that I do not think that he has covered adequately. The section of the act that he seeks to remove states:
        "It shall be no part of the duty of a person authorised under this section to make an inspection of any educational establishment, to inquire into instruction in religious subjects given therein or to examine any pupil in religious knowledge or in any religious subject or book."
        We recognise that the Minister seeks to afford the opportunity to newly appointed inspectors of schools to be allowed to look at the teaching of religion. There are, however, certain questions that must be raised. Is it expected that all children will have to sit SCE O-grade exams in religion? Is it a subject that will be optional in the third and fourth years. If considerable expense is to be involved in setting up yet another section of the schools inspectorate, it would be appropriate for all children in secondary schools to be required to receive religious instruction.
        Mr. Robert Hughes (Aberdeen, North)Will my hon. Friend think carefully about what he says? I hope he does not mean what he says. He seems to suggest that all children in secondary schools must take religious education. That would be an affront to many teachers who do not hold religious views.
        Mr. O'NeillI am not very grateful for my hon. Friend's intervention because he has not allowed me to develop the point to the extent I had intended. There would obviously have to be the parental right to withdraw from such education. This is a substantial point. If this course is to be made available and if it is of the significance that the Minister describes, is it to be a central part of the curriculum in schools with the obvious opt-out provision that exists at present for parents who, for conscience reasons, have no desire that their children should be exposed to religious education? If so, who can withdraw their children from these classes?
        I should like to raise the issue of denominational schools. I accept that the Minister has had consultations with the Roman Catholic Church. Can he say whether the Roman Catholic Church is happy that inspectors should be going into schools to look at what has hitherto been its exclusive preserve, namely, the provision of religious education in regard to examinations?
        The Minister has referred to examinations. Are the SCE changes worth while at this stage? The Minister is committed to the implementation of those recommendations of Munn and Dunning that he can get through with minimum expenditure. Will he say whether it is appropriate to set up new courses that will be quickly superseded by the new arrangements in the mid-1980s? We may see that no sooner are examinations organised than the structure that has been created will be dismantled. Had this proposal been introduced earlier, during consideration of the Bill, as it should have been if it is of the importance that the Minister thinks, we would have been able to consider the subject in a more leisurely manner and perhaps give it more careful scrutiny.
        We do not object to the amendment. We are concerned, however, about the points that have been raised. One hopes that there would be no question of teachers being required to fill their timetable with periods of religious education in any period of teacher shortage. It is to be hoped that at times when there are insufficient numbers of
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        teachers of religious education, teachers will be able legitimately, on grounds of conscience, to opt out of taking the extra religious education classes that will be called for. The Minister must make this point clear.
        I do not suggest that the teaching profession consists of atheists. However, a considerable number would be most reluctant to participate in such courses. Their consciences will have to be honoured. It would be helpful if the Minister made clear that there is no suggestion that, because of timetabling difficulties at a time of teacher shortage, any teacher will be required to undertake work that their conscience would preclude them doing.
        Mr. Robert HughesUntil I heard the speech of my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. O'Neill) I had not intended to take part in the debate. It may be surprising to some that, as an atheist, I adopt a catholic approach to religious education in schools.
        If those who hold strong religious views wish their children to receive religious education or instruction I am happy to see that done, but I object to the attitude of schools that religious education is the norm and parents who do not wish their children to have such education have to exercise their conscientious rights to withdraw them from the subject. That is nonsense in an age when perhaps the majority of the population are atheists or agnostics.
        Mr. Donald Stewart (Western Isles)That is absolute nonsense.
        Mr. HughesIf the Minister is saying that, following discussions with the Catholic Church, the Church of Scotland and educational bodies, there is to be provided from about 1984—perhaps an appropriate date—an SCE O-grade course in religious education, that is fine by me. If he says that it is therefore necessary to have properly trained teachers to provide the course and a properly qualified inspectorate, that is also all right by me.
        However, if that is the Minister's argument he ought to put religious education on all fours with every other subject taught in schools and parents should be able to decide whether they want their children to take that course.
        I hope that we are moving away from the idea that religious education should be compulsory in schools. I do not think that the Minister is suggesting that, but I hope that as a result of his discussions he will accept that religious education should be an ordinary subject, on a par with mathematics, geography and the rest, so that parents may choose whether they wish their children to take religious education.
        It is nonsense that parents who withdraw their children from religious education, and such parents may be Jews, Moslems or atheists, should be regarded as different or abnormal.
        I hope that the Minister will give us a categoric assurance that there is no question of adding religious education as a compulsory subject to the curriculum of primary or secondary schools. I hope that the views of parents such as myself, who are not religious, will be respected, because they have as much force and morality as do the views of those who have a religion.
        Mr. MaxtonI start with a small, but important, point. The Minister said that religious education had been disadvantaged in the past because it had not had an inspectorate. I am grateful to my hon. Friend the Member

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        for Berwick and East Lothian (Mr. Home Robertson) for letting me see a letter that he received from the Minister on 24 April this year in which the hon. Gentleman said:
        "In the light of the developments I have outlined I do not believe it can be argued that because Religious Education is not subject to inspection by HM Inspectorate of Schools the interests of the subject are prejudiced."
        There has been a remarkable volte face since then. The Minister now says that religious education must be included in the Bill and his main argument in favour of that is that if it is not inspected the interests of the subject will be prejudiced.
        I do not want to duplicate the arguments of my hon. Friend the Member for Aberdeen, North (Mr. Hughes), but I agree with him and I am glad that he expressed his views on the Floor of the House. Such views are not expressed here often and it is necessary that we give voice to them on occasions.
        5.15 pm
        The Minister, my hon. Friend the Member for Aberdeen, North and my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. O'Neill) all referred to religious education, but the 1980 Act and the Lords amendment contain no reference to religious education. The reference is to "religious instruction".
        Mr. Donald StewartThey are the same.
        Mr. MaxtonI do not believe that instruction and education are the same thing. The Minister also made that point. He spoke of religious education, but he was talking about religious instruction.
        Whom has the Minister consulted? The Churches, of course. We are talking about the instruction of particular religion in particular schools and not about the development and history of religion, comparisons between religion or comparisons between religions and non-religions. Specific religions and credos are taught in our schools under the guise of religious education.
        I have no enormous objections to religious education if it gives children an idea of what religion is about, its place in the history of our culture and other cultures in the world and how it has played, and is playing, a part in our society and its development. There are different religions. Some people do not believe in a religion and their views must be respected. I have no objection to a sort of religious education as a voluntary subject in schools.
        However, religious instruction is indoctrination—something that is condemned by the Minister and Conservative Members in other parts of our society. I should like the Minister to guarantee that he will ensure that what I have described as religious education is taught in our schools.
        Did the Minister consult the Churches of ethnic minorities, such as Muslims and Hindus? Will any attempt be made to ensure that some element of their religions is included in religious education? If not, schools will be failing those minorities. What part will there be for those who do not believe in religion? They may be anti-religious, but anti-religion is part of religion. The forces against religion also have to be taken into account.
        How many inspectors will be needed? Will they be divided among the traditional areas? What qualifications will they need? Many senior people in religious education
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        in Scotland are ministers of the Church of Scotland. Will inspectors be ministers? Many questions remain to be answered.
        Mr. John Home RobertsonMy hon. Friend the Member for Glasgow, Cathcart (Mr. Maxton) referred to the brief correspondence that I had with the Minister earlier this year on this question. I dissent from some of my hon. Friends in welcoming the Minister's conversion. Whether that conversion was the result of education or instruction, we cannot be sure. However, as recently as 16 June 1981 the Minister wrote to me saying
        "I have yet to be convinced that to introduce inspection... could, on balance, be justified".
        Evidently, he has been persuaded rather rapidly.
        All the detailed consultation with the Churches and the other interests that he mentioned must have been carried out in an extremely short time. I am glad that this matter is to be subject to inspection, perhaps on the ground that it is the only subject that has to be taught in schools compulsorily. It is, therefore, altogether welcome that a subject that all children have to take at school should now be subject to inspection. I hate to dissent from my hon. Friend in any way, but on this occasion I find myself in agreement with the Minister.
        Mr. Alexander FletcherI hope that the hon. Member for Berwick and East Lothian (Mr. Home Robertson) does not feel too apologetic. I am glad to have his support.
        I have listened carefully to the views that have been expressed in this short debate. We were determined that religious education in schools should be enhanced. As the hon. Gentleman said, we are talking about the one subject that is compulsory, yet we felt that it was not given its correct place or status in schools. The first step that we determined was that it should be an examinable subject—obviously, an optionally examinable subject—but, nevertheless, that the Consultative Committee on the Curriculum and the Scottish Certificate of Education Examination Board should set up the joint committee to advise the Secretary of State whether an O-grade in religious education was practicable.
        I hope that the paper will be acceptable to the various denominations, certainly to the Protestant and Roman Catholic Churches. I understand that there may be one or two optional questions in the paper, but it would be helpful if there were some recognition of the fact that although the Christian religion spans different denominations it is essentially the same religion.
        felt, first, that religious education should be an examinable subject. Secondly, I was persuaded, albeit late in the day, that it would further enhance religious education if the inspectorate were brought in. On further examination by my right hon. Friend and myself, it appeared that the final contribution that the Scottish Office could make to ensure that the status of religion in schools was enhanced was to introduce inspection, in addition to making it an examinable subject.
        Mr. Robert HughesI am grateful to the Minister for giving way. He should use language precisely and make it clear that the examination paper, this SCE O-grade subject, is a Christian religion paper and should be so defined. So far he has said that there might be questions about Catholicism and that there might be questions about Protestantism. He has said nothing about the Jewish faith,

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        or the Muslim, or anyone else. So perhaps he should describe it properly as a Christian education SCE O-grade paper. Then we shall all know where we stand.
        Mr. FletcherI was coming to that point in due course. However, I shall deal with it now, not because the hon. Gentleman invites me to do so, but because I believe that it is right to state my position on the matter. The hon. Gentleman will be aware from his experience at the Scottish Office that the CCC advises the Secretary of State, and the Secretary of State himself is not empowered to interfere directly with the curriculum. The view that I take, as one who holds this office temporarily, is that it should be essentially a paper on the teaching of the Christian religion. I, as an individual, have no objections to the broader dimensions of world religions being taught in our schools, but I see nothing wrong, in a Christian country, in the essential teaching in the subject that we are discussing being teaching of the Christian religion. I make no apology for expressing my personal views.
        My experience of the so-called minority religions. whether Muslim, Jewish or anything else—and it is something which I very much envy—is that they usually look after their own religious interests far better than the majority religions in this country. Those who claim to have some experience of teaching, particularly Labour Members, will be aware that children from the minority religions who attend our schools usually have a stronger basic religious training at home than those of the majority Christian religion. That is something that should be borne in mind. I repeat that I have no objection to a broad perspective of religion being taught in our schools, but I do not apologise for my personal view that the emphasis should be on the Christian religion.
        The purpose of the exercise is to enhance the standing of religious education in our schools. Unlike Labour Members, we are not half-hearted in our desire to do so.
        I come to the more specific points that were raised. I was asked whether the Catholic Church was happy with these arrangements. I have said that the Catholic Education Commission has been consulted and is happy with the arrangements. It has accepted the principle, and sees little practical difficulty in the inspection of the examination course. There may be more practical points to discuss about the inspection of the general course for all pupils, but there will continue to be supervision of the content by the Church supervisor, who is often the parish priest, while the inspectors will be able to help with the method and assessment of the effectiveness of the courses.
        I was asked about the right of teachers to opt out. The general expectation now is that religious education will be taught by specialist secondary teachers who have chosen to qualify in that subject. Quite a number have already done so. There should be no question of dragooning unwilling teachers of other subjects to teach religious education. Nothing would be more damaging than that.
        The hon. Member for Aberdeen, North (Mr. Hughes) said that he takes a catholic view of education. I know that he takes a catholic view of parental choice, and I have always appreciated his support—mainly silent, but I always know that it is there—when we discuss matters of parental choice. Let me repeat, if I have not made it clear , that the conscience clause, section 9 of the 1980 Act, will still apply, and parents who do not wish their children to receive religious education will be entitled to have their children withdrawn.
        Mr. Home RobertsonI shall be grateful if the Minister will satisfy my curiosity in one regard. As he was totally opposed at the end of June to arranging for inspection of religious education in Scottish schools, will he explain at what point on the road to Damascus he saw the light?
        Mr. FletcherIt does not matter. The important fact for the hon. Gentleman should be that I have seen the light.
        Mr. O'NeillI want to ask the Minister two questions that he has not yet really answered. With the opt-out provision, will it be compulsory for children in third and fourth years of secondary schooling to do a religious education course, in the same way as it is compulsory at present for them to do English and arithmetic? Although they do not have to go on to CSE examination, they nevertheless have to undergo courses in these two subjects. Does the Minister propose to elevate religious education to the same position as those subjects? Will the Minister make that clear?
        Secondly, will the Minister also take account of the fact that many of the people who have been trained and are qualified to teach in religious education at present do so on the assumption that they will be teaching in schools what is to all intents and purposes comparative religion, which, although it may well have a strong Christian content, nevertheless does not imply that they themselves subscribe to the Christian religion?
        Therefore, if there is to be some test of faith of the individuals concerned or some implication that there is faith in the Christian religion among the specialist secondary teachers, problems could arise if people decide to act on the basis of conscience and say that they are happy to teach comparative religion but are not happy to teach a Christian-based religious education course, the like of which the Minister has been referring to.
        5.30 pm
        Mr. Alexander FletcherI think that the answer to that point is that the enhancement of religious education in our schools, which we hope will follow as a result of the steps that we are taking, may well cause some teachers of comparative religion to consider the new syllabuses that we expect will be devised. There is much consultation still to take place on these matters, but if the syllabuses that are brought into schools are too Christian, for example, for some teachers of religious education and they do not wish to teach them, that is entirely a matter for them. These points will be subject to continual consultation. As I have already said, none of these steps will be introduced until we have settled many important matters in much more detail.
        I repeat that our aim is to enhance religious education in our schools. This means that the present arrangements in some of our schools, where the minimum of lip service is paid to religious education, will have to be substantially improved. The extent to which that will affect pupils in the third and fourth year, and in the first and second year, will depend on the arrangements that now exist in schools. I would hazard a guess that most of our schools will, as a result of these arrangements, provide more effective religious education in the future than they have been doing in the past.
        Question put and agreed to.

      Schedule 1

        APPEAL COMMITTEES
        No. 24, in page 53, line 29, at end insert—
        "A person who is a member of the education committee of the authority shall not be chairman of an appeal committee."
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        This amendment is supported by the Government in recognition of the force of the argument that the chairman of an appeal committee should be seen by the parents as standing outside the authority's policies and decisions on educational matters. As hon. Members will appreciate, parents must feel that their case has received a fair hearing in a reference to an appeal committee and that the chairman is impartial in his decision. While I would argue that the essential protection for parents in this regard is laid in paragraphs 5 and 6 of schedule 1, which exclude from membership of an appeal committee any person involved with the decision on the placing request in question, none the less I accept that doubt may arise in the minds of some parents if a member of an education committee can be a chairman of an appeal committee. The Scottish Consumer Council has also made representations about the matter and it is strong in its views about the extent of public misgivings on this issue. The present amendment therefore puts the matter beyond doubt and excludes a member of the education committee from service as chairman. It would not, however, exclude a member of the regional council who is not a member of the education committee.
        Mr. O'NeillWe shall not divide the House on this matter but we have certain misgivings about the amendment. We feel that this is another example of the Government seeking to foment distrust in local authorities and to undermine the authority of councillors. However, there is another aspect to the matter on which I should like the Minister's view.
        What is the status of parent members of school councils? In some instances, school councils are deemed to be sub-committees of the education committee of the local education authority. What would be the standing of a parent who was elected to a school council and who subsequently became the chairman of an appeal committee? Would he be debarred from continuing in that position?
        As the Minister will doubtless remember, in Standing Committee we spoke of the sterling work done by the school councils in Strathclyde, which, after all, constitutes half of Scotland. These school councils have played a very active role, right up to appeal committee level, so it is not impossible under these arrangements for a school council member to be involved. It would be most unfortunate if this amendment extended to that group as well. I am sure that the Scottish Consumer Council did not have those individuals in mind. I am sure that the Scottish Parent-Teacher Council, which normally runs in tandem with the consumer council on these matters, would not wish for the debarment of members of school councils who were there because of their role as parents rather than as elected representatives.
        Mr. Alexander FletcherOur legal advice is that school councils are not sub-committees of education committees, so a parent member is not debarred.
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        Therefore, the specific point that the hon. Gentleman has made would not apply in this case in the legal sense. From what I have said the hon. Gentleman will understand that the purpose of the exercise, in referring to the chairman of the committee, is to reassure the parent who is appearing before an appeal committee.
        This point was made strongly to us by the Scottish Consumer Council, and we felt that it should be taken very much into account. If parents go in to make their appeal, which can often be quite a process for people who are not used to appealing or arguing in this way, and then find that the chairman of the appeal committee is a member of the education committee, they are bound, rightly or wrongly—perhaps mainly wrongly—to feel that the dice may be loaded against them before they start. It is that specific point that the amendment seeks to overcome.
        Question put and agreed to.

      Schedule 3

        APPLICATION OF CERTAIN PROVISIONS OF THIS ACT TO RECORDED CHILDREN AND YOUNG PERSONS
        Lords amendment: No. 25, in page 56, line 29, leave out "an education authority" and insert
        "the education authority for the area to which the child belongs (in accordance with section 23(3) of this Act)"
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        Mr. Deputy SpeakerWith this it will be convenient to discuss Lords amendment No. 26.
        Mr. FletcherThese amendments were moved in another place by my noble Friend the Minister of State to establish an exception to the general principle that the duties of education authorities in respect of placing requests extend to requests relating to children from outwith their area.
        The parents of recorded children have been granted the right, not available to others, to make a placing request specifying a grant-aided or independent school making provision for special educational needs. Special needs are, of course, already met in this way and quite frequently the school involved is not in the child's home area.
        As matters stood, the education authority receiving the placing request, which might in theory be any authority, would have a duty to finance the child's attendance at the specified school unless one of the listed grounds of refusal applied. It is clearly appropriate that any such duty to give financial support should be restricted to the home authority. The amendments provide that a placing request specifying a grant-aided or independent special school is valid only if it is made to the education authority which, in terms of section 23(3) of the 1980 Act, is responsible for making provision for the child's education.
        Question put and agreed to.
        Lords amendment No. 26 agreed to.
        Lords amendment: No. 27, in page 72, line 26, leave out "and 51" and insert ", 51 and 60 to 65F"
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        This is a technical amendment and is consequential upon amendments Nos. 7, 8, 13, 15 and 16, to which the

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        House has already agreed. The amendment widens the regulation-making power in section 23(3) of the 1980 Act to include the purpose of sections 60 to 65F of the 1980 Act.
        Question put and agreed to.
        No. 28, in page 72, line 27, at end insert—
        "7. After section 23(6) of that Act, there shall be inserted the following subsection—
        "(6A) Nothing in this section affects the duty under section 28A of this Act or that section as it has effect under schedule A2 to this Act of an education authority to place a child in accordance with a placing request or authorises them to decline to make for the pupil to whom the placing request relates such provision of school education as is mentioned in subsection (1) above."
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        The amendment is necessary to put beyond a shadow of doubt the duty of an education authority to comply with a placing request where the child concerned does not belong to the authority's area.
        Under the provisions of new section 28A, education authorities will be under an obligation to accede to a parent's request that his child should be admitted to a particular school except where one or more of the specified grounds of refusal apply. These grounds do not include the parents' area of residence: we do not believe that an authority should be able to refuse a parent's choice of school simply because the parent lives outside the catchment area for the school.
        The Government have made plain to the Convention of Scottish Local Authorities that they believe the same principle should apply across local authority boundaries. That is, an authority should not be able to refuse a placing request simply because the child concerned comes from outwith its area. Of course, it will be able to give priority to children from its own area, but if there is still room in a school after it has met the needs of those children it should not be able to refuse a place to someone from across the regional boundary or across the border. In accordance with this policy new section 28A of the 1980 Act, contained in clause 1 of the Bill, is expressed in general terms relating to a placing request made by any parent, not confined to a parent living in the area of the authority to which the request is addressed.
        It has been suggested, however, that there may be an inconsistency between new section 28A and the existing section 23(1) of the 1980 Act which could be interpreted as empowering, but not requiring, an education authority to make provision for a child resident in the area of another education authority or a local authority in England and Wales. Lest it be argued that this gives authorities a degree of discretion over whether they should or should not cater for such a child, the present amendment adds an additional subsection (6A) to section 23, and makes plain that nothing in that section affects an authority's duty to accede to a placing request and make provision for a child from outwith its area.
        Mr. O'NeillWho will pay for the education of children who go outwith their local authority? Will the home local authority or the receiving authority accede to the parents' request?
        Mr. FletcherThe home authority will automatically come under an obligation to pay the outwith area fee or contribution to the authority providing for the child. Thus,
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        schedule 9 repeals the proviso to section 23(2) of the 1980 Act, which at present allows the Secretary of State to direct that no contribution should be recoverable by the receiving authority on the ground that
        "there was no sufficient reason why he should not have attended a school provided by the authority of the area to which he belongs".
        This provision repeals those words.
        The amount of the fee payable by one education authority to another is in practice fixed by the Convention of Scottish Local Authorities on behalf of all education authorities, at present on the basis that it covers the full average cost of providing for a pupil; and under a similar arrangement it would also be open to the convention, in practice, to fix a fee covering the marginal cost only of admitting a pupil to a place that would otherwise remain empty.
        Question put and agreed to.

      Schedule 8

        TRANSITIONAL PROVISIONS
        No. 29, in page 72, leave out from beginning of line 34 to end of line 4 on page 73 and insert—
        "2. During any period—

        after the date of the coming into force of the provision of section 1(1) of this Act inserting into the principal Act the provision which becomes paragraph (d) of section 28A(3) of that Act; but

        before the date when section 4 of this Act comes into force,

        there shall be submitted for the said paragraph (d) the following paragraph—
        '(d) if the specified school is a specified school and the child has not been ascertained as requiring special education;'.
        2A. During any period—

        after the date of the coming into force of the provision of section 1(1) of this Act inserting into the principal Act the provisions which become sections 28C and 28E of that Act; but

        before the date when section 4 of this Act comes into force,

        the said sections 28C and 28E shall not apply in respect of a decision of an education authority refusing a placing request made in respect of a child who has been ascertained as requiring special education.".
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        Though it is at first sight fairly long and complex, this Government amendment was moved in the other place for technical drafting reasons. It substitutes more precise wording to identify those provisions in clause 1, whose coming into operation is to be taken as the starting point for the transitional period leading up to the introduction of the "special educational needs" provisions of the Bill. During this period the "placing in schools" provisions in clause 1 will operate by reference to the existing system of special education.
        Question put and agreed to.
        No. 30, in page 73, line 30, at end insert—
        "3A. Any consultation made or other thing done by an education authority for the purposes of their functions under Part I of the principal Act before the making of regulations under section 22A(2) of the principal Act which would if made or done after the making of those regulations be consultation for the purposes of section 22A(1) of the principal Act or part of the process of such consultation shall be deemed to be such consultation or, as the case may be, a part of the process of such consultation."
        5.45 pm
        Mr. Alexander FletcherI beg to move, That this House doth agree with the Lords in the said amendment.
        The purpose of the amendment is simply to clarify transitional arrangements to be made in connection with new section 22A inserted into the principal Act by clause 6. As hon. Members are aware, new section 22A requires consultations to be held on proposed changes in education arrangements of a kind prescribed in regulations. It would clearly be both wasteful and unreasonable if consultations or other actions by an education authority, which were in accordance with this new section, but which were carried out before this Bill became law and the regulations were made, had to be repeated following enactment. The amendment therefore provides that, in so far as such consultations carried out before the making of the regulations were in accordance with consultations required to be carried out under new section 22A, they will be deemed to be consultations held under that new section or part of the process of such consultations.
        In effect, the authority would not be required to repeat consultations which in the event fulfilled the requirements of new section 22A when regulations under that new section come into operation.
        Question put and agreed to.
        Lords amendment No. 31 agreed to.

        Road Traffic
        5.46 pm
        Mr. John PrescottI beg to move,
        That an humble Address be presented to Her Majesty, praying that the Hereford and Worcester Trial Area Order 1981 (S.I., 1981, No. 885), dated 19 June 1981, a copy of which was laid before this House on 6 July, be revoked.
        This prayer gives us an opportunity to discuss a trial area. In the Hereford and Worcester area the concept has been in being for only three weeks. Indeed, the concept was contained in the Transport Act 1980. It is a controversial matter. We opposed the concept of a trial area in Committee and on Report, but we were defeated. This is the second, not the first order. The Norfolk order also reflected the Act's intention to declare a designated area as a trial area for the operation of public road passenger services.
        In April, we did not oppose the latter order because it was largely in keeping with the concept embodied in the Bill. In that area there has not been much controversy about the order's implementation. However, that is not true of the Hereford and Worcester trial area order. That is an entirely different kettle of fish.
        It is important to remind ourselves about the Government's intentions when they designed these trial areas. Trial areas are not a new concept to Parliament. Some years ago a Labour Government used the term "trial areas" for experiments with certain types of transportation in rural areas where transport was difficult or expensive to maintain. Therefore, we have been involved in the principle of trials. However, the development of a trial area for all public bus transport in a designated area is a completely new concept. An attempt will be made to see whether road service licences can be done away with and whether the consumer can be provided with a greater choice in the provision of transport.
        In our earlier debates the Secretary of State outlined his anxiety about the decline in the number of bus passengers since 1949. He pointed out that the figure of 17,000 million passengers had declined to 7,000 million by 1979. That considerable decline worried hon. Members on both sides of the House. The Minister particularly wished to see whether it was possible to increase the choice available to passengers within a certain area by dismantling the system of controls that still exists in major parts of Britain. I refer to the road service licences that are given by the Traffic Commissioners. Appeals concerning them can be made to the Secretary of State.
        The Minister believes that the concept should be applied throughout the country though he is only prepared to test it in limited areas. We support him in that. Although we complain about the possible consequences of operating the scheme in a limited area, we do not wish to unleash ideological concepts on the travelling public in the country at large. The Minister was quite clear. He felt that this was an interesting limited experiment to see whether he could set the people and operators free. He wanted to become the Freddie Laker of the roads. The idea was that these trial areas would provide a good opportunity to test the theory that if one removes the requirement for a road service licence, the public will get better services and the taxpayer will pay less in subsidies.
        We were told that 10 counties were straining at the leash to become members of this exclusive club of trial

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        area operators. When they realised the significance of what the private and public transport operators told them about the maintenance of services, they shied off. They feared losing the integrated transport system. They were not prepared to put the system at risk, no matter how much it had declined over the years. They did not share the Minister's enthusiasm. The Minister was in favour of the scheme but he was somewhat sceptical about the role of road service licences. I remind the House of the Minister's remarks in Committee. He said:
        "What is in the Bill is based on prudence and caution. We wish to test the belief that road service licensing will prove unnecessary in trial areas introduced in consultation with the county councils and upon application by the county councils themselves."
        That was said during a debate about the right of county councils to consult district councils and whether district councils should have a veto on this question in the event of a disagreement about applications for trial areas between counties and districts. There is a considerable difference of opinion between the district councils and county council in the Hereford area.

        The Secretary of State also said:
        "The trial area itself is basically an area in which there is no restriction on the number of bus services."—[Official Report, Standing Committee H, 5 February 1980; c. 936–65.]
        It is clear from that that trial areas should be free from restriction. We must allow bus operators to give the best service that they can.
        That statement was echoed by the new Secretary of State in a speech at the Conservative Party conference because he said:
        "Our trial areas in Norfolk and Hereford and Worcester will, I hope, show us the way forward to further easing of restrictions."
        The idea behind the trial area was to be free of restrictions and not to burden our bus operators by commissioners deciding when a bus should run and what the fare should be. Such restrictions were regarded as a restraint on the provision of adequate services for the consumer.
        Looking at the facts of the Hereford case, one finds that the system is not as the Minister expected. Since certain financial inducements have been offered by the Government, I assume that agreement has been reached on how trial contracts in this area will be handled. The arguments in Committee about whether the Government would force such a system on areas have been reflected by the division in the county council of 45 votes to 33 after a debate on whether to risk being a trial area. That proposal has been vigorously opposed by some district councils which have only consultation rights. They will have to live with the judgment of the county council. There is a unique alliance between private and public sector operators against the implementation of the trial area.
        The expected 10 applicants did not knock on the Government's door, and Ministers have had to travel round with bags of cash to induce local authorities to introduce the system. I understand that it cost the Minister £200,000 in Norfolk and £140,000 in Hereford. I admit that that money might represent a combination of a direct grant and a transport supplementary grant, but it was paid out to persuade people to operate a system that the Minister once thought would not cost money. He believed that it would involve less money and produce better services. The counties have agreed to the system, not because of conviction but because they have been bribed financially. I am reminded of one of his speeches.
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        The press notice of a speech by the Under-Secretary, headed "Travel squandermania criticised", stated:
        "The spending of ratepayers' and taxpayers' money on cheap bus fares in the bigger cities is a waste of resources that could be spent in much more sensible ways and could lead to a serious loss of jobs."
        That did not prevent the Under-Secretary from running round with taxpayers money asking authorities to buy the trial area concept.
        According to a press statement by the local authority concerned, there will be no decorating of the area's 428 schools before the next century. The authority, apparently, will not be able to maintain the schools properly. Garden parties and fetes are being organised to raise money to repair rotten doors, and so on. If the Minister has £100,000 to spare, it would be better to give it to the education system so that the minimum standards of education may be guaranteed in the area of Hereford.
        However, the Minister has decided to use financial inducements. It would not be unfair to say that he is using bribes to persuade authorities to accept the trial area concept.
        What is the result? I have seen the figures. It appears that the fears of some hon. Members in Committee might well be justified, although it is a little early to say whether the new system has worked. The same applies to the Norfolk scheme. In Committee, we reduced the experimental period from three years to two years because we hoped to reduce the damage that we believed might occur as a result of pursuing the principle of trial areas. A number of authorities expressed views similar to those expressed in Committee.

        The Hereford scheme is different from the Norfolk scheme. It is also different from that envisaged in Committee. We must bear in mind that the Government's intention was to remove restrictions and to set bus operators and people free. The plan was to remove the requirement for the road service licence. However, a new licence came into being. The county council imposed a new requirement. It decided that it would determine the nature of the service, the competition and the type and quality of service operated. Education contracts are an important source of revenue to bus operators, particularly private operators. All operators were requested to give notice of the areas in which they would operate without subsidy. The real restrictions applied to areas for which bids have been made for contracts which require public support. The restrictions are considerable.
        Many forms have to be filled in when a request is made for a trial area. Information about timetables, fares, quarterly changes in the provision of services and the rates to be charged for scholars is required. Minimum and maximum fare levels have to be provided when a request for a subsidy to operate a service is made.
        It was much more information than the commissioner required under the old service. The operators have to fill in more forms and provide more information, presumably on the basis that the contract lasts only for 12 months—that is, if they can keep up with the contract during that time.
        Clearly, a road service licence has been replaced by a county council licence, except on the profitable areas where it does not require the agreement of the county council, although there are restrictions placed on that. If an operator is in receipt of a subsidy under the county council licence, he cannot compete on a profitable route and provide an alternative to the consumer. Apparently

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        that is not allowed, because, if he does that, he will be denied the subsidy given by the county council. Indeed, to make the restrictions tighter, the county council has set up a register—a club for subsidised operators. If an operator competes on profitable routes and he is in receipt of a subsidy for another route, he faces the penalty of the loss of that subsidy.
        The commissioner did not lay down any such restrictions. The restrictions for a county council licence are considerably greater than those for a commissioner licence. There is a disadvantage about appeals which Parliament writes in when it gives the power to the commissioner to decide such principles. Therefore, we now have a considerably different position. There is a further example of more restrictions being placed than was envisaged by the commissioner system. It is the old problem of private competition that everybody fears. When an operator produces a timetable, another bus operator can arrive three minutes earlier. The Transport Act 1930 was passed to prevent that sort of development. Under the provisions of the present Act there is nothing to stop somebody working three minutes ahead of an established route, and the existing company will need county council permission to withdraw. The fear is there will be another restriction providing that if the operator is in receipt of a subsidy, he will lose that subsidy if he carries out the competition that the Minister says he wants on routes which are not conditioned by subsidies. The evidence shows something quite different from what was intended by the Act, because there is a regulated system controlled by the county council.
        The result is difficult to assess, The Minister says that it will take two years and that we must wait and see. I am glad that I am not in the trial area and do not have to make the judgment. I have visited it and made clear my views about what I think the result will be at the end of the two years. I shall stand by that, and we shall see what the position is. However, sufficient evidence is beginning to surface. For example, the National Bus Company has reduced its routes to 400,000 miles from approximately 700,000 miles. It has pulled out of the non-profitable sector, gone away from the cross-subsidisation, and decided to limit its activities solely to the profitable area. There is no doubt that has happened. Whether the routes were profitable or non-profitable is a matter of judgment, but I am told by the company that there has been that reduction in mileage. It has led to a restriction of services at weekends, in the early hours and at night. It creates problems not for the majority of passengers, but for those who have to travel at those times. There is a student in my area who, because of that restriction in Humberside, cannot get to a lecture at 9 o'clock in the morning. He can get to the town only 10 or 20 miles away at half past nine or 10 o'clock. A few people only may be inconvenienced, but it undermines the way that we think a public service should be run.
        There has been a restriction in services. The private operators have taken up some of the services. We must wait and see how long they will last. Some prices have risen, others have been reduced and many remain the same. The report on that position estimates that, having gone through all the tendering systems, only one new operator was established. Two or three applied for each of the contracts, although it had been envisaged in the survey
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        that 25 new operators would emerge. The subsidy system budgeted for £160,700. Presumably, most of that is Government money so that the ratepayers do not gamble with their money. The operators are gambling with the bags of money given to them by the Minister when they were induced to take on the trial areas. The tenders show a reduction of about £62,000 on the year. The county surveyor is much more realistic about the possibilities. He believes that the service may cost more. It depends whether Midland Red can maintain its present services. There are doubts about that, because of the financial problems of the National Bus Company and the further restrictions on its financial obligations imposed by the Government in May.
        The smaller operators who have won contracts may find in a few months that they are not able to meet their obligations and that the service has cost much more than they estimated. There is evidence for that both in the Midland Red area and in my area of Humberside where the operators found, after two or three months, that the operation cost considerably more than the tender price they had submitted to the council.
        The reality is that the council recognises that in some instances some tenders may have been too low for economic viability and that certain operators may wish to terminate contracts after a few months' experience. The conditions of contract provide for that eventuality. The council wishes to show that the service costs less, but it allows contracts for less than 12 months because the tendering price may be too low and may have to be increased in two or three months. Those are the fears when an established system is disrupted.
        I must tell the Minister that one of the large operators in that area—I think it is Yeovils—opposed the system. It has 40 buses and claims that it has lost three operations through the tendering system. It believes that contracts have gone to operators with low tenders who may not be able to work economically. The company also points out that one operator who won a contract operates from a car park and has some arrangement with a garage about maintenance with non-union low-wage labour. No established bus operator, private or public, can hope to compete on those terms. The disaster is that the county council is prepared to allow for that. It is making a gain at the moment, but it admits that in a few months the operators may be knocking on its door and asking for more money. We must bear in mind that in future the costs of transport will increase far more than those in any other sector. The surveyor's report shows a certain amount of realism about the system upon which the council has embarked.
        There will be fewer services for the consumer. Some of the operators feel that they have to operate the system because the county council is enforcing it. Although they are co-operating, they are extremely doubtful about the full circumstances and consequential effects of the system.
        Our argument is that the order does not reflect the intentions of the trial areas as envisaged. We think that it raises important points about transportation and transport policies generally. One example is the new interpretation of the trial area that has been canvassed and debated. It may mean that the county councils that I visited in the summer, such as Devon, which would not touch the trial areas with a barge pole, but were perhaps tempted ideologically to consider it, now find and believe that if they can control the services by the purse strings—as many

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        county councils have wanted to do—they will be happy to have that control. The Minister may find more than two or three knocking on his door because the trial has beer adjusted not to the trial area envisaged and not to whether fewer restrictions produce better services. In fact, I have pointed out the restrictions. We find ourselves having to adjust to a situation which we think will lead to a deterioration in the established public sector at the expense of the small operator who is much more susceptible to the costs and operations of transport planning.
        The second area of major concern is the National Bus Company. It is a large operator with considerable overheads. It is probably a higher cost operator than it needs to be. When I look at the sort of offers and terms with which the National Bus Company has been involved, I often ask myself "When you did the map exercise, why did you not offer them 400,000 miles at no subsidy?" Why was that not considered? I do not agree with that principle. There is much work to be carried out on the costings of the National Bus Company. Various criticisms have been made in the House—
        Mr. Peter Fry (Wellingborough)Perhaps the NBC and other public transport operators recognise that hitherto there has been a duty to attempt to provide a degree of public service as opposed to a purely commercial service.
        Mr. PrescottI was coming to that sound transport concept, which is wrapped up in the question of cross-subsidisation. Since 1930 we have all believed that a balanced service should be provided and that it should be cross-subsidised. What is taking place in the trial areas may undermine that principle in the remainder of Britain. It may provide a direct threat. If the revenue and passenger miles of the NBC begin to reduce, that will affect its operating costs which, in turn, will affect other areas of its operation. Approximately 60 per cent. of operators in Britain are in the public sector, and they carry about 90 per cent. of the traffic. Therefore, it is important to maintain that major section of transportation.
        We must bear in mind that the financial targets placed upon the NBC by the previous Secretary of State require it to make further cuts in its costs. The Secretary of State said:
        "I have also set the company a performance aim for 1981 in terms of a reduction in operating costs per vehicle mile of 3 per cent. in real terms.—[Official Report, 22 May 1981; Vol. 5, c. 201.]
        That will increase the difficulties of maintaining the cross-subsidised service in which the NBC has been involved If the inter-city services are taken away from the NBC, its problems will become considerably worse, with serious consequences for the transportation system. That raises the question of the future of the NBC. However, I recognise that some deal has been made about legitimately considering the heavy capital interest costs of the company and its contribution to meeting its costs.
        Worry has been expressed by those living in the area affected by the order about safety operating standards. The Minister should keep a close watch on the operating standards, licences and control of the buses. It will be useful to know whether the standards are lower—as commonly alleged—because of smaller operators working on lower costs and cutting corners and paying non-union labour.
        I turn to the issue of licences. The order means that licences will be issued by county councils, which will
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        replace the commissioner. There is no appeal against a county council decision. There is no appeal to the Secretary of State. Previously, if an operator applied for certain routes that the commissioner thought would be against the public interest—for example, Whitehaven—and even if the inspector appointed by the Minister agreed, as he did, with the commissioner, the Secretary of State could and did say "My judgment is far better and I am overruling the decision." That sort of appeal will no longer be possible.
        The Opposition oppose the order because it does not reflect the terms and conditions laid down in the Act. It raises important issues that have not been debated by Parliament. The restrictions and controls of licensing being developed in the Hereford area may reduce the full consequences of the order. However, we believe that the order will lead to a reduction in services for the consumer at a higher cost to the taxpayer and ratepayer. We shall oppose the order in the Lobby tonight.
        6.14 pm
        Mr. Peter Temple-MorrisThe order affects my constituency. I have a long-standing interest in transport matters and spoke on Second Reading of the Bill. I do not intend to detain the House by repeating my Second Reading speech. However, I said at that time—and the hon. Member for Isle of Wight (Mr. Ross) agreed with me—that the proposals should not be put forward as a panacea for all the ills of rural transport. The problems are deeprooted and there is little or no money in rural transport. We fall back on the argument that, bearing in mind all the faults of the old system, we should achieve a proper level of subsidy, which, I regret, must always be given from our precious resources, in the most meritorious manner.
        I wish to deal with some of the specific remarks of the hon. Member for Kingston upon Hull, East (Mr. Prescott). We are grateful to him for providing an opportunity to discuss the matter. He put his case fairly. As he said, it is too early to decide whether the system is working. He mentioned that several times. Therefore, I hope that the Opposition will not force the House to divide. The hon. Gentleman said that he was glad that doctrinaire policies were not being followed throughout Britain. That is a two-edged sword. A debate at this stage is somewhat doctrinaire. We are discussing a worthy experiment that should be allowed to pursue its course.
        The hon. Gentleman suggested that district councils were against the order. In the short time that has been available to me, I have not found that to be the case. I am sure that the hon. Gentleman had good reason to make that claim, which, I assume, is a national summary. I wish him good luck in that context. However, in the Herefordshire area, where the experiment is taking place, district councils have not complained to me, although I have received five, if not 10, letters this week complaining about virtually everything else under the sun.
        Mr. PrescottI hope that the hon. Gentleman is not saying that district councils are not opposed to the order. They have taken votes on the issue. The city of Hereford is against it, as are other district councils. Simply because the hon. Gentleman has not received correspondence about the matter does not mean that the district councils in his area are not against it.
        Mr. Temple-MorrisI am sure that the hon. Gentleman has good grounds for his remarks. As he will appreciate, the city of Hereford is not in my constituency, although it is in my area. It is not one of the most rural councils. Indeed, it is the most urbanised council in my area. The very rural Leominster district council and other district councils will be primarily affected by the order. There are three in my constituency, and they have not complained to me.
        I and other hon. Members on both sides of the House have relentlessly pursued the byways and highways of our constituencies during the recess. I visited 35 villages in remote parts of my constituency, in addition to towns and other places.
        It should go on record that no complaint was ever made. It was mentioned only in the context that fares were tending to drop and that the National Bus Company was retreating to the main routes and leaving more of the isolated routes to the main competition. I say, so far so good for this experiment and for Leominster. I hope that the Minister is pleased to hear these words. He knows that my area requires this experiment to continue. If, at the end of the day—I shall not be doctrinaire or dogmatic—it is not working, for whatever reason, the House must reassess it.
        This is a long-standing problem. The public are not using the services that are provided because they have motor cars. Most people have motor cars and the proportion of those in rural areas who have motor cars is higher than in urban areas. The net result is that the old and young, who are often poor, suffer. That is the problem now and it was the problem before the experiment was introduced.
        We would all love to subsidise virtually everything if we could. However, when we do not have the necessary resources and when we have not had them for many years, we must consider seriously, fairly and honestly which are the most suitable areas to subsidise. We must stretch the private sector's role as much as possible. We must see what it can do.
        The old licensing procedures involved far too much procedure and it was far too difficult for any "new boy" to come into the business. With this experiment we shall be able to see what can be done and I hope that we shall have a much better service for the public. I hope that the experiment will succeed. We must bear in mind the poor old customer.
        I have much time for national bus companies and I do not criticise them or other original operators, which have been called upon to play a difficult role. However, at the end of the day the customer must be considered. If the experiment succeeds, the customer will be much better off. Indeed, he is already better off on certain routes. If it does not work and we start losing too many routes, it will not be enough to say that the fare has been reduced on route A if we lose routes B and C.
        There has been competition and there has been tendering within the experiment. It is said that the county council's role in some ways supersedes the traffic commissioners' role. The county council has not considered the rather tortuous criteria that the traffic commissioners used to have to consider. More importantly, it has put no fewer than 53 contracts out to tender. Many small operators have tendered for them and have obtained them.
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        The hon. Member for Kingston upon Hull, East, said that there were very few "new boys" coming in. However, if the 26 had come in, or even more than that, no doubt the cries of "cowboy" and "sheet tender" would have gone up more loudly than the criticisms that have been expressed by the Opposition. The experiment has given us one new boy and we have the sound system of existing operators who are mainly small. Where there has been no competition and there was no tendering, the tenders, in the view of the county council, have been much more expensive.
        Surely it makes sound sense for the nationalised bus companies to drop back to the main routes. We are all familiar with the rural areas, even those who represent urban constituencies. One has only to drive through them by day or night to see vast Midland Red buses. In my area there are vast buses. If the lights are on at night, one might see a solitary passenger sitting in the back seat admiring what he can see of the view. That is not good enough when one considers the amount of public money that is being expended.
        I want public money to go where it is needed—for example, to schools. It should not be poured into a company operating on both large and small roads, such as the National Bus Company, irrespective of the needs of the consumer and, although operating properly and well, expensively by comparison with the humble routes that might be operated at any given time.
        Finally, the experiment is being studied by many reputable bodies, including Bristol university, which has shown much interest in it. It is an active concept. It is far more active in Hereford and Worcester than in Norfolk. Norfolk has had its experiment and it does not seem to have taken off so well there. I concede that immediately. A go is being made of it in Hereford and Worcester and I ask the House to wait and see. I hope that we shall have a more informed debate subsequently. At present, as the Member for Kingston upon Hull, East has said, it is premature for us to seek to ascertain where the House stands on this matter.
        6.25 pm
        Mr. Peter Fry:First, I declare my interest, which is well known to those who take part in transport debates. My hon. Friend the Member for Leominster (Mr. Temple-Morris) made a significant remark. He said that public transport in rural areas virtually cannot survive without subsidy. That is one of the most significant aspects of this short debate. In the years when the Conservative Party was in Opposition, some of us thought profoundly how we could improve the level of public transport, especially in rural England, where it appeared to be collapsing.
        As I understood the original intention of the experimental areas, it was to have a virtual "free for all" and to see what could be provided. It was not intended to feed in public money from the center to keep services going. If that had been the original idea, we would have approached the problem from a slightly different angle. Having said that, it is significant that there now appears to be a realisation that in many parts of the country, we cannot keep even a skeleton of public transport without some subsidy. Whether that subsidy is paid on transport grounds, which I would dispute, or on social service

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        grounds is a subject that the House should debate on a future occasion. However, this debate is useful. Unfortunately, it is too late to be effective.
        A prayer to annul the order should have been tabled before the experiment came into being. As I understand it, it has been operating for about three months. In fairness, we should await what happens in Hereford and Worcester.
        Some of the questions asked by the hon. Member for Kingston upon Hull, East (Mr. Prescott) were interesting. Will many of the small operators find before 12 months are out that they are regretting the tender that they submitted and that there will not be the improved services that were intended? The Government are right to experiment and it is right to let the experiment run its course. However, at this stage I shall sound one or two words of warning to follow some of the comments that have been made. Cross-subsidisation has been the effective means of maintaining what public transport there is in many areas. We can disagree with cross-subsidisation when we can move completely away from it. If we do, we must accept the corollary that unprofitable services are likely to be dropped.
        I accept that over the short term, or even the medium to long term, Many people feel able to operate a service better and more economically than those operated in the public or private sectors. I would remind my hon. and learned Friend that what happened in coaching surprised even him. By and large it has not been the private operator who has cleaned up in the inter-coaching service. That has been done by the National Bus Company and its subsidiaries because of their size and organisation. They have been able to undercut and in some areas they have put out of business the private operators who had hoped to take advantage of the 1980 Transport Act.
        I am not saying that that is right or wrong. I am merely suggesting that the intentions behind the Act have not been fulfilled by events. I suspect that the Government's intentions in respect of experimental areas will follow a similar pattern. In some areas their intentions will be fulfilled but in others they will not.
        However, I am dismayed that the county council has apparently been put in the position of judge, jury, prosecuting counsel and just about everything else. I remind my hon. and learned Friend that, during the passage of the 1978 Transport Act, when the Conservative Party was in Opposition, we strenuously advanced the view that district councils should have a greater say in the transport balance. There were battles on that issue on many mornings in Committee. It is odd that the two parties appear to have transposed themselves now that the other is in Government.
        The district councils often know better than the county councils. They know what services the people want. As we get nearer to the population by approaching the first tier of elected representatives we often find that that man or woman knows better what his or her area wants.
        There is a great danger in making it appear that the traffic commissioner is virtually superfluous in experimental areas. I have spoken to private and public operators. I have discussed these matters with trade unions and bus operators. I have discovered that over the years there has been a healthy respect for the independence and integrity of the commissioners. If responsibility is handed solely to a local authority—dare I mention the building of empires?—there is a danger that some of the decisions that are taken will be viewed in a somewhat different light from
        348
        those that were taken by the commissioners and that there will not be the same respect for those making the decisions.
        I shall not oppose the order. The experiment should take place. Even if it proves to be a disaster it will be useful. That is because it will teach us how our ideas operate when put into practice. That is the only way in which we can test anything. We may theorise and write books, but at the end of the day we must implement our ideas.
        I commend my hon. and learned Friend and the Government for introducing the experiment but I hope that we shall not rush ahead and encourage too many experimental areas before we have examined closely the way in which the existing ones are operating. It would be a retrograde step to bribe too many areas to have experimental areas before we are aware of the long-term effects of those that are already in operation.
        There is a growing uneasiness among bus operators about how they will cope with the phasing out of bus grant. This is not a party political issue. The Labour Government arranged to phase out bus grant and the Conservative Administration have not changed the timetable. The problem of replacing modern buses, which are expensive assets, must occupy the minds of those who are trying to run public services. There was the commendable intention in part of the 1978 Act to provide some continuity of subsidy for bus operators to enable them to plan their services. That continuity has not been provided. That part of that Act has never been satisfactorily implemented.
        Bus grant is to be phased out and operators will be faced with the problem of finding money to replace their buses. Many small operators are in danger in the same respect as haulage operators of entering into competition and finding after a short while that they will no longer be able to continue. When that happens the question that arises is, "Who will pick up the mess?" If the services fail, are we to expect the county council to approach the Government to tell them, "These operators cannot run on this basis; you, the Government, must increase the money that is being provided."? This issue warrants the closest investigation.
        When my hon. and learned Friend replies, in his usual efficient way, I hope that he will take my comments in the spirit in which they are intended. It is not my purpose to carp or to criticise the Government's policies. There are many unresolved questions and at the end of the day we are interested in ensuring that the customer gets the best possible service. If the best possible service is one that provides no buses in the evening and no buses on Sundays, that might suit 80 per cent. of the local population that travels on the route but it might condemn the other 20 per cent. to virtual isolation.
        The answer does not lie in satisfying large percentages of local populations. We must consider the contribution that a bus service makes to the quality of life, especially in rural England. I hope that my right hon. Friend the Secretary of State will not be too ready to say, "I provided a new bus service between village A and village B but the public will not be able to use it for most of the week because it operates on an extremely restricted timetable." I hope that better services will flow from the experiment, but we are at an early stage. I ask my hon. and learned Friend to continue experimenting. However, if we are to subsidise, it might be better to view the overall situation.

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        If we abandon cross-subsidisation we may need more and more experimental areas and more and more public money to maintain the very minimum of public transport.
        6.36 pm
        Mr. Colin ShepherdI must apologise to you, Mr. Speaker, and to the hon. Member for Kingston upon Hull, East (Mr. Prescott) for not being in the Chamber at the start of the debate. I was conducting a party of constituents to the Minister of State, Department of Education and Science, about the closure of a school and the reorganisation of schools. I was placed in a rather difficult position.
        I do not wish to say very much about the order, which is very much centerd upon Hereford and Herefordshire. First, I commend the county council for its initiative in taking advantage of the offer to conduct the experiment. In my constituency there are a city service and rural services. They have been of great interest to me during the time that I have been a Member of this place and for much longer.
        The complaints that I have had levelled at me by my constituents over the years are based on large, empty buses rumbling through the countryside and phenomenal expense as perceived in bus fares. I have received complaints of services being discontinued in the city when there might have been a demand. However, demand has fallen off because of the high cost. The main operator in Hereford city has said to me consistently by innuendo that unless there is more subsidy the city service will collapse. He has then added, "Where will the city be then?" There has been a steady rumbling. It is said, "Unless there is more subsidy we shall have to pull out."
        If we do not conduct experiments we shall not ascertain what is possible for rural transport and urban transport. It is vital that we get the maximum possible juice out of the trial period and that we examine carefully the consequences after the expiry date. Indeed, as my hon. Friend the Member for Wellingborough (Mr. Fry) said, the experiment should be monitored as it proceeds so that the lessons can be learnt. If, as once again my hon. Friend the Member for Wellingborough said in his enlightened remarks, the experiment is a disaster, we shall thereby have learned that it was a disaster. However, if we find that the system adjusts itself to accommodate the different criteria that we have set for it and matches itself more accurately to the needs of those in the rural areas and in the cities, we shall have a sound foundation for breaking down some of the rigidity and nonsense within bus services.
        Over the years we have placed ourselves in an almighty twist over buses. We have built a massive superstructure, massive overheads and massive rigidity. That is because we have failed to realise that circumstances that applied in 1931 no longer apply. Therefore, it is right that we should conduct the experiment. I shall be watching its progress with great interest. I hope that towards the end of the experiment we shall have an opportunity to ascertain how it has gone and the lessons to be learnt from it.
        6.40 pm
        (Mr. Kenneth Clarke)As one or two hon. Members have said, in some ways the House has been unlucky in the
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        timing of the debate. As my hon. Friend the Member for Wellingborough (Mr. Fry) said, if the debate were to annul the order coming into effect, it should have been held earlier. On the other hand, as my hon. Friend the Member for Leominster (Mr. Temple-Morris) said, it is too early to judge the success of the experiment. That is an opinion with which I thought the hon. Member for Kingston upon Hull, East (Mr. Prescott) appeared to agree. That was no one's fault. The usual channels were unable to arrange a debate before the recess. The prayer against the order was tabled when the new system was merely being contemplated and we are now debating it a few weeks after it has come into effect.
        I understand why the Opposition felt that they had to table the prayer when they did because the introduction of the trial order in Hereford and Worcester was accompanied by a background of strong opposition from all sorts of bus operators and from two out of the four district councils affected—they were evenly balanced. No doubt the Opposition, who have always been opposed to those elements of the Transport Act 1980 that seemed likely to introduce into transport greater competition, flexibility and consumer choice, feared that there would be a disaster in this area.
        The Opposition were spurred on by warnings given by various people interested in the subject which, fortunately, did not deter the Hereford and Worcester county council. The banner headline of the Hereford Evening News of 11 March 1980 says: "Cowboys will ruin buses". Mr. Roger Shutt, deputy chairman of the city of Hereford public transport committee, said:
        "The scrapping of licence controls under the proposed Transport Bill will create 'cowboy' and 'maverick' bus operators … the local bus system could disappear under Hereford and Worcester County Council's experiment in making Herefordshire a 'free for all' area. Cowboys and maverick operators will cotton on to the best routes while other bus services will suffer. As they cut each other's prices and put each other out of business, the buses will gradually disappear."
        On 20 May 1980 a private operator, well known to those who follow the subject, Mr. Ron Whittle of the Confederation of British Road Passenger Transport Association, got headlines in the Hereford Evening News saying:
        "Buses 'free for all' warning. Services will be lost—operator. The establishment of a free enterprise bus system in Herefordshire could lead to the demise of services on uneconomic routes, according to a leading independent bus operator. The warning was given by Mr. Ron Whittle … He told a conference in Hereford that it was the public and the rural areas in particular which would suffer as a result of the creation of a free-for-all on the buses."
        Those are the fears that were voiced and that the Opposition shared when they tabled the prayer to the order. I hope that I shall persuade the House that those fears are unfounded and that so far, at this early stage, the order is proving to be something of a success.
        I do not criticise the Opposition for pressing on with their debate, because there have been recent reports giving the impression that all is not well in Hereford and Worcester. The Sunday Times last Sunday contained an article by Muriel Bowen, headlined:
        "Bus 'freedom' scheme is hitting the services".
        Miss Bowen appeared to believe that
        "Since the Hereford trial area came into operation in July, … there has been a reduction in bus services."
        Again I am glad to tell the House that that is based on a total misunderstanding of what has happened in Hereford since the order was made. Miss Bowen was referring to

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        the withdrawal of Midland Red from bus services in the area because Midland Red, as a national policy, decided that it would not participate in the tendering system for stage carriage. That does not mean that the public have lost services. To be specific, on 21 September 1981, which was when Midland Red withdrew its service from the area, the X91 from Hereford to Stratford was withdrawn. Most of that route was outside the trial area. The better used part outside the area between Malvern and Stratford was replaced by a new service, the X51. The part of the service in the trial area with which we are concerned has been fully replaced by an independent, private sector operator.
        On 21 September, Midland Red withdrew all services between Hereford and Ledbury, but they were replaced by the independent operator who had bid for the route. The new services operated at lower fares than those of the Midland Red. There has been no loss of service. A few evening and Sunday services have been withdrawn on those routes as the county withdrew the subsidy because of low patronage. That sort of thing has been going on steadily all over the country for some time. It was a deliberate decision by the county that they were large empty buses. New services are emerging in the trial area.
        The nationalised companies—Midland Red and National Welsh—for some reason decided not to go in for the tendering process for stage carriage. They tendered for services for assisted pupils, but now they have been withdrawn from the area. Now all the services are being provided by independent stage carriage services in the trial area. Therefore, some services have changed hands and some have changed hands between independents because a new independent successfully bid for the service. Usually the same fares as before apply. Some services have changed from Midland Red to independent private operators. In those cases, so far lower fares have been the first perceived effect by the customers in that area.
        Some examples of the changes in fares that have taken place so far with the changeover from a national bus company—either Midland Red or National Welsh routes—to independent private sector operators under the new arrangements have been supplied to me by the county council. I have mentioned Hereford and Ledbury. The National Bus Company charged 110p for a single journey. The fare is now 75p. A day return cost 175p and it is now 150p. Hereford to Tarrington cost 90p single, and the fare is now 50p. A day return was 145p and it is now £1. Hereford to Lugwardine was 55p single and it is now 40p. A day return was 90p and it is now 80p. Hereford to Tillington Common was 80p single and it is now 30p single. The day return fare was 130p and is now 60p. Hereford to Widemarsh Common was 20p single and is now 10p. A day return was 40p and is now 20p. Much Marcle to Ledbury was 65p single and is now 36p A day return was 105p and is now 60p.
        Those changes are where the new operator is operating substantially reduced fares. I do not say that to criticise the National Bus Company fare operations, but it illustrates one of the points made by my hon. Friend the Member for Leominster, and one of the points which we made repeatedly throughout our discussions on the Transport Act 1980 about rural services. There are many areas where the local operator with lower overheads and a more flexible ability to respond to service demand will often be able to provide rural services in a much more cost effective way than the large nationalised concerns.
        Mr. Albert BoothIn fairness to the House, will the Minister say that the National Bus Company is operating a series of routes in that trial area? Its fares were reduced when it cut back its scheduling in order to run only over such parts of the routes as it could operate without transport supplementary grant. Therefore, it is misleading, at least, to suggest that in taking over parts of schedules from the National Bus Company new operators have brought in lower fares, because the National Bus Company reduced fares and now operates in the area without transport supplementary grant. Private operators working in the area, however, receive transport supplementary grant.
        Mr. ClarkeThe private operators are receiving less transport supplementary grant than the National Bus Company used to, and they have reduced the fares. There are still some national bus services operating on a non-supplementary grant basis. For some reason they decided not to bid for revenue support and take part in the tendering process. Fares have been reduced, in some cases in response to competition with independents. But the overall picture is that so far the fares have come down where there has been a transfer of rural routes from the national buses to the independents.
        The first applications are coming in for new services where people have taken advantage of the de-licensing in the area. The county council will deal with these, but I understand that applications are coming in from Hemming Coachways, which wants to provide new services from Worcester to Leominster via Bromyard. Some of them will be inside the trial area. Some will be outside and require traffic commissioner approval. A company called Flash Coaches is proposing to provide additional peak hour services in the Hereford city area, particularly in the Newton Farm and College Road areas. It is proposing to introduce a new Sunday service out of Hereford to Widemarsh Common. From the customers' point of view, the present pattern is fairly satisfactory.
        I stress for the last time that one is only saying, as my hon. Friend the Member for Leominster has said, "So far, so good". I am not claiming, on the basis of three weeks' operation, that the overwhelming success of the trial area has been proved. But so far, in this limited period, there has been no loss of services, the fares are generally lower, there is less cost in subsidy to the ratepayer and the taxpayer, and new services seem to be in the offing. It is a very limited period, but I put it to the hon. Member for Kingston upon Hull, East that that is a curious background against which to vote against the order and try to stop the experiment.
        A great deal of credit for what has happened must go to the Hereford and Worcester county council, rather than to the Government, who brought about the change in the law. Hereford and Worcester county council has devised its own system in order to take advantage of the trial area arrangements. I readily concede to the hon. Member for Kingston upon Hull, East that the method adopted by the council is not one which was contemplated by the Ministers concerned. It is, as it were, a Hereford and Worcester one-off use of the trial area. Nevertheless, I say "Good luck" to the Hereford and Worcester county council.
        During the debates on the Transport Bill, we made clear that what we were proposing in trial areas, as elsewhere, would not cut across or reduce in any way the role of

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        county councils in managing their transport policies. It is up to them to take advantage of what we have done and to devise their own methods in doing so.
        There have been some quotations from the Official Report, and I should like to quote from what I said on the subject on Report:
        "Counties must realise that trial areas are not a substitute for revenue support… However, trial areas will provide counties with an opportunity to use revenue support in an intelligent, creative and better way. Trial areas will identify not only the present routes, who operates them, what are their losses and how much finance is required to keep them running—most of the present networks are a combination of history and chance—but which routes the county council, as the transport authority, considers to be fulfilling a public need but which are not being served or which might not be served if there were change to a more commercial regime. The county councils must identify the routes and the public need, and decide how to make intelligent use of their revenue support to provide the necessary services."
        Later I said:
        "We are indicating that counties can, if they so wish, take away the restrictions on road service licensing where they can make better use of revenue support. Once the restrictions have been lifted, there will be a wider choice of operators and service. It is for the county councils to use the purse strings that are in their possession and their duties as a co-ordinating authorities to make the best use of the moneys provided."—[Official Report, 24 March 1980; Vol. 981, c. 1023–4.]
        That is what the county council is doing in Hereford and Worcester, but I had not expected that this method would be adopted. The county council is using the purse strings, as the hon. Member for Kingston upon Hull, East has said. It is identifying the routes that it wishes to support because it perceives a social need for them. The county is inviting tenders from operators who want to provide those services. It is choosing the service that seems, in its eyes, to give its ratepayers the best value for money, and it is allowing the operators to provide services in a way that is much more matched to social need.
        In our debates on the Transport Bill that general approach is certainly what we anticipated. We much prefer that approach to the idea that we can go on pouring in subsidies to the existing network provided by the existing operator, who comes along at the end of the year and says how much he thinks he is losing in the particular area of the county council and expects the council to foot the bill.
        Mr. PrescottThat will happen now.
        Mr. ClarkeI have understood that there are some doubts about the tendering process that has been carried out by Hereford and Worcester. I have, therefore, contacted Hereford and Worcester in order to find out exactly what have been the rules of the tendering process that the council has undertaken. The council has kindly discussed the matter with me. The council insists that there is no question of stifling competition between the operators. There is no question of taking sanctions against operators who do not co-operate.
        I am told that if an operator moves on to a service which at the moment is being provided by a subsidised operator, and the new operator moves in on an unsubsidised basis, obviously the council will be wary if later that new operator wants some subsidy for his service. The council also reserves the right, on school contracts, to shop around in the way that all county councils do. Otherwise, the tendering process has been aimed at getting the operators to provide the services which the county council wants. The county council has no licensing role.
        Mr. Prescott Mr. Prescott: Oh!
        Mr. ClarkeNo, the county council has no licensing role. The process that has been described by the hon. Member is the one that the county council has adopted in order to decide how to use the revenue support that it proposes to give, and it has gone for the tendering process.
        The county council invited tenders for 53 services. All those services are now being provided. There were competitive bids for almost all of them. In five cases, three different operators bid for a service. In the majority of cases there were two operators bidding. There are now 13 operators, including the two National Bus Company subsidiaries, because they are providing some contracts for what are described as "entitled scholars" in the area. All the services have been taken up. There has been no transport desert. There has been no falling-off of services. The system is working rather well, in the manner that I have described.
        It has been said that the county has taken this action only because we bribed the county to do it. Reference has been made by my hon. Friend the Member for Wellingborough, as well as by the hon. Member for Kingston upon Hull, East to offers of Government money for these operations. It is certainly true that—as with Norfolk—when Hereford and Worcester made the bid, which all county councils make each year, for transport supplementary grant, it put in an additional bid of £100,000 for what it feared might be the transitional cost of adopting a trial area system. The county council regarded itself as being prudent and saw this as an insurance policy against transitional cost which might emerge in going from the old system to the new. In our opinion, the county council was being very prudent. But when one looks at the almost hysterical campaigning which was taking place against the whole idea of a trial area, it is hardly surprising that the county should have wanted to have some insurance policy behind it.
        The Secretary of State took those additional bids into account in awarding transport supplementary grant to the council. But so far, as again the hon. Member for Kingston upon Hull, East said, the county has found that it has not been necessary to use the additional money, or certainly not all of it, although the officials have put forward caveats to the effect that if there is a need to revise contracts after a short time, the council may need to draw on a larger part of that sum than has so far proved to be necessary. If the county does not draw on it, it will be in the happy position of having money available which it will be able to use in looking round for ways in which to indentify other worthwhile services. It will be able to repeat the process and develop an independent lower cost network throughout its rural areas, in that way improving its public transport system. Benefits could, therefore, flow to the area if the system continued to be a success.
        It would seem, therefore, to be foolish to reject the order tonight. I hope that the trial area will be allowed to continue, in the hope that it will be as successful in the future as it has been so far. All the dafter arguments that have been used about trial areas are plainly wrong. A transport desert has not opened up in Hereford and Worcester. The first experiences there have been entirely favourable from the point of view of the county and the customers.
        If the scheme remains successful it will continue for a minimum of two years, but it will not end in two years;

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        it will go on indefinitely. The trial area is terminable. It is possible for the county council to approach the Secretary of State after two years and ask him to terminate it, but it will be terminated only if the county council makes that approach and if the Secretary of State agrees. We shall not terminate a trial area unless it turns out that the whole experiment is going wrong. I hope that the Hereford and Worcester trial area will prove to be a continuing success and will be initiated elsewhere.
        Norfolk has been cited. Nobody has prayed against that order because nothing dramatic has happened there. The trial area has been declared, the traffic commissioners' control has been ended, the services are running and nobody has found anything left to make a fuss about. If anything, Norfolk has probably been a little too restrictive in the area that it has derestricted. It might, with hindsight have been a little more ambitious. Certainly, this has done no harm in Norfolk. I hope that other parts of the country will look at the experience of those two counties and will now put forward their own poposals.
        The whole concept of trial areas was based upon the Government's belief that in significant areas of the country the whole paraphernalia of the traffic commissioner system would turn out to be serving no worthwhile purpose. It was there because it was there, and removing it might give county councils more opportunity to develop services in a way that would match modern public demands. We should certainly like to see more trial areas as the fears about them seem so far to be utterly groundless.
        In conclusion, the narrow subject of trial areas by no means covers the whole problem of rural transport. It was never claimed to be the answer to rural transport problems I agree with my hon. Friend the Member for Leominster that it certainly is not. Indeed, the concept of trial areas is not particularly aimed at rural areas alone. We are awaiting the first application from an urban area. I personally am sure that a useful trial could be carried out in a non-rural setting to see whether the present licensing restrictions really do much good in some of our medium sized towns and even in our cities.
        The scheme in Hereford and Worcester is just one experiment. The answer for rural areas lies in experiments and innovation of all kinds. We want low-cost, independent operators with a rural base to emerge on to the scene. We want more community buses. We want more use of post buses, which are extensively used in Scotland. Car-sharing has a continuing and growing role to play in rural areas. There is room for more facilities to be shared with the services provided by social service and education departments. A great deal of additional thought and effort is needed on the whole problem of rural transport. The Government intend to give all this very high priority. In rural areas, as elsewhere, there is great need and much room for innovation, for new ideas, experiments and competition, for new operators and a more flexible range of services.
        I believe that the Hereford and Worcester trial area has every prospect of opening the way for all those things, to the great benefit of people living in that part of the country. I therefore hope that the House will support the order and reject the prayer if, in the light of three weeks' experience, the Opposition insist upon voting against something which appears to be heading for modest but reasonable success.
        7.2 pm
        Mr. PrescottClearly, there is a broad philosophical difference between the two sides in their approach to transport matters. This was aired in the opening speeches and in some cases throughout the debate and I shall not reiterate the arguments.
        Our basic contention has been that the second order for a trial area does not reflect the principle envisaged by the Minister. Indeed, his colleagues have made that point. We believe that a new principle is being enunciated, giving the county the right to control, through the licence of the purse strings, in a far more restrictive way than that in which road service licensing is at present conducted by the commissioners.
        The Minister said nothing about rights of appeal in this matter. Parliament has always been prepared to provide for appeals in public interest matters, but that does not apply to the county councils.
        I shall not reiterate the arguments. We believe that the free enterprise, all-competing concept has put the fear of life into these areas. They are therefore making sure that it does not apply by introducing restrictions and controls. If so, the Minister must face the argument that one has to subsidise bus services in order to maintain a total network. If that is the position, the House should decide the matter on that basis rather than support an order which clearly does not face up to the free enterprise concept, but is simply another system of controls and restrictions maintained by the taxpayer.
        The Minister says that we may have to wait for two years or so to see what happens. We believe that at the end of that time the consumer and the operator will be worse off and the taxpayer will be paying considerably more. The reason why we shall vote tonight, however, is to make our position on this matter absolutely clear. We did not have the chance to do so during the passage of the Act because it did not envisage this way of operating a trial area. As the Minister said that he is considering extending it to other areas on these terms, the Opposition must make it absolutely clear that they oppose the principle embodied in the order.
        Question put:
        The House divided: Ayes 103, Noes 179.
        Division No. 308] [7.05 pm

        AYES

        Allaun, Frank

        Douglas-Mann, Bruce

        Archer, Rt Hon Peter

        Dunnett, Jack

        Ashton, Joe

        Dunwoody, Hon Mrs G.

        Atkinson, N. (H'gey,)

        Eadie, Alex

        Booth, Rt Hon Albert

        Eastham, Ken

        Brown, Hugh D. (Provan)

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

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

        English, Michael

        Buchan, Norman

        Ennals, Rt Hon David

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

        Evans, John (Newton)

        Campbell-Savours, Dale

        Fletcher, Ted (Darlington)

        Carmichael, Neil

        Ford, Ben

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

        Foster, Derek

        Concannon, Rt Hon J. D.

        Foulkes, George

        Craigen, J. M. (G'gow, M'hill)

        Freeson, Rt Hon Reginald

        Cryer, Bob

        George, Bruce

        Cunliffe, Lawrence

        Gilbert, Rt Hon Dr John

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

        Graham, Ted

        Dalyell, Tam

        Hamilton, James (Bothwell)

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

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

        Dean, Joseph (Leeds West)

        Hardy, Peter

        Dewar, Donald

        Harrison, Rt Hon Walter

        Dixon, Donald

        Hart, Fit Hon Dame Judith

        Dormand, Jack

        Hattersley, Rt Hon Roy

        Douglas, Dick

        Home Robertson, John

        NOES

        Alexander, Richard

        Carlisle, John (Luton West)

        Alton, David

        Carlisle, Kenneth (Lincoln)

        Ancram, Michael

        Cartwright, John

        Arnold Tom

        Churchchill, W.S.

        Aspinwall, Jack

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

        Atkins, Robert (Preston N)

        Clark, Sir W. (Croydon S)

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

        Clarke, Kenneth (Rushcliffe)

        Baker, Nicholas (N Dorset)

        Cockeram, Eric

        Banks, Robert

        Colvin, Michael

        Beith, A. J.

        Cope, John

        Bell, Sir Ronald

        Cormack, Patrick

        Bendall, Vivian

        Cranborne, Viscount

        Bennett, Sir Frederic (T'bay)

        Crouch, David

        Benyon, Thomas (A'don)

        Dean, Paul (North Somerset)

        Berry, Hon Anthony

        Dickens, Geoffrey

        Biggs-Davison, Sir John

        Dorrell, Stephen

        Blackburn, John

        Douglas-Hamilton, Lord J.

        Bonsor, Sir Nicholas

        Dover, Denshore

        Boscawen, Hon Robert

        Dunn, James A.

        Boyson, Dr Rhodes

        Dunn, Robert (Dartford)

        Braine, Sir Bernard

        Eggar, Tim

        Brinton, Tim

        Fairgrieve, Sir Russell

        Brittan, Rt. Hon. Leon

        Faith, Mrs Sheila

        Brotherton, Michael

        Fisher, Sir Nigel

        Brown, Michael(Brigg &W Sc'n)

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

        Budgen, Nick

        Fletcher-Cooke, Sir Charles

        Bulmer, Esmond

        Fookes, Miss Janet

        Burden, Sir Frederick

        Fox, Marcus

        Butcher, John

        Fraser, Peter (South Angus)

        Cadbury, Jocelyn

        Freud, Clement

        Question accordingly negatived

        Hughes, Robert (Aberdeen N)

        Powell, Raymond (Ogmore)

        Jones, Rt Hon Alec (Rh'dda)

        Prescott, John

        Jones, Barry (East Flint)

        Radice, Giles

        Kerr, Russell

        Robertson, George

        Lamond, James

        Rooker, J. W.

        Leadbitter, Ted

        Ross, Ernest (Dundee West)

        Leighton, Ronald

        Sever, John

        Lestor, Miss Joan

        Skinner, Dennis

        Lewis, Ron (Carlisle)

        Spriggs, Leslie

        McCartney, Hugh

        Stewart, Rt Hon D. (W Isles)

        McDonald, Dr Oonagh

        Stoddart, David

        McElhone, Frank

        Stott, Roger

        McGuire, Michael (Ince)

        Taylor, Mrs Ann (Bolton W)

        McKay, Allen (Penistone)

        Thorne, Stan (Preston South)

        McKelvey, William

        Urwin, Rt Hon Tom

        MacKenzie, Rt Hon Gregor

        Wainwright, E. (Dearne V)

        McNamara, Kevin

        Walker, Rt Hon H. (D'caster)

        McTaggart, Robert

        Welsh, Michael

        McWilliam, John

        White, J. (G'gow Pollok)

        Marks, Kenneth

        Whitlock, William

        Mason, Rt Hon Roy

        Willey, Rt Hon Frederick

        Maxton, John

        Winnick, David

        Milian, Rt Hon Bruce

        Woodall, Alec

        Miller, Dr M. S. (E Kilbride)

        Woolmer, Kenneth

        Morton, George

        Wright, Sheila

        O'Neill, Martin

        Palmer, Arthur

        Tellers for the Ayes:

        Park, George

        Mr. Donald Coleman and

        Parker, John

        Mr. Frank Haynes.

        Parry, Robert

        Fry, Peter

        Normanton, Tom

        Garle-Jones, Tristan

        Onslow, Cranley

        Goodhew, Victor

        Osborn, John

        Goodlad, Alastair

        Page, John (Harrow, West)

        Gray, Hamish

        Page, Richard (SW Herts)

        Griffiths, Peter Portsm'th N)

        Pattie, Geoffrey

        Grist, Ian

        Pawsey, James

        Grylls, Michael

        Penhaligon, David

        Hampson, Dr Keith

        Pink, R. Bonner

        Haselhurst Alan

        Pollock, Alexander

        Hawksley, warren

        Prentice, Rt Hon Reg

        Henderson, Barry

        Proctor, K. Harvey

        Holland, Phillip (Carlton)

        Raison, Timothy

        Hooson, Tom

        Rathbone, Tim

        Howell, Ralph (N Norfolk)

        Renton, Tim

        Howells, Geraint

        Rhys Williams, Sir Brandon

        Hunt, David (Wirral)

        Roberts, Wyn (Conway)

        Hunt, John (Ravensbourne)

        Roper, John

        Johnson Smith, Geoffrey

        Ross, Stephen (Isle of Wright)

        Johnston, Russell (Inverness)

        Rossi, Hugh

        Jopling, Rt Hon Michael

        Sainsbury, Hon Timothy

        Kaberry, Sir Donald

        St. John-Stevas, Rt Hon N.

        Kellett-Bowman, Mrs Elaine

        Shaw, Giles (Pudsey)

        Kershaw, Sir Anthony

        Shaw, Michael (Scarborough)

        Knight, Mrs Jill

        Shepherd, Colin (Hereford)

        Knox, David

        Speller, Tony

        Lawson, Rt Hon Nigel

        Spicer, Jim (West Dorset)

        Lee, John

        Spicer, Michael (S Worcs)

        Lewis, Kenneth (Rutland)

        Stainton, Keith

        Lloyd, Peter (Fareham)

        Stanbrook, Ivor

        Loveridge, John

        Steel, Rt Hon David

        Lyell, Nicholas

        Stokes, John

        McCrindle, Robert

        Taylor, Teddy (S'end E)

        Macfarlane, Neil

        Temple-Morris, Peter

        McNair-Wilson, M. (N'bury)

        Thomas, Mike (Newcastle E)

        McQuarrie, Albert

        Thomas, Rt Hon Peter

        Major, John

        Thompson, Donald

        Marland, Paul

        Townend, John (Bridlington)

        Marlow, Antony

        Townsend, Cyril D, (B'heath)

        Marshall, Michael (Arundel)

        Tripper, David

        Mather, Carol

        Van Straubenzee, Sir W.

        Maude, Rt Hon Sir Angus

        Viggers, Peter

        Mawby, Ray

        Waddington, David

        Mawhinney, Dr Brian

        Walker, B. (Perth)

        Maxwell-Hyslop, Robin

        Walker-Smith, Rt Hon Sir D.

        Meyer, Sir Anthony

        Waller, Gary

        Mills, lain (Meriden)

        Warren, Kenneth

        Moate, Roger

        Watson, John

        Monro, Sir Hector

        Wells, John (Maidstone)

        Montgomery, Fergus

        Wells, Bowen

        Morgan, Geraint

        Wheeler, John

        Morris, M. (N' hampton S)

        Wickenden, Keith

        Morrison, Hon C. (Devizes)

        Williams, D. (Montgomery)

        Murphy, Christopher

        Wolfson, Mark

        Myles, David

        Young, Sir George (Acton)

        Neale, Gerrard

        Needham, Richard

        Tellers for the Noes:

        Nelson, Anthony

        Mr. Peter Brooke and

        Neubert, Michael

        Mr. Selwyn Gummer.

        Newton, Tony

        Education (Scotland)
        7.16 pm
        Mr. Martin J. O'NeillI beg to move,
        That an humble address be presented to Her Majesty, praying that the approval by the Secretary of State for Scotland, dated 8 April 1981, of the Lothian Regional Council's Transfer Scheme 1980, dated 9 December 1980, a copy of which scheme was laid before this House on 30 June, be revoked.
        Our opposition to the Lothian region's transfer scheme centers on the amendments which the Secretary of State is seeking to impose on that region. We believe that those amendments, which serve to undermine the Lothian region scheme, are simply part of the right hon. Gentleman's petty vendetta against Lothian region because of the disagreements he has had in recent years over the level of provision which, with democratic approval, the region has decided to make available to the people in the area.
        The scheme, as amended by the Secretary of State, is designed to fall in line with the Education (Scotland) Bill which was given approval this afternoon. However, the right hon. Gentleman first started in August last year to enforce his views on the Lothian region. At that time, he wrote to the region requesting a scheme along the lines anticipated in the new legislation. I say "anticipated", because at that time the Education (Scotland) Bill had not even been published.
        In August 1980, six weeks were given for the scheme to be presented to the Secretary of State. At that time, the Lothian region said that the six-week period was insufficient as it wished to consult the region's schools councils. The right hon. Gentleman agreed to an extension until December so that those consultations could be carried out.
        The consultations were far-reaching and involved a variety of groups, because the schools council organisation in Lothian region is based on a secondary school with feeder primaries. As a result, there are many of these bodies, and all of them replied.
        The burden of those replies was that the existing provision for the transfer of pupils and parental appeal was, by and large, satisfactory, although there were several areas where it was felt there could be greater flexibility. The region took these pretty mild criticisms on board, and the scheme presented to the Secretary of State embodied the views of the schools councils following their acceptance by the Lothian regional council.
        The Secretary of State's reaction was to put an advertisement in the local press requesting individual responses to the scheme. Any test of public opinion based on a self-selective sample is bound to be suspect. In this instance, the Secretary of State used it as the basis for his opposition to the Lothian scheme and suggested that there was a need for even greater flexibility.
        At this stage, it is worth while pointing out some of the criteria on which the Lothian scheme was to be operated. First, all the secondary schools were examined and the level of staffing to be allocated for the forthcoming session was anticipated and related to the number of pupils in the first year of secondary school. The maximum class size was set at 33, with exceptions if limitations were imposed by the size of classrooms, the internal organisation or staffing in certain practical subjects, down to a minimum
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        of 30. Account was also taken of the fact that there would be remedial classes, some of which would be half the size of normal classes
        In addition, account was taken—this is important—of the planned removal of some of the older buildings and transportable units. Accommodation, therefore, was one of Lothian region's first considerations. Over many years it has endeavoured to improve the quality of accommodation and to take advantage of the reduction in school numbers wherever possible.
        The council then looked at the grounds for refusing its request. The minutes of the education committee state:
        "The amendments to the scheme stipulated by the Secretary of State require that requests shall normally be granted if there is accommodation in the secondary school desired by the parent."
        Unfortunately, the Secretary of State's diktat did not in any way measure up to the criteria that Lothian had laid down for accommodation. Lothian took account of the provisions under what was then the Education (Scotland) (No. 2) Bill. It is still uncertain and unhappy about the provisions made for accommodation. It feels that its ambitions for the children for whom it is responsible are higher than the Minister's.
        Lothian region also laid down priority criteria for admission. It is worth putting them on the record. The aim was:
        "to afford the opportunity to children in primary 7 moving to secondary year 1."
        The priority criteria were:
        "certificated medical reasons including ease of access in the case of disabled pupils; brother/sister already in attendance at the school requested; pupil requesting a specific educational course not available in the local school; behavioural problems related to the individual pupil or his/her siblings; nature of the parents' employment where child could become subject to stress at the local school; place of employment of parents or other domestic reason resulting in the pupil being cared for near to non-district school; parental affinity with the aims, philosophy and religious beliefs of the school; road safety; attendance of pupil at a non-district primary school feeder; ease of travel; parents of siblings attended school; relatives of other siblings attending school."
        The priority criteria were clearly spelt out and were included in the minutes of the education committee meeting. They were fairly comprehensible for anyone who wanted to take the trouble to find out what they were.
        That was not the action of an authority that should be singled out for action, as Lothian has been. The Minister has not taken any other local authority to task and, as far as I know, has certainly laid no other such measure before the House. I am interested to know whether he has in fact seen fit to bring any other measure before the House.
        On Second Reading of the Education (Scotland) Bill, we discussed the comparative statistics of the four Labour local authorities, which showed that about 97 per cent. of all placements were accepted without appeal. Only about 3 per cent. of parents were not satisfied with the choice of school presented by the local authority. The reason for the Secretary of State's desire to whip Lothian into line can only be assumed to be part of his vendetta against Lothian region in recent months.
        It was requested that the proposed amendments be given full and proper consideration, but we are confident that the provisions made by Lothian region met the criteria. Statistics provided by the region show that in the first instance a request is made to the director and is then handled administratively. An appeal is then made to the first transfer committee, then to a second transfer committee, to a third and in some cases a fourth and fifth transfer committee. The appeals have been moderately

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        successful and, in many cases, once the individuals concerned had been given a hearing by the education committee, they were happy to accede to the demands. I understand that only 20 parents kept their children away from school for any length of time and, of those, 10 were involved in the famous Leith academy court case. There were only 10 other instances where parents were forced to take extreme action and to withdraw their children from school.
        The availability of a variety of appeals, the use by parents of the ultimate illegal sanction in a small number of cases and the general level of appeal against a transfer offer suggest that Lothian region is no worse or no better than any other region. In fact, it can be argued that Lothian region has a more clear and specific programme than most other Scottish authorities.
        In Committee on the Education (Scotland) Bill it was stated that other local authorities had used the schools councils in a slightly different way. That is because of the nature of the organisation of the schools councils. For example, in Strathclyde a group of secondary schools have joined together and the schools council covers several schools rather than simply one secondary with feeder primaries. It is almost academic to consider which of the two schemes is more desirable. The Secretary of State did not interfere in the scheme that Strathclyde offered. He may have been happy with it. If so, perhaps he should have suggested that Lothian adopt the Strathclyde model instead of choosing a scheme closely tied to what was anticipated as the new format in the Education (Scotland) Bill.
        As I said, the Minister has tried to dictate to Lothian before Parliament reached a decision. Since the middle of April a scheme not dissimilar to that in the new legislation has operated in the Lothian region. Lothian—I agree grudgingly—accepted the diktat of the Secretary of State and operated the scheme as it was required to do. However, the Labour-controlled local authority approached the Opposition to have the matter considered by Parliament, as it is entitled to do under the 1980 Act. A local authority should have the right to determine its admission criteria, albeit against the background of legislation. The previous Government talked of parents' charters, so the anxiety of parents to have the right to question local authority decisions is not an exclusive preserve of this Government.
        Greater credence must be given in the development of a comprehensive system of education to the concept of the neighbourhood comprehensive. I have rarely heard the Minister mention the concept with great enthusiasm. He is reported in The Scotsman as wanting to close neighbourhood comprehensives in Edinburgh and Glasgow.
        Lothian has gone out of its way to improve school accommodation and the quality of education generally, and should have been supported in bolstering the neighbourhood comprehensive. Instead, it has been criticised and challenged at every turn. In this instance the Minister seeks to force it into a corner by using the 1980 Act in anticipation of the legislation completed this afternoon. No other local authority has been subject to that tactic. It is yet another example of the Secretary of State having a go at Lothian. It is utterly unreasonable.
        Lothian has gone out of its way to provide a sensible and coherent system, albeit different from other local
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        authorities. However, one attraction of local government is local choice, which should be available to local politicians just as much as to parents. In Lothian region the majority of parents are satisfied with the education and choices available. They may not continue to be satisfied when criteria as vague and unspecific as those applied by the Secretary of State come into effect and difficulties arise with schools that were undergoing programmes of renewal and development.
        Some schools may find that pupils are taken away not for education reasons but because of ill-informed parental prejudices. There are schools in Edinburgh—I have taught at some schools—that have reputations that are long undeserved. A snobbishness prevails in Edinburgh. Parents may not be able to send their children to fee-paying schools, which they consider desirable, because they cannot pay for them or because their children may not be acceptable to schools under the assisted places scheme. They will try to ensure that they are not sent to balanced community schools.
        Lothian region wishes to develop the neighbourhood comprehensive to make sure that the accommodation is viable and financial provision is sufficient to attract the most able and committed staff. Over the years the Secretary of State has criticised Lothian for alleged overspending, but much of its spending is on education. Lothian has been one of the biggest spenders on education. It has put tremendous efforts into improving the system, which had been allowed to decay until the early 1970s under successive Tory councils on the old Edinburgh corporation. The Minister is trying to turn the clock back and prevent education provision from going from strength to strength.
        We oppose the measure. It interferes with the rights of local authorities and is yet another example of the Government's vendetta against Lothian region since they came to power in May 1979.
        7.36 pm
        Mr. Robin F. CookIt is extraordinary that we should be asked to go through the full palaver of having the measure brought in by the Government when we all know that the parent legislation under which the transfer scheme was prepared and the measure is brought in is swept aside by the Education (Scotland) Bill, which completed all its stages only this evening. Two hours after we completed the last stages of that legislation we are considering a measure that arises out of the repeal of a section of that earlier Act. That is an extraordinary procedure for the Government to ask us to go through. There needs to be extraordinary justification of why at this last gasp, in the dying days of the earlier legislation, the Government take this exceptional action against Lothian region.
        Why Lothian region? As my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. O'Neill) said, the region believes that its transfer scheme is more sophisticated than others it could name. Comparisons are invidious and I shall not attempt to make them, but to put it no more indelicately than this—other transfer schemes are shorter. Why single out Lothian as the sole education authority in Scotland to receive the treatment? Has the Minister studied the other nine education authority schemes and concluded that they are acceptable but that in Lothian there is a need to intervene? If so, perhaps he can tell the House how many instances there are in Lothian

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        where parents' wishes have been overridden by the local authority. How does the number compare as a proportion of the total transfer from primary to secondary with the number of disgruntled parents in other education authorities? Unless he can demonstrate that there is a greater problem in Lothian than in the other education authorities, he cannot in all conscience bring the measure before the House and ask us to take this unique step.
        We should apply another criterion, which I hope the Minister will satisfy in his response. He indicated his intention to bring in the amendment in a letter to the Lothian regional council dated 8 April, in which he states:
        "From the response to those consultations and advertisements, the Secretary of State is satisfied that there is a substantial body of opinion, particularly relating to Edinburgh schools, which favours a more flexible approach".
        That is a response to advertisements inserted in the local press by the Scottish Office. Will the Under-Secretary of State say what response was received? How many replies were received? To how many children did they refer? What analysis was made of the response? It is not good enough to claim in a letter that the response to advertisements indicates a substantial body of opinion when the Government have not been prepared to divulge to Lothian region or to Parliament exactly what was the response received and how much substantial opinion the response revealed.
        I hope that the Under-Secretary will pay attention to the questions that I am putting. The House is entitled to expect an answer before hon. Members come to take a view on the order.
        Mr. David LambieHe did not answer last night.
        Mr. CookI am aware of that. I was present for that debate. One can only live in hope of an answer. One is nevertheless entitled to request an audience of the Under-Secretary of State so that he is at least aware of the questions being asked before deciding whether to answer them.
        Why has the Under-Secretary chosen this particular form of change? He will be aware of what he has done. He has brought forward a paragraph that is wholly contradictory. It would be a courtesy to the House if the Under-Secretary were to pay attention. This does not promise to be a long debate. If the Under-Secretary of State chooses to have a long debate, it can stretch over the next four hours. Since, however, it is likely to be a brief debate with few interventions, the Under-Secretary of State could try and pay attention instead of gossiping with the Secretary of State on the Front Bench. Neither of them, of course, can be sure how long he will remain in office. They may feel that they have to make use of such time as they still have together on the Front Bench.
        The Under-Secretary of State for ScotlandCome off it.
        Mr. CookI will not come off it. The Under-Secretary of State chattered throughout the speech of my hon. Friend the Member for Clackmannan and East Stirlingshire and has chattered to the Secretary of State ever since he entered the Chamber.
        Mr. FletcherNonsense.
        Mr. CookIt is not nonsense. The Under-Secretary of State has spoken to the Secretary of State more often than either my hon. Friend or I have spoken in the debate.
        Mr. FletcherI shall listen patiently to any point of substance that the hon. Gentleman makes.
        Mr. CookI have already put two questions in detail to which I shall expect a response. I am now about to put a third point and hope to get the hon. Gentleman's attention. The third question relates to the amendment that he has proposed. The amendment is wholly contradictory. The amendment says that each particular case
        "shall be given full and proper consideration taking account of the particular and individual circumstances"
        relating to the request. The amendment goes on to say that it
        "shall normally be granted if there is accommodation in the secondary school".
        It eludes me how the local authority can give proper and full consideration in the circumstances of the case if it is assumed from the start that it shall normally be granted if the accommodation is available. If it should normally be granted if the accommodation is available, why is there need for the proviso that it should be given full and proper consideration with regard to particular circumstances? [Interruption.] The hon. Member for Edinburgh, South (Mr. Ancram), in an intervention from a sedentary position, says that it was not being given. My hon. Friend the Member for Clackmannan and East Stirlingshire has spelt out the procedures that were available under the transfer scheme and the procedures for the committee to give consideration to the circumstances of each individual case.
        The hon. Member for Edinburgh, South may not have read the measure before the House. Its effect if the amendment is carried is to remove from a local authority any individual discretion that it can use in bringing to the case full and proper consideration. Whatever the particular circumstances of the case, it shall normally be granted. The Under-Secretary of State says "Hear, hear". In that case, I hope that he can be persuaded to withdraw his proposal and strike out from his amendment the reference to giving full and proper consideration, taking into account the particular individual circumstances. It is obvious from the hon. Gentleman's intervention that this is humbug. It is hypocrisy to pretend that he expects each case to be given particular and individual attention and full and proper consideration. He expects that it shall normally be granted subject to the solitary test relating to whether accommodation is available. This means that there will not be the ability to resist a case nor the right to give consideration to whether a transfer meets the need of the child and whether a child has a particular need.
        Parents often request a transfer on the basis of curricula and subjects that may be available at a school to which they seek transfer. The local authority will no longer have the right to give consideration to whether that subject and facility are available at the school to which the parent seeks a transfer. It is not a matter that is relevant under the amended provision of the transfer scheme. It will not be possible to give consideration to the distance that a child has to cover. A local authority could be faced with a request for a transfer from one end of Lothian to the other. Under this amended transfer scheme it would not be competent to have regard to that factor in deciding whether to approve a transfer.

        A child may require a special educational facility. It will not be competent for the local authority to have regard to that factor. The only factor to which it may have regard is whether there is available accommodation at the school.

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        If that test is met, the transfer should normally be granted. The ground to which a local authority may have regard under the amended scheme is even more narrow than the grounds provided by the Government in the Education (Scotland) Bill. The Bill provides a whole page of considerations to which the local authority may have regard in deciding whether to approve a transfer. None is to be available to the Lothian region except the single test whether accommodation is available.
        There are practical administrative problems about obliging a local authority to accept pupils at any secondary school up to the limits. We are debating this scheme some months after it has taken effect. We can judge from what is happening in Lothian the effect of the scheme. I do not speak from a sense of grievance. I do not represent any schools from which pupils are being transferred. I represent two schools to which pupils are being transferred. One of my schools is full. Pupils have been transferred from the constituency of the hon. Member for Edinburgh, Pentlands (Mr. Rifkind). I do not wish to draw any political conclusion from the fact that education within my constituency is preferred to education within the constituency of the hon. Member for Pentlands. A problem, however, arises. In each class in the school there is the maximum number of pupils due to the large number coming from outside the zone.
        A recently arrived constituent has sought to enrol his child at the secondary school. It is not possible for the secondary school to accept the boy because the school is full. If the boy is admitted the science class will number 21 rather than 20 pupils. The conditions of service for the employment of teachers is that no science teacher should be required to teach more than 20 pupils. If the pupil were admitted, an additional science teacher would have to be employed at the school or the pupil would have to go back to Wester Hailes. The Minister shakes his head. We shall look forward to his response. If the Minister has a solution to the problem, Lothian region will be delighted to hear it. At present it is unable to accept the pupil for the local community secondary school although that pupil wishes to enrol. This is a direct result of the measure that allows for no discretion at an earlier point in the year to resist any application for the school so long as available accommodation exists within the school.
        It is an idiotic situation that, as a result of the scheme, there are pupils in my constituency who are unable to enrol in the local secondary school. That consequence of the order should itself be a sufficient ground on which to resist it.
        However, there are also general principles. The Lothian regional education authority has taken substantial steps and gone much further than any other education authority in seeking to integrate the transfer from a primary school to a secondary school. It has promoted regular contact between teachers at primary and secondary schools and, through those contacts, to harmonise the curricula at primary and secondary level. It has also ensured that information about pupils who are to transfer is passed from primary schools to secondary schools.
        That intimate relationship between primary and secondary schools will be wrecked if the Government ensure that pupils from any primary school can transfer to
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        any secondary school without the local authority being able to impose any restriction on the secondary school to which a pupil may transfer.
        It is impossible not to have regard once again to the fact that the Government obtained power on the wholly bogus platform that they would create more freedom and achieve less Government interference in the dealings of local government, business and individuals. We have seen in the past two and a half years the most comprehensive programme of meddling and interference in local authority affairs that the nation has witnessed in peacetime.
        The Under-Secretary interrupted my hon. Friend the Member for Clackmannan and East Stirlingshire to suggest that he was arguing the case that politicians know best. That gibe comes ill from the Minister's lips, because he has imposed his own view of what is best on a local authority that was elected to administer educational policy within its region. The Under-Secretary is saying, in effect, that he knows best how every transfer from primary school to secondary school should take place. That demonstrates a self-satisfaction with his own judgment that borders on megalomania.
        We have seen in the past two years a number of major nails driven into the coffin of local democracy. Perhaps we have seen so many that it may be thought that it is almost pointless to complain about this further drawing pin being inserted in the coffin lid. But we have seen so many steps taken to erode local discretion and autonomy that we cannot allow even this further step to take place without making a protest.
        7.53 pm
        The Under-Secretary of State for ScotlandI am grateful to the hon. Member for Edinburgh, Central (Mr. Cook), because his concluding remarks summarised the philosophical gulf that divides the two sides of the House on education and parental choice.
        The hon. member did not serve on the Standing Committee that considered the Education (Scotland) Bill, but that does not matter. He is also a victim of the prejudice that runs throughout the Labour Party, with one exception. I referred earlier today to the Scottish Labour Member who takes a more enlightened view.
        Before dealing with the details of the order, I should tell the hon. Member for Edinburgh, Central that it is not a question of my knowing best or of Lothian region's knowing best. I firmaly believe that parents know best. The hon. Gentleman said that he was worried about the administration of schools and about the position of teachers and Lothian councillors, but it never seemed to enter his mind that parental choice matters above all else and that the education system is the servant of the parent and the child.
        The Government believe that the best thing that we can do for education in Lothian and elsewhere in Scotland is to make sure that the maximum parental choice is available. We accept that parents will make mistakes and send their children to schools which, in the view of educationists, may not be the best schools for them, but it is far better that the occasional parent should make a mistake and be free to do so than that Lothian and other areas should have a conscript system of education. That is what the Labour Party is calling for. It wants conscript education, or "You will go to that school and like

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        it"—whether the child likes it or not. That is the basic philosophical difference between the two sides of the House.
        The hon. Member for Clackmannan and East Stirlingshire (Mr. O'Neill) accused the Government of waging a petty vendetta against the Lothian regional council and the eduation authority. I assure him that it gave us no pleasure to have to bring forward the measure. We tried patiently to persuade the region to pay far more attention to what parents want and say instead of reorganising education to suit its own administrative convenience and political prejudices, which is precisely what Lothian has been doing for some years.
        It may be helpful if I outline the background under the present law. All education authorities maintain what are known as transfer schemes. Section 29 of the Education (Scotland) Act 1980 provides that, if so required by my right hon. Friend the Secretary of State, they must submit any such schemes for his approval under section 69 of that Act. Transfer schemes relate only to the transfer of pupils from primary to secondary education and the schemes currently operated by authorities are those approved in 1976 by the then Secretary of State.
        The operation of the provisions of Lothian regional council's 1976 transfer scheme, enshrining its policy for dealing with out-of-zone requests—a policy which I have already suggested can only be described as negative, unnecessarily restrictive and irrelevant, especially at a time of falling rolls—has been the source of bitter complaint from parents and it was this that prompted the Government ultimately to ask the regional council to revise its scheme.
        I am surprised that Edinburgh Labour Members do not know from their mailbags how dissatisfied many Edinburgh parents have been for some years.
        Mr. CookWill the Under-Secretary give way?
        Mr. FletcherI should like to proceed a little further.
        The terms of the council's 1976 scheme for dealing with parental requests for a particular school are explicit. The scheme says:
        "Requests by parents or guardians for placement in a school other than that designated will be considered but are unlikely to be granted except in special circumstances such as where brothers or sisters will be in attendance at the school requested when the pupil transfers, or where the Director of Education recommends to the Transfer Committee a particular placement on the grounds that the transfer under normal arrangements would be contrary to the educational or other interests of the child".
        I need hardly remind certain Labour Members of the large number of parents who have fallen victim of that policy and the deep sense of injustice felt by some parents at the consideration given by the Lothian transfer committee to their requests. That has resulted in children being withheld from school, attendance orders being served and parents ending up in the sheriff court to argue their case.
        Mr. CookHow many?
        Mr. FletcherA more flexible approach by the council would have spared unnecessary damaging effects on the child's education in most of these cases.
        Mr. CookHow many?
        Mr. FletcherA sufficient number of cases have caused distress. I shall quote some figures in a moment.
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        There are existing cases in Lothian region of parents still withholding their children because they are not getting satisfaction.
        Mr. John MaxtonHow many?
        Mr. FletcherThe hon. Member for Glasgow, Cathcart (Mr. Maxton) calls, like a parrot, "How many?". I should have thought that he would be concerned if only one child were being were being withheld from school because Lothian or any other region was not dealing properly with a transfer request.
        What some authorities appear to forget is that parents, too, have statutory duties in relation to the education of their children: section 30 of the 1980 Act places a clear responsibility on parents to provide for their children efficient education suitable to their age, ability and aptitude. Education authorities themselves also have a statutory duty, in terms of section 28(1) of the Education (Scotland) Act, to have regard to the general principle that pupils are to be educated in accordance with the wishes of their parents, not in accordance with administrative convenience so far as this is compatible with the provision of suitable instruction and training and the avoidance of unreasonable public expenditure.
        These are straightforward commitments in existing legislation and I am bound to say, with deep regret, that for too many years now they have been ignored by the Lothian regional council when considering parental requests. That is the position under the law as it stands today.
        Mr. CookThe Minister asked about the mailbags of Members of Parliament. During my seven years as a Member of Parliament I have not had one complaint from a constituent regarding the transfer from primary to secondary school. I ask the Minister again two questions that I put in my speech. First, what response did he receive to the advertisements, and how did he come to the conclusion that they revealed a substantial body of opinion? Second, what comparative figures does he have for the difference between the number of disaffected parents in the Lothian region and any other education authority against which this action is not being taken?
        Mr. FletcherI shall come to those matters in a few moments. In answer to what the hon. Gentleman says about the absence of complaints from his constituents about the transfer scheme in the Lothian region, I am not surprised, judging by the speech that he made this evening, which showed no concern whatever for parental choice. I take it from what he said that his constituents would get the same short shrift from him as they receive from the regional council itself.
        Lord James Douglas-HamiltonIs the Minister aware that many of my constituents have complained vigorously, and some of them live not far from the hon. Member for Edinburgh, Central (Mr. Cook), who is one of my constituents? Is the Minister aware that there is strong support for this measure?
        Mr. FletcherI am grateful to my hon. Friend. It is not surprising that constituents write to Members of Parliament who they think will give them a sympathetic ear. There is not much point, clearly, in writing to Members who are wholly opposed to the wishes that the constituents are expressing.

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        I had hoped that, given the Government's policy to extend parental choice of school, the regional council would be open to persuasion and that the use of statutory powers available to my right hon. Friend to bring about more flexibility could be avoided. With this in mind, and on my instructions, my department wrote to the council on 3 March 1980, indicating that its policy was considered to be unduly restrictive and expressing the hope that in dealing with parental requests it would in future have regard to the principles set out in my consultative paper "Admission to School—A Charter for Parents"—the consultative paper which was issued in March 1980 as part of the process of formulating the Bill which we have been considering earlier this evening. It was in my view a reasonable request to which a reasonable authority would have responded positively.
        Our hope, of course, was disappointed. The council took the line that in its view the number of requests was so small against the number of pupils in the relevant age group that no further action on its part was required. On the region's interpretation of the figures, between 98 and 99 per cent. of parents received the school of their choice, and the situation was therefore satisfactory. I dispute categorically that there is any relevance in this comparison. In my view, it is beyond doubt that parents in the region are discouraged from making requests regarding choice of school because of the council's intransigent attitude.
        The view that parents are discouraged from applying would be consistent with the fall in the number of requests received by the region. It was 4.5 per cent. of all pupils entering primary education in 1977, and it fell to 3.4 per cent. in 1979.—[Interruption.] I hope that the hon. Gentleman is not suggesting that entry into primary schools is any less important as a matter of parental choice than the entry from primary into secondary schools. Opposition Members have asked for figures, and I have said that I would provide them. If those figures are not acceptable to them, that does not mean that they are irrelevant. Opposition Members may not like them, but it does not make them irrelevant.
        Similarly, in relation to transfers from primary to secondary education, the number of requests fell from 5 per cent. in 1977 to 4 per cent. in 1979. What I find most disturbing is that, despite the decline in the proportion who asked, the percentage of applicants whose requests were refused increased over the same period. At primary level it rose from 22.5 per cent. in 1977 to 28 per cent. in 1979 and in transfers from primary to secondary comparable figures show an increase from 26.4 per cent in 1977 to 28 per cent. in 1979. Hon. Members will see, therefore, that even the figures which the regional council produces in its own defence give disturbing evidence of an unnecessarily restrictive policy. As a result, my officials wrote again on my instruction on 17 April 1980 to say that the evidence supplied by the council justified repeating my request that in dealing with parental requests it should have regard to the principles underlying the Government's proposals for more parental choice. I regret to say that the council resolved to take no action.
        My conclusion was, therefore, that in order to assist parents in Lothian who wanted more choice, I had no option but to ask my right hon. Friend to exercise his
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        power under section 29 of the Education (Scotland) Act 1980 to require the authority to submit a revised transfer scheme by no later than 31 October 1980.
        This request was made in a letter dated 7 August 1980, which stressed the Secretary of State's expectation that the scheme would be revised to the effect that all requests for out-of-zone admissions would normally be granted. The letter also asked that where refusal was necessary the reasons for this should be explained in writing to the parents. The Lothian council had been extremely remiss in not having the courtesy to explain properly to parents why their requests had been refused.
        The regional council subsequently asked for the deadline for submission of the revised scheme to be extended to 12 December 1980, to allow consultations to take place, and this was granted. I make this point simply to illustrate that we started in March 1980 and showed much patience with the local authority, hoping that in considering the matter with us, it would relax its rather stiff view of parents and granting parental requests. It was quite evident, however, that the consultations which the council had been anxious to carry out were conducted through the medium of school councils only.
        School council membership, of course, includes parental representatives, but my experience of school closure and other applications seeking approval to changes in educational provision has been that the views of school councils, while valuable in themselves, do not necessarily always accord with those expressed by parents. My opinion was therefore that the consultations undertaken by the council were not as extensive or thorough as I would have liked. Both in order to give parents a chance to make direct representations and to satisfy the Secretary of State's statutory responsibility, advertisements were placed in the Edinburgh Evening News on 6 and 7 January this year inviting comments on the scheme and in particular on the revised statement of the council's policy relating to the consideration of requests for out-of-zone transfer to secondary schools. The regional council was asked at the same time to supply detailed information about its consultative process.
        The results were very revealing. Of the bodies consulted by the regional council in its deliberations, 16 of the 25 representing schools in the Edinburgh area wanted a change in policy. Those were the consultations of the council. In addition, the response to the press advertisement placed by my Department was considerable. One hundred and sixty-eight letters, together with a petition containing 341 signatures, were received, and of these only 17 parents were content with the council's policy for considering parental requests. The hon. Member for Edinburgh, Central raised this matter, and I say to him in all sincerity that surely there can be no surer measure of evidence of the unpopularity of the council's transfer scheme or greater motive for arrangements to give parents a greater say in the school their child attends. I am sure that any experience that the hon. Member has had of asking people to send in their views by mail would be the same as that of other people.
        It is rather unusual for 168 people, quite separately and completely unorganised in any political or other way, to write individual letters. There was only one petition. The Department inserted the advertisements and waited for the response. That was the response that came in. It was absolutely a duty on my right hon. Friend and myself,

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        therefore, to take account of this and to continue to try to persuade Lothian regional council to recognise the fault of its ways.
        Mr. O'NeillHow many of the signatories were parents,? How many of the signatories, if they were parents were involved in the transfer scheme at that time? Does the Minister agree that a figure of 492, even assuming that they were parents, is not that far from the number of disgruntled parents who apply every year for an appeal? The figure has run between 3 per cent. and 4 per cent. of the 10,000 to 12,000 children who are being transferred at any time. These figures are worthless. That they have been presented in this way is intellectually insulting to the House.
        Mr. FletcherFrom experience in Committee, I know that the hon. Gentleman does not think much of minority views. The fact remains, however, that although this may not impress the hon. Gentleman, it had some impact on Lothian regional council when it began to consider what it might do.
        It is important that hon. Members should consider the position that was reached at this point. To begin with, Lothian's response to my request for a more flexible policy in relation to parental requests was to say, without prior consultation with parents or anybody else, that its statistics showed that most parents got their choice of school and, therefore, no change in its policy was needed. That was the response before consultation took place. I think that I have made it quite clear why I consider that that interpretation of the council's statistics was widely inaccurate and unrepresentative of true parental feeling in the area.
        Now we are at the point where the council, by force of law, undertakes consultations which lead it to revise its scheme to take account of
        "opinion expressed by the majority of the interests consulted."
        The council's shift of ground was remarkable. From a position where it considered statistical evidence to justify no change, it had moved to the point of acknowledging that its own consultations showed that some change in its policy was called for.
        The wording of the council's revised scheme, as submitted to my right hon. Friend was still, however, in too negative terms. Somewhat grudgingly, it now provided:
        "Parents or guardians may request placement of a pupil in a secondary school other than the designated school. Every such request will be considered in the light, of the particular and individual circumstances relating to that request."
        But it went on to say:
        "Pupils will only be placed in terms of this paragraph in a secondary school other than that designated where there is accommodation in the alternative school when all the requirements of children within its area have been satisfied."
        Obviously, I agree that parents living in a neighbourhood should have first priority for a place in the local school. But the tone is still too negative:
        "Pupils will only be placed"
        after all other needs are met. One would almost think that the authority was wishing that there would be no room left in the school once the local places had been filled.
        The modification which my right hon. Friend has made to the scheme, in contrast, makes this positive statement:
        "Every such request shall be given full and propel consideration taking account of the particular and individual circumstances relating to that request and shall normally be
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        granted if there is accommodation in the secondary school desired by the parent, in accordance with the policy which the Council have adopted for settling priorities for admission."
        I must say again to the hon. Member for Edinburgh, Central that it makes nonsense of his suggestion that the education committee could not take into account, for example, a long travelling distance or the unsuitability of the curriculum of the school, because, as I shall go on to say, by ensuring that the education authority gives proper consideration, it can take these matters into account and, in refusing a request, it is now obliged to give full written details of the refusal. If it were a matter of a child travelling 20 miles or so across the region, that would be very simple to state and to argue in the event of a refusal.
        The emphasis is placed on the words "shall normally be granted", and I believe that that is how it should be. The scheme now is a more positive commitment to meet parents' wishes wherever possible.
        Mr. CookThe anxiety of Lothian region is perfectly understandable. As the Minister is aware, its action on this matter could be challenged and could appear eventually before the sheriff. If it were taken before the sheriff, what the sheriff would read in the amended form of this scheme is that an application shall normally be granted where accommodation is available. The only criterion offered in this amended order is whether accommodation exists. The council's anxiety is that it will be very difficult for the local authority to plead in front of the sheriff any reason for refusal other than that spelt out here, which is the simple one of whether accommodation is available.
        Mr. FletcherIf that is the region's view, I am surprised. It is a very naive view, and one that other authorities do not share. I am sure that it would not be the view taken by a sheriff. A sheriff considering the example that I gave, of a child who was being taken 20 miles or so from home to school, would perfectly understand the position and would be sympathetic to the local authority.
        A further defect in the scheme as submitted to my right hon. Friend is that it made no provision for giving parents on request details of the council's policy for settling priorities for admission where any school was oversubscribed. Just as important, no provision was made for parents whose requests had been refused to be given a written explanation of the consideration given to their request and the reasons for the council's decision. These defects too were remedied by means of the modifications made to the scheme.
        In short, our view quite simply was that the scheme as submitted by the council was not drafted in terms wide enough to accommodate the more flexible and sympathetic approach towards parental choice which consultation showed many parents wanted; that it lacked provision for parents to be given details on request of the council's policy for settling priorities for admission to an oversubscribed school; and that it also lacked provision for parents whose requests had been refused to be given reasons. The Government's modifications put these matters right.
        Mr. MaxtonI hope that the Minister will answer the very serious question put by my hon. Friend the Member for Edinburgh, Central (Mr. Cook) about the comparison with other regions. The House is entitled to know what percentages of people in other regions apply for transfers, and the percentage refused by those other regional

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        authorities. If they are roughly the same as those in Lothian region, why is it only Lothian region that has been picked out for this sort of treatment?
        Mr. FletcherThe very simple reason is that the complaints that we receive in the Scottish Office—people are perfectly entitled under existing legislation to complain to the Secretary of State—have almost entirely related to the Lothian region.
        Mr. George FoulkesThat is because they all live in Edinburgh and write to each other complaining.
        Mr. FletcherWe have not had the complaints from Fife. [Interruption.] South Ayrshire is proving the point again this evening.
        We do not get complaints about Fife regional council. I happen to know that Fife operates a liberal scheme of parental choice and pays close attention to the complaints that parents make about the choice of school available to them. I think that the same is true in many parts, if not most parts, of Strathclyde. We do not receive anything like the same number of complaints from any other authority.
        When parents exercise their statutory right, as the law now stands, to appeal to the Secretary of State because they believe that a local authority is not carrying out its duties properly, the Secretary of State has every right and duty to intervene.
        There is one final point that I should make. As I have already mentioned, the provisions of transfer schemes apply only to the transfer from primary to secondary education. Lothian has, however, as a matter of policy in the past, applied the principles written into its transfer scheme in dealing with out-of-zone requests to similar applications in relation to primary schools. In notifying the council on 8 April of my consideration of its revised scheme and the outcome, I also asked that the general principles written into it should apply also to applications for admission to schools at stages other than the transfer stage—as I have said, no more than asking Lothian to continue past practice.
        I understand, however, that the council has decided not to adopt the same policy for out-of-zone requests relating to admissions to primary schools. This is another example of the council's inflexibility and is clear evidence of its willingness to make it difficult for parents with children at primary school to get their choice, in order to force hard, unbending, narrow-minded policies on an unsuspecting public who deserve better from their local authority.
        I have a classic example, which I hope will give rise to some genuine sympathy from the hon. Member for Glasgow, Garscadden (Mr. Dewar), of the problems the authority can create for parents. It was manifest in two cases that aroused considerable press interest in August this year, at the start of the new school session. That is not too surprising. Two sets of Edinburgh parents wanted their children to attend the Royal High primary school, only a few yards from their homes, rather than Craigentinny primary school which is some distance away, over busy roads. Sticking closely to its policy, the council refused the parents' request and I understand—[Interruption.] I note that my remarks are thought to be irrelevant.
        Mr. MaxtonOn a point of order, Mr. Deputy Speaker. The order concerns the transfer of pupils from
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        primary to secondary schools. The Minister has spent a considerable time talking about the entrance of five-year-olds into primary schools. Are his comments relevant?
        Mr. Deputy SpeakerI was under the impression that the Minister was building up his case from primary to secondary school.
        Mr. FletcherIn Edinburgh, parents who wish to send their children—[Interruption.] This subject is terribly important to the parents, although it might be quite irrelevant to Opposition Members. Parents wish to send their children to schools with accommodation that are a few yards from their homes. That is being denied to them. They are being asked to send their children to other parts of the city and on journeys that will involve crossing busy roads. They find that they are denied the right to put their children in schools that can accommodate them and they feel so strongly that they are withholding their children from school and are likely to receive an attendance order. Opposition Members and the region should be ashamed of that.
        For the future, the outlook for parents in Scotland is much brighter. Earlier today, the House approved the amendments made in another place to the Education (Scotland) Bill. The Bill now awaits Royal Assent. The provisions of that legislation will ensure that in future parents will have a greater say about the school that their children attend. We strongly believe that that is precisely as it should be.
        8.23 pm
        Mr. O'NeillWe have had to listen to the Minister for 30 minutes. He has gone through a case that is based on premises that are quite irrelevant to the scheme. The only examples that he could bring to hand had nothing to do with the transfer from primary to secondary schools.
        Mr. CookThe Minister has introduced two cases that are irrelevant to the order and that are not affected by it. However, he has failed to answer the case that I put to him concerning a constituent who is affected by the order and who cannot obtain a place for his son at the local secondary school. At the start of the session, every available place was taken up by out-of-zone pupils.
        Mr. O'NeillThe Government's concern for parents is very selective. It would appear that they are concerned only about those parents who do not wish their children to go to particular schools and they are not concerned to defend the rights of those who clearly intend to send their children to local neighbourhood comprehensives.
        The Secretary of State has not provided any meaningful statistics. As regards the figures quoted for the so-called survey, anyone starting even an 0-grade course in statistics would know the worthlessness of self-selected samples. As regards the consultation procedures entered into with school councils, it is clear that it is not the school councils or parents who know best, but the Secretary of State. In every respect, the Secretary of State has failed to explain why no other local authority has been called to order in this way.
        That leads me back to my initial conclusion, namely, that this is an attempt once again to get at Lothian. The Secretary of State has had another chance to have a go at Lothian and to carry on the vendetta. The case has been completely and utterly lost and we do not in any way wish to be associated with the scheme.
        Question put and negatived

        Youth Opportunities Programme
        Motion made, and Question proposed, That this House do now adjourn—[Mr. Newton.]
        8.27 pm
        Mr. Jim CraigenI applied for permission to raise this Adjournment debate because I felt that the young people on youth opportunities programme schemes deserved a fairer deal. At present, our school leavers and young people are getting a pretty raw deal as a result of the Government's economic policies. When one looks in detail at this month's unemployment figures, it is interesting to note the extent to which the numbers entering the youth opportunities programme have increased. In Scotland, the figure has risen from 28,000 for last month to 35,000. The overall figure has increased from 215,000 to 270,000. That reflects the extent to which the youth opportunities programme is taking young people out of the official unemployment statistics.
        I need hardly tell the Minister that more than 1 million young people have passed through the youth opportunities programme since its launch in April 1978. A programme that was originally designed to have about 25,000 places has grown almost tenfold and now faces serious criticism. The Minister knows full well that anxiety about certain aspects of YOP schemes is growing not only among trade unions but among employers' associations and, not least, among the young people themselves. I should like the Minister to spell out precisely Government thinking on youth employment. To help the Minister with his reply, I shall put three initial points to him before I mention the more general problems facing young people who seek to enter the work force.
        First, I should like to see an immediate increase in the training allowance from £23.50 to a far more realistic figure. The Manpower Services Commission has recommended to the Department of Employment that the allowance should be increased to £28 a week as from 1 November.
        Before the Summer Recess I asked the Minister what the allowance would be if it had been uprated in line with cost of living increases. The allowance was last raised in November 1979. I know that the Government do not believe in indexation, but I was told that in those circumstances the allowance would be £30.
        Since the present youth opportunities programme will continue to operate in the next year or two the Minister should consider increasing the training period from six months to 12 months. He should also ensure that there is an adequate training element within all the current programmes. Moreover, some recognition should be given to the degree of training as a component of the youth opportunities programme. The Minister is looking a little bemused. Some credit should be given to the young person later if he happens to be fortunate and gain an apprenticeship.
        I am disturbed to learn that only about 30 per cent. of young people completing YOP schemes are now entering employment. There has been a considerable drop since the scheme was introduced.
        The Minister might be even more puzzled by my third point. The Government should be more explicit about when YOP will be replaced by a national system of training with employment for our school leavers and young people. There is a major commitment. It cannot

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        properly be financed entirely by employers or, indeed, by local authorities. The State accepts the responsibility for the financing of secondary schooling and higher education. It is about time that the State accepted that it has a responsibility for post-school training for young people in the 16 to 18 age group.
        We cannot divorce unemployment among young people from the general mishandling of the United Kingdom economy by the Government. The job opportunities for young people reflect the depressing economic situation. Let us consider, for example, the latest October figures for unfilled vacancies in the Glasgow area. The Glasgow city total at the jobcenters is 2,171 and at the careers offices 14. Those are the job vacancies in a city where, according to the monthly unemployment figures, 73,756 people are out of work. In general, 54 youngsters are chasing each job.
        During the Summer Recess I visited my local careers offices and jobcenters. Careers office staff are becoming demoralised. Careers offices are becoming placement bureaux for the special programmes, particularly for YOP. Although my remarks are directed primarily at YOP, I pay tribute to the achievements of the community industry scheme. Young people seeking job opportunities are disillusioned. I do not want the Minister to give us the usual Conservative Party Central Office bluff about the great international recession. The Government are inflating the impact of the global recession by cutting more deeply and more savagely into the domestic economy than is required. We see this in terms of the country's output and particularly in the drop in manufacturing output in the past 12 months, to the extent that it almost compares with the fall in output between 1929 and 1931.
        Moreover, the Government threw away a marvellous opportunity by their decision to jettison the plans for a gas-gathering pipeline—I note that my hon. Friend the Member for Bothwell (Mr. Hamilton), is in his place which would have given jobs not only to the steel industry but to the construction industry and service industries. More particularly, I think that it would have raised the confidence that is so lacking when one talks to the managers and trade union officers in industry. That would have been especially significant. It is no wonder that more and more fellow Scotsmen look abroad for a future. The number of people seeking to emigrate from the United Kingdom is on the increase and it is no small wonder.
        Young people have every right to expect far more than a taste of work when they leave school. We know that, unfortunately, there have been abuses in the operation of the present programmes. I concede readily that the Manpower Services Commission is doing its best to weed out employers who are not measuring up in some instances to the objectives and purposes of the youth opportunities programme. We have the madness, when we know that the number of young people aged 17 and 18 years is on the increase and coming to a peak, that the Government's policy for higher education is to cut back on the opportunities that might otherwise be available in our universities and advanced colleges. This contrasts curiously with the policy in the United States and Japan, where a far higher percentage of young people obtain university and higher education opportunities.
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        The 18-year-olds are at the end of the queue for the youth opportunities programme. They are also at the bottom of the pack for the community enterprise programme. In other words, they are no one's priority. They lose to the 16 and 17-year-olds and they do not really have the same chances as older adults. The Minister must realise that some school leavers stayed on at school a little longer in the hope of acquiring additional qualifications and thereby enhancing their employment prospects.
        What is the number of 16 and 17-year-olds who have held a full-time permanent job? The YOP figures mask the true position because it takes them out of the monthly unemployment barometer. Will the Minister—the civil servant in the Box can occupy himself with this—tell me the number of 16 and 17-year-olds who have never held down a permanent job? They may have been in and out of a YOP scheme but they have never held down a permanent job.
        I wrote to about six companies in my constituency about the Prime Minister's much-lauded young worker scheme. It was a sample grouping. My constituency is not especially industrial. The Government have done their best to reduce the number of firms within it. I wanted to know whether the young worker scheme would encourage firms to recruit more young people. The firms almost all replied to the effect that the scheme that the Department hopes to launch next January will make not one whit of difference. They all agreed with me that it would be simpler if the Government chose to remove the employers' national insurance surcharge for those under 18 years of age. They thought that that would be more conducive to their recruitment.
        Moreover, we know that the young worker scheme is designed not so much to bring more young people into the employment market but to lower the wages of young people in industry generally. I hope that the Minister will be impressing on his Treasury colleagues, hard-faced men that they are now, that there is a case for removing the surcharge.
        I ask the Minister to comment on the report that appeared in The Sunday Times of 18 October about the CBI's estimate that there will be 800,000 young people on the dole in two years' time. We are getting perilously near that figure already. The feature that strikes me about the tables that appear in the MSC's forecasts of growth and decline areas within the economy between 1978 and 1985 is that most of the increases that the commission expects are in the public sector, or are to be largely fuelled by public expenditure in areas such as construction. Even private employers in the building industry are glad these days to get public contracts. The declining sector to which the MSC was pointing was manufacturing industry. We have already seen a substantial avalanche in the decline in manufacturing.
        The Times is not the most widely read newspaper north of the Tweed but my attention was drawn to its editorial of 9 October, which was rightly entitled
        "A generation at risk".
        It is more than a generation that is at risk. Britain's future will be at risk if we persist in this fashion. Ministers are rather like rabbits that become paralysed in front of a stoat when it comes to taking positive action to reduce unemployment. On Friday one rather unwanted meeting that I shall be attending in Glasgow will involve meeting

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        the chief constable. My hon. Friend the Member for Glasgow, Queen's Park (Mr. McElhone) has co-ordinated the arrangements for some of us to meet him.
        We are going to see the chief constable about the growing incidence of drug taking and drug abuse, a problem that is by no means confined to the West of Scotland, and is growing in most parts of the country. Part of the problem is that more and more people have far too much time on their hands because they find it easier to get hold of heroin than a job. We know that some sinister people are making sizeable profits in that process, but the fact remains that the Ministers in the Department of Employment have a responsibility in that area because it seems that the up and coming generation prefers the world of hallucination to the realities of living under Mrs. Thatcher.
        8.46 pm
        Mr. James HamiltonI make no apology for continuing the debate. One of the greatest scourges to hit the country is that of unemployment. I know that it is not new. It was apparent during the Labour Government's term of office. However, it has now reached such gigantic proportions that the people are becoming restless as they see no light at the end of the tunnel. Every day of every week large redundancies in some of the major industries are revealed to us, and they are having an adverse effect on the economy.
        In Bothwell, one company has made it known that 800 people will become redundant within the next few months. Another company has intimated to me that 220 people will become redundant. That may have happened already. The tragedy is that many people who have never been unemployed are signing on for the first time at the Department of Employment.
        In such a situation our young people must suffer. This is one of the greatest tragedies to hit our nation. It is an even greater tragedy when young people leave school with no hope of employment. It can be said that the youth opportunities programme will give employment for six months to some of our young people, but I want to bring to the Minister's notice that in far too many instances many of those young people are being exploited by employers who should know better.
        Those young people are being paid £23.15 a week, which is a mere pittance compared with the work which they are asked to do. I am aware that the MSC has suggested that the figure should be increased to £28 from 1 November. However, that is still insufficient. I suggest that many young people are continuing with further education not because they are desirous of doing it, but because they know that there will be no work for them when they leave school.
        My hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) said that with the cuts in further education, there is still no hope for young people continuing their education. Those who are prepared to continue their higher education at secondary school should be paid the equivalent amount paid under the youth opportunities programme. That could go a long way towards solving this pernicious problem.
        There was a television programme about Jarrow last night. One doctor said that, in his opinion, some of the suicides being committed are due to the unemployment scourge which now prevails. Those are not words which make me feel overjoyed. They make me feel very sad.
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        We have cajoled the Government. We have attempted to persuade them. We have tried everything within our power to get them to change their policies so as to give not only young people but all the people in the country the opportunity to get back to work.
        Every Tuesday and Thursday, and in every big debate on the economy, the Prime Minister states that her main objective is to bring down inflation. I am sure that the Minister is aware that she has not yet brought down inflation to the figure which she inherited when she became Prime Minister in 1979. That is indeed an indictment of the Government's policy.
        It is farcical to use the money that is coming from North Sea oil to keep people on social security and unemployment benefit. It would be far better if the money were used to get people back to work. Our young people will never forgive the present Government, and in many instances they will not forgive us as Members of Parliament, because they feel frustrated, rejected and disillusioned. They feel that no one wants to do anything for them. We, as Members, are under criticism because nothing is happening in this House to end the sinister situation in which young people find themselves.
        During the recess I visited the careers offices, the jobcenters and the various factories in my constituency. It was the most dismal recess that I have encountered during my 17 years in Parliament.
        Before I came to this House I was in the construction industry. That industry, of course, is always one of the first casualties of any cuts. This, in turn, has a serious and adverse effect on the economy of the country. In such a situation our young people have no hope whatever.
        It is important to note that many of our best craftsmen and tradesmen are emigrating. Therefore, unless young people are properly trained, on a national basis, to fill the jobs which will arise if and when the economy changes for the better, the country is bound to suffer.
        I know that the Minister is not a member of the Cabinet but, knowing him as I do, I think that he is one of the wets. It is time that the wets got together and did something about the Goverment's policy. They know that the Opposition can do nothing about it. The wets should get together and tell the Prime Minister to change her policy. If she refuses to change her policy, she should resign and have a general election. If there were to be a general election now, there is no doubt that there would a change of Government and a change of policy.
        8.53 pm
        Mr. Dennis SkinnerI am pleased that my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) has taken the opportunity to raise this important matter in the House tonight. My hon. Friend the Member for Bothwell (Mr. Hamilton) spoke of his visits, during the long recess, to areas in his constituency. He was able to witness what was happening in the factories, the job centers, and so on. He was able to observe the misery, the desolation and the despair which are apparent now in all parts of Britain.
        There are thousands of young people without work in the East and West Midlands where, for two or three decades after the war, unemployment among young people and adults was at a relatively low level. But the West Midlands has seen a massive increase in unemployment—even higher than in Scotland, which bore the brunt of unemployment in the 1950s and 1960s. Scotland

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        usually leads the way for the rest of Britain, and the trends that are first seen there are usually repeated elsewhere at a later date. That is also true in political terms. That is why we look forward to the demise of the Government and to the next general election, based upon the way in which Scotland has reacted since the East election and beyond.
        When the YOP was first introduced, the Labour Government spoke of the need to introduce it to deal with matters at the margin. It was a kind of cosmetic to deal with a few youngsters who were unable to find jobs. That was the idea. No one in his wildest dreams imagined that it would stretch across the whole of Great Britain and that so many thousands of young people would have to take part in the scheme for a few miserly months, only to be thrown back on the scrap heap. I have no doubt that what my hon. Friends from Scotland have said can be repeated throughout the country.
        Just a few days ago, at the Tory Party conference, the Minister for unemployment had the audacity to suggest that those on the dole, young and old alike, should get on their bikes and go looking for work. I do not know whether they would reach Scotland, but, from the evidence of my hon. Friends, it is clear that there is no possibility of any respite there, nor in Wales, nor indeed anywhere in Great Britain. It is clear what the Government are really up to when their spokesman at the Tory Party conference tells people to get on their bikes and search for jobs. Those people have searched the jobcenters throughout their communities in the hope of finding jobs, but in many parts of the country 600 to 700 people are going after one job.
        This is no accident. It is not because the recession is some kind of act of God, as Ministers like to suggest. It was deliberately planned, well before the election, with a view to throwing people out of work. The dole queue was deliberately increased to shift the so-called balance of power away from those in work to those in the Establishment. That is the truth of the matter. Indeed, the Tories, in Opposition, said that they wished to shift the ratchet back towards the ruling class, so they are quite happy. The Minister may tell us today how sorry he is that all this has happened, but every policy of the Tory Government has been oriented towards ensuring that the misery and despair continue.
        The Government had no pay policy when they came to power, but they have one now. It is the policy of putting 3 million to 4 million people out of work, including 1 million under the age of 25, so that the rest have to work for peanuts. That is why Michael Edwardes can say that he has a 3.8 per cent. pay policy for British Leyland. I am glad that young and older people there are standing up to this. If we are to have jobs in Scotland, in the East Midlands and in the rest of the country, purchasing power must increase. It cannot be done except by more money circulating in the pockets of those at work and those who wish to work, so that they can buy more goods and other people can have jobs in Scotland and elsewhere.
        The same applies to the taxation argument. We remember all the stories before the election about cutting taxes. We need a real reduction in taxation, not a bogus one which cuts taxation by 3p and then refuses to raise personal allowances in line with inflation. We need to cut taxation by massively raising personal allowances in the
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        next Budget, so that those living at the margin and below the poverty line can push more money back into the economy to produce more jobs for other people.
        There is also the interdependence of the various industries in the United Kingdom which feed upon one another. The Government have systematically run down first one industry, upon which another has relied to some extent for jobs, and then another industry. All those industries—engineering, shipbuilding, textiles, even fishing—are interdependent and live upon one another. As a result, a massive number of job opportunities have been lost.
        Is it any wonder that we had the type of disturbances seen during the summer? That was bound to happen. Britain's social fabric will break down if young people are told that they have no jobs or no hope and that they must stick with this policy until the Prime Minister decides to change it. I doubt whether it will be changed, because the right hon. Lady is likely to be forced to go the country on the basis of 4 million people out of work.
        I used to work in the mines. For nearly 30 years it was generally reckoned that young people in Nottinghamshire or Derbyshire would be able to go down a mine, if nothing else. But because many factories that used coal no longer exist, young people are now being sifted by the National Coal Board. There are now queues at the so-called prosperous Midlands coalfields that were crying out for labour throughout the 1950s, 1960s and early 1970s. Only by feeding money into the economy to help our various industries shall we be able to get people back to work—people who are now receiving this miserly £23 a week.
        That is why a few weeks ago at the Labour Party conference our alternative strategy called for full trade union rights and rates of pay for those on the youth opportunities programme. That would give those young people the ability to push more money into the economy. That is why our alternative strategy also talked about earlier retirement, similar to the scheme introduced in the mining industry.
        What is wrong with giving people the opportunity voluntarily to retire at 60, or over, and giving them the extra £23 a week on top of their old age pension? That would provide an inducement for them to retire, thus giving young people the opportunity to move into their jobs. That is a more realistic programme, because the kids receiving this miserly sum of money are being exploited by these so-called entrepreneurs up and down the country.
        My hon. Friends referred to the suffering that has been caused. During the past 12 months, there have been many examples of young people in various parts of the country committing suicide. Documents have been produced by experts who have carefully analysed the figures showing how the number of suicides has increased among not only young people but older people who have been thrown out of work. Without doubt, there is a strict correlation between the suicide rate and the stress and other factors allied to unemployment.
        Yesterday, the Minister for Health said that he was worried about the correlation between unemployment and the matters that I have described. But what does he intend to do about it? He is now part of a Government who yesterday, and supposedly next week, discussed in Cabinet the possibility of cutting back even more. By

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        further reducing our purchasing power, they will throw even more young people and others out of work. They will deny to those people the chance to obtain work.
        I jotted down a note as I came into the Chamber. I noticed that the smoked salmon specialists were not present to talk about this real and central issue in our economy. Where are they? Not one SDP or Liberal Party Member is here. They are all eating their smoked salmon and drinking their claret at Croydon, in the hope that some people might support them tomorrow. But this is where the argument is. They should be here tonight to voice their opinions on this important subject that has been brought to our attention by my hon. Friend the Member for Maryhill.
        My hon. Friend the Member for Bothwell spoke about restoring cuts in public expenditure being essential. There are about 500 million bricks stored at the London Brick Company and at various other places. About 300,000 construction workers are unable to get jobs. There are probably about 1 million people who could be described as homeless or on the verge of being homeless. It does not need a Pythagoras to get the bricks laid by construction workers in order to put roofs over the heads of people who want houses. It does not need a Pythagoras to sort that lot out. It needs the intention of a Government who are prepared to do it, but this Government are determined to cause even more misery.
        Electrification of the railways could provide additional jobs for young people. Sewers are falling into disrepair all over the country. We hear daily of the repairs needed in the major conurbations. Here is an opportunity to put young people to work instead of having them racing about on some of these nonsense schemes and being exploited by Marks and Spencer and other employers who take them on for £23 a week and push other workers, who would be getting a proper wage, out of jobs.
        (Mr. Peter Morrison)Is the hon. Gentleman saying that he is opposed to the scheme?
        Mr. SkinnerAlthough the Minister may be looking at the problem—and it is a mighty problem—within a cocoon of its own, I am saying that it is part and parcel of a greater malaise deliberately brought about by the Government continually attempting to increase the number of places on the youth opportunities programme, the work experience programme and various other schemes. The Government are not tackling the real problem—the need to change the whole economy, restore the cuts, build more houses, and get people engaged on railway maintenance and on the sewers and canals which have fallen into disrepair. That is what I am trying to illustrate.
        The youth opportunities programme was introduced to alleviate at the margin, but it is becoming a central feature of the Government's programme. That is why the Prime Minister declared that it would be a good idea to have an addition to the YOP whereby employers would be given so many pounds per week to employ young people as long as they did not earn more than £40 a week. That is another variation of the YOP. It has become an essential feature of the Government's programme. The idea is to depress wages more and more to ensure that the trade unions' bargaining power is weakened ever more.
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        While young people are searching for jobs, what do they see on the other side, in the green pastures? They read about those who are managing to get by very nicely in the casino economy. Last year Ladbroke announced profits of 71 per cent. The banks made £3,000 million in the first two years of the Government's term of office. When interest rates are at 17 per cent. for most of the time£they are not much lower than that now£it gives the banks and financial institutions the ability to operate within wide margins, They are able to make a lot more money because the chance of failing with interest rates at that level is very small. For the industrial base, the returns are down to the miserly levels of 2 per cent., 3 per cent. and 4 per cent.
        This Government, who came to power on the basis of helping small businesses, have made sure that there are small businesses. They have got smaller and smaller. About 15,000 have disappeared during the two and a half years that the Government have been in power.
        The Tories said that small businesses were weighed down by the paraphernalia forced on them by the Labour Government. Some employers in my constituency and in other areas would welcome the opportunity to fill in forms for some of the schemes introduced by the Labour Government. About 15,000 do not even have a letterbox for the forms to go through. They would welcome the chance to be back in business and to employ more young people.
        The casino economy is proliferating under this Government, but they are not looking after our youngsters. Some are using heroin and God knows what else. That is the market force State that we now have. There is a market for heroin in the free world of the Tory Party. The market forces set the price for heroin. In Glasgow, it can be up one week and down another, according to supply and demand. That is the testament of this Government. It is a matter not of getting out bikes, but of getting people back to work manufacturing bikes and all the other things that are necessary.
        I am not against the YOP being used at the margin, but it is being used as part of the base of the Tory Government's economy. The only way that they will get these hundreds of thousands of young people back to work is to change the whole system, increase purchasing power and restore the cuts in public expenditure, which will enable people to take part in the various areas of construction that are absolutely necessary.
        The headmaster who appeared recently on television said it all. We have to consider not only the 1 million youngsters under 25 who do not have jobs. He said that he did not know what to tell his fourth and fifth form pupils. There is no incentive for them to get more O-levels and A-levels. Their brothers, sisters and friends have no jobs, and some of them have O-and A-levels. They do not see why they should bother to further their education and do their homework.
        That is the legacy of this rotten Government in two and a half years. The Minister is part of it. He can weep crocodile tears. He may say that he is a wet, although he would not dare to do so from the Dispatch Box. The Government's strategy has caused misery and despair, and they will reap the harvest when an election is called.
        9.13 pm
        Mr. Bob CryerI am grateful to my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) for giving us an opportunity to discuss the scourge of unemployment at the beginning of this spillover period—the time when we deal with the odds and sods that are left over. However, unemployment is not a leftover item. It is a main and continuing cause of anxiety to the House and the people outside.
        In Keighley unemployment stands at 13 per cent. In May 1979 it was only 4.2 per cent. The increase is entirely the responsibility of the Government. In comparison with other areas 13 per cent. may be modest. It is still a scourge in Keighley. People in Keighley are apprehensive about the develoment of an industrial desert in the area. They see little prospect of an upturn in the economy whatever the Chancellor of the Exchequer says from time to time about the signs of coming rescue.
        Only recently the People's Campaign for Jobs passed through Keighley. We entertained those taking part in the march which took them from Sheffield to Blackpool. Many of the marchers had been involved in a YOP scheme. When they got to Blackpool they demonstrated their strength of feeling in a forceful but disciplined manner. What happened inside the Conservative Party conference? Various Conservative Members were interviewed on television. They sneered. There were sneers from the rostrum, suggesting that those taking part in the march were engaged in a bit of a dodge. That attitude was symbolised by the cheap, nasty and sneering speech from one of the cheapest, nastiest and most sneering Ministers of the Tory Government, the right hon. Member for Chingford (Mr. Tebbit). Opposition Members have not forgotten the day when the right hon. Gentleman, sitting on these Benches, told the late Tom Litterick to go and have another heart attack. Perhaps the right hon. Gentleman is satisfied.
        That vicious attitude was demonstrated to all and sundry at the Conservative Party conference. The right hon. Gentleman departed from his prepared speech. He went off into vicious Right-wing flights of fancy, telling the unemployed that they should follow his father's example, get on a bike and find work. I invite the Minister who will be replying to say where the unemployed can go when they get on their bikes to search for work. Some young people are already going all over the place. They are desperate for jobs. Some would not mind the jobs that Tory Members have on the side. It would be a nice gesture if some Tory Members with directorships in addition to receiving public assistance as hon. Members gave up a few of those jobs as a gesture. That would amount to a few hundred jobs for a start.
        His cynical vicious sneer at the unemployed exposed the Secretary of State for Employment for what he is—a man with a heart of iron. He does not give a damn about the unemployed. His answer is for the unemployed to get on a bike and look for jobs, even though he knows that the reality is that 4 million, not 3 million, face the dole if those who are not registered are included. This situation is ruining whatever notion the Government might have entertained about reducing the public sector borrowing requirement. It actually forms a major part of the PSBR. About £10 billion is involved in unemployment benefit,
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        schemes such as YOPs and loss of tax revenue. This is going out of control. Indeed, it is inflationary. It is demand without production.
        The Tories must realise that they are reaching a watershed. They must either get rid of the Prime Minister and switch their policies or recognise that they are drifting to an almighty electoral disaster. They are now characterised as the party of unemployment. Not only that; after the Secretary of State's speech at the Conservative Party conference, they are characterised as the party that does not care about the unemployed. The Prime Minister can appear on television, putting on her Saatchi and Saatchi voice, or go on the Jimmy Young Show and say, "I am terribly concerned, Jimmy, about unemployment." The fact is that she has appointed a Secretary of State for Employment as part of the hard attitude that she displays in her selection of Ministers. It is a shift to the Right.
        The Conservative Party is beginning to realise that the only way that it can change the policy is to change the leadership. For the sake of the unemployed I hope that that happens. The Prime Minister and her policies will clearly be a disaster for the Tories at the next election, but I would gain no satisfaction from a Tory electoral disaster at the expense of millions of people experiencing misery and degradation in the dole queues.
        As my hon. Friend the Member for Bolsover (Mr. Skinner) said, the YOP was introduced by the Labour Government to assist a tiny minority. It was one of a number of schemes, most of which were cut as soon as the Conservatives got into office. The grants for small businesses were abolished, the job retirement scheme was cut and has only recently been restored to the level at which it stood when the Conservatives came to power. The temporary short-time working scheme was immediately cut from 12 months to six months and was subsequently extended to nine months as the extent of the employment disaster hit the Government.
        It is worth reflecting on why all those schemes were cut. The Conservatives said that they would unleash entrepreneurial ability and give tax concessions to the wealthy so that the capitalists in our society could clamber into their Rolls-Royces, Bentleys or Jaguars, go to areas of high unemployment and create jobs. I know that it sounds lunatic and we said in 1979 that it was lunatic, but the Conservatives believed it.
        But it has not worked out that way. The entrepreneurs have shown a striking lack of patriotism. They are putting their money anywhere except in this country and they have been assisted by the Chancellor of the Exchequer, who removed all exchange controls shortly after taking office. The Government believe in the rights of capital over the rights of labour. They knock the trade unions through legislation, but they give freedom to those who own capital.
        It is not working. Capitalism is tottering. Entrepreneurs are not entrepreneuring or producing all the jobs that we were promised or making the high quality decisions that tax concessions and high incomes apparently give them the right to make.
        The YOP scheme, which was designed by the Labour Government to assist a relatively small number of young people, has become a central pillar of the Government's strategy. When the Government are taxed with that, the Prime Minister puts on her Saatchi and Saatchi voice and

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        tells us how many thousands of young people have places on the extended scheme. That is the Elastoplast on the bleeding sore of unemployment.
        Current Department of Employment statistics show that there are 270,000 young people on the YOP scheme. They stay on the scheme for only six months, so an enormous section of our youth has been involved in the scheme. They must feel desperate when, after being given a nominal job, they are discarded after six months and have to go back in the dole queues.
        It is worth remembering that before the general election the Tories said that YOP jobs and others were fake jobs and not real jobs. They said that they would provide the real jobs, but they now use the very system that they criticised so vehemently in 1979 as an example of their care and concern for the unemployed.
        I emphasise that many of the youngsters involved in the YOP scheme believe that they are being exploited in some instances, that the wage is relatively low, that they are not paid trade union rates, and that they are not encouraged to have trade union rights. The industrial injuries position is somewhat hazy and hazardous.
        I am impressed by the turnout of Labour Members tonight. It is obviously an expression of the Labour Party's worry about the level of unemployment among the population at large and particularly the young. There is concern on the Opposition Benches that YOP schemes are being used to replace full-time workers in full-time jobs. We want that to be stopped.
        I emphasise that all the Government's crocodile tears about caring for the unemployed are belied by their attitude to their own workers in the public sector, because the Government are requiring cuts in Civil Service jobs. This is not as a result of productivity For example, in the Central Office of Information an instruction has been given that so many jobs must be cut. That means fewer opportunities for young people. It means a greater likelihood that the YOP scheme will have to be extended. It is directly as a result of Government action and decision to cut jobs in the Civil Service. It is nothing to do with productivity. The COI has told its members that it must now cut jobs as a result of Government decree and direction.
        Mr. Robin F. CookWill my hon. Friend also bear in mind the example of the Property Services Agency? In the two years in which the present Government have been in office, the number of apprentices recruited by the PSA has been cut from 518 to a mere 36, which represents 500 school leavers who this year will not have the opportunity of a training for a skill in a steady and secure job.
        Mr. CryerMy hon. Friend is absolutely right.
        I shall bring my remarks quickly to a close because my hon. Friends are here to contribute to the debate to express their concern.
        The Government must look at reflation. It is absurd to spend money on schemes such as the YOP and at the same time cut local authority expenditure, cut areas of Government activity and cut the nationalised industries, and so create longer dole queues which they have to spend more money propping up with Government schemes such as the YOP.
        The Government must consider import controls. We have had a big lobby here today from the Transport and
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        General Workers Union and the Amalgamated Union of Engineering Workers—mostly in the car industry—expressing their fears. It is not a question of cutting in relation to the developing countries. We can give them preferential treatment—but only if we plan our trade. If we have a free trade economy, we cannot do anything about them at all.
        Lastly, I emphasise that for the future we have to reckon that we must switch from defence expenditure to expenditure for peaceful purposes. The Minister may say, "Public expenditure does not create jobs." That is not an argument that the Government use over defence. They say that defence expenditure cannot be cut because it creates jobs.
        We must make sure that we put money into research and development for the goods and products that people need and want. We have the example of Japan, whose industry is thriving. Japanese products are all over the world. They are good, efficient products. One of Britain's problems is cutting imports of Japanese motor vehicles. That is because the Japanese put their ability and their investment into peaceful purposes. They do not soak up their resources in the wasteful way in which we do, on defence, for products that can only exterminate people and cannot benefit mankind.
        There is a future provided that we get a Government who will implement Socialist policies, a Labour Government, to clear up the terrible, deteriorating and harmful mess created by the policies of the present Tory Government. The sooner we get a Labour Government, the better.
        9.29 pm
        Mr. Frank Haynes: I feel proud to participate in this debate, along with some of my colleagues who have remained here to participate. It is one of the most important debates that we shall have for a long while, even though it will last for only a couple of hours. It has given us the opportunity to draw attention to the serious problem of finding work for young people.
        Like many of my colleagues on these Benches, I worked hard in my constituency during the recess. I had the opportunity to get around and see the problems of unemployment.
        I wrote to the Prime Minister two days ago, because before the recess she said that Members of Parliament could knock on the door of No. 10 and tell her whether firms in their constituencies were in serious difficulties. I seized that opportunity because of the unemployment situation and because of the way in which firms are collapsing in a way that has never happened before in my constituency in the East Midlands.
        Many Labour Members have been saying for some time how the Government could overcome some of the unemployment problems—problems which affect the railways, the roads and water. Yes, I want to talk about sewerage. There is a firm in my constituency—
        Mr. Deputy SpeakerOrder. This is not a general debate on unemployment. It should relate to the youth opportunities programme, and that is what the Minister will reply to.
        Mr. HaynesI shall draw attention to that, Mr. Deputy Speaker.
        This firm regularly took on youngsters from school to train them. In May 1979, there were 473 employees at this

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        firm. Today there are 103. That is the sort of situation that exists in many constituencies, not just in mine. It means that the kids who leave school do not have a hope in hell of getting a job. About 635 children left school in my constituency this summmer, and few of them have got a job. They could have gone to this firm which regularly took on youngsters to train in concrete pipe making. The managing director has to go abroad, cap in hand, to Japan and Spain, to try to find work and keep adults as well as youngsters in employment.
        I continually tell the Minister for Health that the National Health Service is going down the drain. He keeps telling me that waiting lists are dropping. It so happens, because of Government policy, that the waiting lists are going the other way. They are getting longer and longer.
        There is a tragic situation in the training of young lads and lasses. Those who train as nurses are being turned away. The youngsters who are being trained at the moment and who finish in December have been told, after two years' training and all the public expenditure that that involves, that there is no job for them in the National Health Service in the locality. That is a shocking state of affairs. The Government should not be proud of that. They keep saying "We are winning through. Our policy will work, not yours. There is no alternative."
        However, there is an alternative, and that is to plough money in the right direction, and not into the dole queue and into youngsters who are being paid £23.50 a week. Let us face the facts of life. People in the country are waking up. We woke up long ago. The Conservative Government are using the scheme as a racket. It was brought into being by a Labour Government for a purpose, but it is being abused. There are firms which are abusing the system with Government support—the big combines in the market place and along the high street. I can name them: Marks and Spencer, Littlewoods, British Home Stores. What are they doing? They are taking youngsters on at £23.50, at the expense of jobs for adults. In my locality, I find youngsters, not adults, working in the stores. Adults are on the dole, costing the nation a fortune. All the oil revenues from the North Sea are being spent on unemployment. That is a ridiculous state of affairs. We are paying people to be bone idle and to stay at home doing nothing.
        I wrote to the Minister, but he told me to table a question if I wanted to know the answer. In my area, youngsters cannot even get hearing aids, because the work force that supplies them has been reduced. That relates to the cuts. The former Secretary of State for Social Services constantly told us that more and more money was being ploughed into the social services and into hospitals. The opposite is true. At the same time, the Government encourage the private sector. Those who can afford the services receive them. Poor youngsters and adults who had jobs 12 months ago, but who are without jobs now, cannot afford to pay. They must remain dependent on the National Health Service, which the Government are ruining. So it goes on.
        I was surprised by a suggestion that the Government are now putting into operation. The Government are allowing people to retire at 60 and to take redundancy payments so that they can create positions for youngsters. That is fair enough. However, if we were not in such a situation, the Government would not take such action. Early retirement
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        is a racket to cover up the state of unemployment. The sooner Conservative Members wake up to the actions of their Cabinet, the better off we shall all be.
        Mr. Harry Greenway Mr. Harry Greenway (Ealing, North) rose——
        Mr. HaynesWe have a nation, not just——
        Mr. Greenway Mr. Greenway rose——
        Mr. HaynesSit down. We must look after the work force that provides the money. The hon. Member for Ealing, North (Mr. Greenway) has only just come into the Chamber. That is shocking. Some Conservative Member must have left the Chamber to tell his colleagues to come in and fill the Benches. They were empty a few minutes ago.
        The sooner the Government and Conservative Members wake up, the sooner we shall move in the right direction and the sooner jobs will be created for the adults who have to look after youngsters who are themselves looking for work.
        I made it a duty to check at the local courts about appearances. Since the last election in 1979, appearances among the 16 to 19-year-olds have doubled. Why? Youngsters have nothing to do. They hang round on street corners and at discos. They have nothing to do but to get into trouble. The Government's response is to suggest that someone should raise some money by holding a raffle somewhere. They want to entertain those youngsters and keep them active. That is not the answer. They are tomorrow's work force. If we do not deal with the situation, we shall go further and further downhill. The sooner the next election comes that will get the Conservative Party out of office the better off we shall all be.
        9.38 pm
        Mr. D. N. Campbell-SavoursIn debates such as this there is a danger of underestimating the role that the youth opportunities programme can play in resolving our problems. I endorse many of the comments made by my hon. Friends, but I should like to draw on the other side of the argument. Within British society, there is an institution—local government—that can play a very important role in the correct exercise of schemes under the Manpower Services Commission's programmes.
        In the Lake District, Cumbria and Workington there is an important problem—escalating unemployment. Only in the last few hours it has been announced that a further 250 jobs might be lost in the next few months. They will be lost from an important employer—High Duty Alloys—which has operated in West Cumbria for 40 years. Officers in that company have been passionate in their attempt to steer the Manpower Services Commission and the Department of Employment in the direction of new and adventurous forms of employment opportunities for young people. Officers of the company sponsored the West Cumberland Training Association which, with only limited resources, has made a major contribution locally. The Under-Secretary of State has considered the company's position before. In the light of the most recent wave of announced redundancies by a company which has an important part to play in the provision of apprenticeships in West Cumbria, I hope that the Under-Secretary will give its position extra attention.

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        Since last March 3,000 young people in the area have been placed in the youth opportunities programme However, 1,000 young people in Cumbria still need to be placed if we are to fulfil the Christmas guarantee of 1980 I agree with my hon. Friend's reservations about the operation of the youth opportunities programme in the private sector. Abuses have occurred, but they have not been wholesale. Many good employers in the private sector use the scheme carefully and I do not wish to undermine them, but abuses have occurred.
        I believe that local government has a strong role to play in the provision of schemes which are acceptable, which do not abuse the Department's guidelines and which are acceptable not only to Government supporters but to many of my hon. Friends who are disturbed about the possibility of trade union rights being undermined. Some of my hon. Friends have faith in public institutions because they are more accountable and more responsible. Local authorities, as public institutions, can be used by the Government in the development of the type of schemes that we are discussing.
        Earlier this year I spent some days in Blackburn examining schemes that the Blackburn district council had set up. The Blackburn MSC operation draws several million pounds of Government money. It is interesting in that the scheme has been set up in a special unit outside the town hall but it is totally accountable to the town hall. At the last count, in excess of 1,000 young people were being hired and that was biting into the problems of unemployment in the town. The MSC schemes that operate in Blackburn have the support not only of local community bodies but of the whole trade union movement in Blackburn. The trade unions there are directly involved in the selection and administration of the schemes.
        After my visit to Blackburn I wrote a document for the Allerdale district authority entitled "Target 750", which suggested the construction of a unit within that district similar to that which operates in Blackburn. I suggested that the Allerdale district should set up a similar sponsored unit, operated and imaginatively backed by special appointments of young people and with professional expertise to ensure a responsible and sensible approach to the problems of youth unemployment.
        My authority has not been as receptive as I should have liked, but I understand that some objections have been raised by councillors—not of my political persuasion—who believe that the materials allowance is insufficient to back up the sort of operation that Allerdale district council would wish to have if it were possible. The problem would be resolved if the materials allowance were increased and if the Government said to local authorities "You have a responsibility to set up schemes to resolve our problem of youth unemployment."
        Perhaps the Minister will call a conference of representatives of all the local authorities in Britain to discuss the setting up of such schemes on the basis of the imaginative way that it has been done in Blackburn. If the Government do not respond in that way, we shall not resolve this problem. Increasing numbers of young people will find themselves obliged to enter into schemes which abuse the principle of the youth opportunities programme, The programme will become discredited and it will be difficult in future for any of us to stand up and demand that the necessary resources are expended and invested to solve the problem.
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        The Manpower Services Commission's regional operations raise a problem that is not often reflected here. Some of the regional and district offices feel that they do not have the resources necessary to provide the sort of monitoring service that should be provided. The responsibility rests upon the Department of Employment and on the Manpower Services Commission to go out and examine the schemes being sponsored by the Department. Unless there are sufficient monitoring officers and unless the pressure on existing monitoring officers is relieved, there is a danger that further abuses will develop and the schemes will be further discredited.
        I rose to speak tonight to draw the Minister into the argument and to suggest to him that local authorities, being publicly accountable bodies having traditional relationships with trade unions, should have it within their power to set up responsible programmes. The Minister can call on local authorities to take the initiative, but he must set the conditions to enable them to respond. At present they do not accept that they are in a position to respond, first, because £23.50 a week is insufficient and, secondly and more importantly, because the materials allowance is too low. Too often the allowance is spent on the provision of transport from the central site to the job that is being undertaken on any particular programme. We should like to see a greater materials allowance, if only to provoke a reaction from local authorities and to enable the Minister to get them round the table and bring them into the area of responsibility for resolving this problem.
        We must resolve this problem. We cannot allow it to go on as it is. The whole machine that has been built up has become amateurish in many areas, and many people in the regions openly admit it. They feel that the programme is starved of the necessary resources to give it the professional polish that it needs if it is to attract and be given the kind of credit that young people wish it had when they apply for the posts. Many young people refuse to enter MSC schemes because they feel that they lack the extra finesse that full-time employment offers. The approach that I have outlined will further help young people to feel that this at least offers them some solution to their immediate problem.
        9.50 pm
        Mr. Peter HardyI shall not detain the House. I shall not express my agreement with my hon. Friend the Member for Workington (Mr. Campbell-Savours) at too great a length. I hope that the Minister will take note of my hon. Friend's remarks about the need to improve materials and allowances.
        I can relate an experience in my constituency last Friday when I visited one work scheme. I discovered that while the allowances are sufficient if the youngsters help the elderly, if they are to embark upon an imaginative scheme, which I hope they shall do shortly, by de-silting the lake at the Firbeck hospital, the allowances will be scarcely sufficient. If inflation continues to rise—we have no reason to expect otherwise—the level of allowances will create problems.
        I am delighted to have this brief opportunity to speak. I applied for an Adjournment debate this week, together with scores of Labour Members, many of whom are worried about unemployment. Only five Members could be satisfied.
        I wish to raise the question of employment in the southeastern part of my constituency. I realise that if I put the

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        general arguments about employment I shall be out of order. I shall concentrate on youngsters, who are affected by the general position. I remind the Minister that on 19 occasions by letter, five occasions at Question Time and four occasions in debate during the past two years I have pointed out that for both young and old people in the parishes of Dinnington, Anston, Firbeck, Woodsetts, Gildingwells, Letwell, Kiveton Park and Laughton Common unemployment averages more than 23 per cent. The towns are not part of an assisted area.
        I read in The Star, the Morning Telegraph, and no doubt I shall read in the local weeklies on Friday, about the figures in the Sheffield travel-to-work area. They are above the national average. The figures for the Dinnington employment exchange will not be published. They are buried in the travel-to-work area as a whole. I have argued time and time again that it is the right time for the employment exchange area at Dinnington to be removed from the Sheffield travel-to-work area and placed within the other employment exchange areas in the metropolitan borough of Rotherham so that it may enjoy assisted area status.
        It is absurd that youngsters in my constituency should be treated in a different manner. Maltby has intermediate status and Rotherham and Mexborough and Wombwell are development areas. It is quite right that they should be so categorised. Their unemployment level is ridiculously high. Dinnington is even higher, yet it is not assisted. I hope that the Minister will not accept that the patterns of neat bureaucracy must always be the only criterion upon which decisions are made.
        I wish to pay tribute to the attitude and record of my local authority. Rotherham borough council has a splendid record. My hon. Friend the Member for Workington mentioned the reluctance to act of non-Labour councils in parts of Cumbria. We are fortunate in Rotherham because 63 of the 66 councillors are Labour, as are 18 of the 18 county councillors. All of them are determined to do their utmost to ensure that the maximum possible opportunity is given to our youngsters. Rotherham has a number of schemes. Perhaps my hon. Friend would care to come to Rotherham to look at some of the successful ventures.
        There has been much anxiety about abuse. If the trade union movement is properly involved, as it should be, it is possible to stamp out much of the abuse and, in local authority schemes, to obliterate it altogether.
        I am a trustee of the Rother Valley youth force. It is engaged in splendid and commendable work. Two of the trustees are officials of local trade union branches. I attended the last youth force meeting when those trustees played an active and prominent role. The Minister should seek to ensure that trade unions are fully involved. If that is to be done properly, he must do something about the rate of pay of £23.50 a week. No self-respecting trade unionist can expect people to work for a week for such a sum. I am not suggesting that youngsters should be paid enormous wages. There must be limits. However, the Minister must recognise that that sum has not kept pace with inflation and does not provide the incentive that will take our youngsters off the streets and prevent the troubles in Toxteth, Southall and many other places.
        In addition to paying a slightly higher materials allowance it would be disirable to provide a substantially higher level of remuneration. However, none of those
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        schemes, none of the good will and none of the dedication of the local authority will survive unless we have a different economic climate.
        There is no way in which youth opportunities schemes or any of the other job creation schemes which we have in South Yorkshire can match the need. We need a different attitude from that displayed by the previous Minister of State with responsibilities for regional aid, who sent me a most arrogant and insensitive letter. I showed it to the local industrialist on whose experience my case was based. That industrialist will regard this Government for a long time with great contempt. That contempt will be deserved unless we have not merely an adjustment in our policies for youth employment but a dramatic change from the way in which our economic affairs are being mismanaged.
        9.57 pm
        Mr. Edwin WainwrightThis is an important debate even though it is not concerned with the direct issue. The Government do not seem to understand he nation's position.
        The economic situation is so grave that there is no hope for our young people. They cannot look to the future with hope. They know full well that they will be incapable of doing the jobs that will be demanded of them in this technological world. The Government are talking about alleviating unemployment by providing jobs for young people that are of no great value.
        We have argued about conscription. It is said, "Take them into the Forces. Give them discipline. Occupy their time." What effect will that have? What will they have been trained to do in this highly technological period? How many young people of wealth are not free to earn their living in valid forms? Often it is not in industry but by some other means that they ensure that they are educated to earn a living in society.
        Too often many of the working class join the Conservative Party and think that they are doing marvellously on behalf of themselves and others. They do that knowing full well that they are not guaranteeing a future to boys and girls from the same stock from which they came. We talk about engaging youth at £23.50 a week when many a labouring job for six months or 12 months would pay them more.
        What about their training for the future? What about their education? What about their ability to earn a living in a system that applies throughout the world? Where would they be in Japan? Where would they be in the United States of America? Where would they be in Germany or France? They would not be capable of earning a living because they would not be trained. It is a shocking disgrace and a damnation to our society that we who are in control of this society tell our young people, "We will give you jobs doing all sorts of little things without any future for £23.50 a week to occupy your time."
        I do not know how we dare to talk in that way in this place. We must try to place ourselves in the position of our young people. We must talk to them. We must ask them about their ambitions and how they see their future in life. Some will be able to tell us and some will not because they have lost heart. They are losing their faith in society and we are to blame. We are not giving them their future—
        It being Ten o'clock, the Motion for the Adjournment the House lapsed, without Question put.
        Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brooke.]
        Mr. WainwrightThat which we are offering young people is of no value to them and they are losing faith in society.
        Why do we have so much trouble with our young people? Why do not we think back to our earlier lives? I think about mine on many occasions. I worked in the pits at 14 years of age. I had a terrible job. I would not wish such a job upon anybody. I became unemployed when I was 20 years of age. For nine months there was no hope. I was blacklisted in the district. My friends think that I am too moderate and too quiet. I drew 17 shillings a week for six months and then I was given nothing. There was no more. At first my father received nothing and then he watt given 10 shillings.
        Why do the Government not look to our young people? Why do we not train them? Why do we not educate them? No boys or girls should be allowed to leave school until they are 21 or 22 years of age unless they are going to a trained occupation.
        Why do we not give young people sandwich courses? Why do we not offer that sort of opportunity? Why do we not tell industry, "If you want this young boy or girl, you must put him or her on a sandwich course and provide a wage for six months. If you do that, we shall educate them for six months"? Why do not we plan for their future?
        The Government should think about what is happening in Japan, France, Germany and the United States. When it comes to educating young people, Britain is at the bottom of the league. We are at the bottom of the league, too, when it comes to producing wealth. We have never ensured that our young people are educated for the future. In technological terms we still live in the days of the backwoodsmen.
        In the area which I represent there has been unemployment ranging from 21 per cent. to 14 per cent. The Manvers coking plant was closed. The foundry is destined to close. Recently I received a letter from the Minister of State, Department of Industry. It referred to young people. One paragraph stated:
        "The Manpower Services Commission is active in the area in trying to alleviate the unemployment problem by running youth opportunities programmes and training courses."
        How many young boys and girls from the Manvers coking plant have been promised a job? How many will get a job after leaving the Wombwell foundry? We are letting down our young people.
        We are also letting down the community as a whole because our young people are being taken advantage of and the system has been abused. If companies believe in private enterprise to the extent to which the Government believe in it and if, at every opportunity, they take advantage so that they can make money out of anything at all, many of them will employ young people in place of adults. Sometimes that principle is adopted.
        Unless both Front Benches wake up to what is happening and to advanced technology in Japan, the United States, Germany and France in comparison with our technology, we cannot hope to compete. Technology is advancing so much that we need many educated young people. The middle-aged and the elderly realise what it means to be young and to be out of work, to be underpaid and to have no future. The sooner this Government get out and let in a Labour Government who have the foresight that the Conservatives have not yet achieved, the better.
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        We must bring society to the realisation that we must care for our young people and make sure that they are so well trained that they can compete for the jobs and produce the wealth that this nation requires.
        10.7 pm
        Mr. John LeeI welcome the opportunity of saying a few words. I am sorry that I have not been in the Chamber for all the debate. I was preparing a speech for the annual general meeting tomorrow of the National Youth Bureau of which I am chairman. The question of youth unemployment and the problems of YOP will dominate our session tomorrow.
        I wish to make one or two national points and then some local points. The Government should be given credit for the money that they have made available to YOP. We should like much more to be made available, but significant funds have been made available. There are growing pains in the YOP schemes and people abuse them. There is no argument about that, but anything that has grown on such a scale and is now the size of YOP is bound to have anomalies.
        The biggest worry of all is the number of young people who, when they come out of YOP schemes, do not go into permanent employment. In my area of north-east Lancashire the percentage of young people going into permanent employment is down to about 20 per cent., which is enormously depressing.
        The Government should be given credit in one or two areas. There is a need for new technologies and for our young people to be trained for more modern skills. The Government are setting up about 20 new information technology centers specifically designed for young people throughout the country. They are sited particularly in our urban areas.
        I have some interesting statistics about apprenticeships in Germany as compared with this country. At present about 70,000 or 80,000 people are going into apprenticeships in this country compared with about 600,000 in Germany. That problem is compounded. Whereas in this country those apprentices are going into only about 50 different training sectors, in Germany there is a range of about 450 to 500 different training sectors of opportunity and choice for young people, with an emphasis on the service sector and clerical jobs. That is not something that we have developed here to any extent.
        Each Member of Parliament, irrespective of party, should do what he can in his own constituency. In my constituency, about six months ago, I formed a youth employment steering group. I brought together the representatives of the local careers office, the MSC, the local authority, Rotary, local industry, the minority communities, and so on, to see how we could tackle the problem at local level.
        Mr. Walter HarrisonHow many jobs?
        Mr. LeeThere is no doubt that we have succeeded in awakening the consciousness of employers. I also pay tribute to the efforts of our mayor. Perhaps other local authorities can take heart from this. Our mayor is not of my political persuasion. He called together in the town hall representatives of firms and industries in the constituency, and as a result of the meeting many of them came to the local MSC office with offers of jobs.
        Mr. HarrisonHow many jobs were created?
        Mr. LeeIt is difficult to give a precise number, but in my area the MSC is hopeful of meeting its obligation to provide those who are leaving school this year with a job or with further training by the end of the year.
        10.12 pm
        Mr. Hugh D. BrownI thank my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) for initiating the debate. I am sorry that I did not hear him. That was because the Scottish Members, in their wisdom, did not take as long as they usually take in the operation of their business. Perhaps for that reason we are now having a rather more useful debate.
        We are indeed indebted to my hon. Friend. Those who know him are aware of his special interest in young people and of the work that he does in that connection. The Scottish Select Committee has also been looking at the problem.
        I shall not embarrass the Minister by asking him whether he is a wet or a dry, but it is appropriate that, in discussing the youth opportunities programme, we should ask him to use his influence within the Department to ensure that youth problems are given priority over anti-trade union legislation, which would neither solve the economic problems of this country nor help to provide opportunities for youth.
        I am not an economist, and I can never understand how, in all the big discussions about public expenditure, we can justify increased public expenditure to enable young people to do jobs that should be done by people who are properly employed by local government. That criticism applies also to my own party when in office.
        I hope that the Minister will accept that many of us are genuinely worried about the operation and administration of the youth opportunities programme. In particular, when is the announcement likely to be made about the increase in the allowance? Is there likely to be any change in the arrangements for the travelling allowance? The inadequacy of the allowance adversely affects many youngsters who have to travel some distance in order to take advantage of the current youth opportunities programme.
        I do not want to damn the Minister, who will have our good wishes if he can exercise a spirit of moderation within his Department and at the same time improve the opportunities that are available under the programme.
        10.14 pm
        The Under-Secretary of State for Employment (Mr. Peter Morrison)I, too, am most grateful to the hon. Member for Glasgow, Maryhill (Mr. Craigen) for raising this very important subject. I am also pleased that, unlike most Adjournment debates, we have been able to have about two hours' discussion.
        I should make it clear at the outset that I am more than aware of the anxiety expressed by all Opposition Members. I hope that they will give me, as a Minister at the Department of Employment, a little credit for the fact that I might be just as interested as they are.
        The youth opportunities programme is an important aspect of Government policy, not least because, for the school leavers concerned, it is their first experience of work and their reactions to it can and do colour their attitude to work for the rest of their lives.
        The hon. Member for Maryhill said that the young people participating in the scheme were getting—I believe
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        these were his words—a raw deal. He went on to cite the number of places, which was being substantially increased and, to give him his due, he gave the Government, the MSC and my Department credit for that. There seems to be a contradiction in terms, however, if he says in one breath that it is a raw deal and in the next that the number of places is being increased substantially, which I imagine that he, unlike one or two of his hon. Friends, welcomes.
        I shall not, in the time left to me, go into the political points made by the hon. Gentleman about the economic situation, except to say this. The hon. Gentleman referred to the number of unfilled vacancies in Glasgow. I believe that he said that in the job centers there were 2,171 and in the careers offices 14. I do not have the specific figures for Glasgow —
        Mr. Craigen Mr. Craigen: I have.
        Mr. MorrisonOf course, I understand that. I am not contesting the hon. Gentleman's figures. I do not have the specific figures for Glasgow, but I am sure that the hon. Gentleman is aware that in the country as a whole at least 400,000 people per month actually find jobs. To take the number of jobs available on a day, therefore, is not an entirely correct analysis.
        The hon. Gentleman asked how many 16 to 17-yearolds have never held down a permanent job. I do not know the answer to that, but I shall write to him as soon as I can with the reply.
        The important subject of the allowance was raised by almost every Opposition hon. Member. All forcefully made the point that they believed that £23.50 was not enough. I believe that the hon. Member for Keighley (Mr. Cryer) thought that even the £28 that the MSC was seeking was too little. Another hon. Member thought that £30 might be appropriate, as that is what the figure would have been if inflation had been taken into account. I have to have regard, as does the MSC, to the resources available. If the allowance were increased enormously, the number of places available would inevitably be that much less. Moreover, if £23.50 were really so mean, do Opposition Members believe that school leavers would be applying to join the programme in the numbers that they are?
        Mr. Harold WalkerThey have no alternative.
        Mr. MorrisonWhat is more, a recent survey shows that 75 per cent. of them regard their stay on the programme as having been either fairly helpful or very helpful indeed.
        Therefore, when we come to make the decision about the £23.50—
        Mr. Walker Mr. Walker: When?
        Mr. MorrisonIn all honesty, I cannot tell the right hon. Gentleman when, because I do not know. When we take the decision, we shall of course bear in mind what hon. Members have said, but we shall also bear in mind that the number of applications is substantial even at the level of £23.50, that the resources available are finite, and that we wish to give the opportunity to join the scheme to as many youngsters as possible.
        The question of substitution was the second point of substance made by Labour Members, and I would be blind if I did not recognise that it represents a potential problem. I know of, and understand, the anxiety of the trade unions about it. I cannot estimate the level of substitution, but any

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        substitution at all is of concern to me and the MSC as well as to the trade unions. The MSC has instituted stringent procedures to check schemes before approval. That is the best way to beat substitution—in other words, not to let it happen.
        However, once a scheme has been approved, if there is a complaint of abuse, the MSC immediately investigates. Where the allegation is proved to be correct, the scheme is immediately closed down and the trainees on that scheme are moved to other schemes. In any case, I believe that as we improve the quality of the programme, the likelihood of substitution will become that much less.
        Mr. CraigenI am sure the Minister is aware that the MSC special programmes division submitted a paper to the Select Committee on Employment. It did calculations on job substitution, and I hope that the hon. Gentleman has read that paper.
        Mr. MorrisonThe hon. Gentleman flatters me. I try to read everything that I possibly can, and I was aware that that paper had been submitted.
        I turn to improvements in the quality of the YOP. Many complaints have been made, although not in this debate, that not enough is being done to train young people within the programme. The hon. Member for Maryhill laid great emphasis on that, although some of his hon. Friends did not. We hope to improve the quality of the YOP schemes, and that will take different forms. First, we want to increase the number of trainees who receive off-the-job training. Secondly, we want to lengthen the period of time spent on the programme as a whole to provide a greater variety of work experience.
        How fast can that be done? Unfortunately, it looks as if it will not be as fast as we would like because the scale of the programme is immense and change takes a substantial time. The MSC is preparing proposals, and if necessary we are prepared to look at how the YOP can be developed into some sort of training programme.
        The hon. Member for Bolsover (Mr. Skinner), in an extraordinary speech, maintained that the recession was deliberately planned before the general election. The hon. Gentleman is a highly astute politician. He is a senior member of his own party on the National Executive Committee. I would have thought that he would understand perfectly well that no Government plans a recession, because, for good reasons, all Governments wish to be returned to power. There was no planning of a recession. It has come about for a multitude of different reasons. The hon. Gentleman is arguing that we should spend our way out of it, but in my view the recession would be worse if there were a Socialist Government.
        The hon. Member also referred to early retirement and argued that there should be early retirement on a greater scale. The hon. Member for Keighley referred to the job release scheme in respect of which we have just reduced the age limit. That is a form of early retirement that provides jobs as a result.
        Mr. SkinnerI need to correct the Minister. He probably did not hear me correctly. I said that if it seems sensible to the Government to give £23.50 to these youngsters to be exploited, and in some circumstances to be doing work that is worthless—I am not saying that that is so in all cases—it would be more sensible for people who retire voluntarily to be given that £23.50 plus their old
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        age pension. That would give people an incentive to retire early, like the miners. Miners do not retire early on the basis simply of receiving their old age pension, but on the basis of receiving the old age pension plus an incentive of an additional sum, which is equivalent to redundancy pay. If the Government gave people the £23.50 plus the old age pension it is likely that more people would retire early because they would have an incentive, and more young people would get jobs as a result.
        Mr. MorrisonThe fact is that the hon. Gentleman is again asking for a large increase in the amount of money to be spent—[HON. MEMBERS: "No."]—and he has not fitted his remarks into the criteria of the job release scheme, which ensure that when a person retires early he is replaced by a person who is, by definition, younger than himself.
        Mr. CryerThis is supplementary.
        Mr. MorrisonI do not think that the earlier remarks of the hon. Member for Keighley about my right hon. Friend the Secretary of State for Employment are worthy of him or the House. They are not true and he knows it. He knows perfectly well that my right hon. Friend has made good from very humble beginnings. The tone of his remarks was not worthy of him or the House.
        The hon. Gentleman talked about import controls and about cutting defence. Has he really worked out whether, if we went down that route, the net result would be a substantial loss of jobs? I can assure him that that would be the result.
        The hon. Member for Ashfield (Mr. Haynes) slated Marks and Spencer as a sponsor of the youth opportunities programme. I hope that on consideration he will withdraw the personal remarks that he made.
        Mr. HaynesI shall not withdraw. It is true. It is a racket.
        Mr. MorrisonMarks and Spencer is an exceptionally good sponsor of the scheme. It provides many opportunities for young people—probably in the hon. Gentleman's constituency too—who would not otherwise have that opportunity.
        Mr. HaynesThat firm contributes to the hon. Gentleman's party. It is a racket.
        Mr. MorrisonThe hon. Gentleman is doing no service at all, either to the youth opportunities programme or to school leavers who benefit from it, by making those sorts of remarks about Marks and Spencer.
        Mr. HaynesIt is true and I shall keep repeating it.
        Mr. MorrisonI listened closely to the two points made by the hon. Member for Workington (Mr. Campbell-Savours). He spoke about local authorities. I welcome anyone who wants to participate in the scheme. I shall speak to my right hon. Friend the Minister of State, who

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        is responsible for the youth opportunities programme, and see whether there is some way in which we can make further improvements.
        Mr. CraigenI should like something positive to come out of this debate. When may we expect an announcement about an uprating in the present training allowance?
        Mr. MorrisonI cannot give the hon. Gentleman an answer, not least because I do not know exactly when. I should imagine that it would be in the not too distant future, but I do not know when. It is a matter that we review on an annual basis, as did his right hon. Friend the Member for Doncaster (Mr. Walker), when he was
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        Minister of State. I should not like to mislead the House by giving a date when, as the hon. Gentleman knows, it is impossible to give dates.
        The hon. Member for Workington referred to the materials allowance. There is annual review and I shall make sure that his point is taken carefully into account by the Manpower Services Commission.
        I could not agree more with the hon. Member for Dearne Valley (Mr. Wainwright) when he says that we must face up to technology and be competitive. With remarks such as that, he could easily join our Benches. I thought that that was a matter that his right hon. and hon. Friends—
        The Question having been proposed at 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 accordingly at half-past Ten o'clock.

NATIONAL FINANCE

  Prince of Wales
  Mr. Frank Allaun
  asked the Chancellor of the Exchequer what is the net loss per annum to the Exchequer of the recent financial arrangements with the Prince of Wales.

  Sir Geoffrey Howe:
  The net revenues of the Duchy of Cornwall voluntarily surrendered to the Consolidated Fund in 1980 amounted to £275,222. This represented 50 per cent. of the total net revenues of the Duchy. Under the new arrangements agreed with the Prince of Wales, this annual surrender will in future be reduced to 25 per cent. of the total net revenues. Precise figures for the change in payments cannot be given, as they will vary in line with the future income of the Duchy of Cornwall. I draw the attention of the hon. Member to the following press statement issued by Buckingham Palace on 2 October 1981. It explains the change in the arrangements in detail.
  "The money paid under Act of Parliament from the Consolidated Fund to The Queen's Civil List makes no provision for the Prince and Princess of Wales or their Household. His Royal Highness' expenses are met out of the income from the Duchy of Cornwall.From the Prince of Wales' majority on 14 November 1969, His Royal Highness, as Duke of Cornwall, became entitled to the whole net revenues of the Duchy. At that time His Royal Highness offered to make over to the Consolidated Fund, as from the date of his majority, half of the Duchy of Cornwall net revenues. This offer was accepted by the Government of the day and it was agreed that the amount to be made over should be subject to review on His Royal Highness' marriage or in the light of other changes in circumstances.Following His Royal Highness' marriage, the expenses of his Household and the amounts required to meet the cost of undertaking public duties, which had already increased substantially since 1969, will rise sharply. In particular, there will be the additional cost of maintaining a separate establishment at Kensington Palace, and a considerable increase in the size of the Prince and Princess of Wales' Household. Nevertheless, so far as can at present be foreseen, the revenues of the Duchy of Cornwall will continue to exceed His Royal Highness' requirements, and he has offered to continue to pay to the Consolidated Fund, from this year, 25 per cent. of the Duchy's net revenues. This offer has been accepted by the Government. It has been agreed that the arrangement should be reviewed if future changes of circumstances require it."

  Exchange Controls (Investment Outflow)
  Mr. Hooley
  asked the Chancellor of the Exchequer what is his estimate of the total outflow of private investment funds from the United Kingdom since exchange controls were abolished; and what information he has as to the countries in which the largest sums have been invested in aggregate since that date, including investment by individuals and by institutions and pension funds.

  Mr. Bruce-Gardyne:
  An analysis of the effects of ending exchange controls was published in the October 1981 Economic Progress Report. That article gives the
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  most up-to-date estimate of balance of payments capital flows in recent years; and notes that it is not possible to disentangle the separate contribution of ending controls from all the other influences over the period. There is no information available on the geographic breakdown of new investment flows, although certain figures are published on the geographic breakdown of unit trusts and investment trusts' overseas holdings in footnotes to tables 8.11 and 8.12 of Financial Statistics.

  Spastics Society (Value Added Tax)
  Mr. McQuarrie
  asked the Chancellor of the Exchequer if he will now reconsider his decision not to grant relief from the payment of value added tax to the Spastics Society.

  Mr. Bruce-Gardyne:
  I shall let my hon. Friend have a reply as soon as possible.

  Mortgage Interest
  Mr. Winnick
  asked the Chancellor of the Exchequer when it is proposed to adjust the income tax relief on increased mortgage interest rates; and if he will make a statement.

  Mr. Ridley:
  I shall let the hon. Member have a reply as soon as possible.

  Profit Sharing Schemes
  Sir William Clark asked the Chancellor of the Exchequer when he will publish the Government's proposed consultative paper on the tax treatment of rights issues under approved profit sharing schemes.
  Mr. Ridley: The consultative paper was published on 28 August, and was given publicity in an Inland Revenue press release. A copy has been placed in the Library, and further copies are available on request from the Inland Revenue at Somerset House.

  Pensions and Benefits (Tax Deduction)
  Mr. Bowden asked the Chancellor of the Exchequer whether he can now state the date when the scheme for deducting tax directly from national insurance retirement pensions and widows' benefits will be introduced.
  Mr. Ridley:
  We have now reviewed the timetable for introducing the scheme. Progress in devising the procedures involved has not been as fast as hoped, and in view of this we now propose that the scheme should be introduced in April 1983. We shall be informing organisations representing pensioners of this.

  British Petroleum (Shareholding)
  Mr. Horden asked the Chancellor of the Exchequer whether Her Majesty's Government intend to acquire the Bank of England's shareholding in the British Petroleum Company Ltd.
  Mr. Ridley:
  The Government have already made clear their intention to acquire in due course the shareholding in the British Petroleum Company Ltd. (BP) held by the issue department of the Bank of England, which the bank acquired from Burmah in 1975. Following the recent conclusion of the legal proceedings between the bank and

  131
  Burmah, the Government and the bank have agreed that the shares should be transferred to the Government, subject to parliamentary approval of a winter Supplementary Estimate for the provision of the necessary funds.

  The Estimate will provide for a payment by the Treasury to the bank of a sum equivalent to the shareholding's valuation, established in accordance with the procedure set out in the Treasury minute of 4 April 1968 for valuation of the assets of the issue department in accordance with the provisions laid down in section 9 of the National Loans Act 1968. The Estimate will also provide for the payment of the necessary stamp duty. Neither the payment by the Treasury to the bank nor the payment of stamp duty will add to the central Government borrowing requirement or the public sector borrowing requirement.

  At the time of the bank's acquisition of its shareholding in 1975, assurances were given to the Panel on Takeovers and Mergers, restricting the exercise of votes by Her Majesty's Government and the bank in respect of their shareholdings. The panel has agreed that these restrictions will cease to have effect after the shares have been transferred to Her Majesty's Government. The panel will not require the Government, as a result of the transfer, to make an offer under the City code for the BP ordinary shares then held by the public.

  The Government's relationship with BP will continue to be maintained in a way which does not breach the traditional practice of non-intervention in the administration of BP as a commercial concern.

TRADE

  Energy Consumer Committees
  Mr. Gwilym Roberts asked the Secretary of State for Trade if he will take steps to set up district energy consumer committees to help at local level with consumer problems on all energy matters; and if he will make a statement
  Mrs. Sally Oppenheim: We are examining the arrangements for helping consumers at local level in our current review of the machinery for representing consumer interests in all the nationalised industries. I will make a further statement as soon as possible.

  Arab Trade Boycott
  Mr. Greville Janner asked the Secretary of State for Trade whether, in view of the decision of the industrial tribunal in the case of Anthony Simmons, where it was shown that Mr. Simmons was dismissed on the grounds of his race or ethnic origin, in order to meet the requirements of the Arab boycott, he will now seek to introduce legislation to counter the Arab boycott.
  Mr. Peter Rees: I shall reply to the hon. and learned Member as soon as possible.

  National Coal Board
  Mr. Mason asked the Secretary of State for Trade if a decision has been taken to refer the National Coal Board's industrial and financial performance to the
  132
  Monopolies and Mergers Commission for investigation; if so, what are the reasons for the reference; and if he will make a statement.
  Mr. Biffen:
  I shall reply to the right hon. Member as soon as possible.

CIVIL SERVICE

  Senior Grades (Entrants)
  23. Mr. Gwilym Roberts asked the Minister for the Civil Service if, in the light of the Civil Service Commission's annual report indicating that a high proportion of entrants to the administrative grade of the Civil Service came from a public school or an Oxford or Cambridge university background, or both, she will take steps to ensure that entry to the senior grades in the Civil Service is more representative of the population as a whole; and if he will make a statement.
  Mr. Hayhoe:
  The Civil Service commissioners have a duty to select on merit for the administration trainee grade the most suitable of those who apply without regard to which schools or universities they attended. I am satisfied that the commissioners are doing all that they can to encourage able graduates of universities other than Oxford or Cambridge to apply.

  Official Forms (Format)
  Mrs. Renéee Short asked the Minister for the Civil Service if she has yet received the report of the Rayner team that was reviewing the format of official forms in order to make them more easily understood by the public.
  Mr. Hayhoe: The departmental studies of administrative forms have been completed. Ministers and Sir Derek Rayner have received most of the reports and are considering them. Sir Derek Rayner expects to report soon to the Prime Minister.

  Civil Servants (Racial Origins)
  Mr. Gwilym Roberts asked the Minister for the Civil Service if he will take steps to record the figures for the number of civil servants in the administrative grade or in other senior Civil Service posts who are of non-Caucasian origin, with a detailed breakdown of post held and department.
  Mr. Hayhoe:
  The Home Affairs Committee in its report on racial disadvantage issued on 6 August recommended that I should reconsider the decision not to undertake some sort of ethnic monitoring of the Civil Service and the Government's response to the report is under consideration.

  Pay Norm
  Mr. Canavan asked the Minister for the Civil Service whether he has had any response from Civil Service trade unions to the Government's proposal for a 4 per cent. pay norm in the public sector.
  Mr. Hayhoe:
  The Government have not proposed a 4 per cent. pay norm. As my right hon. and learned Friend the Chancellor of the Exchequer made clear in his statement on 15 September, the 4 per cent. figure is a

  133
  broad measure of what the Government think reasonable and can be afforded as a general allowance for increases in pay at this stage of fixing the programme from which the public service wage bill has to be met. It does not imply that all public service pay increases will or should be 4 per cent. Some may be less and some may be more. In response to enquiries from the Civil Service unions we have confirmed that the assurances they were given earlier in the year about next year's pay negotiations are unaffected by this announcement.

PRIME MINISTER

  Secretary of State for the Environment (Merseyside)
  Mr. Parry asked the Prime Minister if she will make a statement on the responsibilities of the Secretary of State for the Environment so far as these relate to Merseyside.
  The Prime Minister: I set out these responsibilities in the statement I issued on 9 October, a copy of which was sent to the hon. Member by my right hon. Friend the Secretary of State for the Environment.

  Members of the Government (Citizenship)
  Mr. J. Enoch Powell asked the Prime Minister whether she will ascertain which members of the Government are citizens of countries other than the United Kingdom, either being, or not being, citizens of the United Kingdom also.
  The Prime Minister: I shall write to the right hon. Member as soon as possible.

HOME DEPARTMENT

  Director of Public Prosecutions
  25. Mr. Arthur Lewis asked the Secretary of State for the Home Department when he last met the Director of Public Prosecutions; and when he expects to have a further meeting.
  Mr. Mayhew:
  The Director of Public Prosecutions carries out his duties under the superintendence of my right hon. and learned Friend the Attorney-General. My right hon. Friend the Home Secretary's last formal meeting with the Director was on 3 December 1979, and he has no present plans for a further meeting.

  Prisons (Overcrowding)
  Mr. Charles Irving asked the Secretary of State for the Home Department what is the current excess of prison population over certified normal prison accommodation.
  Mr. Mayhew:
  On 16 October, the total number of inmates of prison department establishments in England and Wales was about 43,900, an excess of 4,400 over the certified normal accommodation of about 39,500.

  Racial Attacks (Study)
  Mrs. Renéee Short asked the Secretary of State for the Home Department, pursuant to his reply to the hon. Member for Wolverhampton, North-East on 6 May, if he will make a further statement following his study of the incidence of racial attacks being conducted in selected police areas.
  Mr. Whitelaw:
  The work of my officials is now well advanced. A survey of reported incidents has been carried out in the 13 selected police areas, and my officials have visited these areas to discuss the problem of racial attacks with those directly concerned. The study has found that racially motivated attacks have occurred on a significant scale, but that they do not appear generally to be based on an orchestrated campaign by Right-wing extremist organisations. I shall report the findings to the House in greater detail as soon as possible.

  Police Officers (Racial Origins)
  Mr. Gwilym Roberts asked the Secretary of State for the Home Department what are the latest figures available for the number of senior officers in the police forces who are of non-Caucasian origin; if he will give a detailed breakdown in the Official Report showing rank and force; and if he will make a statement.
  Mr. Mayhew:
  There is at present no such police officer above the rank of inspector.

  Prisoners (Age Groups)
  Mr. Christoper Price asked the Secretary of State for the Home Department how many prisoners in custody were in the following age groups at the latest convenient date (a) 14 to 18 years; (b) 19 to 25 years; (c) 26 to 45 years and (d) 46 to 65 years; and what proportion each of these groups represented of the population as a whole.
  Mr. Mayhew: The most recent information readily available giving by age group the numbers and proportions of sentenced prisoners in prison department establishments in England and Wales is published in table 1(e) of "Prison Statistics, England and Wales 1980"—Cmnd. 8372.

  Police and Probation Services (Manpower)
  Mrs. Renéee Short asked the Secretary of State for the Home Department whether he has any plans to increase manning in the police and probation services; if he is satisfied that there is adequate funding to achieve these levels; and if he will make a statement.
  Mr. Whitelaw:
  It is for police authorities to fix the authorised establishment of police forces, subject to the approval of the Home Secretary and in the light of local needs and resources available. Since May 1979, the establishment of the police service in England and Wales has been increased by 2,328, and its strength by 7,000. Nearly all forces outside London are up to strength and the Metropolitan Police continues to recruit at an encouraging rate.

  Probation and after care committees determine the number of probation officers in their areas. The Government will support levels commensurate with their policy of diverting offenders from custody within the limits of their expenditure plans, yet to be announced.

  Ethnic Minorities (Research Study)
  Mrs. Renéee short asked the Secretary of State for the Home Department what steps he intends to take on the results of the research study on the progress of ethnic minorities in Great Britain; and if he will make a statement.
  Mr. Raison:
  The recently published study by the Home Office research unit entitled "Ethnic Minorities in Britain" brought together information from national surveys about the position of ethnic minorities in British society. The collation of this information will help in preparing and implementing Government programmes, in which account is taken of the needs of ethnic minorities.

OVERSEAS DEVELOPMENT

  South African Students (Grants)
  Mr. Hooley asked the Lord Privy Seal whether refugees from the Republic of South Africa are eligible for any form of scholarship or training grant from United Kingdom funds or from international funds to which the United Kingdom contributes.
  Mr. Luce:
  No United Kingdom Government funds are available to finance scholarships or training for refugees from the Republic of South Africa.

  Mr. Hooley asked the Lord Privy Seal what scheme of scholarships or training grants administered by the United Kingdom exists for the benefit of black South African students; and how many students are current beneficiaries of such a scheme in the United Kingdom.

  Mr. Hurd:
  There are two schemes administered by the British Council which provide for South Africans to come to Britain for study or training. One is entirely financed by the British Government, partly through the British Council budget and partly through ODA. Forty South Africans are at present benefiting from this scheme. The second scheme is the United Nations education and training programme for Southern Africa. This is financed by contributors to the scheme, and 20 South Africans are at present in the United Kingdom benefiting from this scheme.

  The British Council does not record ethnic origins in its statistics, but I am advised that all but six of those at present in. Britain under these schemes are non-white.

  Southern Africa (Education and Training)
  Mr. Hooley asked the Lord Privy Seal what contribution has been made by the United Kingdom to the United Nations educational and training programme for Southern Africa in each of the years 1975 to 1981; and what percentage of the total funds in the programme was contributed by the United Kingdom in each of those years.
  Mr. Luce:
  The British contribution to the United Nations education and training programme for Southern Africa in each of the years 1975–1981 and the percentage which that contribution represented of the total funds in the programme was as follows:

  United Kingdom Contribution £s

  Percentage of total funds

  1975

  70,000

  10.9

  1976

  70,000

  8.6

  1977

  80,000

  6.9

  1978

  90,000

  5.0

  1979

  100,000

  6.0

  1980

  100,000

  5.7

  1981

  nil

  nil

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  Mr. Hooley asked the Lord Privy Seal how many students currently studying in the United Kingdom are financed through the United Nations educational and training programme for Southern Africa.

  Mr. Luce:
  Eighty-one students currently studying in the United Kingdom are financed through the United Nations education and training programme for Southern Africa.

  Food Aid
  Mr. Hooley asked the Lord Privy Seal what proposals will be made by the United Kingdom to require genuine competitive tendering for food aid contracts within the European Economic Committee in the light of the recent report by the Court of Auditors, particularly with regard to cereals.
  Mr. Luce:
  It is for the Commission to respond to the observations of the Court of Auditors. But I expect member States also to have the opportunity to discuss points that arise, and when the time comes we shall certainly stress the importance of ensuring genuine competitive tendering on all such contracts.

  Mr. Hooley asked the Lord Privy Seal (1) what contracts for the supply of food have been secured by British suppliers under the European Economic Community food aid programme in 1979, 1980 and 1981 so far;

  (2) if he will list the aggregate value of contracts for food aid under the European Economic Community food aid programme secured by each member State of the European Economic Community in 1978, 1979, 1980 and 1981 so far;

  (3) what are the main foodstuffs supplied by British producers under the European Economic Community food aid programme in each of the years 1979, 1980 and 1981 so far;

  (4) what was the total value of the European Economic Community food aid programme in each of the years 1975 to 1980 at current prices expressed in £ sterling.

  Mr. Luce:
  I am obtaining the information and will circulate it as soon as possible in the Official Report.

WALES

  Tan-yr-Unto Bend
  Mr. Morgan asked the Secretary of State for Wales whether he will consider the institution of a permanent 30 mph speed limit for vehicles around the Tan-yr-Unto bend, Llanbedr D.C., Ruthin, Clwyd.
  Mr. Michael Roberts:
  My hon. and learned Friend has written to me about this and I shall reply shortly.

EMPLOYMENT

  Arab Trade Boycott
  Mr. Greville Janner asked the Secretary of State for Employment whether, in view of the decision of the industrial tribunal in the case of Anthony Simmons, he will institute an inquiry into the effects of the Arab trade boycott on the employment of Jewish people in the United Kingdom.
  Mr. Waddington:
  While the Government deplore this boycott, I can see no grounds for an inquiry into its effect on employment. So far as I am aware the case referred to is the only one in which discrimination in employment has been attributed to the boycott.

  Islington (Short-time Working)
  Mr. O'Halloran asked the Secretary of State for Employment how many jobs in the London borough of Islington are dependent on the temporary short-time working subsidy.
  Mr. Peter Morrison:
  There were 233 potentially redundant jobs covered in applications that were current under the temporary short-time working compensation scheme in the London borough of Islington in September 1981.

  Greater London (Short-time Working)
  Mr. O'Halloran asked the Secretary of State for Employment how many jobs in the Greater London area are dependent on the temporary short-time working subsidy.
  Mr. Peter Morrison:
  In September 1981, 6,313 potentially redundant jobs in the Greater London area were included in claims that were approved for payment under the temporary short-time working compensation scheme.

  Dismissals (Racial and Ethnic Origin)
  Mr. Greville Janner asked the Secretary of State for Employment whether he will introduce legislation to make it a special offence to dismiss employees of particular racial or ethnic origin to meet the requirements of the Arab boycott.
  Mr. Waddington:
  No. The decision in the Anthony Simmons case has shown that such discrimination can be dealt with adequately under the existing legislation.

  Careers Staff (Wolverhampton)
  Mrs. Renéee Short asked the Secretary of State for Employment why no special careers staff funded by his Department were allocated to Wolverhampton.
  Mr. Peter Morrison:
  I shall reply to the hon. Member as soon as possible.

  Community Business Ventures Unit (Study)
  Mrs. Renéee Short asked the Secretary of State for Employment when he intends to publish the feasibility study by the community business ventures unit received by his predecessor last April.
  Mr. Peter Morrison:
  The report of the community business ventures unit, "Whose business is business", was published in September 1981 by the Calouste Gulbenkian Foundation. My Department received a copy of this report last month.

  Disabled Persons (Occupational Aids)
  Mr. Carter-Jones asked the Secretary of State for Employment what progress has been made in setting up a computer-based data bank of occupational aids for
  138
  disabled people, following research by the Production Engineering Research Association; and if he will make a statement.
  Mr. Peter Morrison [pursuant to his reply, 20 October 1981]: The association is seeking financial support from a number of sources including the European social fund and the Manpower Services Commission. Discussions are continuing with the association about the level of financial support that can be given.

  Unemployed Persons (Wolverhampton)
  Mrs. Renéee Short asked the Secretary of State for Employment what is the latest unemployment number and rate amongst males and females in Wolverhampton; and how this compares with May 1979.
  Mr. Peter Morrison [pursuant to his reply, 20 October 1981]: The following is the information for the Wolverhampton travel-to-work area. the figures include school leavers and are not seasonally adjusted.

  Number unemployed

  Percentage rate of unemployment

  Male

  Female

  Male

  Female

  May 1979

  5,616

  2,565

  6.2

  4.6

  October 1981 ∗

  17,849

  6,943

  19.9

  12.3

  * Provisional.
  Mrs. Renéee Short asked the Secretary of State for Employment if he will list the industries in (a) Wolverhampton and (b) the West Midlands in which there have been increases in unemployment since May 1979; and if he will give the percentage increase.
  Mr. Peter Morrison [pursuant to his reply, 20 October 1981]: The following table gives the percentage increases between May 1979 and August 1981 in the numbers registered as unemployed in the West Midlands region. The figures are analysed according to the industry orders of the standard industrial classification in which the unemployed person last worked. Similar information for Wolverhampton could be provided only at disproportionate cost.

  West Midlands Region per cent.

  Agriculture, forestry and fishing

  87.2

  Mining and quarrying

  56.4

  Food, drink and tobacco

  132.2

  Coal and petroleum products

  128.6

  Chemicals and allied industries

  204.4

  Metal manufacture

  240.4

  Mechanical engineering

  261.4

  Instrument engineering

  143.3

  Electrical engineering

  219.3

  Shipbuilding and marine engineering

  122.7

  Vehicles

  336.9

  Metal goods not elsewhere specified

  236.8

  Textiles

  165.6

  Leather, leather goods and fur

  183.3

  Clothing and footwear

  194.7

  Bricks, pottery, glass, cement, etc.

  242.3

  Timber, furniture, etc.

  1678

  Paper, printing and publishing

  160.2

  Other manufacturing industries

  201.4

  Construction

  181.0

  Gas, electricity and water

  68.4

  Transport and communication

  153.7

  Distributive trades

  153.1

  West Midlands Region Per cent.

  Insurance, banking, finance and business services

  149.5

  Professional and scientific services

  121.7

  Miscellaneous services

  155.4

  Public administration and defence

  88.8

  Not classified by industry (including school leavers)

  205.5

  Total

  190.7

  Disabled Persons Register
  Mr. Hannam asked the Secretary of State for Employment how many people were removed from the disabled persons register from October 1979 to October 1980 because they were classified as being unable to work, and what percentage this was of the total register.
  Mr. Peter Morrison [pursuant to his reply, 20 October 1981]: The register established under the Disabled Persons (Employment) Act 1944 is maintained at individual jobcenters and employment offices and there are no comprehensive national statistics on the numbers of people removed from the disabled persons register because they are unable to work.
  However, the Manpower Services Commission estimates that the number of such cases is very small and is unlikely to alter significantly the total register of disabled people.

DEFENCE

  Army Pensions
  Mr. Colin Shepherd asked the Secretary of State for Defence by what percentage Army pensions have increased by since May 1978.
  Mr. Wiggin:
  The total for pension increases compounded since May 1978 amounts to about 45 per cent.

  Commissioned Officers (Racial Origins)
  Mr. Gwilym Roberts asked the Secretary of State for Defence if he will take steps to record the figures for the number of commissioned officers in the Army, Royal Air Force and Royal Navy of non-Caucasian origin, with a detailed breakdown of rank, and regiment or unit.
  Mr. Wiggin:
  No.

  HMS "Edinburgh"
  Mr. Waller asked the Secretary of State for Defence what arrangements were made to prevent the desecration of the official war grave HMS "Edinburgh" during operations to recover gold bullion from the wreck; and if he is satisfied that these were adequate.
  Mr. Wiggin:
  To prevent desecration of the war grave by unauthorised salvors and to protect it to the fullest possible extent, arrangements for a controlled salvage were agreed, under a contract which provided for as little disturbance as possible to the wreck. Arrangement were also made for a Ministry of Defence observer to be present. After considering various salvage proposals, Jessops Marine Recoveries Ltd. was selected as being
  ###################################
  140
  most likely to be able to effect recovery in the required manner. I am satisfied that these arrangements were adequate. Reports on the operation are being prepared.

FOREIGN AND COMMONWEALTH AFFAIRS

  Arab Trade Boycott
  Mr. Greville Janner asked the Lord Privy Seal whether, in view of the decision of the industrial tribunal in the case of Anthony Simmons and NEPC Limited, where it was shown that Mr. Simmons was dismissed on the grounds of his race or ethnic origin in order to meet the requirements of the Arab boycott, he will cease authenticating Arab boycott documents.
  Mr. Luce:
  No evidence was offered to the tribunal in support of a claim that pressures relating to the Arab boycott were put on Mr. Simmons' company. In its conclusions, the tribunal stated that it could not speculate on whether such pressures had induced the applicant's dismissal. Whilst remaining totally opposed to the boycott, the Foreign and Commonwealth Office will continue to authenticate the attesting signatures on negative certificates of origin, as on other documents, which is of course quite different from authenticating the documents themselves.

  Gibraltar
  Mr. McQuarrie asked the Lord Privy Seal if he has any plans to meet the Chief Minister of Gibraltar to discuss the re-opening of the border between Gibraltar and Spain at La Linea in the Campo de Gibraltar; and if he will make a statement.
  Mr. Humphrey Atkins:
  I have told the Chief Minister of Gibraltar that I hope he will come to see me whenever convenient to him. No specific arrangements for a meeting have yet been made.

  Lisbon Agreement
  Mr. McQuarrie asked the Lord Privy Seal what further progress is being made in the implementation of the Lisbon agreement signed on 10 April 1980; and if he will make a statement.
  Mr. Humphrey Atkins:
  The agreement has yet to be implemented. When my right hon. and noble Friend saw the Spanish Foreign Minister in New York in September, Senor Perez-Llorca reaffirmed his Government's commitment to the Lisbon agreement. I continue to hope that they will fulfil their undertakings without further undue delay.

  Angola
  Sir Patrick Wall asked the Lord Privy Seal what consultations were held with the United States delegation to the United Nations prior to the vote on the Angolan matters concerning South Africa; and what conclusions were reached.
  Mr. Luce:
  During the meeting of the Security Council which considered the complaint of the Angolan Government against the Government of South Africa, the usual consultations took place between the United States and the United Kingdom delegations. The reasons for the United Kingdom abstention on the draft resolution were given in my reply to my hon. Friend on 19 October.

NORTHERN IRELAND

  Unemployed Persons
  Mr. Parry
  asked the Secretary of State for Northern Ireland if he will make a statement on the latest unemployment figures for the Province.

  Mr. Adam Butler:
  The Northern Ireland unemployment figure for October is 112,224, a rate of 19.5 per cent. This is a decrease of 1,738 since last month, but the underlying trend is still upwards. The Government view such a high level of unemployment as a matter of very grave concern.

  P and O Ferry (Closure)
  Mr. Parry asked the Secretary of State for Northern Ireland, what representations he has received concerning the proposed closure of the P and O Liverpool to Belfast ferry; and if he will make a statement.
  Mr. David Mitchell:
  I shall reply to the hon. Member as soon as possible.

INDUSTRY

  State Assets (Privatisation)
  Mr. Henderson asked the Secretary of State for Industry if he intends to make any further progress in privatising State controlled assets during the current year.
  Mr. Kenneth Baker:
  Arrangements are being completed for the offer for sale by Kleinwort Benson Limited, on the instructions of the Lords Commissioners of Her Majesty's Treasury and the Secretary of State for Industry, of 133,285,000 ordinary shares of 50p each of Cable and Wireless Public Limited Company at 168p per share, payable in full on application.

  The prospectus will be advertised in the newspapers on Monday 26 October 1981 and the application list will open at 10 am on Friday 30 October 1981. The offer for sale has been underwritten by Kleinwort Benson Limited, Baring Brothers and Co. Limited and J. Henry Schroder Wagg and Co. Limited. The brokers to the offer are Cazenove and Co., James Capel and Co. and Rowe and Pitman.

  Of the ordinary shares being offered for sale, 70 million are new ordinary shares which the Government have agreed—subject to the terms of the underwriting agreement—to subscribe at par, thus raising £35 million of new equity capital for Cable and Wireless PLC.

  Following the offer for sale, and after deducting the shares committed to the employee share schemes, Her Majesty's Government will have a shareholding of 50 per cent. of the issued share capital of Cable and Wireless PLC plus one ordinary share.

  At the time of the offer for sale, the Government are making available a maximum of 285,833 shares—approximately 0.11 per cent. of the issued share capital following the offer for sale—for the benefit of employees of the group under the employee share schemes. In addition, preferential consideration will be given to applications received from employees of the group for up to a total of 13,500,000 ordinary shares under the offer for sale at the offer for sale price on the special application forms which are being made available to them. The Government have also agreed to transfer over a period
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  of not less than five years a maximum of approximately a further 0.53 per cent. of the issued share capital following the offer for sale to the trustees of the employee share schemes. The amount transferred in any one year will be subject to the level of group profit.

  We intend that the costs of the sale and of the subscription to the rights issue should be met out of the proceeds of the flotation. Parliamentary authority for this will be sought in Supplementary Estimates. Pending that approval, the necessary expenditure will be met by repayable advances from the Contingencies Fund. The gross proceeds of the sale are expected to be around £224 million of which £35 million, representing the subscription for the new shares, will be paid to the company. After deducting other costs, which are estimated to be in the region of £6 million exclusive of VAT and stamp duty, net proceeds are expected to be around £183 million.

  The following is the text of a letter from the Government to the chairman of Cable and Wireless regarding the future relationship between Her Majesty's Government and the company. Mr. Alan Wheatley, a non-executive director of the company, has been nominated as a Government director.

  20 October 1981
  "Following the Offer for Sale HM Government will have a shareholding of just over 50.53 per cent. of the issued share capital of the Company and has agreed to transfer over a period of not less than five years a maximum of 0.53 per cent. of the issued share capital to the Trustees of the Group's Employee Share Schemes. The amount transferred in any one year will be subject to the level of Group profit. After deducting the shares so committed, HM Government will have a shareholding of 50 per cent. of the issued share capital plus one Ordinary Share. HM Government, which is empowered under the British Telecommunications Act 1981 to acquire or dispose of shares in the Company at any time, intends to maintain a majority shareholding for the foreseeable future.
  HM Government does not intend to use its rights as a shareholder to intervene in the Company's commercial decisions. Nor does it expect to vote its shareholding at general meetings of the Company in opposition to resolutions supported by a majority of the Court of Directors, although it retains the right to do so.
  Under the Company's Articles of Association, HM Government has the right to nominate or appoint two non-executive Directors to the Court and HM Government has now nominated Mr. Alan E. Wheatley as a Government Director. A Government Director has no special powers and his duties, like those of all Directors, are to the Company as a whole."

  Engineering Council
  Mrs. Renéee Short asked the Secretary of State for Industry if he will list in the Official Report the membership of the new Engineering Council.
  Mr. Wakeham:
  My right hon. Friend will make an announcement as soon as possible.

  Mrs. Renéee Short asked the Secretary of State for Industry what funding is to be given to the new Engineering Council; and what responsibilities the council will have for training engineers.

  Mr. Wakeham:
  I shall reply to the hon. Member as soon as possible.

  Loan Guarantee Scheme
  Mr. Beith asked the Secretary of State for Industry whether he is satisfied with the acceptance rate of applications submitted under the loan guarantee scheme.
  Mr. MacGregor:
  Information is not available to indicate the number of occasions where the banks themselves have decided not to put forward an application to the Department of Industry. However, I am satisfied with the fact that very few applications submitted to the Department by the participating banks have been rejected by the loan guarantee unit.

  Mr. Colvin asked the Secretary of State for Industry whether, in view of the demand for guarantees under the Government's loan guarantee scheme, he will increase the ceiling of £50 million for the year; and whether more banks will be joining this scheme.

  Mr. MacGregor:
  In view of the substantial response to the scheme to date, we have decided to increase the ceiling for the first year, which started on 1 June 1981, to £100 million. The Government will be reviewing the progress of the scheme when more experience has been gained of it.

  A large number of financial institutions not already included within the scheme have expressed interest in participating than can be accommodated in a limited pilot scheme. A further mumber of these are being invited to take part. An announcement will be made when agreements with them are signed. I have already made clear the criteria on which these applications will be judged. In view of the already substantial numbers applying I have decided that I cannot consider any further fresh applications at the present time.

EDUCATION AND SCIENCE

  Salford University
  Mr. Frank Allaun asked the Secretary of State for Education and Science how many letters on the subject he has received since the announcement was made that Salford university's grant is to be cut by 44 per cent.
  Mr. Waldegrave:
  Ministers have received approximately 400 letters about the allocation of grant to Salford university.

  Mr. Frank Allaun asked the Secretary of State for Education and Science if he will make a statement on the effects on British technology of the reduction of 700 places for engineering students at Salford university as a result of the financial cuts imposed by the Government and the University Grants Committee.

  Mr. Waldegrave:
  The number of students who will be trained in particular disciplines over the next few years will depend on decisions taken by individual universities in the light of the views expressed by the University Grants Committee. Although the total number of students is expected to fall overall, the committee has provided for some increase in the number of students of engineering and technology compared with the position in 1979–80.

  Teachers' Salaries (Parental Contributions)
  Mrs. Renéee Short asked the Secretary of State for Education and Science, pursuant to his reply to the hon. Member for Wolverhampton, North-East on 4 June, if any further examples have been brought to his attention where teachers' salaries are being paid for partly or wholly by parental contributions; and if so, if he will give details.
  Dr. Boyson:
  One further example has come to the Department's attention. The teacher involved is a part-time music teacher working for three hours per week at Monks Eleigh primary school in Suffolk. Since the beginning of the present school term, her salary has been paid partly from funds raised by the parent-teacher association and partly from a local parish trust.

  Secondary Reorganisation (Manchester)
  Mr. Marks asked the Secretary of State for Education and Science if he will announce his decision on Manchester local education authority's proposals to reorganise its secondary schools.
  Mr. Alfred Morris asked the Secretary of State for Education and Science why there has still been no announcement of a decision on the city of Manchester's proposals for secondary school reorganisation; when he expects to announce his decision; and what recent representations his Department has received on the matter.
  Dr. Boyson:
  These proposals are complex and far-reaching in their consequences for Manchester's children, and my right hon. Friend has needed time to study them carefully. He is fully aware of the case for an early decision and will announce his conclusions as soon as possible. Three representations have been received urging early approval, including one from the city of Manchester and another from the campaign for a uniform system of education; two representations are in favour of further consideration and rejection, including one from the campaign for retention of 11 to 18 schools in Manchester.

  Teaching Jobs (Spending Cuts)
  Mrs. Renéee Short asked the Secretary of State for Education and Science how many teaching jobs he estimates will be lost over the next three years as a result of public expenditure cuts; how many compulsory redundancies this will involve; and if he will make a statement.
  Dr. Boyson:
  The Government's present expenditure plans envisage the employment in January 1984 of 386,000 teachers for service in ordinary maintained schools—43,000 fewer than in January 1981. The Government look to local authorities in co-operation with their teachers to take full advantage of natural wastage, early retirement and redeployment in managing this contraction. The Government recognise that some compulsory redundancies may also be necessary, but the number will depend on decisions by individual local education authorities in the light of local circumstances.

  Aberdeen University
  Mr. McQuarrie asked the Secretary of State for Education and Science if he will arrange an immediate meeting with representatives of Aberdeen university to discuss the implications of the decision of the University Grants Committee concerning the university.
  Mr. Waldegrave:
  No. Universities that wish to discuss the University Grants Committee's allocations of grant should do so with the committee. Its chairman has made it clear that he is available for this purpose.

TRANSPORT

  Channel Tunnel
  4. Mr. Temple-Morris asked the Secretary of State for Transport if he will make a statement about progress towards a decision upon a Channel tunnel project.
  Mr. David Howell:
  Last month's Anglo-French summit meeting commissioned joint studies by officials from both countries to determine whether a scheme could be developed which would be beneficial to both countries. Those studies will be pursued as quickly as the complexities of the issue allow with the aim of an early decision in principle by both Governments.

  British Railways
  9. Mr. Bill Walker asked the Secretary of State for Transport if he will discuss with the chairman of the British Railways Board investment in track and signalling equipment.
  Mr. David Howell:
  I shall be meeting the chairman shortly to discuss this question.

  18. Mr. Moate asked the Secretary of State for Transport when he next expects to meet the chairman of British Railways to discuss railway productivity.

  Mr. David Howell:
  I have already met the chairman of the British Railways Board and we discussed a number of matters, including the urgent need to improve British Rail's productivity. Further discussions will take place from time to time, when I am sure this important issue will be raised.

  21. Mr. Arthur Lewis asked the Secretary of State for Transport why he has reappointed Sir Peter Parker as chairman of British Rail at a salary of £60,000 per annum in view of the fact that this is an increase of 25 per cent. on his previous salary when the Government's declared policy is of a limit of 4 per cent. increases in salaries of public servants.

  Mr. David Howell:
  The 4 per cent. is an indication of the total amount the Government believe can be afforded on pay bills in the public services. In Sir Peter Parker's case, the issue was the terms on which his services could be secured for a further two year period, his five-year contract having ended.

  Rail Bus
  19. Mr. Campbell-Savours asked the Secretary of State for Transport what representations he has received on the new rail bus.
  Mr. David Howell:
  I have received no representations about the rail bus, although I know that it has generated a great deal of interest because of its potential for reducing operating costs on rural rail services.

  Seat Belts (Compulsory Wearing)
  Mr. Arthur Lewis asked the Secretary of State for Transport whether he will introduce the necessary legislation to enable any person to take legal action against his Department if it can be proved that his injuries sustained in a vehicle crash were caused or aggravated by
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  the compulsory use of a seat belt; and similarly, to enable the next of kin to be able to take action in the event of the loss of life of their closest relative in similar circumstances.
  Mr. David Howell:
  No. There would be considerable practical difficulties in such an arrangement, because it would be necessary to demonstrate that the injuries a person actually suffered through wearing a seat belt were worse, to a measurable extent, than the notional injuries he would have suffered had he not been wearing a belt. Such a calculation would rarely, if ever, be capable of being proved.

  Land Compensation (Great Barr and Perry Beeches)
  Mr. Rooker asked the Secretary of State for Transport how many payments of compensation under the amended Land Compensation Act have been made to persons in the Great Barr and Perry Beeches areas of Birmingham; how much has been paid out in total; what is the range of payments; and what is the amount of interest payable under the compensation.
  Mr. Kenneth Clarke:
  So far 176 payments of compensation have been made to people in the Great Barr and Perry Beeches areas of Birmingham who have taken advantage of the further opportunity to claim under part 1 of the Land Compensation Act 1973 as amended by section 113 of the Local Government, Planning and Land Act 1980. These payments range from £92 to £1,507. A total of £58,620 has been paid out, including £24,310 interest. Many claims are still being dealt with.

  Inland Waterways
  Mr. Spearing asked the Secretary of State for Transport what applications or consultations he has had in respect of the new powers to provide grants for transport facilities on inland waterways.
  Mr. Kenneth Clarke:
  No applications for grant have yet been received, but a number of potential applicants have already sought advice from officials in my Department in order to work out their proposals.

  M1 Motorway (Repairs)
  Mr. Greville Janner asked the Secretary of State for Transport when he expects repairs to the M1 motorway between Leicester and London to be completed.
  Mr. Kenneth Clarke:
  Seven major strengthening repairs were planned for this section of the M1 this year. One has been completed, three more will be finished by the end of this month and the last three will be completed by the end of November. This motorway will continue to require carefully phased major works throughout the 1980s.

  Traffic Congestion (A40)
  Mr. Shersby asked the Secretary of State for Transport what proposals he has for alleviating the severe traffic congestion at the junction of the A40 Western Avenue and Long Lane, Hillingdon, and at Uxbridge Circus at the junction with the A40 and Swakeleys Road; and if he will make a statement.
  Mr. Kenneth Clarke:
  The trunk road programme is currently under review. I am considering sympathetically whether grade separation at these two junctions could be included in it.

  Motor Accidents (Medical Charge)
  Mr. Speller asked the Secretary of State for Transport if he will seek to amend that part of the Road Traffic Act 1962 which puts an automatic responsibility for payment of a medical charge upon the motorist involved in an accident with a pedestrian, no matter if the accident was entirely the fault of the pedestrian or some third party.
  Mr. Geoffrey Finsberg:
  I have been asked to reply.

  No. An emergency treatment fee has been payable under road traffic legislation since the 1930s. The charges payable under the 1972 Act enable the Health Service to recover a small proportion of the increasingly heavy cost of treating road traffic casualties—currently over £90 million per year in England. Whilst the emergency treatment fee must be paid irrespective of proven negligence, this liability is covered by insurance policies, and most insurance companies will reimburse the fee without prejudice to any no claims bonus.

AGRICULTURE, FISHERIES AND FOOD

  Lime Subsidy
  Mr. McQuarrie asked the Minister of Agriculture, Fisheries and Food if he will now introduce a lime subsidy for all cultivated agricultural land, to be available to all farmers able to prove the need to combat deteriorating soil condition resulting in a loss of production; and if he will make a statement.
  Mrs. Fenner:
  Grant aid is already available under the capital grant schemes for the application of lime when it is part of a grassland regeneration programme. Grants of up to 50 per cent. are available on hill land. We have no plans to introduce a further subsidy.

  Hill and Livestock Compensatory Allowances
  Mr. McQuarrie asked the Minister of Agriculture, Fisheries and Food when he will be in a position to announce the rates for the hill and livestock compensatory allowances for the current year; and if he will make a statement.
  Mr. Buchanan-Smith:
  A review of economic conditions in the hill livestock sector is now being carried out in consultation with the farmers unions. The outcome will be announced as soon as possible.

  Common Fisheries Policy
  Mr. McQuarrie asked the Minister of Agriculture, Fisheries and Food what was the result of his discussions with the Danish Fisheries Minister on the common fisheries policy in Copenhagen on 16 October; and if he will make a statement.
  Mr. Buchanan-Smith:
  I discussed with the Danish Fisheries Minister on 16 October the possibilities for agreement this autumn on a revised common fisheries policy, and also a number of other fisheries issues of mutual interest.

  Fish (Marketing)
  Mr. McQuarrie asked the Minister of Agriculture, Fisheries and Food if, in order to reduce the use of fish for fish meal and consequent financial loss to the fishing industry, he will institute a marketing campaign to encourage the sale of fish for human consumption in the United Kingdom.
  Mr. Buchanan-Smith: Powers for promoting fish consumption have been given to the Sea Fish Industry Authority whose members are well aware of the importance which the Government attach to identifying ways of improving marketing in this sector.

ENVIRONMENT

  Rates
  Mr. Thornton asked the Secretary of State for the Environment what proportion, for each of the last 10 years, payment of rates has represented of the costs of (a) all industry and commerce, (b) manufacturing industry and (c) commerce, or the nearest available figures.
  Mr. King: The available information for manufacturing industry is as follows:

  Rates as a Proportion of Gross output, United kingdom, 1973–78

  per cent.

  1973

  0.55

  1974

  0.58

  1975

  0.67

  1976

  0.62

  1977

  0.58

  1978

  0.58

  This information is not available for commerce.
  Mr. Thornton asked the Secretary of State for the Environment what has been the proportion which rates in England and Wales have represented in each of the last 10 years of (a) total direct taxation and (b) total indirect taxation.
  Mr. King: Figures for direct and indirect taxes are not available for England and Wales. A comparison of rates in England and Wales with direct and indirect central Government taxation for the United Kingdom is as follows:

  Rates England and Wales

  Income tax & surtax (United Kingdom)

  Other central government taxes (United Kingdom)

  £m

  £m

  £m

  1971–72

  1,924

  6,780

  7,045

  1972–73

  2,180

  6,818

  8,177

  1973–74

  2,198

  7,444

  9,438

  1974–75

  2,941

  10,457

  11,205

  1975–76

  3,784

  15,150

  12,245

  1976–77

  4,126

  17,076

  14,521

  1977–78

  4,721

  17,450

  16,751

  1978–79

  5,182

  18,763

  19,072

  1979–80

  6,086

  20,613

  25,842

  1980–81∗

  7,700

  24,709

  30,826

  ∗ provisional
  Mr. Thornton asked the Secretary of State for the Environment what has been the total amount raised in (a) domestic and (b) non-domestic rates in England and Wales in each of the last 10 years.
  Mr. King: The information is as follows:

  Rate income in England and Wales, 1971–72 to 1980–81

  Domestic rates £million

  Non-domestic rates £million

  1971–72

  858

  1,066

  1972–73

  976

  1,204

  1973–74

  964

  1,234

  1974–75

  1,171

  1,770

  1975–76

  1,462

  2,322

  1976–77

  1,627

  2,499

  1977–78

  1,918

  2,803

  1978–79

  2,151

  3,031

  1979–80

  2,590

  3,496

  1980–81∗

  3,346

  4,354

  ∗ provisional
  Mr. Thornton asked the Secretary of State for the Environment what has been the proportion of rates raised in each of the past 10 years divided between domestic rates and non-domestic rates in England and Wales.
  Mr. King: The information is as follows:

  Rate income in England and Wales, 1971–72 to 1980–81

  Domestic proporation £ million

  Non-domestic proporation £ million

  1971–72

  44.6%

  55.4%

  1972–73

  44.8%

  55.2%

  1973–74

  43.9%

  56.1%

  1974–75

  39.8%

  60.2%

  1975–76

  38.6%

  61.4%

  1976–77

  39.4%

  60.6%

  1977–78

  40.6%

  59.4%

  1978–79

  41.5%

  58.5%

  1979–80

  42.6%

  57.4%

  1980–81∗

  43.5%

  56.5%

  ∗ provisional
  Mr. Ronald W. Brown asked the Secretary of State for the Environment what were the average rates paid in cash terms, of a two-bedroom flat in the London borough of Hackney when the ceiling on rate rebate entitlement was set at £6.75; what is the average rate paid in cash terms currently for the same property; what is the ceiling in rate rebate entitlement; and if he is satisfied that the ceiling level has kept in step with the increase in rate levels.
  Mr. King: The average rate bill for a typical (purpose built) two-bedroom flat in the London borough of Hackney was estimated to be about £6.00 per week in 1980–81 and about £9-00 per week in 1981–82. (The average rate bill in 1981–82 for all types of domestic property in Hackney is estimated to be about –7.70 per week). As from 23 November 1981, the rate rebate maximum in London will be increased to –9.00 per week. The average domestic rate bill for London as a whole is currently about –6.80 per week. I am satisfied, therefore, that the increased level for rate rebate entitlement will remain in step with average rate levels in London.

  Local Government Audit Commission
  Mr. Spearing asked the Secretary of State for the Environment what period he set for replies to his consultation paper on proposals for a local government audit commission; to whom the document was circulated; and what present public rights these proposals suggest should be terminated.
  Mr. King:
  The consultation paper was issued on 28 July, inviting comments by 15 September; this was later extended to 30 September. It was sent to the local authority associations, the professional accountancy bodies and a wide range of other interested parties. We propose to retain in full the public's rights under the Local Government Act 1972 in relation to the audit of local authorities. For water authorities we propose that auditors should in future be appointed by the Secretary of State, as is the case with conventional nationalised industries.

  Housing (Homeless Persons) Act 1977
  Mrs. Renéee Short asked the Secretary of State for the Environment if he is satisfied with the operation of the "intentionally homeless" clause in the Housing (Homeless Persons) Act 1977; what plans he has to alter this; and if he will make a statement.
  Sir George Young:
  Intentional homelessness is one of the issues we are considering in the review of the Housing (Homeless Persons) Act 1977, which we hope to conclude fairly soon.

  Local Authorities (Employment Creation)
  Mrs. Renéee Short asked the Secretary of State for the Environment if he will withdraw circular 14/81 which informed local authorities that any moneys they received from the Manpower Services Commission to promote employment would be taken out of their capital grants; and if he will make a statement.
  Mr. King: A letter was sent by my Department to every local authority in England in August to clarify the treatment of expenditure by local authorities financed from grants by the Manpower Services Commission. Expenditure funded by the youth opportunities programme or the community enterprise programme is to be treated as current expenditure; where the commission gives grants towards capital expenditure but retains ownership over the assets bought with those grants the expenditure by the local authority should be treated as agency work on behalf of the commission. In neither case should the expenditure be scored against an authority's capital expenditure allocation. This is not incompatible with circular 14/81, but the clarification will be recorded formally in a further circular in due course.

  Local Authorities (Standing Orders and Contract Provisions)
  Mr. McQuarrie asked the Secretary of State for the Environment what is his response to the memorandum submitted to him by the National Federation of Building Trade Employers on attempts by certain local authorities to amend their standing orders and standard contract provisions so as to reduce competition from private sector

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  contractors and retain all work in the authorities' own direct labour organisations; and if he will make a statement.
  Mr. James Pawsey asked the Secretary of State for the Environment if he will take steps to ensure that local authorities do not evade the competition regulations surrounding direct labour organisations by implementing legislation preventing them from artificially sub-dividing new building and maintenance work into packages below the threshold limits for which competition must be sought from private contractors or by modifying or amending their standing orders or conditions of contract to exclude private contractors from fair competition with a direct labour organisation by introducing restrictive tendering or contract conditions which either force contractors out of competition or make compliance with the conditions unreasonably difficult.
  Sir George Young: The review of the legislation affecting direct labour organisations promised by my predecessor in his reply to the hon. member for Nuneaton (Mr. Huckfield) on 22 June—[Vol. 7, c. 56.]—is now under way. The NFBTE memorandum is being carefully considered along with all the other evidence submitted by a wide range of interested organisations who were invited to comment. Any statement must await the outcome of this review.

ENERGY

  Windscale (Incident)
  Mr. Hooley asked the Secretary of State for Energy what was the cause of the release of radioactive iodine-131 from the Windscale fuel reprocessing plant in October; what investigations of the incident have been carried out by the Nuclear Installations Inspectorate; what level of contamination occurred within the plant and outside it; and if he will make a full statement to the House.
  Mr. John Moore I refer the hon. Member to my answer of 19 October to the hon. Member for Whitehaven (Dr. Cunningham).

  Research (European Community Funds)
  Mr. John H. Osborn asked the Secretary of State for Energy how much the United Kingdom has received from the European Community for research into nuclear power, including fusion, for energy saving and for projects in the hydrocarbon sector since 1973.
  Mr. Gray: Since 1973, United Kingdom bodies have been awarded approximately £24 million for research, development and demonstration work in nuclear power (including fusion), £9 million for energy savings, and £32 million for offshore oil and gas technology. Contracts are negotiated directly between the Commission and the body concerned, and the payments are usually spread over a number of years.

  Gas-feed Stock Plant (Peterhead)
  Mr. McQuarrie asked the Secretary of State for Energy what discussions he has had with the Occidental Oil Company on the proposals to set up a plant at Peterhead in the East Aberdeenshire constituency using gas-feed stock for manufacturing purposes; and if he will make a statement.
  Mr. Gray: I appreciate my hon. Friend's concern. As he knows, my right hon. Friend and I maintain close contact with oil companies, among other things about the prospects for industrial development related to United Kingdom continental shelf hydrocarbons. It would not be appropriate for me to give any specific details about a particular company's plans.

  Gas-gathering Pipeline
  Mr. McQuarrie asked the Secretary of State for Energy if he has any plans to meet the representatives of the oil companies who have expressed their interest in financing the gas-gathering pipeline from St. Fergus in the Aberdeenshire, East constituency; and if he will make a statement
  Mr. Gray: The companies which originally expressed interest in financing the gas-gathering pipeline scheme did not translate that interest into proposals to invest at the necessary levels. I have frequent meetings with oil company representatives, who keep me informed of their plans to bring gas ashore.
  Mr. McQuarrie asked the Secretary of State for Energy what representations he has received from the Grampian trades council on the decision not to begin construction of the gas-gathering pipeline system at St. Fergus in the Aberdeenshire, East constituency.
  Mr. Gray: None.

  Severn Barrage Committee
  Mr. Mudd asked the Secretary of State for Energy when he intends to publish volume II of the Severn Barrage Committee's report.
  Mr. Mellor: Volume II, containing more technical information for specialist readers, is being published today. I have arranged for a copy to be placed in the Library of the House.

  SOCIAL SERVICES

    Special Hospitals (Patient Transfers)
    Mr. Kilroy-Silk asked the Secretary of State for Social Services if he has now reviewed progress made in the first six months of 1981 in the transfer of patients from special hospitals; what conclusions he has reached; and whether he plans any action as a result.
    Mr. Geoffrey Finsberg:
    Figures are now available for the first nine months of 1981—to 30 September. They show that in that period 169 patients were transferred from special hospitals to National Health Service hospitals compared with 106 transfers in the corresponding period in 1980—a very significant improvement. My noble Friend the Under-Secretary of State, the Lord Elton, who now has oversight of matters to do with mental health and mental handicap, will continue to monitor the position.

    Injuries and Deaths (Statistics)
    Mr. Arthur Lewis asked the Secretary of State for Social Services whether he will give at the latest and most convenient stated date as much information as may be readily available showing (a) to what extent the National

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    Health Service has dealt with injuries and deaths resulting from vehicle accidents, and in particular where deaths and injuries can be attributed to the failure to wear seat belts, (b) the number of deaths and illnesses resulting in medical treatment and (c) the number of deaths caused by or accentuated by smoking, drinking, obesity, and domestic or industrial accidents, which have involved the use of the National Health Service.
    Mr. Geoffrey Finsberg: Mortality figures by main cause of death are given in the mortality statistics published annually by OPCS, but contributory factors are not separately identified. No accurate estimates are available of the total number of deaths attributable to smoking, drinking or obesity.
    In 1978 there were about 71,600 discharges and deaths of patients admitted to National Health Service hospitals for treatment following road accidents, but equivalent figures for outpatients are not available. Many injuries would undoubtedly have been prevented if a seat belt had been worn.

    Ormskirk Hospital
    Mr. Kilroy-Silk asked the Secretary of State for Social Services if he will list all those firms that tendered for the contract to modernise the maternity wing at Ormskirk hospital; which firm received the contract; and whether this was the lowest tender.
    Dr. Vaughan:
    There are two separate contracts in relation to alterations to the maternity department at Ormskirk.

    The first was for works in the special care baby unit. Tenders were received from the following:

    1. Messrs Creynor Construction of Preston

    2. Messrs Fairweather of Altrincham

    3. Messrs Morris Construction Ltd. of Southport

    4. Messrs Thomas Riding of Ormskirk

    5. Messrs J. R. Woods of Burscough

    The lowest tender, which was accepted, was submitted by Messrs J. R. Woods.

    The second contract was for an extension to the maternity day rooms. The following firms tendered:

    1. Messrs Creynor Construction

    2. Messrs W. H. Holden of Stretford

    3. Messrs Nayland and Warkden of Chorley

    4. Messrs J. R. Woods

    Messrs W. H. Holden submitted the lowest tender, which was accepted.

    Mr. Kilroy-Silk asked the Secretary of State for Social Services if McAlpine Limited has subcontracted the joinery work on the teaching extension at Ormskirk hospital to another firm; and, if so, (a) whether it is permitted and (b) from where the labour is being drawn.

    Dr. Vaughan: McAlpine, the main contractor for the mental illness unit and the department for the elderly severly mentally infirm at Ormskirk hospital has let subcontracts for the major joinery work in these jobs.

    The main contractors for the postgraduate medical center is Yeardsley, which has also sublet most of the joinery. The terms of the standard joint contracts tribunal form of contract permit the contractor to sublet any portion of the work, with the consent of the architect-supervising officers, and contain no provisions relating to the source of labour, which is a matter left to the contractor or subcontractor's discretion.

    Epilepsy
    Mr. Ernie Ross asked the Secretary of State for Social Services what funds his Department is granting to sponsor research work into epilepsy; and if he intends to increase them.
    Dr. Vaughan:
    In 1975 Professor A. E. Bennett of St. George's hospital medical school began, with financial support from my Department, a major study of the provision of care of persons with epilepsy.

    This followed the publication in 1969 of the Reid report on people with epilepsy. The study aimed to provide information on the type and distribution of facilities and personnel required for the assessment, treatment, rehabilitation and continuing care of those suffering from epilepsy.

    Work on this was completed in December 1980, at a cost of £112,000, and the Department has now received Professor Bennett's comprehensive report, which discusses the recommendations for service provision put forward by the Reid committee. The report is being considered and will be the basis of a full departmental review of policy on services for people with epilepsy. The need for further research will be considered.

    War Pensioners
    Mr. Porter asked the Secretary of State for Social Services if his Department will take special measures to assist war pensioners, especially those of them who are now unemployed; and if he will make a statement on the effect that the war pension has on such persons' application for supplementary benefit.
    Mr. Rossi:
    The Government remain fully committed to protecting the interests of war pensioners, and the rates of pension are being increased in November. We have no proposals for special measures for war pensioners who are unemployed. In assessing entitlement to supplementary benefit, up to £4 a week of a war pension is disregarded, subject to an overall maximum disregard of £4 a week for miscellaneous income. In addition, any constant attendance allowance paid with a war pension is disregarded completely.

    Voluntary Retirement
    Mr. Charles Irving asked the Secretary of State for Social Services if he will estimate the approximate cost of introducing voluntary retirement for men aged 60 years.
    Mr. Rossi:
    I refer my hon. Friend to my reply of 20 October to the hon. Member for Cannock (Mr. Roberts). Under the job release scheme operated by the Department of Employment disabled men may already leave work at age 60 provided that their employer undertakes to replace them from the unemployed register. The scheme for other men is about to be expanded by lowering the age of eligibility from 64 to 63 from 1 November 1981 and to 62 from 1 February 1982.

    Television Licences (Elderly Persons)
    Mr. O'Halloran asked the Secretary of State for Social Services what representations have been made to him concerning waiving television licence fees for the elderly living alone in view of the recently announced increases in cost; and if he will make a statement.
    Mr. Rossi:
    No announcement of increases in television licence fees has been made. Whilst I have had some representations from members of the public on the cost of television licence fees for elderly people, this is a matter for my right hon. Friend the Secretary of State for the Home Department.

    Retirement Pension
    Mr. Rooker asked the Secretary of State for Social Services how many retirement pensioners are not yet receiving their full pension entitlement due to the industrial action in his Department; and if he will make a statement.
    Mr. Rossi:
    I regret that the information is not centrally available. The backlog of accumulated claims for those people who retired after 6 July 1981 is being cleared by local offices as a matter of priority, and it is estimated that the great majority of interim awards will be finalised before Christmas. I am glad to say that the normal procedure of sending out invitations to claim retirement pensions four months in advance of retirement date is once more in operation.

    Earnings-related Supplements
    Mr. Rooker asked the Secretary of State for Social Services what action his Department is taking to ensure that persons entitled to earnings-related supplements to national insurance benefits which were not paid during the period of industrial action will now receive the benefits due to them.
    Mr. Rossi: I refer the hon. Member to the reply given to my hon. Friend the Member for Worcestershire, South (Mr. Spicer) by my right hon. Friend the then Secretary of State on 31 July.—[Vol. 9, c. 687.] An advertisement explaining the position and what should be done has appeared in national daily newspapers this week, commencing 19 October.

    School Leavers (Supplementary Benefit)
    Mr. Skinner asked the Secretary of State for Social Services whether he will seek to amend the provisions of the Social Security Act 1980 which have encouraged students to leave shool at Easter in order to become eligible for supplementary benefit thereby depriving them of taking GCE and CSE level examinations; and if he will make a statement.
    Mrs. Renéee Short asked the Secretary of State for Social Services what further consideration he has given to the payment of supplementary benefit to unemployed school leavers immediately after they leave school in the summer; and if he will make a statement.
    Mrs Chalker:
    Comments on the effect of the rules, the monitoring of the summer term CSE examinations and other relevant information, such as the registration for work figures, are under consideration.

    Dementia
    Mr. Carter-Jones asked the Secretary of State for Social Services (1) what research is being done to investigate the cause of dementia;
    (2) what financial assistance his Department is giving to research into the causes and treatment of dementia.
    (3) what research is being done to investigate suitable types of treatment for elderly people suffering from dementia.
    Mr. Geoffrey Finsberg:
    The Medical Research Council is the main Government-funded body supporting research into the various types of dementias, including senile and pre-senile dementia; in 1980ဓ81 the council's expenditure on research directly relevant to the dementias was some £250,000 with nearly £500,000 on other relevant research projects.

    The council's support includes a trial of lecithin treatment in early cases of senile dementia; biochemical and clinical studies of senile dementia at the MRC brain metabolism unit; other projects at the division of psychiatry in the MRC clinical research center, the clinical psychiatry unit, the neurochemical pharmacology unit, the neuroendocrinology unit, the University of Oxford and at the Agricultural Research Council's Institute for Research of Animal Diseases. The health Departments have informed the Medical Research Council that they have identified the dementias as a priority need in medical research.

    The research supported directly by the Department which relates to the elderly is essentially concerned with the efficiency of the caring services within the National Health Service, Social Services Departments and voluntary organisations.

    Mr. Carter-Jones asked the Secretary of State for Social Services how many health districts have a consultant geriatric psychiatrist for the treatment of elderly people suffering from dementia and other related illnesses.

    Mr. Geoffrey Finsberg: As the position is changing rapidly, I am seeking up-to-date information from regional health authorities in England and will publish a full reply in the Official Report as soon as possible.

    Mr. Carter-Jones asked the Secretary of State for Social Services what steps his Department is taking to improve the provision of care for patients with senile dementia.

    Mr. Geoffrey Finsberg:
    The White Paper "Growing Older" and the handbook on policies and priorities "Care in Action", both published earlier this year, have stressed the need for priority to be given to the provision within every district of enough suitable accommodation for the care of the elderly severely mentally infirm, and to the appointment of consultant psychiatrists with a special interest in the elderly who can play a key role in developing the district's service for these patients. A number of special posts at senior registrar level have been authorised for this reason. The implementation of national priorities in the light of local circumstances and opportunities will be the responsibility of the new district health authorities. The NHS planning system, which is currently being revised, will assist them in this task and will also assist the Department in monitoring their progress.

    I am also aware that the Health Advisory Service is engaged on a special project aimed at improving the provision of care for elderly psychiatric patients generally.

    Mr. Pavitt asked the Secretary of State for Social Services if he will take into account the possible effect on

    157
    employment of registered disabled persons if employers are made responsible for payment for the early weeks of sickness.

    Mr. Rossi: This was one of the factors which was considered during the development of the statutory sick pay scheme. I do not expect the introduction of the scheme to have an adverse effect on the employment prospects of disabled people.

    Childhood Cancer
    Mrs. Renéee Short asked the Secretary of State for Social Services why his Department has ended its financial support for the Birmingham research group and the Oxford survey of childhood cancer; and if he will take steps to ensure that their work continues.
    Dr. Vaughan:
    The period of support agreed by the Department ended on 30 September 1981 but, despite severe pressures on research budgets, we can extend support until 31 January 1982. The university and the researcher have accepted this offer.

    We understand that the researcher is making an application for support to the Medical Research Council. It must be for the council to decide, in the light of scientific assessment as well as its financial situation, to what extent further support can be given.

    Severely Handicapped Babies
    Mrs. Renéee Short asked the Secretary of State for Social Services if he has any plans to issue guidelines concerning the treatment of severely handicapped babies; what discussions he has held on this and with whom; and if he will make a statement, bearing in mind the recommendations of the Social Services Committee in its report on perinatal mortality to his predecessor in office.
    Dr. Vaughan:
    We brought out in Cmnd. 8084 that the treatment of severely handicapped babies, about which there has rightly been much public concern, presents problems of a particularly difficult and sensitive nature. I am aware of the professional advice issued by the British Medical Association in its revised "Handbook of Medical Ethics" and the recent statement by the British Paediatric Association, and am keeping the issues involved under careful review.

    Unemployment Benefit Regulations
    Mrs. Renéee Short asked the Secretary of State for Social Services what amendments he proposes to make to the unemployment benefit regulations to allow unemployed people to take part in voluntary work without forfeiting their entitlement to benefit; and if he will make a statement.
    Mrs. Chalker: As the hon. Member may know, draft regulations to increase the earnings limit for people receiving unemployment benefit from 75p to £2 a day and to make some easements in the conditions under which unemployed people may continue to receive benefits while doing voluntary work were referred to the social security advisory committee. The Committee has reported to my right hon. Friend on the proposals, with their recommendations, and as soon as consideration of them is complete, regulations will be laid before Parliament.

  SCOTLAND

    Certificate of Qualification for Social Work
    Mr. Cook asked the Secretary of State for Scotland how many graduate and non-graduate entrants were admitted to Certificate of Qualification for Social Work courses in Scotland in 1980 and 1981.
    Mr. Allan Stewart:
    I am informed by the Central Council for Education and Training in Social Work that 192 graduates and 278 non-graduates were admitted to courses in 1980. The figures for 1981 are not yet available.

    Nurses
    Mr. Ernie Ross asked the Secretary of State for Scotland how many trained occupational nurses are employed in the National Health Service in Scotland.
    Mr. Allan Stewart:
    This information is not available centrally and could be obtained only at disproportionate cost.

    Orthopaedics and Urology
    Mr. Ernie Ross asked the Secretary of State for Scotland what is the average waiting time for both inpatient and outpatient treatment for (a) orthopaedics and (b) urology in (i) Tayside Health Board, (ii) Dundee and (iii) Scotland.
    Mr. Allan Stewart:
    In 1979, the latest year for which information is available, the mean waiting times for patients treated as inpatients in orthopaedic an urology specialties are as set out in the table below. The information requested on waiting time for outpatient treatment is not available centrally.

    Orthopaedics

    Urology

    Tayside Health Board

    146 days

    116 days

    Dundee

    116 days

    116 days

    Scotland

    117 days

    88 days

    Information about waiting times is available only after the discharge from hospital of patients admitted from the waiting list.

    Mr. Ernie Ross asked the Secretary of State for Scotland if there are any indentifiable reasons to explain the the differences in waiting time for (a) orthopaedics and (b) urology treatment between Dundee and Scotland as a whole.

    Mr. Allan Stewart:
    Variations in waiting times between health board areas arise largely from the demand for a service in a particular area and the priority which a health board gives to that service when allocating the resources available. It is for health boards locally to decide the relative priorities for the allocation of resources.

    Unemployment and Health
    Mr. Ernie Ross asked the Secretary of State for Scotland if he will evaluate (a) the product-moment correlation coefficient and (b) the rank order correlation coefficient between (i) the average annual number of unemployed males in Dundee and (ii) the number of males in Dundee dying of ischaemic heart disease since 1970, assuming a one-year time lapse between (a) and (b); and what is the level of significance of each of the coefficients.
    Mr. Allan Stewart:
    Assuming a one year time lapse between (i) and (ii), the coefficients requested are (a) 26 and (b) 47. Neither is statistically significant.

    Mr. Ernie Ross asked the Secretary of State for Scotland if he will evaluate (a) the product-moment correlation coefficient and (b) the rank order correlation coefficient between (i) the number of males out of work for one year or over and (ii) the number of males dying of ischaemic heart disease in Dundee since 1970, assuming a one-year time lapse between (a) and (b); and what is the level of significance of each of the coefficients.

    Mr. Allan Stewart:
    Assuming a one year time lapse between (i) and (ii), the coefficients requested are (a) 35 and (b) 48. Neither is statistically significant.

    Mr. Ernie Ross asked the Secretary of State for Scotland if he is now in a position to consider the request from the hon. Member for Dundee, West to study the relationship between unemployment and health.

    Mr. Allan Stewart:
    The Department of Health and Social Security, in consultation with my Department, is continuing to explore the opportunities for research initiatives in this difficult field. Much work remains to be done, and therefore I am not in yet in a position to give an indication of the possible nature and extent of my Department's participation.

    Expenditure (Tayside)
    Mr. Ernie Ross asked the Secretary of State for Scotland what was the guideline figure for expenditure issued to Tayside region for the financial year 1980–81; and how much was actually spent.
    Mr. Younger:
    The 1980–81 current expenditure guideline issued to Tayside regional council, and relevant for rate support grant purposes, was £136.1 million, at November 1980 prices. The final outturn according to recent information is estimated to be £131 million (November 1980 prices); both figures are exclusive of loan charges.

    Education Expenditure
    Mr. Ernie Ross asked the Secretary of State for Scotland what is the current expenditure on school books per pupil by Tayside region and in Scotland overall.
    Mr. Alexander Fletcher:
    Figures for the current financial year are not yet available.

    The per capita expenditure for 1979–80 on expenditure outturn figures was £3.28 in the Tayside region and £7.12 in Scotland.

    Mr. Ernie Ross asked the Secretary of State for Scotland what was (a) the amount allocated for and (b) the amount actually spent on capital expenditure in education in the Tayside region in each year since 1976–77; and if he will also express the underspend or overspend at constant prices in each case.
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    Mr. Younger:
    The information is as follows:

    Tayside Region—Education Capital Expenditure Programme

    Financial Year

    Total Allocation (at outturn prices)

    Total Capital Payments(at outtun prices)

    Under-spend(-) or overspend(+)(at 1980–81 out-turn prices)

    £'000

    £'000

    £'000

    1977–78

    2,930

    2,690

    -330

    1978–79

    2,760

    2,300

    -570

    1978–80

    2,360

    2,430

    +70

    1980–81

    1,450

    1,120

    330

    Note: Before the financial year 1977–78, allocations were in terms of work to be started in the periods to which the allocations related. From 1977–78 onwards, allocations have been in terms of expenditure to be incurred in a financial year. Figures for 1976–77 are omitted because they would not relate to an allocation and an amount spent would not be comparable with figures for later years.

    Fish Processing Industry
    Mr. McQuarrie asked the Secretary of State for Scotland when he will be in a position to announce his decision on aid to the fish processing industry.
    Mr. Younger:
    The fish processing industry is eligible for the same investment assistance as is available to manufacturing industry generally. It may also receive loans on its investment from the Sea Fish Industry Authority and, in certain cicumstances, grants from the European Community.

    I am considering the cases for special and additional assistance submitted by the Aberdeen Fish Merchants and Curers Association—on behalf of the processing industry in North-East Scotland–and by the Herring Buyers Association. After consultation with colleagues, I shall announce a decision in the near future.

    McDowell-Begg Report
    Mr. McQuarrie asked the Secretary of State for Scotland if he has any plans to discuss the McDowell-Begg report on the impact of oil on traditional industries with the local authorities in Scotland which are to lose assisted area status; and if he will make a statement.
    Mr. Alexander Fletcher:
    A copy of the report has been sent to all local authorities in the study area, and any comments received on it will be taken into account in the review which the Government have promised of circumstances in areas scheduled to become non-assisted in August 1982 by downgrading by more than one step compared with the position in 1979. My right hon. Friend and I welcome the contribution which the report provides to our knowledge of the economic background and prospects in the areas most affected by oil.

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

Railcards: The Mentally Disabled
Lord Tanlaw: 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 mentally disabled rail passengers requiring an escort are not eligible for the disabled person's railcard.
The Earl of Avon: My Lords, it is for the British Railways Board to set the conditions of eligibility for the disabled persons railcard. However, I understand that mentally handicapped persons in receipt of an attendance allowance are eligible and that the board will keep the operation under review in order to see whether its scope could be widened.
Lord Tanlaw: My Lords, I thank the noble Lord the Minister for his Answer, which I regret may not be received with thanks by a number of parents of mentally handicapped children. Can he therefore say whether in the public transport industry there is in any way discrimination in outlook between physically handicapped and mentally handicapped passengers? I understand that British Rail took advice from the Department of Health and Social Security on this matter of principle.
The Earl of Avon: My Lords, the board did indeed take advice not only from the department but also from associations dealing with the disabled. The noble Lord perhaps does not do justice to what British Rail have done. In this International Year of Disabled People they have moved quite a long way towards helping the disabled. As I said in my original Answer, they have announced that the operation is under review. I am sure that what the noble Lord has said will be taken into account.
Lord Tanlaw: My Lords, does not the noble Earl consider it to be a little unfair that customers who purchase soap powders and other sundry consumer items are offered free tickets by British Rail? Could not this possibly be extended to the escort of mentally handicapped children?
The Earl of Avon: My Lords, I understand that escorts are equally allowed half price fares. Again I can only bring this point to the attention of the British Railways Board.
Baroness Faithfull: My Lords, would not the Minister agree it is strange that under the Chronically Sick and Disabled Persons Act 1970 the mentally handicapped
752
are included as disabled people but that they are not included here?
The Earl of Avon: My Lords, as I understand it, they are included. As I said in my original Answer, mentally handicapped persons in receipt of an attendance allowance are eligible. The only question arises when they are not in receipt of this attendance allowance.

UN Disarmament Committee: Attitude of UK Delegation
2.39 p.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what was the attitude of the British delegation at the Disarmament Committee at Geneva (established by the UN Special Assembly on Disarmament) to proposals for international conventions banning underground nuclear weapon tests and the outlawing of chemical and radiological weapons, and to the establishment of working committees on nuclear weapons and comprehensive disarmament.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, the British delegation to the Committee on Disarmament support the work of the committee for the conclusion of international agreements banning chemical and radiological warfare. They have resisted proposals for the establishment of a working group on nuclear weapons because nuclear disarmament is a matter best negotiated between the nuclear weapon states. The delegation have played an active part in the work of the sub-group for a comprehensive programme on disarmament.
Lord Brockway: My Lords, is there not a great contrast between what the Minister has said in this House in support of multinational disarmament and the actions of our representative on this committee? For example, is it not the case that in opposing the working committees on nuclear arms and on comprehensive disarmament they are opposing the major recommendations of the United Nations General Assembly? Is it the case that the British representative has actually proposed that all subjects now under discussion at bilateral and multilateral negotiations should not be dealt with by the United Nations until 1990?
Lord Trefgarne: My Lords, the proposals which we support are those which are best calculated, in our view, to achieve some measurable success in the area to which the noble Lord has referred. As I have said very often from this Box, our aim in this matter—and the noble Lord has acknowledged it—is to achieve balanced and verifiable measures of disarmament. Our policy within those constraints is to achieve individual elements of disarmament rather than the sort

753
of scatter-gun effect which I think is advocated by the noble Lord.
Baroness Llewelyn-Davies of Hastoe: My Lords, could the noble Lord give an answer to the Question which my noble friend has put to him about whether discussion has been postponed until 1990?
Lord Trefgarne: My Lords, we certainly hope that progress will be made long before 1990 but rather along the course which I have suggested.
Lord Gisborough: My Lords, as this country has no chemical weapons and as the Soviet Union have some 50 per cent. of their forward ammunition in chemical weapons, with training designed to use it all, is it not much more apt to ask what their attitude is to this conference?
Lord Trefgarne: My Lords, there are of course a number of conferences in the disarmament fora going on at present. As for the question of chemical warfare which my noble friend has raised, we are very much in favour, as he well knows, of a convention to ban chemical warfare.
Lord Jenkins of Putney: My Lords, is it not the case that the Soviet Union and the United Kingdom have signed the convention on chemical warfare and that the United States has not done so? Will the noble Lord say what proposals the Government have for ratifying the convention on chemical warfare?
Lord Trefgarne: My Lords, the existing convention on chemical warfare dates back, I think, to 1925. A number of shortcomings have, not unnaturally, been found to exist in that particular convention. I do not think it is yet the case that we have reached the point of ratifying a new convention, but we hope that this will occur before long.
Lord Wynne-Jones: My Lords, does the noble Lord confirm the statement of his noble friend that 50 per cent. of the forward troops of the Soviet armies are armed with chemical weapons?
Lord Trefgarne: My Lords, I am not sure that that was the precise implication of my noble friend's earlier supplementary question, but it is certainly the case that the Soviet Union possesses a very substantial chemical warfare capability.
Lord Brockway: My Lords, is the Minister aware that the unaligned nations committee of 21, which is a majority in the Disarmament Committee, has accepted the principle of the treaty proposed by the world disarmament campaign and has proposed three stages? The first stage is 25 per cent. abolition of nuclear weapons and proportional for conventional weapons; 50 per cent. in the second stage, and comprehensive disarmament in the third stage? Are our Government supporting that proposal?
Lord Trefgarne: My Lords, as I said earlier, we consider that progress in these matters is best achieved by negotiations between the nuclear states themselves.
754
We do not think that the intervention of the nonnuclear states is quite as constructive as the noble Lord suggests.
Lord Whaddon: My Lords, can the noble Lord confirm that the Soviet Union has proposed a ban on all new types of weapons of mass destruction? Was this raised at Geneva and, if so, what was the attitude of the British delegation?
Lord Trefgarne: My Lords, I understand that a proposal along those lines has been made by the Soviet Union, but we need to evaluate it rather more fully before we can reach a formal position on it.
The Earl of Lauderdale: My Lords, does my noble friend agree that, as against the Security Council which has the responsibility, the United Nations Assembly is in fact a popular but an irresponsible body which conserves its rights without really committing us to anything?
Lord Trefgarne: My Lords, I am afraid it would not really be appropriate for me to brand the United Nations General Assembly as an irresponsible body, although I must say we do not always agree with the conclusions it reaches.
Lord Davies of Leek: My Lords, when the noble Lord is considering treating somebody as irresponsible, will he remember that at the present moment the President of the United States might be in that group?

PLO: Source of Funds
2.45 p.m.
Lord Barnby: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of press reports that the Secretary of State for Foreign Affairs hopes, during his term as President of the Council of EEC Ministers, to meet the leader of the Palestinian Liberation Organisation, they can state or ascertain the source of the funds used by that organisation in their operations.
Lord Trefgarne: My Lords, the Palestine Liberation Organisation obviously derive their funds from a number of sources but we have no precise information on the proportion which each contributes.
Lord Barnby: My Lords, that Answer appears inconclusive. Is it not similarly the case that SWAPO is in unchallenged receipt of Russian support in its aim to develop disruption against the Republic of South Africa? Can it really be rewarding to Britain to support the bogus statehood represented by these two Marxist-funded organisations?
Lord Trefgarne: My Lords, occasionally these organisations declare the source of some of their

755
funds but it is rare that any of them will admit that they get all their funds from one particular source, less still that they would announce what that source was, and I am not certain that my noble friend does not over-simplify some of the arguments.
Lord Molloy: My Lords, does the noble Lord not agree that the probability is that the Palestine Liberation Organisation look upon themselves as something similar, say, to the Free French or the Free Dutch in this country in the last war and that inevitably they will get some form of financial support? And is it not equally distressing that on the other side there are rumours, in the British press at. least, that the occupants of the settlements that the Palestinians say are their lands are also being helped financially? Would it not be right for this House to acknowledge that the British Foreign Secretary, in meeting the PLO and anyone else involved, is only trying to take out the bitterness and the hatred so that young children and perhaps even those as yet unborn will not grow up to hate and fight one another? Is not the Foreign Secretary, in following Winston Churchill's dictum that "Jaw jaw is better than war war", contributing to a civilised solution?
Lord Trefgarne: My Lords, I am grateful to the noble Lord for his kind words about my noble friend the Foreign Secretary and I would certainly agree with the last part of his supplementary.
Lord Glenamara: My Lords, will the noble Lord reaffirm that the Foreign Secretary will not meet the PLO until that organisation recognises the existence of Israel with inviolable frontiers?
Lord Trefgarne: My Lords, certainly while the PLO retain their present position about the existence of Israel, meetings between them and British Ministers will be difficult.
Lord Mayhew: My Lords, will the noble Lord confirm that the leader of the PLO has recently, explicitly and publicly, endorsed the proposal for a peaceful settlement put forward by the Government of Saudi Arabia which involves, among other things, the right of all countries in the region, including Israel, to live in peace? Will he agree that this is an important and hopeful development and that the leader of the PLO should be encouraged in the line he is taking?
Lord Trefgarne: My Lords, I am not certain that the PLO was quite as receptive to Prince Fahd's eight points as the noble Lord suggests. Certainly I have not yet heard the PLO say in public that they accept the right of Israel to exist.
Lord Paget of Northampton: My Lords, is the noble Lord aware that the conduct of foreign policy by assassination is no new thing in the Middle East, nor is this the first time that we have been asked to enter into diplomatic communication with the assassins? Is he aware that in 1193 King Richard of England was invited by Philip of France to send a delegation to the King of the Assassins whom the crusaders knew as
756
"the old man of the mountains" and that he refused to do so because he considered it to be contrary to the honour of a knight, and can he ask his noble friend to take a similarly scrupulous attitude, so far as we are concerned, to organised assassinations?
Lord Trefgarne: My Lords, I cannot answer for his late Majesty King Richard I, but as for my noble friend I can say that I believe he would be willing to meet Mr. Arafat if it was clear that to do so would move forward the peace process.
Lord Wells-Pestell: My Lords, does the fact that we did not send a British delegation to the funeral of General Moshe Dayan last Sunday, but only an embassy official and not even a Minister of this Government, indicate that there is now a pro-Arab policy at Whitehall?
Lord Trefgarne: My Lords, indeed not. We would very much have liked to send a Minister to Mr. Dayan's funeral, but the administrative arrangements could not be made in the very short time available.
Lord Hankey: My Lords, is it not, however, in fact the case that until someone talks to the Palestinians we shall not succeed in getting a satisfactory settlement in the region of Israel and the West Bank?
Lord Trefgarne: My Lords, I think there is a good deal in what the noble Lord says. The PLO undoubtedly represent an important sector of Palestinian opinion, and it is inconceivable, I think, that we can achieve a lasting settlement without taking their position into account.
Lord Barnby: My Lords, since it is the repeated policy of Her Majesty's Government to aim at negotiation rather than violence, and since both these organisations appear dedicated to violence rather than negotiation, is it not regrettable that they are both in receipt of support from Marxist sources?
Lord Trefgarne: My Lords, the noble Lord clearly has other sources of information than those that I have. I was not able to give a detailed account of the sources of funds of the PLO, and of course the other organisation to which my noble friend refers, SWAPO, is not part of the Question on the Order Paper. But certainly I think we need to take a broad view of these matters. If we dismiss the PLO as being of no account, no settlement will be reached.

Coaches: Tax Revenue and Road Costs
2.52 p.m.
Viscount Sidmouth: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied that coaches make an adequate contribution by way of licence fees towards road costs.
The Earl of Avon: My Lords, in looking at this matter it is necessary to take account not only of vehicle

757
excise duty, which is what the noble Viscount, Lord Sidmouth, has particularly asked, but also of the contribution made by coach and bus operators through fuel taxation.
On that basis the Department of Transport estimates that in the present financial year buses and coaches will pay £139 million in taxation, of which £4 million is in licence fees. This is before any rebates of fuel duty payable on stage carriage operations, which amounts to £100 million. Road costs attributable to them both will be about £80 million. Separate figures for coaches are not available, but, based on a number of assumptions, the Government believe that coaches cover their road costs.
Viscount Sidmouth: My Lords, I thank the Minister for that reply. Would he not agree that it still is anomalous that a heavy goods vehicle of 9 tonnes pays over £1,000 in excise licence duty whereas a coach or a hackney carriage of similar weight pays only £50 to £60?
The Earl of Avon: My Lords, it has been for a long time now the practice of Governments to allow this vehicle excise duty concession to stage services and also to coaches, and it is particularly difficult to separate the two.
Lord Bruce of Donington: My Lords, could the noble Earl oblige the House with the calculations which he uses in arriving at his assumptions, not necessarily now but perhaps in reply to a Question for Written Answer?
The Earl of Avon: My Lords, I shall be very happy to. The figures were actually provided in answer to a Question for Written Answer in July, which may help the noble Lord.

ECC 37th Report: Employee Consultation
2.54 p.m.
Lord Wolfenden Lord Wolfenden rose to move, That this House takes note of the report of the European Communities Committee on employee consultation (37th Report, H.L. 250).
The noble Lord said: My Lords, I rise to move the Motion standing in my name on the Order Paper. This report deals with complicated and often controversial issues and I should like to express the committee's thanks to those who have guided us through them. First, our specialist adviser, Dr. Frank Heller, who has kept us informed about practice in other member states as well as enlightening us about our own country. Secondly, I would pay tribute to Mr. John Turnbull, Clerk to Sub-Committee C, whose habitual calm was never ruffled by tantalising telephone conversations throughout Europe or complicated arrangements for the attendance of elusive witnesses. Thirdly, it is right that I should acknowledge the help and information which were given to us by the British Embassies in three of the countries concerned.
But they could not have helped us as they did if the committee had not had the advantage of written and
758
oral evidence from many quarters, including the Departments of Employment and of Industry, the TUC, the CBI, the Institute of Directors, the European Trade Union Confederation, and the Industrial Society. Especially we valued visits from members of the European Parliament, Mr. Roland Boyes, Mr. Amédée Turner, QC, and Mr. Aart Geurtsen, and we had the benefit of informal discussions with Mr. Grennan of the Commission. The evidence submitted to us will be found in the appendices to the report, and those of your Lordships who can find time to read it will, (a) learn a great deal, and (b) see how deeply the committee is indebted to them all.
Before I proceed to a detailed examination of the committee's report, I hope that perhaps I may have your Lordships indulgence if I mention, very briefly, another issue, slightly different but highly relevant. Almost simultaneously with their consideration of the proposal on employee information and consultation the committee had before them a separate, but obviously related, draft directive from Brussels on employee participation in asset formation. The main tenor of this document was the desirability of enabling employees to participate in the fortunes of companies, their own or others, through ownership of shares in them. This might well be considered as a special case of the general subject of employee consultation and participation. After some discussion the committee decided that, although the two issues were closely related and it might seem artificial to separate them, they should nevertheless examine them separately, since there were two separate initiatives from the Commission. Accordingly, the committee has reported separately on asset formation and on employee consultation, and it is to its report on the latter that I now turn.
My Lords, I have hinted already that we are here concerned with complicated and often controversial issues. The document with which the report deals is entitled:
"Proposal for a directive on procedures for informing and consulting the employees of undertakings with complex structures, in particular transnational undertakings".
So we are not dealing with a directive or even a draft directive but with a proposal for a directive.
There is, of course, one great advantage in having the document submitted at what I may perhaps call its embryonic stage, namely, that there is the opportunity to make comments that will be taken into account at the next stage of policy making and drafting. It sometimes happens that draft directives come before your Lordships' House at too late a stage for comments and criticisms to be able to have much effect. That is not so in the present case, where we are dealing with a proposal of great importance at a very early stage. We have reason, indeed, to believe that amendments have already been proposed in the European Parliament.
Further, there is also reason to believe that before its submission the document had already been amended in one important respect. It was originally intended that it should apply only to transnational undertakings. But it was pointed out that this would be discriminatory in relation to undertakings which were not transnational, and that the same rules must apply to all complex structures, whether transnational or confined

759
to one member state. Hence the wording of the title, which is clearly intended to be universal in its application, with what is almost a postscript saying, "in particular, transnational undertakings". It may be that the balance of the proposal has been jeopardised by this change. Certainly that change introduced the vexatious issue of the Community trying to legislate outwith the Community.
I am deeply aware that there are a great many of your Lordships who are infinitely more knowledgeable in this field of industrial relations than I can ever hope to be and I hope that they will forgive me if, by contrast with their lifelong experience and accumulated wisdom, what I have to say seems naive and jejune. What I propose to do is simply to concentrate on the five headings of the summary of the committee's conclusions and expand briefly on each.
The first statement is that:
"There is a need to improve information and consultation procedures".
Naturally, the committee heard a good deal of evidence on this point from both sides of industry. I wish, incidentally, that we could stop thinking and talking about "sides" with the inevitable suggestions of opposition and conflict. But I think it would be artificial for me to import some newfangled neologism into the accepted vocabulary. Naturally, the views expressed were very diverse, ranging from a belief that everything in the garden is lovely to the complete opposite. But those extremes were rare, and as our discussions proceeded the armies embattled in their fortresses in the hills came down into the plain to talk with each other amicably and constructively. Far more frequent and authoritative were opinions that things were not all that bad but there was plenty of room for improvement and that, in so far as this might require a change of approach by employers, it need not unduly embarrass them.
The crucial questions, of course, are: What sort of improvement and how do we bring it about? Here the committee found helpful the distinctions which the Industrial Society drew in their evidence to us between briefing, consultation and negotiation. One of our witnesses reckoned that 50 per cent. of what goes wrong in industry is due to misunderstanding. So these distinctions are not merely semantic, but represent a positive analysis with a view to greater clarity in policy-making and in practice.
"Briefing" is downward communication through the management chain, including supervisors; "consultation" provides formal channels of two-way communication through representatives elected by employees: and "negotiation" is the trade union/ management procedure through which the two parties jointly agree on a course of action. Of course, those distinctions and definitions do not solve the problems, but the observance of them might lead to far less misunderstanding and therefore to greater mutual trust and increased efficiency.
Three important questions arise here. First, how much in real life do employees want to know? Obviously they want briefing and consultations about matters which affect their own business and bosoms, projected closures, plant reorganisations, working conditions and so on. But are they really interested
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in receiving information about far-flung subsidiaries in other countries of the Community, often concerned with products and fields of operation totally different from their own?
Secondly, do they want the information relevant to their own jobs to come down the line until it reaches them individually, or do they want it to be conveyed to them only by their elected representatives? Thirdly, on either route, what guarantees can be required or given about the confidentiality of information the disclosure of which might be of value to a rival firm? On those points there were marked differences of opinion among our witnesses.
That leads me to the second of the committee's conclusions: that the proposed directive, as at present drafted, is too detailed and too doctrinaire. Documents from Brussels are sometimes criticised as opaque, ambiguous, tortuous or, more succinctly, "wet". None of those adjectives could be applied to the present one. The trouble is rather the opposite: that it is too sweeping, too detailed in what it tries to cover and too rigid in its approach. The doctrinaire goal of complete harmonisation is pursued with little regard for the widely differing histories, traditions, practices and procedures which exist in member states in this highly sensitive field of industrial relations. The attempt to impose a black and white uniformity is likely to produce more problems than it solves.
Nevertheless—and this is the committee's third conclusion—things cannot be left as they are. Without going the whole hog of imposing uniform mandatory requirements throughout the Community there is a fairly general recognition that voluntary arrangements, often made piecemeal and ad hoc, are not enough. The Committee recognise that many companies do have excellent information and consultation arrangements; but unfortunately there still occur examples of poor or almost non-existent consultation on matters which may involve very serious consequences for employees. There are confusions, inconsistencies, sometimes contradictions; and there is often a reasonable complaint that, "We don't know where we stand". It is also the case, according to evidence received, that in the area of communication and consultation formal legal backing for procedures is less extensive in the United Kingdom than in other member states. What, then, can or should be done?
In its fourth conclusion the committee makes a suggestion for consideration by your Lordships' House and, it may be hoped, by the Commission. It is that instead of a detailed and all-embracing directive there should be a framework directive, supported by an agreed body of guidelines. The directive would set out clear objectives and minimum standards to be observed throughout the Community and guaranteed by legislation throughout the member states. It would be what I think is sometimes called the "rock-base".
The practical steps by which these standards should be attained would be taken in accordance with the guidelines, and would doubtless differ from one country to another in the light of its presently existing position and procedures and its legislative practices. There were, indeed, those among our witnesses who held that the existing OECD guidelines and the ILO tripartite declaration were of themselves sufficient,

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without legal underpinning. But the committee decided—some of its members with some reluctance—that a basic minimum of mandatory authority was necessary.
It would be easy to dismiss this suggestion as "a typical British compromise" or even as a piece of mugwumpery. I think that that would be unjust. If the present position is recognised as unsatisfactory, and if the root and branch approach of the Commission is recognised as insensitive, what is wrong with proposing a solution which tries to combine the advantages of each with avoidance of the disadvantages of both?
Therefore, I come to the committee's final conclusion. This, not unexpectedly, is that the Commission should pursue further consultations and arrive at a redraft which will be more acceptable to the social partners; and there are indications that the Commission itself now considers that this is necessary. Apart altogether from national Governments and legislatures, the European Parliament and the Economic and Social Committee are known to have views, some of which, I have reason to believe, are being put forward in Strasbourg at this very moment. As I have already said, there is general agreement that something positive should be done in this extremely important field, where attitudes have perhaps become unnecessarily polarised. The question is, What? I hope that this report and your Lordships' observations on it today may play some part in answering that question in a positive and fruitful way. My Lords, I beg to move.
Moved, That this House takes note of the report of the European Communities Committee on employee consultation (37th Report, H.L. 250).—(Lord Wolfenden.)
3.12 p.m.
Lord McCarthy: My Lords, I should like to begin by apologising to the House in general and to the noble Lord, Lord Wolfenden, in particular, if this debate goes on beyond six o'clock, because I am afraid that at that stage I have to leave to fulfil another engagement. Perhaps it will not, and I hope that it will not; in that context I shall try to be as brief as I can. As regards my own remarks, I should like to do four things. First, I should like to congratulate the noble Lord on another valuable report, one of many valuable reports that he has produced over the years.
Secondly, I should like to say something about the nature and significance of the draft directive as I see it today, because I do not totally agree with his view and his committee's view on the significance of the draft directive. Thirdly, I should like to say a little about the arguments of the opponents, and in particular the opponents as they are represented by the CBI and by the Government. Finally, I should like to pose one or two questions to him as a representative, if he is, of the committee's general views.
First, of course, it is an admirable summary of the position, and in general terms I think that I would agree with four out of five of his conclusions. I cannot agree—and I want to say why subsequently—that this is a too detailed and doctrinaire directive. I think that on the whole it is a rather general and modest
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directive, but I shall come to that later. Nevertheless, it is an admirable report; not least is it an admirable report in the evidence which it put in and in the very useful summary of the state of research in this subject, which is contained in the report as a part of the appendices. Indeed, I make no bones about the fact that I am always on the lookout for examination cribs, and those parts of the report will make an excellent examination crib; indeed; so far as I am concerned, that is what they will be used for. Therefore, in general terms it is an excellent report and I am sure that we should all like to thank the noble Lord and the members of the committee for producing it for us.
Secondly, on the nature and significance of this report, I should like to say that I regard it as a modest, flexible and more than justified series of proposals. It is a modest series of proposals for a number of reasons, some of which, in fact, the noble Lord mentioned. The first is the scope of what is suggested. As he rightly said, we are taking the breakdown of the industrial society; we are talking about consultation, about the passage of information, about briefing people. We are not talking about the nasty, dirty business of negotiation and collective bargaining. As a result of this draft set of proposals, nobody will be forced to agree, negotiate or bargain with any dirty trade unions. It is not that kind of thing at all; it is much more elevated, modest and moderate. So it is modest in its scope.
However, if you look at the subjects which are listed, you will see that they are relatively modest and noncontroversial. Employees are to be told about the economic and financial situation in their organisations; they are to be told about their employment prospects, about any rationalisation plans, about closures and the consequences of closures for them. So in terms of the subjects listed I would say that this is a modest and non-controversial list and that any decent employer would want to tell his employees about matters of this kind.
However, it is also modest in the details of what you need to be told under these subject headings. For example, you have to be given the reasons why the employer intends to do things. You have to be told about the impact on the workforce of these various decisions; for example, in particular, closures or partial closures. In both these respects, I would say that this is a modest, reasonable set of proposals and, as I say, it has nothing to do with collective bargaining. If anyone says that it is unusual, that, of course, cannot be sustained because in both these respects, as regards the subject matter and what needs to be told under the various headings, the Commission is following the actual model which was found to be acceptable by all member countries in the case of the draft statute for the proposed European company. There were no great outcries when these lists were put forward for the proposed European company statute, and in broad terms Article 5 and Article 6 follow those words.
Therefore, in these respects I would say that this is very modest, and it is very reasonable in respect of what is provided for the protection of confidentiality. Once again, the models here are previous EEC models. I challenge anyone to say that the proposals for confidentiality and the protection of confidentiality in this draft draft directive would rule out of account,

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for example, the kind of generally satisfactory proposals —which have caused employers very few difficulties—which we have in the Employment Protection Act at the moment. No one would suggest, for example, in the disclosure provisions that the kind of protections for confidentiality—which under the Employment Protection Act have been administered by the CAC and by Professor Woods as chairman of the CAC—would not hurt a fly. Yet these are the kind of protections which, I would suggest, could be perfectly easily encountered under Article 15 of this draft draft directive.
Finally, on grounds of modesty, the sanctions which are to be imposed, if the employer does not carry out the provisions of this draft draft directive, are also reasonable. Indeed, they are left to the country concerned. Once again, in this draft directive there is no reason why we should not have the kind of sanctions which we have at the moment for the disclosure provisions under the Employment Protection Act. No one would suggest that they are unfair, invidious or impose great fines and penalties upon employers.
Therefore, I would say, first, that this is a modest set of proposals. Secondly, undoubtedly it is flexible. I do not see how anyone can say that it is rigid and doctrinaire. It is extremely flexible. For example, there is no insistence on a particular model of consultation on the workers' side. Nobody is saying that we must have statutory works councils, as for example they have in most countries in the Common Market and on the mainland of Europe. Nobody is saying conversely, as was said for example in the majority report of the Bullock Committee, that we must have joint shop stewards' committees. You can have what you like. It is quite open. No one is insisting that these procedures of consultation should be dominated by trade unions, or that non-unionists should be excluded. All this is left to the country concerned and the way in which a particular Government might want to do this.
There is specifically stated in the draft draft directive that there should be a respect for existing practice. As I have said, you can do what you like on the question of sanctions. In any case, as the noble Lord, Lord Wolfenden, has rightly said, we are at a very early stage in this draft draft directive. All we are really being asked to do at this stage is to say whether we agree with the general approach; that there should be this general set of subjects with this general requirement to consult, the institutions to be worked out subsequently; and whether at the end of the day there should be some legal underpinning of this system. This is all we are really being asked to say at this stage.
We know that this will not yet appear before the European Parliament or its Economic and Social Committee. We know in fact that we shall be extremely lucky if this draft directive becomes a directive by the end of 1983, so no one can say that we are being rushed. The only firm commitment, I put it to the House, in this directive from which there is no real escape is that there must be a consultative committee, an information giving committee, at the level of the central authority of the enterprise. If the central
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authority of the enterprise is outside the European Economic Community, then there must be a consultative committee of some kind in the largest subsidiary of that organisation in the EEC. This is the one firm commitment in Article 7.
Again I would say that that is an eminently reasonable proposal, and anybody who does not agree with this is really not arguing in favour of the development of consultation in this country at this point of time. Therefore, for this reason I would say that the proposal is eminently justified, especially in the United Kingdom, for several reasons. First, as the noble Lord has said, the research evidence collected by the committee shows that we are in fact in a relatively poor position so far as consultation is concerned in this country as compared with our European friends, especially above the level of the plant.
There are virtually no procedures for consultation in the large private sector conglomerates in this country. No negotiation. No consultation. Most interaction between the representatives of employees and the representatives of management takes place at plant level and below. All the research indicates this, and therefore for these reasons this proposal is eminently justified, particularly in this country. But in general terms, as the noble Lord has said, we have done less than any other country in Europe to improve this situation by legislation. Indeed, very large parts of this directive are already in operation over large parts of private and public sector industry in Germany, France, Belgium, and other EEC countries.
In this country we have virtually no legislative support for consultation outside the area of redundancy and disclosure. Whereas most other countries in the EEC have some form of worker participation at board level, we no longer talk in any way about the implementation of the fifth directive. At least during the period of the previous Conservative Government from 1971 to 1974, somewhere in the basement of No. 8, St. James's Square an assistant secretary toiled away trying to produce a draft White Paper or Green Paper on industrial democracy. Now we do not hear about that any more. Nothing whatever is being done to extend consultation, or information processes, by legislation or legal support by this Government in this country.
In all these ways we contrast very sharply with virtually all other European countries. Yet the curious thing is that we prate more than almost anyone else about the virtues of consultation. We prate about our conflict ridden system of collective bargaining dominated as it is, we say, by the confrontational element of trade union and employer wage bargaining. Yet we know that this is partly at least, not entirely, the historical result of the fact that the British system of industrial relations gives great power and great influence at the bottom where the considerations on the workers' side are always sectional, always short term, and bound to be narrow in their incidence. Whereas we have virtually no dialogue going on at all at the level of the company, or the corporation, in large parts of British industry. So that all the British worker can do about a closure when he learns about it is to strike, or conduct a sit-in. So for all these reasons I would say that this is a modest, reasonable, flexible, justifiable set of proposals.

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So I come to my third point, which is the opposition. I should like to take first the opposition of the employers, and in particular the opposition of the CBI. As I understand the evidence which the CBI gave to the Select Committee, they said that the draft draft directive was a dangerous affair because of three things. First of all, they said it would lead to conflict and litigation. A strange thing for the CBI at this moment in time to be worried about. There you are—it would lead to conflict and litigation. They said it would lead to a situation in which workers were showered with unnecessary information; and they said it would undermine local management initiatives.
One could spend a lot of time going into the reasons why the employers say these things. In some ways it is quite natural that an employers' association should say these things. There are two answers to them. The first short answer is that, of course, so far as this country is concerned they said similar things about the Employment Protection Act, the Equal Pay Act, the Redundancy Payments Act, and about every attempt to introduce positive employment rights from the beginning of the Factory Acts. The second thing to say about them of course is, as our friends in the European TUC said to the committee, they are not alone, because all European employers' associations said much the same thing; in particular in Germany at each stage of the co-determination experiment since the war. They all said it would lead to conflict and litigation. They all said it would do no use to give workers this unnecessary information, and they all said it would undermine management initiative. Nowadays we know of course that you cannot move for distinguished employers from continental countries in Europe coming to seminars in this country to explain how their system of co-determination is the main reason why they are so much more productive than we are.
In fact, the central problem in consultation and information is completely the reverse. It is not that it leads to litigation. It is not that it showers workers with useless information. It is not that it undermines the employers' authority. It is that you have great difficulty in getting the workers, and even the representatives of the workers, to read what they should read—or what you think they should read—about the actual day-to-day problems of the company, and to ask the right questions about how they can make their contribution to overcoming those problems. Without the correct framework—and as the continental countries have found, without, if necessary, the correct framework underpinned by legislative provision—you cannot get the kind of information flow and the kind of dialogue at the right level in the organisation at which this whole process can begin.
Now a few words about the attitude of the Government, and it was an amazing position which was advanced to the committee by the luckless Mr. Galbraith, who I may say, I do not blame; he had his brief and he followed it through. He was asked the things we ask our civil servants to do; he was asked to advance two mutually contradictory, fallacious arguments: first, that employee involvement is essential but that it is possible only on a voluntary basis; as he put it:
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"where managements themselves want such improvements and employees are willing to respond".
That was the first proposition. The second was that, given the widely different circumstances which operate in particular companies—I ask noble Lords to pass over why that is so—it would mean that,
"the imposition by law of a single inflexible system would cause serious problems and undermine useful voluntary initiatives which are already taking place".
I ask the House to set aside the fallacy within a fallacy, to set aside the fact that this comes from the spokesman of a Government prepared to impose any inflexible system you like in relation to a whole range of EEC regulations which have affected a large area of British economic life, from settling the fate of the British kipper to the reform of British companies.
On this analysis, there could be no basis for the Factory Acts, for health and safety legislation, for race discrimination legislation and even for wages councils, because, of course, all these pieces of legislation were created in circumstances where either management or employees, and sometimes both, failed to see the need for such things. And they all created some form of legal system which the opponents of legislation at that time said was an inflexible system which prevented voluntary initiative. As I say, on this argument, the whole range of positive labour law could have been resisted, and maybe the Government will go on, on this basis, to repeal it all.
But it is not only positive labour law which would fall under this two-headed monster which the luckless Mr. Galbraith has been asked to put forward. On this basis, what becomes of the Employment Act 1980? Surely the exclusion of trade union membership, the legislation on secondary picketing and the provisions on the closed shop were all denounced by the trade unions because they said they undermined useful voluntary initiatives. And certainly we did not have a situation in which both management themselves wanted such so-called improvements and employees and trade unions were willing to respond. I leave aside what the consequences would be for what we shall no doubt in the coming months come to call Tebbit's Folly—all the proposals in the next Industrial Relations Bill for destroying the immunity of trade unions and the protection of their funds, for abolishing all forms of secondary picketing and for abolishing the present parity of compensation in respect of unfair dismissal. No doubt those will be opposed by one or other of the parties, who will say that they destroy voluntary reform and regulation. I venture to say, however, that the Government will nevertheless turn a deaf ear to those arguments on that occasion, although they would not expect us not to remind them on that occasion of the arguments they are using on this occasion.
The truth of course is that, from the mouth of the Government, talk of voluntarism in this area is like patriotism, the last refuge of the scoundrel. In fact, voluntarism in industrial relations is a name given by an academic, Professor Otto Kahn Freund, to the agreement in the 1950s of both parties, employers and trade unions, with the present state of labour law, both positive and collective labour law. On the whole, in the 1950s, and even in the early 1960s, the parties defended the status quo, and it was defence of and satisfaction with the status quo which was what volun-

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tarism meant. The fact is that we no longer have any agreement on the status quo. Developments in Europe in positive labour law, the actions of the judges in undermining the 1906 settlement and the counterattack of employers and Conservative lawyers on trade union rights have destroyed agreement about the status quo and all meaning of the word "voluntarism". A defence in terms of voluntarism means, "I don't want it" or, "My side won't have it".
The sensible man, if he wishes to criticise any set of arguments for extending the area of legal regulation, will not talk about voluntarism; he will ask, "What is the balance of rights here?", "Whose rights should and could be advanced by law?", "What is the utility, the use, of what is being suggested and will it help the progress of good industrial relations?", "What do they do in other countries?", "Is what we are doing rather insular, or can we show that in other countries things like this have been happening for some time and in fact they have had beneficial effects?" If, in terms of the balance of rights, the utility and the comparative position, he comes out in favour of an argument which supports a particular set of proposals—as I think these arguments support this set of proposals —then he will argue in favour of them and not fall back on talk about voluntarism.
Therefore, my final point to the committee is to ask the noble Lord, Lord Wolfenden, whether he will say what it is about this draft directive which his committee regarded as too detailed and doctrinaire. I cannot see it. Other than that, I wish to thank him once again for initiating this debate and for summarising, in the extremely valuable way he did, his report. Mr. Justice Wills once said to F.E. after a very long exposition of his case:
"If that is your argument, Mr. Smith, I am no wiser".
To that, F.E. replied:
"No, my Lord, but perhaps rather better informed".
I suggest that in this debate today, because of this report on employee consultation, we have been made both wiser and better informed.
3.38 p.m.
Lord Rochester: My Lords, from these Benches wish to join in thanking the noble Lord, Lord Wolfenden, for the clear way in which he introduced the debate and, for my part, to say how grateful I am to him and the members of his committee for allowing me to join in the discussions on this crucial matter. I am glad also to associate myself, subject to one important qualification to which I shall return, with the conclusions reached by the committee and expressed in the final paragraphs of the report.
It is plain that employers are at variance with trade unions on this proposed directive. I am therefore glad that the Commission are now contemplating a redrafted directive, for, in this matter of employee consultation in the Community, I am convinced that it is best to seek the widest possible support through international consensus. It follows, in my view, that the use of the law should be limited at this stage to certain clearly defined minimum standards, supported by a code of practice which recognises the complex differences between the social, legal and industrial
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systems in the various countries that comprise the Community.
Let me now get out of the way as quickly as I can the more negative parts of what I have to say. Unlike the noble Lord, Lord McCarthy—and he made a number of points with which I disagree, but I shall not spend such time as is available to me in crossing swords with him—I subscribe to the general view of the committee, expressed in paragraph 67 of the report, that as at present drafted the proposed directive is indeed too detailed and too doctrinaire, and 1 shall endeavour briefly to take up the challenge of the noble Lord, Lord McCarthy, in saying why I think so.
From Articles 4 and 5, for example, it is clear that existing national legislation would need to be supplemented in order to ensure that employees receive such additional information as would enable them to obtain a full and comprehensive picture of the activities and the results of the undertaking as a whole in the various countries in which it operated. But as one of the papers received by the committee put it, the emphasis should surely be on quality of information, rather than on quantity, and in my experience employees' representatives are normally satisfied to have that information which affects those whom they represent or is relevant to their activities.
Then again Article 5 makes it plain that if national management is unable to supply the information required, employees' representatives will be able to-request it directly from the management of the dominant undertaking, even though the headquarters of the undertaking is located in another country. But that might enable employees' representatives to seek information from the management of the dominant undertaking without first notifying the management of the subsidiary of their intention, and that it seems to me would be altogether at variance with normal consultative procedures as I have experienced them in this country.
Then in Article 6 there is a reference to employees' representatives being authorised to open consultations with central management through what are called authorised delegates. But surely, under whatever conditions consultations with central management may be opened, at the very least it should be a requirement that those undertaking that task should be elected on a democratic basis. In the same article it is not, in my view, made sufficiently clear that, although the expressed aim of such consultations is to reach agreement, the exercise would remain one of consultation rather than of decision-making. Moreover, as to the substance of the information to be provided, although I can understand, and even sympathise with, the concept that employee representatives, and for that matter employees themselves, should have rights to as much information as shareholders, I cannot for the life of me see why they should have more information.
Lastly on this aspect of the matter, there is the now notorious so-called "hostage provision" in Article 8, under which in the case of firms whose decision-making centre is located outside the Community, the management of the subsidiary employing the largest number of people in the Community may be held responsible for fulfilling the obligations imposed on the management of the whole undertaking. That criterion could lead to legal responsibility falling

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upon a company in a Community country other than that in which the offence against the directive has taken place. It might be that the subsidiary thus arbitrarily selected was excellently managed, but because it operated in a field of production different from that of the transgressor, it would not have the particular knowledge needed to obtain the appropriate response from the headquarters of the undertaking in another continent. Surely there must be some more rational means than those which could be used to deal with such a situation.
I have mentioned those points to indicate my agreement with the committee's view that the proposed directive needs extensive revision before it can be accepted. But having got all that off my chest, so to speak—and I do not doubt that other noble Lords will wish to elaborate further on some of those points—I should like now to draw on my experience in industry by making as constructive an approach as I can to some of the basic questions that the proposed directive raises.
I should perhaps first remind the House that in the view of my party British companies of the kind that we are discussing should have supervisory boards of directors and that in them employees should have equal rights with shareholders in electing to such boards directors who would thus be representative of both groups rather than of one or the other. That course is surely much to be preferred to other arrangements that have been canvassed in recent years for so-called worker-directors. However, that is a matter that has to do more with the fifth directive than with this one, and it is concerned with co-determination rather than with consultation.
In Western Germany there are already supervisory boards on which representatives of the employees sit. Indeed, the German subsidiary of the great international company for which I used to work is run in that way. My own feeling, for what it is worth, is that if the attempt were to be made immediately to transplant any such arrangement into this country, our existing culture could not tolerate the shock; and that is not to say that it is an unworthy objective at which to aim. But in my view employee participation will flourish here only through organic growth, which starts at the bottom and works upwards, rather than the other way round. Everywhere, however, the seed should surely be sown.
I am firmly of the belief that it should now be made a statutory requirement for all undertakings employing more than a certain number of people to set up consultative committees. Before decisions are taken on specified items that directly affect employees, such as investments and plant closures, in my view it should be made obligatory for management to discuss those matters with employee representatives.
And here I come to the qualification that I mentioned at the beginning of what 1 have to say. This is, I realise, to go a little farther than is envisaged in paragraph 69 of the report before us, in which it is suggested that a code of practice embodying guidelines should require organisations to set up consultative committees. But, in my view, as I endeavoured to make plain in the committee, by definition guidelines cannot have mandatory effect, and it follows that this particular requirement should form part of a revised
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directive, rather than merely be incorporated in a code of practice. Such a step would be timely because, as I see it, it would simply be a matter of building on the present practice of the most successful undertakings in the Community, including companies in the United Kingdom. For the rest I am content for the time being that guidelines concerning procedures for consulting and providing information should be put in the suggested code of practice, and of special importance, as the report recognises, is the point that such procedures should clearly be distinguished from collective bargaining.
The organic growth of which I have spoken has certainly worked well in my old company, for in this country it has had works councils since its inception 65 years ago, and there are now integrated consultative committees at divisional and company level, capped at the top by a representative central business and investment committee.
Paragraphs 24 and 25 of this report note the view of the European employers' organisation (I really dare not pronounce it by its French title) that where this proposed directive,
"draws on the legal requirement to inform and consult which already applies in some member countries, it overlooks an important factor. In those countries the law 'also defines the duties of the employee representatives'. It stipulates or implies that the Works Council's function is to' aim at co-operation between the employee representative and management in the interest of the efficient running of the enterprise'.".
The British Bankers' Association, in their evidence, argued that the proposed directive,
"is heavily influenced by the practices of countries that have 'a Works Council structure divorced from trade union machinery'. This is not the case in the United Kingdom".
To that, I think I would have to say: So what? We have to deal with the situation as it is, and not as we might like it to be. In a unionised company in the United Kingdom employee representatives will by definition be union members, often shop stewards, being consulted at one time and negotiating at another. But we cannot, on that account, get off the world.
Paragraph 66 of this report says:
"The Committee believe that employee demands are not likely to go away".
Just so. Faced with increasing demands from an educated workforce to be more fully informed and to exercise more influence in the making of decisions that affect them, we must make a positive response. The president of the CBI, Sir Ray Pennock, recognised this need long ago. If we simply stand still British employers will find, eventually, that regulations are imposed on them which are far more stringent and less acceptable than those we are now discussing. Of course, all this places a tremendous additional burden on management in this country to achieve with their employees a shared understanding of business realities, but it is only by providing relevant information and adequate facilities for consultation that that will happen.
There is one more thing that I want to say about the provision of information, and it is in strong support of the evidence given by the Industrial Society to the committee, to which the noble Lord, Lord Wolfenden, referred in introducing this debate. Providing

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information to the representatives of employees is not nearly as important, in my experience, as that management and supervisors should regularly tell employees themselves, in small groups, face to face, what is happening and why, and how what is going on in a particular department affects or is affected by happenings up or down the line. As Mr. John Garnett, a director of the society, stressed to the committee, it is no use looking to employee representatives to pass down word from management. That is not just because the message will become distorted in the telling but because employee representatives are elected to represent the views of their constituents to management and not the other way round by doing the job of management for it, and if that principle is not observed employee representatives will fall flat on their face, they will be dubbed "bosses' men" and they will simply cease to hold office. In conclusion, I would simply say that although this draft directive is not in my view acceptable in its present form it has performed a useful service in reminding us of the needs of British industry in this vital matter of employee participation.
Lord McCarthy: My Lords, before the noble Lord sits down I wonder whether he could reassure me in what I seem to see as a conflict in the direction of his criticisms. Is it not true that most of the suggestions he proposes want to make the directive more vague and imprecise—for example, what he says about Article 5—but that one or two seem to want it to be more specific? For example, in Article 8 he wants to specify a way of making external organisations responsible; and, most particularly, in Article 6, as I understand him, he wants to insist that the representatives should be democratically elected. This would make it much more precise, and surely that is in conflict with the other things he says.
Lord Rochester: My Lords, I am glad to have this opportunity to make it plain to the noble Lord, Lord McCarthy, that the whole tenor of my remarks was intended to be directed to the proposition that the law should play as little a part in all this as possible. I hoped I had made it plain that there was one exception to this, in my view; namely, that the time had now come when consultative committees should be set up in companies over and above a certain size, and that the employee representatives on those committees should have the right to be consulted about certain specified matters.
3.56 p.m.
Lord Redesdale: My Lords, may I first apologise to the House that I may have to leave before the end of this debate, and hope that your Lordships will not consider this discourteous. I am afraid, however, there is a flight that I must catch tonight, and it is the last one. I should also like, right at the outset, to thank and congratulate the noble Lord, Lord Wolfenden, on introducing this debate and in putting forward his views so clearly; and I would also congratulate his committee on preparing such an excellent report on the draft directive, which one knows so much better as the Vredeling proposal.
My Lords, I have to declare an interest in that I
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work for an American multinational bank. However, this puts me in an excellent position to know how multinational corporations actually work, which is very different in fact from the way the proposers of the draft directive believe these operations function. These misconceptions are a very serious flaw in the drafting of the proposal as it stands. However, the proposer obviously started out with the very best of intentions to produce legislation that, through greater disclosure of information, would result in greater security of employment and improved industrial relations. Let me state here and now that I know that most multinational corporations fervently wish to improve industrial relations, and also believe that good communications result in a better informed workforce that overall works to everyone's advantage.
However, what is really necessary information is the crucial point in this directive, and it would seem that Mr. Vredeling and his supporters have become somewhat over-enthusiastic as to the degree of disclosure that they require. This would result, not only in a flood of useless information but also in the disclosure of trade secrets and other sensitive information that would put companies operating within the EEC at a very dramatic disadvantage in relation to those operating outside the area. In fact, this disadvantage would be so severe that it is not an understatement to describe the directive as it stands as a recipe for European industrial disaster.
The conditions laid down in its present form (I stress "its present form") are so rigid that their imposition, when developed even further and applied by the draft directive to industries, would inevitably produce an enormous and pointless bureaucracy that would soon stifle even the strongest companies that are already having a hard time in maintaining their position in the highly competitive markets of today. The inevitable delays in decision-making, reduced competitiveness and inefficient working could regretfully result in forced closures with huge job losses. This is just the opposite of what the directive sets out to achieve.
Let us just see how tough and significant is the nut which apparently requires such a massive legal sledgehammer to crack. It would seem that the proposers believe that telegram closures of plants by multinationals are an everyday occurrence and have to be stopped whatever the cost to the rest of industry. In fact, the actual number of instances of bad industrial relations is infinitesimal when compared with the great benefits to the community that these organisations have brought. The present Commissioner, Ivor Richard, cites as the most blatant example the closure by our own nationalised British Leyland of their Belgian plant. Regrettably competitive markets sometimes do become totally uncompetitive, but most multinationals have gone to enormous trouble either to transfer work or, in the end, to ease the closure as much as possible.
The record of the multinationals overall has been excellent and, when it comes to the American multinationals, their record is particularly good. Many subscribe to the OECD guidelines and have an excellent record of industrial relations. They have invested more, contributed more to the economies of their host countries, pay higher average wages, have higher productivity rates and do their best to observe all the laws and regulations of the countries in which they operate,

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because they wish to go on operating there and, if possible, to expand; and this, in turn, necessitates good relations with national Governments and labour.
So, my Lords, a lot more could be lost by rigid disclosure legislation than could be gained. A wide range of companies and trade associations have spent a considerable amount of time looking at the draft directive and consider that it would reduce the competitiveness of EEC industry and result in a deterioration in industrial relations because of four main issues.
First, there is a requirement of the draft directive that forward plans should be disclosed in a number of areas that would normally include sensitive information valuable to competitors and therefore dangerous for an organisation to allow to become public. This sort of disclosure could well reduce the profitability of the company and consequently adversely affect employment prospects for the whole workforce. Even with the very best will in the world, the more people who know a secret the less secure it becomes. Of course not all the information that has to be disclosed is particularly sensitive, and there are very good industrial relations reasons for keeping the workforce well informed. But there is a world of difference in degree between sufficient information and total disclosure. Disclosure and consultation is much better handled by national laws that are consistent with local practice.
Secondly, over-regulation of business leads directly to inefficiency. The draft directive would certainly result in an organisation having to create a structure of information disclosure and consultation that would be extremely inefficient and costly, and that would delay decision-making and thus reduce the competitiveness of the companies. The directive requires the disclosure of so much information about other subsidiaries that much of it would be of no interest to the employees of the one subsidiary concerned. In fact, it would be vastly time-consuming and counterproductive. The OECD guidelines should be enough to provide the indisputably necessary information. As far as consultation is concerned, there the law should cover only those areas of job security such as major redundancies or plant closure. It should be specific and apply at local level, leaving all other consultation on a voluntary basis.
Thirdly, the draft directive establishes significant rights for employee representatives. This means that all workers must be represented. This is no problem in Germany or Holland but it is a problem here, where employee representation is voluntary and normally through the trades unions. Consequently, this either totally enfranchises the unions or requires a different form of representation, as in Germany.
Fourthly, the proposal diminishes local management authority by giving employee representatives the right, at their own discretion, to go over the heads of local management to a higher level for additional information and consultation. This is contrary to the OECD guidelines as well as going against national laws which are there to ensure that local management has full and proper authority to act according to the rules and regulations of the country. Everything prior to the directive was moving in the direction that good industrial relations require discussion and consultation at a local level. By encouraging employees to go
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over the heads of local management, the latter's authority is diminished, with a resultant increase in conflict between the employees' representatives and local management.
My Lords, I would respectfully point out that multinational corporations decentralise much authority to local management so that decisions can be made more quickly and can take into account local conditions. Nearly any decision affecting a subsidiary is either made locally or, if at a higher level, only after taking into account the recommendations of local management.
The directive relies primarily and very heavily on German and Dutch law, which is very, very different from that of this country. To a layman, German law seems to be based on the principle that an action has to be proved legal, whereas in the United Kingdom that action is legal unless it is actually prohibited. In Germany, for instance, you are not allowed to use your lawnmower unless you use it at certain specified times and below a certain stipulated level of noise.
But, my Lords, these rigid conditions are taken a great deal further in the directive. The evidence in the report shows that much of the proposed law is of a very innovative nature. Also, it relies heavily on other draft directives that are so controversial that they will certainly be very considerably modified before they ever take the force of law. So it seems somewhat ridiculous to stipulate and enforce such concepts as employee representatives when the proposals for revising company structure are still under discussion. It would seem that this legal egg should come after the proposed legislative chicken.
Going on from here, the way in which the employee representatives would have the right to veto any decision unless they were totally satisfied with not only the information but also the outcome of the consultation would put companies in a totally one-down position. The definition of consultation with a view to reaching agreement is itself so unclear that it could be interpreted in many different ways. In fact, it could be interpreted in any way the employees' representatives wish, producing the ultimate "Catch 22" situation.
Because of my involvement with banking I paid particular attention to the evidence submitted by the British Banks' Association, which is very clear and spells out the special dangers and problems that the directive raises in the form of total disclosure for financial institutions which are obviously dependent on confidentiality. I should like to draw your attention to page 125 of the report, in which their evidence shows the example of a US listed company being placed in the position that it might have to divulge information to its employees in Europe before it could notify the Stock Exchange in New York and thus might be deeming itself guilty of manipulation of the securities market under US law.
My Lords, I shall not weary you further with some of the other very considerable problems such as the hostage provisions or the tribunal procedures in Article 15. The draft directive has been forced through in its present very unsatisfactory state, presumably in the hope that by making it wide enough, part of it will become legislation in the end. This is not a happy state of affairs because, although the

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intentions are good, the effect would be catastrophic. The point that alarms me most is that yesterday in Brussels the Legislative Affairs Committee met and, as I understand it, the committee put through the draft directive with very minor amendments. Therefore, it goes through in an almost unchanged state. Much of the evidence put forward in this excellent report shows that it needs dramatic changes. If it goes through and is passed by the European Parliament, it will have to be vetoed by the Council of Ministers. Then the best thing is that it should be sent back to the Commission and discussed again from scratch with all the interested parties so that a more satisfactory and workable form of legislation is produced.
4.10 p.m.
Lord Seebohm: My Lords, the noble Lord, Lord Wolfenden, has explained in his normal skilful way the feelings and findings of the committee and I do not think it is necessary for me to make a long speech. I should also like to take this opportunity of congratulating the noble Lord on the skilful and charming way in which he handled our witnesses during the process of our examination. It was extremely well done and he managed to extract from these distinguished people all the information that he required.
In view of the fact that there are almost certain to be major alterations to the draft proposals that we have been studying, it may be felt that this debate is somewhat unnecessary. In fact, I believe that the opposite is the case. I understand that the Commission, and people in Brussels, pay very great attention to the reports of Select Committees of your Lordships' House and also what is said in these debates. So it is incumbent upon us to make what contribution we can from here. As has already been pointed out, the pressure for the proposed legislation has come from the trade union side and is not only concerned with the clarification of employees' rights in a capitalist society, but also to increase trade union power and influence over management decisions. As a result, there has been an almost unanimous opposition from employers and employers' associations.
Some of the main objections from the employers have already been touched upon: that the implementation of the proposals is impractical; secondly, that the importance of confidentiality has been played down far too much; thirdly, that the proposal that employees' committees should be empowered to obtain information from holding companies over the heads of the subsidiary's management is quite unacceptable—as has already been mentioned by other speakers—and in any case if the headquarters is situated outside the EEC I do not believe that it is enforceable.
While I have considerable sympathy with these views, I must admit that some clarification of the rights of employees to relevant information is desirable and I believe also that too much emphasis on the importance of confidentiality is being expressed by employers. Nevertheless, I am in considerable doubt whether any detailed legislation will have the desired effect, and the suggestion that there should be a much more modest approach accompanied by codes of practice seems to me to be the right solution.
There is another aspect of the problem which I hope
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will be seriously considered and borne in mind by those composing the redraft of the proposals. That is that one of the foremost objectives of such legislation must be to improve industrial relations and not make them more difficult. You cannot make people either love or respect each other by legislation. A successful business will not survive unless, in the long run, the workforce has confidence in the integrity and ability of the management. Nor will the management be able to entrust the consultative committees or works councils with full and meaningful information unless these bodies are democratically elected and fully representative of the workforce as a whole. The composition and method of election of these bodies seems to me absolutely vital. Furthermore, as has already been pointed out, their role must be made clear; that is, whether they are consultative or decision-making; whether they are to come to agreement or agree to differ.
In business there are great varieties of management styles. No one method of personnel management, or any other part of management for that matter, is applicable to all companies. To start with there are fundamental differences between the management of service and commercial industries as opposed to manufacturing industries. Any attempt to bring in detailed regulations applicable to all these is just not on. Then there is the question of size. The present draft brings in all companies or firms that employ 100 or more people. In my experience, very few units with 500 or fewer employees need much guidance of this matter. In one factory I visited which had some 200 to 300 employees the managing director walked round the works every day when he was available, and nearly all problems were solved on the spot. In cases like this, which must be normal for the small business, legislation could only depersonalise the management/employee relationships if it was followed to the letter, which of course it would not be.
In my own case—if I may refer to a personal experience—my first senior appointment was in charge of an area of 180 staff. I found that in a comparatively short time I was able to get acquainted with all of them individually and in those days I never had a problem. My second appointment was over a staff of 400 and it was slightly more difficult and it took rather longer to get to know people well. Nevertheless, I found the same methods I had employed with the previous management had the same effect. The next move found me in charge of 1,000 people. At that point I found my normal informal methods broke down. I had to have various forms of consultation and representative meetings. I will not go into the other forms of management that I had to develop in that situation.
My points are that size and the type of business will affect management styles and management methods which can only be covered by legislation in the very broadest sense. It is perhaps worth making the point that in the end I came to disregard confidentiality almost totally and found that what I used to term "calculated indiscretion" was the best form of lubrication for good relations that I could discover. I think in fact it is worth repeating that when I developed that theme—admittedly I had a larger command—not only did results in staff relations

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improve remarkably but performance improved dramatically. I do not believe that we are going to legislate in sufficient detail to get the relationship that we require in industry: "The letter killeth; but the spirit giveth life".
Finally, I want to stress one more fact: that is, if we are going to have different legislation for companies which happen to be subsidiaries of holding companies and for those which otherwise are completely parallel in their function and possibly what they manufacture, it is going to be a nonsense. I strongly recommend the report.
4.18 p.m.
Lord Plant: My Lords, I too wish to thank the noble Lord, Lord Wolfenden, for chairing this committee and for the report. I also want to thank Mr. Vredeling, for when he was industrial commissioner he took the initiative in creating this first draft. He has been criticised; but, none the less, I for one support his draft. The EEC is taking the issues a great deal further and in greater detail then the tripartite declaration of the International Labour Organisation on Multinational Concerns and the guidelines of the OECD —which of course is not tripartite, but the ILO is.
I am aware how slowly the employers have moved on these issues. I understand their difficulties, but we have to search for a means of bridging the gap between employers and trade unions. We must be able to equalise opportunities for meaningful consultations. Arguments will continue whether the EEC directive should have legal backing and whether there should be some form of sanctions for those corporations which flagrantly disregard moral and legal agreements.
It is not unknown for concerns in Europe to receive telephone calls from the headquarters in the United States to say that they will close immediately. That attitude, of course, is stupid but it has occurred; and we must find ways of avoiding this in the future. Mr. Vredeling told employers at the Economic and Social Committee in Brussels last September to look a little beyond their noses and take more of a long look at the issues at stake, because there is a choice, and the choice is between consultation and confrontation. Mr. Vredeling went on to counsel against confrontation on the grounds that social unrest is lowest in those countries where the best solutions to this problem have been found—Germany, Netherlands and Denmark—and highest where the worst solutions have been found. He went on to say:
"This serves as a guide for the people who oppose the EEC's sensible proposals so ferociously ".
The European TUC and the British TUC maintain that employers' organisations are wrong to say that the EEC proposals interfere with existing and well-tried communication arrangements. Transnationally, these arrangements are woefully inadequate. The TUC will continue to extend the influence of the ILO, OECD and the United Nations on the behaviour of multinationals. For the EEC not to have brought forward this draft directive would have been a grave dereliction of their responsibility to the Community.
Your committee recognise there is more work to be done to achieve an acceptable draft: issues such as
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confidentiality, legal provisions and sanctions, specific guidelines and codes of practice must be spelt out. I am sure that the report now before us, and this debate, will be of great value to the EEC in preparing a final draft after wide consultations with Governments, employers and trade unions.
What my noble friend Lord McCarthy has said indicates the urgency of finding an acceptable draft. I personally would not move greatly from the Vredeling draft. We cannot overlook the fact that 50 per cent. of transnationals are controlled from the United States, and the OECD guidelines, to which the United States subscribes, are important. The United States had withdrawn from the ILO at the time of adoption of the ILO's declaration on multinationals. That was on 16th November 1977 and it was indeed my last ILO governing body meeting. They had been represented when the committee was set up in 1973 and I understand that they have, since their return to the ILO, subscribed to the ILO declaration.
The Research and Planning Division of the Department of Employment have for some time been monitoring industrial relations and consultation at the workplace. In fact, it was started when my noble friend Lord McCarthy was research director for the Donovan Commission. I understand there is now considerable activity to obtain up-to-date figures as to the extent of genuine consultation arrangements and company-wide committees. I hope the department will make an early report to us.
I support the observations of the noble Lord, Lord Rochester on workers' consultative committees. There is a difference between bread and butter negotiations and strategic policy consultation. We must urge all speed to find a solution to the problems before us. If we do not, the future is black. I was nurtured on the Whitley Council principle. It is not without significance that the Civil Service has dropped that title, and, I think, with unfortunate results. The noble Lord, Lord Wolfenden, said there should not be two sides in consultation. I agree; but first we must create or recreate confidence and trust. Then there will be real consultation, which is in the great interest of all concerned.
I do not disagree with the principles outlined by my noble friend Lord McCarthy, but I am sure he recognises that the trade unions themselves cannot draft the document: there has to be agreement. I want the greatest common factor, and if we are in too much of a hurry we may get the least common factor. This discussion will have done much to influence the thinking of the Government, of employers and of Brussels. I fully support the evidence we received from the TUC and the European TUC. I will conclude by quoting the last paragraph of that evidence:
"The EEC proposal is clearly subject to amendment on particular points. The TUC and the ETUC would like to sec a strengthening in some respects. But the important point is that the strategic purpose should be clearly understood and supported as being of great creative significance for the future of the advanced industrial democracies working in a world competitive market environment".
I hope that the document the committee has presented to your Lordships' House, and this debate, will carry this discussion further in Brussels and among Governments, employers and trade unions, with some positive results.
4.26 p.m.
Lord Plowden: My Lords, first, I want to congratulate the noble Lord, Lord Wolfenden, and his committee on having produced this admirable report, which brings into the open much about this subject of consultation, much of it contradictory. I speak as someone who believes strongly—I might almost say passionately—in the development of consultation and discussion in industry, because without this positive development and extension we shall not get the regeneration of British industry for which we all wish. But when one turns and looks at the proposals of the Vredeling directive, it seems to me they were drawn up by people who had very little or no experience of how British enterprise is managed; nor indeed of what it is that people on the shop floor really want to know.
I do not intend to list the numbers of things that the parent company of a group would have to provide twice yearly to its subsidiary companies—noble Lords will have read that in the proposals of the draft directive—but they are really quite enormous. The company of which I was chairman until a few years ago has in this country over 100 subsidiaries or sites where more than 100 people are employed, and we would have to provide this information to those sites twice a year.
Much of the information called for is not held centrally in a group such as the one with which I was associated, and in order to provide it a new bureaucracy would have to be set up. Indeed it would, I think, go directly contrary to the policies which all enlightened management is endeavouring to follow: namely, to pass decision-making down the line as far as it can. This would force decision-making up towards the centre. The noble Lord, Lord McCarthy, I think said it would weaken local management. The very fact that representatives could appeal over their head to senior management undoubtedly would weaken the position of local management.
But is what is proposed really what the man and woman on the shop floor really want to know? My experience in industry is that people want to know what is happening and what is going to happen to the site or the company in which they work. In my company, most people seemed to me to feel that they were working for Accles and Pollock or Tubes Limited, or the Churchill Machine Tool Company—not for Tube Investments. Their loyalties were to the local establishment.
If I may reminisce, when I worked on the shop floor nearly 50 years ago for a British subsidiary of an American multinational company, I am quite sure that what I and my mates wanted was to know what was going on in our company, not what Colonel Sosthenese Behn was intriguing about in Washington, or what was happening to the subsidiaries in Germany, Hungary or South America. I may say that no one told us anything about Colonel Sosthenese Behn, the other subsidiaries or ourselves.
The committee say they consider that any attempt to create the right climate and organisation by mandatory procedures would do great damage. But, on reflection, they say that they reluctantly come to the conclusion that some legislation is necessary. When I first read the report I, too, reluctantly accepted that some directive was expedient, but since then I have
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had very considerable misgivings. How would one frame a directive which took account of the great diversity of businesses in this country, let alone in all the countries of the Community? It would introduce great rigidity and frustration and would hinder the development of different ways of communication suited to individual groups, and to the distinctive industrial relations climate and differing political, social and cultural structures of the various countries of the community.
Like the committee, I attached great importance to the evidence given by Mr. Garnett of the Industrial Society—someone for whom personally, and for his work, I have great regard. Mr. Garnett said—referring to industrial relations:
"Once it falls into the hands of judges and courts all is lost".
Later he went on to say,
"So I think it is worth laying down one or two minimum standards, just to edge things along a bit in a common sense way".
That is a general remark with which I think we would all agree. Then he said:
"I am sure that the most valuable document would be a code of practice".
And, again
"The mistake is to try to use the law to make social progress, to try to develop things that people have not actually ever done".
Despite the reluctance which I understand the committee felt—a reluctance which I share—they have suggested that a possible compromise is to be found in the suggestion made by Mr. Michael Shanks of a "framework directive", leaving considerable latitude to local legislation. If that means that we should have a law in this country that says that consultation is a good thing, coupled with a code of practice developed to suit United Kingdom conditions, that sounds simple. But I find myself in agreement with the noble Lord, Lord Rochester. I do not know how you would combine the law with a code of practice. In passing, I should like to remind noble Lords that we already have a law to require companies to give employees information—all the information they require— for collective bargaining, which is very wide. To introduce another law covering, perhaps, some of the same ground might cause confusion.
Like the committee, I reject absolutely the directive in its present form as likely to do great damage. But, unlike the committee, I have reluctantly come to the conclusion that to introduce law in this field now will hamper rather than promote good industrial relations. What I really fear is that it would reduce arrangements for consultation to the lowest common denominator and inhibit the innovation that is so desperately needed in British industrial relations. Consultation through representative systems is, of course, an essential component in employee involvement, but it has obvious limitations.
Recently, progressive firms have made major efforts to promote direct communication and rapport between managers, supervisors and those on the shop floor who are working directly to them. The key to real employee involvement lies in management attitudes, style and motivation. These imponderables are exceedingly difficult to monitor and assess, even within a company, and are no less difficult to describe and present in

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public debate about the merits and achievements of voluntary effort. This probably accounts for the preoccupation of politicians and bureaucrats—I myself used to be a bureaucrat and I blame myself—with the more tangible mechanics of consultative structures and systems, whose value is often more cosmetic than real.
I should like to come back to the evidence of Mr. Garnett of the Industrial Society. In brief, he seemed to be saying that the law is a good thing when it confirms practices in social matters which are already established. He went on to say:
"Before you discover where you are, and that is the history of the law of both parties in the 1970s, the law actually often works in the opposite direction from what the deeply sincere people who suggested it intended".
I thought that that, coming from such a wise and experienced man, was extremely pertinent.
As a sincere advocate of consultation and discussion —and I mean this—I believe that to introduce the law at this stage will set back rather than promote what we want to achieve. I say this, knowing that there are many companies in this country that pay little more than lip service to the need for consultation. This is a matter for judgment and experience and my judgment, after very careful consideration, is that we should not yet legislate until we have discussed in much more detail among ourselves what kind of legislation we should want, that will not inhibit but will promote better industrial relations.
4.38 p.m.
Lord Oram: My Lords, like other speakers, I very much welcome this report and in particular, as others have said, I welcome the attractive and helpful speech with which the noble Lord, Lord Wolfenden, introduced the debate. I welcome especially the general conclusion which his committee reached, that provision of proper consultative arrangements in industry needs to be very much improved. On the question to which several speakers have referred, of whether there is need for statutory provision or whether it is sufficient to rely on voluntarism, I believe that the conclusion of the committee could be fairly stated as being that, while any progress on a voluntary basis is to be welcomed, nevertheless a statutory provision, as in most other member states, is required in order to encourage progress on a voluntary basis.
I believe the committee concluded that there is a relationship between the two principles. These conclusions are, I suggest, of particular importance in this country—as, indeed, the committee suggested—because of the way in which Britain has been lagging behind other member states in this matter. The committee does not claim to have been dealing with the general malaise of British industry but in fact I believe that the problem that it was asked to deal with is right at the heart of that malaise. What is wrong with British industry—more clearly than anything else, in my view—is that antagonism rather than co-operation between the two sides of industry is all too evident. The "us" and "them" conflict must be eliminated if we are to move forward out of our present desperate industrial situation.
In the industrial relations field we have had only this last week two contrasting examples of major
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industries which surely point to the truth of what I have just said. One of them, British Leyland, shows the wrong way of going about it. The other, British Rail, promises to reveal the sound way of establishing a proper relationship. In the case of BL, an official strike seems now to be the inevitable consequence of the irresponsible diktat from Sir Michael Edwardes. In the case of BR, a strike was avoided because both sides got together and agreed on an improvement in communication. There are now to be further talks in a much better atmosphere about the future of the industry. I heard Mr. Ray Buckton of the train drivers' union say on radio that what was perhaps more important than the actual issue in dispute was the need for good communication between the two sides and that he now looked forward to the union playing a constructive role in the decision-making of the industry.
What I have referred to as the bad case, the bad case of BL, scarcely needs detailing in view of all that we have read, but I very much agree with the views of the Conservative Member of Parliament, Mr. Beaumont-Dark, who has many car workers in his Selly Oak constituency. He said:
"This is not the way to deal with very worried people: to say 'If you do not do what I say we are going to destroy everything'. The workers want to feel that they are helping to build a new BL and not just helping to be caretakers while it is destroyed".
He said it was important to get over to the workers what the productivity agreement meant and what their future was in BL. In other words, he was saying that there had been a serious failure of communication, a serious failure of the briefing to which the report and Lord Wolfenden have referred.
Of course, it is true that bad industrial relations in British society are attributable to faults on both sides of industry. I believe we can all agree with that. But I am glad that the committee has not fallen into the trap, as some people do, of believing that the real villains of the piece are militant trade unionists bent on pursuing the dictates of their greed. The committee recognises the value of the evidence that was submitted to it by the TUC. Among the members of the committee are two eminent trade unionists—I refer to my noble friend Lord Collison and my noble friend Lord Plant—whose very personalities, I suggest, belie the suggestion of irresponsibility in the trade union movement. Therefore, so far from trying to ascribe blame to one side of industry or the other, we should, I suggest, concentrate our minds on the benefits which good employee consultation can bestow on both sides of industry.
If good communications can be achieved, there are undoubted advantages to employers and employees alike. The employers surely stand to gain if there are fewer strikes, lower labour turnover, less absenteeism and fewer restrictive practices. All those, I believe, would flow from a better system of consultation. And all these advantages lead to higher productivity, which surely is the objective not only of the employers but of us all. But the advantages of good relationships to employees are no less significant.
Collective bargaining is, of course, a separate process. That is made clear in the report, and Lord Wolfenden also made it clear. We are talking about two separate concepts. If, however, better communication between

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the two sides is established, it is undoubtedly the case that collective bargaining can be made smoother and more effective. Moreover, if the atmosphere is good and if ideas are shared between the two sides, the decisions which are taken are better decisions. And more often than not the consequent working conditions of workers are superior.
Perhaps most important of all, however, from the workers' point of view is that their whole status in their working lives can be transformed. If a man feels that he has played a part in discussions, in consultation, in determining the shape of his working day, his sense of human dignity is greatly enhanced by comparison with the situation in which he feels himself a nonentity, a small cog in a vast wheel, and if he feels himself unable, through any process or any machinery, to help to determine the nature of his working life. Therefore, if I am right in suggesting that there are obvious advantages both to employers and to employees, surely immense efforts must be made to put this matter right. I believe that the recommendations indicated in this committee's report are admirable as a guide—only as a beginning, as has been recognised—to that end.
The report and the evidence that was given to the committee set out the arguments on both sides. It seems to me that the objections which the employers' organisations advance against the proposed directive are not really substantial. And that indeed seems to have been the conclusion of the committee itself. The employers say that the arrangements should be purely voluntary: that proposals in the proposed directive would interfere with existing arrangements and that they would undermine the authority of local managements. They raise the objection, too, that there is a security risk and that the leaking of secrets would affect the competitiveness of their undertakings. I think the committee chaired by Lord Wolfenden was right, particularly on the evidence given by the trade unionist who came from Germany, to regard these arguments as not being supported by any sufficiently hard evidence.
I am glad to see that the committee supports the opposite point of view: that particularly in relation to Britain—because, as I have said, we seriously lag behind other countries—the need for the rapid development of proper facilities is great and that because reliance on the voluntary principle has in the past proved inadequate, to say the least, it is necessary to have a legislative framework. I do not agree with the noble Lord, Lord Plowden, that it would be difficult to accommodate the variety of circumstances. I believe it would be possible to find a sufficiently flexible legislative framework which could comprehend the different national needs but at the same time would be firm enough to ensure that real progress is made in this matter and that that progress is made as soon as may be.
4.50 p.m.
The Duke of Portland: My Lords, having served on company boards in the United Kingdom, Belgium, France and Germany, I have come to the conclusion that there is much to be said for the German system of workers' and office staff representation on the supervisory boards of companies. I have had some
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28 years' experience as chairman, deputy chairman and member of supervisory boards in Germany. Before the law for the representation of workers and office staff on supervisory boards was introduced in Germany in 1952, I had participated in lobbying against this measure on behalf of foreign industrial investors in Germany. However, experience has taught me that this is a most helpful means of informing the workforce and also of learning the reasons governing their reactions.
I shall give your Lordships the following example. When the management of the chemical company Bayer, who own the photographic company Agfa, decided to merge the latter with the Belgian Gevaert company in order to be in a better position to compete with Kodak, the board of management—that is to say, the executive directors of Bayer—asked for the approval of the supervisory board where, for some years, I was one of the two deputy chairmen. Our colleagues representing the office staff and workforce raised a number of questions regarding redundancy, prospects of promotion, pension rights, et cetera, to which satisfying replies were returned and the proposed merger was approved. The representatives of the workforce then forthwith informed the works council, explaining to them how the merger would be to their advantage, thus averting the spread of mischievous rumours.
The presence of their own representatives on the board gives a workforce the feeling that they have an effective, albeit minority, voice in the direction of the company. From my experience, I am certain that this assists in producing a better understanding and in lessening the feeling of "them" and "us" between the board and the workforce. However, I fear that this proposal will not please the Confederation of British Industry nor the Institute of Directors nor the TUC. Some years ago, I spoke about this to one of the leading members of the TUC and met with the reply "If this does not give power, I am not interested". I agree that it provides for only a minority voice, but it is still a voice and it enables the workforce to obtain an insight into the position of the company and to understand the motives of the management.
I am not advocating a system of two-tier boards, which in my opinion is rather a nonsense. There is very little difference between a full board meeting of an important United Kingdom company and a meeting of a supervisory board and board of management in Germany. In the United Kingdom, executive directors have regular meetings among themselves without their non-executive colleagues and in Germany the board of management meets, as a rule, weekly and perhaps only four times a year together with the supervisory board.
The interests of the shareholders and of the employees could be safeguarded by an article in the company's statutes that the consent of a majority of the non-executive directors would be required for all decisions relating to the following: the closure or transfer of the undertaking or parts thereof; substantial curtailment of its activities; substantial organisational changes; the establishment or termination of long-term co-operation with other undertakings. In this connection, I would refer your Lordships to paragraph 14 of the committee's report.

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My Lords, the German system is not a panacea for all ills, but in my now rather long experience—and incidentally I am still on the supervisory board of a German company—it improves mutual understanding and thus furthers good feeling.
4.55 p.m.
Lord Underhill: My Lords, this is the first occasion on which I have entered into a debate on an EEC report and in this capacity today I may possibly describe myself as putting forward the viewpoint of the common man—if such a person exists. I should also like to express appreciation of the excellent manner in which the noble Lord, Lord Wolfenden, introduced this report. Anyone who may not have read the report will have had a very good summary from that introduction. Also, I should like to express appreciation to the committee because the range of evidence and the questioning of the members of the committee were extremely useful and the report is valuable for that reason alone. By and large, I accept the conclusions arrived at by the committee.
Although the report covers a somewhat limited sphere of information and consultation procedures, this is an important step towards industrial democracy. A number of noble Lords have stressed the fact that in the United Kingdom we are behind many other countries in this respect. The report gives evidence from three countries, and there is no evidence to suggest that the experience in those countries has brought some of the problems on which some noble Lords have expressed fears. I was delighted to hear what the noble Duke, the Duke of Portland, said about his experience in Germany, which I hope noble Lords will have noted.
Despite the differences, so clearly shown in the report, between the Government and the employers on the one side (because the Government seem to have taken the same view as the employers) and the employees, all are agreed that the involvement of employees in the communication and consultation procedures is an essential part of improving industrial relations. In view of some of the apprehensions about legislation, we must point out that both the Employment Protection Act and the Industry Act contain very limited provisions, but the provisions are there for the supply of information to trade unions. The proposed directive goes far beyond the supply of information and it links this with prior consultation on all major decisions affecting the employees' interests. As one of the Trade Union Congress representatives said:
"It is not the least bit of good supplying even a pantechnicon of information unless at the end of the day there is consultation upon it".
The TUC also said, "We are in the business of linking planning with industrial democracy and any consultative committees that might be set up must not be limited to teas and towels, as happens in a number of businesses".
The operations and strategic decisions of undertakings are not the concern solely of the owners of the business, and we must also keep in mind that today a very high and ever-increasing proportion of investment in this country is now in pension funds. The last figure I saw as being involved was some £55 billion.
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The interest of the employees is sometimes greater than that of the investors, because the employee's particular job is usually his only source of income and when that goes there is tragedy for the whole of his family.
This position is backed up by Paragraph 15 of the report, which refers to a Green Paper issued previously by the Commission and quotes the following extract:
"Those who will be substantially affected by decisions made by social and political institutions must be involved in the making of those decisions. In particular, employees are increasingly seen to have interests in the functioning of enterprises which can be as substantial as those of the shareholders and sometimes more so".
That was in a Commission Green Paper. For that reason I was, therefore, surprised at part of the evidence of the chairman of the National Consumers Council, which is set out on page 103 of the report:
"This Directive … could shift the balance of power in multinational companies away from management in favour of the workforce. It would make it more difficult … to rationalise operations between countries by closing down the least efficient operations".
I am certain that the suggestion that this proposed directive is making this shift of power is grossly exaggerated. The other point I would make is this: is it being suggested by this particular person who gave evidence that the employees are to have no voice whatever in the transfer of operations? I am sorry, therefore, that apparently it was not possible for Mr. Michael Shanks, the chairman of that council, to be interviewed, because his replies to any questions might have been very illuminating.
Week by week we have reports of closures, and often a plant is closed without adequate consultation. Too often there are lay-offs and redundancies without consultation until the actual decisions are taken and then there are consultations to deal with a crisis situation. We have protests, which we read about repeatedly. I would suggest that surely the workers must have a right to information on the progress, problems and proposed plans before a crisis occurs, and that does not appear to be the situation in many instances today. Multinationals must obviously be brought within this procedure. To me it seems that a body such as the EEC is a body which can deal with the multinational position, which could not be dealt with on a purely national basis.
Of course, we must remember that the proposed directive deals with not only multinationals—we have apparently a new name now, "transnationals"—but also complex undertakings in this country. The TUC suggest that there should be consultation at various levels, and in view of what has been said by one or two noble Lords, unless there is consultation at the top level of a multinational I cannot see how the employees' representatives are going to get a complete picture in order to give guidance to the particular bodies with which they are concerned.
The CBI state that a majority of employers make efforts to inform employees of the economic facts of life in their business. I wonder what the CBI have in mind when they say this? It might be suggested by Sir Michael Edwardes that he has done just that. Surely that is insufficient; surely it cannot just mean giving the limited facts of the financial position which may affect collective bargaining. That is far too

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limited an approach, and the proposed Directive goes far beyond that, as do the conclusions of your Lordship's committee.
The CBI also argued that no case is made out for a directive. They believe that the OECD guidelines and the ILO declaration are sufficient. I would suggest that if one looks carefully at both the OECD guidelines and the ILO declaration, those are woefully inadequate. They stress voluntarism, which your committee say regrettably is not sufficient in this case. Also there is no sound provision in either of those documents for consultation on the lines suggested in the proposed directive. The TUC disagrees with the view of the CBI on those issues and argues that in general multinationals do not voluntarily provide information which is essential to employees. If I may quote one part of the TUC's memorandum:
"The heart of the problem is that carefully formulated information and consultation arrangements within the enterprise are the more necessary the more complex the enterprise, but they are at the same time far more difficult to establish".
I was pleased that the Committee endeavoured to find out what was taking place. In view of the complacency, if I may say so with respect, of some noble Lords who have referred to the present situation, I would refer to paragraph 51, which deals with the Department of Employment survey of 1979. It was made quite clear that this was a limited survey of 300 manufacturing companies, and excluding what in their own words they call old established trouble-prone industries. However, the survey makes clear that the situation is far from satisfactory. That is also the view reflected by the Anglo-German Foundation survey dealt with in paragraph 53 of the report. Paragraph 66 sets out the conclusion of your committee that in at least half of the organisations that would be covered by a directive the procedures are inadequate, and that employees are very dissatisfied with the information and consultation procedures in a large number of undertakings. That would seem to justify action on the lines of the proposed directive.
The Industrial Society suggest in their evidence that what goes wrong in industry is 50 per cent. due to misunderstandings and the rest to straightforward conflict. We will not argue about the percentages, but roughly I think we would agree. The provision of information and development of consultation procedures as proposed in the draft directive would, in my view, help to remove considerable misunderstandings. The avoidance of straightforward conflict will depend, of course, on other factors, but where consultation develops towards sharing in decision-making I believe that can make a great contribution to avoiding conflict.
Far from being radical—I agree with my noble friend Lord McCarthy—I believe that the proposals in the draft directive are modest. The Commission apparently are to review the draft directive with a view to endeavouring to reduce the differences that are shown up in this report. I notice these words—"but without losing sight of the major goals". I think all of us would agree that agreement is desirable, but this must not be at the cost of producing a directive which may be of little value; in other words, in my view it is pointless leaning over backwards to produce an agreed directive which at the end of the day will
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produce few or no results. I believe the work of your Lordships' committee and the conclusions are basically ones which we can support, and I hope your Lordships agree.
5.8 p.m.
Lord Mottistone: My Lords, I should like to thank the noble Lord, Lord Wolfenden, for the way in which he produced this report and for his kindness in asking me to join Sub-Committee C for the consideration of this draft directive. Perhaps I may open by reflecting a little on the general subject rather than the particular, where I see the particular conundrum being created. It seems to me that there is no doubt whatsoever that employees in companies are increasingly wanting more and more information. I think everybody recognises that. Some companies are better than others, and some examples have been given. It may be that some companies, perhaps not very successful companies, do not do even as much as a small amount. But we are moving in that direction. Attitudes are changing, and it is really quite remarkable how much they have changed in the last 15 years or so in all sorts of areas, including this one. I think we must not be in too much of a hurry to try to push things along at a rate which is faster than the attitudes are changing. By all means let us keep it going and let us keep the momentum up, but not go too far too quickly.
Another factor concerns the notion of what sort of information needs to be released to people. This seems to vary with the types of people who are being briefed, to use Mr. Garnett's phrase. It would seem to me from my experience that the ordinary workforce in an ordinary company or ordinary factory requires as much information as it can get about the facts which affect it on a day-to-day basis, and that, of course, would include something catastrophic like closing the factory. It would need to know all about what was going on which affected it, but it is not desperately concerned, on the whole, with what is going on in the rest of the company—of course there are a few people who are concerned about that, but on the whole that is not what the demand is for. On the other hand, at what one might describe as the trade union official level there is a very sensible perception that, for there to be meaningful negotiation, the information given needs to be much more fundamental than the type which I have just been describing. That is where the difficulty arises.
Fundamental company information, whether in a multinational company or an ordinary national one, if it is meaningful needs to be safeguarded from competitors. Moreover—and I shall be coming back to this point—sometimes, more importantly, it needs to be flexible so that the optimum moment for going "firm" on a particular plan or solution can be chosen. To that extent one has to be particularly careful—and I am not casting aspersions against any particular sort of person—as regards how much this information is spread around before the right moment arises.
It is important to recollect that the purpose of development plans for companies is always to try to improve the companies' competitive position. Possibly more importantly in modern times, it is important to recollect that the benefit of the majority of employees is best served by a company's improved trading. With

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all companies, including multinational companies, benefits from improved trading may not necessarily come to all employees all the time although the trade union officials, quite naturally, would like them so to do. Sometimes some employees may lose out to the benefit of the majority, but—and this is important—most, if not all, company managements also wish their companies to be so successful that none of their employees ever suffers. Thus I suggest to your Lordships that their aims are really much closer to those of the trade union officials, and, indeed, to those of noble Lords opposite who have been speaking this afternoon, than might normally be thought to be the case. The aim is, in fact, the same.
I think that it was the noble Lord, Lord Wolfenden, who said that the "we" and "they" must be done away with. We all agree with that, but I think that a lot of it—and this was mentioned earlier—is a misconception, and an assumption about people's aims and objectives which assumes a conflict where one does not exist. I suggest that in this whole area we need forever to search for where there is not a conflict rather than seeking to search for where there is one. I should have thought that we could tackle this type of problem much better on that basis.
If plans are disclosed prematurely to outside persons, that is, to people not directly employed by the company like trade union officials; and even if, as they usually do, they respect confidentiality absolutely—and the committee was reassured on this point—the essential feature of flexibility (I call it "flexibility" although I think it was the noble Lord, Lord Seebohm, who talked about "efficiency") may be lost. I think that it was either the noble Lord, Lord Seebohm, or perhaps the noble Lord, Lord Plowden,—I hope that your Lordships will forgive me if I am wrong—who pointed out that if an outsider is taken into the confidence of the top management, then the local management will see itself bypassed. One of the biggest lessons of the last five or 10 years has been that a great deal of harm has been done to company management at the working level—the works managers and people like that—in a terrible period when the shop stewards had the greater "ear" of the company chairman than did the works manager. That was not only bad for morale, which was serious enough in this area, but also very bad for efficiency. While accepting the fact that something must be done, we must be very careful as regards whatever we devise that we make sure that the particular point about bypassing the local management is not created by whatever is built up.
Therefore, how do we view the directive under consideration? I was going to say that it is happily under reconsideration by the Commission. Indeed, paragraph 10 of the report says so and the committee was so advised. However, perhaps your Lordships may have noticed that my noble friend Lord Redesdale—who has apologised for having to leave early—made the point that he had up-to-date information that some committee, which he tried to whisper to me when I was trying to listen to the noble Lord, Lord Underhill, had made a decision yesterday which implied that the directive was not going to be revised. I find that hard to believe, but I think that it is worth us looking into it and making quite certain that the Commission is not going off at half cock, as we might
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say in naval terms. I shall, therefore, assume that the directive is under reconsideration by the Commission and that there is room and time for change.
I should also like to say at this stage that I think that the committee—although I was a member of it—made some excellent comments on how the directive might be modified and put into effect. Personally, I particularly liked the code of practice viewpoint although many noble Lords find that it is not tough enough. Your Lordships will realise from what I said earlier that I find that toughness is not the right approach at this time.
I should also like to mention to the noble Duke, the Duke of Portland, whose speech I personally found most interesting, that the CBI have just distributed within the last week or so a copy of a memorandum from their German opposite numbers, who are criticising this directive seriously in saying that the law relating to the constitution of enterprises, which I think is what the noble Duke was talking about, would be drastically affected by the directive if it were enacted in its present form. So in effect they are saying that they do not like the directive but they do like their constitution of enterprises, as indeed does the noble Duke. Therefore, it is perhaps worth noting that the Germans are not in favour of the directive in its present form.
Personally—and I speak personally now and not as a member of the committee—and because I hope that I appreciate the conflicting arguments that I have outlined, I suggest that the Commission produces another draft for the Community to consider, but that it hesitates long and hard before reaching a conclusion. There is a need for much more attitudechanging before the force of law is imposed in this area. In that respect I very much agree with the noble Lord, Lord Plowden. If the Commission needs to go through six drafts, as I have recently done in another context in another job, over a period of several years, for the Community to consider, no crystallising harm will have been done. As the report says, the subject will not go away and repeated drafts will serve to keep us all studying this very real problem. But early finalisation of this directive is almost bound to force a situation which could be disastrous for company flexibility and efficiency throughout the Community. In this day and age we must give the right priority to company efficiency, because on the success of these companies depends the wellbeing of us all, whatever side of the House or whatever position in industry we may occupy.
I beg your Lordships to accept that to have something on the table which is perpetually being updated is very much better than to have something pushed into law which, at a later stage, has to be enacted in some barbarous way in this country. I hope that your Lordships will accord with this viewpoint.
5.21 p.m.
Lord Campbell of Alloway: My Lords, anyone rising to speak in this important debate would wish to congratulate the noble Lord, Lord Wolfenden, on this useful, comprehensive and very brief report. In opening, I would wish to associate myself wholly with everything that has been said by my noble friend the Duke of Portland and the noble Lord, Lord Underhill,

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because everything that those noble Lords have said I most thoroughly endorse. Of course, having said that, it goes without saying that I welcome this report and find its conclusions wholly acceptable.
A framework directive with guidelines would not induce some sort of state of shock or terror such as was adverted to by the noble Lord, Lord Rochester. With respect, as I see it, the implementation of these proposals could only be conducive to the better ordering ofindustrial relations; and I, with other noble Lords, reject the objections, in particular those raised by the CBI. In this, I in no way wish to reflect the somewhat antipathetic attitude to the CBI evinced by the noble Lord, Lord McCarthy.
In passing, and with respect, may I say that a red herring seems to have been introduced into this otherwise constructive debate by the noble Lord, Lord McCarthy. He used this occasion to launch what I understand to be his ritualistic attack upon Her Majesty's judges, the attitude of Her Majesty's Government to statutory immunities and the Society of Conservative Lawyers, of which I happen to be a member. But is not all this wide of the mark? —because here we are not concerned with statutory immunities, secondary action or the other matters to which the noble Lord adverted; we are concerned with the obligation to supply information irrespective of the statutory régime in force at the time.
In times of inflation—and these indeed are such times—when wages are paid in paper or coin of no intrinsic worth, your Lordships may think that wage predictability lies at the heart of investment, commercial confidence and, indeed, forward industrial planning. In order to secure this recovery, I agree with the noble Lord, Lord Wolfenden, that it would be preferable to discard, and to discard once and for all, such concepts as taking sides in industry, with the TUC as some sort of designated giant for the one side and with the CBI, in league with Her Majesty's Government (I think that those were the words used by one noble Lord)—a curious concept perhaps—as the designated giant on the other side, adopting warlike postures. I apologise for it, but that is my edition.
However, this is a non-constructive nonsense. Trade union bargaining, whether nice or nasty, is very much in point and whether it is nice or nasty is, I would suggest to your Lordships, wholly irrelevant. What is relevant is that it is necessary. I adopt the view expressed by the noble Lord, Lord Oram, in this regard, that collective bargaining—trade union bargaining—is relevant to the topic under consideration and fuller information can only help to remove misunderstandings. Whatever the percentage may be—whether it is 60 per cent., or more or less—is again irrelevant, because fuller information will help to remove misunderstandings and assist in achieving realistic settlements, not only as to wages but as to closures, and in this way will greatly curtail the possible areas of industrial unrest.
I agree with another noble Lord—I hope that he will forgive me but I cannot remember his name—who stressed the force of the concept of communication as affording the key, as operating to effect the transformation of status in relation to the dignity of man, which is so important to all your Lordships. Of
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course, harmonisation is not appropriate. We have our own traditions; we have our own trade union structures; we have our own heritage, and we do not need member states to tell us much about that. But a framework directive wide enough to cater for each member state, with guidelines which would supersede not only the existing statutory provisions but existing codes of practice, could only assist in the better ordering of industrial relations and would in no way impede this.
With respect, it is for these reasons that I support the conclusions in this report, although I am uneasy about what I heard from the noble Lord, Lord Mottistone, about the goings-on at Brussels.
Lord McCarthy: My Lords, before the noble Lord sits down, will he not agree that I made no attack upon Her Majesty's judges and no attack upon Conservative lawyers, but merely described their point of view? My attack was on Her Majesty's Government. Will he not agree that it was because of what Her Majesty's Government said, or what their representatives said, before this committee?—which was that they could not agree with the committee, first, because there was no agreement on both sides to do anything and, secondly, because this would impose a single, inflexible system. All I said was that, if that was their view, I wished that they had taken that view on the Employment Act.
Lord Campbell of Alloway: My Lords, if I have misunderstood what the noble Lord, Lord McCarthy, said, I withdraw my remarks unreservedly. It was my understanding of what he said that led me to say what I said. But, if I am wrong about it, I withdraw my remarks unreservedly.
5.30 p.m.
Lord Soames: My Lords, I hope your Lordships will forgive me if I enter into this debate in spite of the fact that I was not present throughout it. I have listened with much interest to recent speeches made by your Lordships. I must say that I have been goaded into entering into the debate by what has been said, particularly by the noble Lords, Lord Oram and Lord Underhill, with particular reference to British Leyland and the name of Sir Michael Edwardes, its chairman.
I do not go along with my noble friend Lord Campbell, the last speaker. The inference he gave was, "Everything is rosy in our garden. We have got our own garden, and we have not got all that much we can learn from other people's gardens in the EEC". I disagree profoundly with that. We have all a good deal to learn from each other. If we ever could arrive at the optimum basis for consultation, then that would be lovely. I would go along with what the noble Lord, Lord Plowden, and my noble friend Lord Mottistone said, but I think we have a long way to go in all countries of the Community in changing attitudes, both from the point of view of the trade unions' side and from the point of view of the employers' side, before we can aspire to such a Utopian perfectionist position.
Consultation is all a matter of degree, is it not? Of course, everybody would like to see in industry the greatest degree of consultation. But, surely, consultation

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presupposes a high degree of responsibility on both sides. From the point of view of management it presupposes a degree of responsibility towards employees in realising where their interests lie, and having regard to their interests in taking the major decisions within the company. Where the employee is concerned it involves a highly developed degree of responsibility not just towards the interests of the employees themselves alone but towards the firm and the interests of management and the shareholders.
Until you get that degree of sense of responsibility it is just not going to be possible—it is not possible—to enter into a satisfactory degree of consultation. Some, of course, yes. I had a bit of it last year. Goodness knows! I did my best to consult—and consult, and consult—but certain things were written in the stars and events followed inexorably one after the other. I do not think it was because I failed in consultation. At least, I like to think it was not. I do not think it is for Sir Michael Edwardes, either.
This is where I want to come to what the noble Lord, Lord Oram, said. I thought that the noble Lord, Lord Underhill, was not entirely fair to him when he said, "Of course, you cannot call it consultation when someone writes a letter round to everybody saying either you must agree or else the carpet is going to be pulled out". Because that was not the beginning of it. It may be the end of it; I do not know.
But I noticed what Mr. Duffy said to the press recently. He reported the figures of production per man in British Leyland five years ago and today. I have not got the figures in my head but he reported the progress that had been made. All I can say is that it shows it was very bad indeed five years back. It shows that it is getting better, but it also shows that there is a long way yet to go. Do any of us really believe that the trouble in British Leyland has been because of lack of consultation? Is that really the key to the problem in British Leyland?
Of course, in many areas of British industry consultation has improved enormously, and the effects are there for all of us to see of employees and employers making sacrifices in order to keep alive in difficult times. This is where consultation really comes in and is effective. But, as I said, it presupposes a sense of responsibility on both sides to keep alive. While in British Leyland every employee knows that every car that comes off the end of the production line is costing the taxpayer money, and at the same time they are putting in a demand for an increase in wages which they know perfectly well the company cannot afford, which is only going to have the effect of increasing the burden on the taxpayer for every car produced, is that the interest of the firm? Is that the interest of British Leyland? Is that the interest of the shareholders, who are the taxpayers?
No, we have got to be a bit careful before we blame Sir Michael Edwardes for lack of consultation in the present situation. I hope very much indeed that the employees in British Leyland will think twice before they choose to start playing a game of bluff and hoping that they will get away with it now as they have got away with it often in the past. There must be a limit to how much Her Majesty's Government can feel it right to prop up an industry unless they are convinced
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that the employees have the interest of that firm at heart as well as the management.
5.36 p.m.
The Lord Advocate (Lord Mackay of Clashfern): My Lords, first of all on behalf of Her Majesty's Government I should like to thank the noble Lord, Lord Wolfenden, very much indeed for introducing this debate to us and for the manner in which he has done it. I should also like to join with all the others who have thanked Sub-Committee C for their careful, wideranging and even-handed consideration of the many issues which arise from the document which is the subject of this report. I should also like to join with Lord Wolfenden in thanking those whom he thanked at the beginning of his speech for the work they did which enabled the Sub-Committee to do for us the work that it has done for us.
I should also like to thank all of your Lordships who have participated in this debate this afternoon for the valuable contributions that have been made in a very constructive way, from a great variety of different experiences, to the matters which are of great importance to all of us, as my noble friend Lord Soames has just made so clear in a speech which I was very glad to hear him make. If later in my remarks a difference in emphasis is detected with the conclusions which the committee have drawn from the evidence put before them, then it springs from a desire to achieve the most effective approach to these most important issues which the Committee have so competently drawn to the attention of the House.
This proposal for a draft directive is somewhat unusual in a number of respects. First, the proposal was adopted by the Commission without even the barest minimum of consultation which might be expected when wide-ranging measures of this kind are being proposed. When the draft directive was first mooted it was aimed only at information and consultation procedures in multi- or trans-nationals.
At a meeting of officials from member states which took place in June 1980 it was pointed out that this would be discriminatory. The Commission's response was to extend the proposals to cover all undertakings of a complex structure without considering the very wide implications of an extension of this kind, and indeed without providing any evidence that such initiative warranted priority consideration in the Community institutions.
This lack of prior consultation was perhaps particularly unfortunate in view of the second unusual feature, which is that the proposals are considerably different in nature from previous action taken successfully in the Community in the field of industrial relations The two previous directives are limited in scope and application and deal with specific situations, and contain relatively straightforward requirements. They are the directive which lays down requirements about the provision of information and consultation when collective redundancies occur, to which Parliament gave effect in the Employment Protection Act 1975 in the provisions which have been referred to; and, the second, the Acquired Rights Directive, which safeguards the employment rights of individuals in the event of businesses, or parts of businesses, being transferred, and again contains specific provisions

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about information provision and consultation. This new directive draft, on the other hand, is seeking to prescribe a rigid system which would cut across the totality of information provision and consultation within all the undertakings which fall within its definition.
The third point I wish to make is that the present proposals are frequently obscure, both in their underlying intention and in the detail of the requirements. I wish to mention just two of the many examples. It is unclear whether, in Articles 7 and 13, an all-embracing consultative committee established at the level of the parent company and covering all subsidiaries and individual plants and establishments, in fact fulfils the information and consultation requirements in those places, or whether it is intended that if such a committee at the top level is established, then it must receive all the information which is sent to the subsidiaries and establishments and be involved in any consultations undertaken at local level. I understood from the way in which the noble Lord, Lord McCarthy, approached this that he took it that the central committee would, as it were, replace and obviate the necessity of transmission of the information to plant level. I submit that it is not at all clear that that is what the Commission had in mind. It is not clear whether the Commission is seeking to promote the establishment of consultation arrangements at the European level or indeed worldwide, which could have the effect of disrupting relationships at local level, or alternatively believes it necessary that a large employer should duplicate his arrangements at each level. That is to say, from the text and the explanations provided, it is not possible to decide.
On a related point, as drafted, the information which has to be provided must give a clear picture of the activities of the concern taken as a whole. It must also include information about such matters as structure and manning, rationalisation, manufacturing and working methods and all plans and all procedures liable to have a substantial effect on employees, which can meaningfully be expressed only in terms of the situation in particular subsidiaries. That is a point to which the noble Lord, Lord Rochester, referred, and again I suggest there is confusion about the objectives. Having said that, I agree with the noble Lord, Lord Wolfenden, that it is a great advantage to have an opportunity of considering the proposal at a comparatively early stage.
The three points I have mentioned are in themselves ample explanation of the controversy which this draft directive has already provoked. It also helps to explain why it appears from paragraph 10 of the report that the committee was informed that the Commission may have in mind to reformulate the proposals to take account of the views it has also received from employers and employees, even though the Economic and Social Committee, which is the official Community institution on which sit employer and employee representatives, and the European Parliament itself, have as yet to deliver their opinions on the current proposals.
Against that background, I fully understand why the committee has chosen to examine the broad issues involved in employee consultation rather than concentrate on the details of this particular proposal,
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including such related matters as whether it does indeed have a direct effect on the establishment or functioning of the Common Market and so has a proper legal basis under Article 100 of the treaty, and whether, under international law, it is in fact possible to impose sanctions on those enterprises with head offices outside the Community and so ensure equality of treatment for EC and non-EC based transnationals.
The evidence which the report has summarised for us and the views expressed by your Lordships in this debate show an encouraging degree of unanimity about the importance of involving employees and their representatives in policies and decisions which affect their working lives. I use the word "involving"; a number of words and phrases could be used in this context. The essential idea is that those who work in an enterprise should be informed of and consulted about decisions taken which may affect them at their place of work. The object should be to underline the unity of interest which all concerned have in the enterprise.
The report makes clear that both the CBI and TUC agree with the broad principle of communicating information to employees as well as the desirability of having effective consultative arrangements. The Government have also consistently stressed that effective employee involvement is an essential part of improving industrial relations in the United Kingdom and have urged continuing progress in all types of enterprise. These days employees are better educated and therefore less willing to accept the old authoritarianism and the "them and us" approach, to which the noble Lord, Lord Oram, and others referred. If they are treated as responsible individuals who have as much of an interest in the prosperity of the business as the top man, they will respond in terms of both productivity and contribution of ideas. They will accept more readily the trauma of technological change, the need for it and how best to implement it. A natural two-way communication of ideas can sometimes avoid the charged atmosphere of the negotiating room. It can be used as a valuable preliminary to collective bargaining, to identify the issues where there is a genuine difference from those where there is nothing to bargain about, thus reducing or eliminating damaging conflict of an adversarial kind.
However, the Government have taken the view that employee involvement is best developed voluntarily and not imposed by legislation. As the noble Lord, Lord Underhill, and my noble friend Lord Soames said, the essential idea is consultation. The giving of information is, in a sense, preliminary; the really essential matter is consultation. True consultation involves a degree of genuineness and open-mindedness which is very difficult to achieve by compulsion. You cannot by legislation, or indeed any form of compulsion, force a manager to think in a certain way, and how he thinks is all important to real consultation. As the noble Lord, Lord Seebohm, put it, you cannot bring a person to love or respect you by legislation. Equally, I submit, you cannot bring a person genuinely to consult with another person by legislation, unless he wishes to do so.
That is the distinction between legislation trying to enforce obligations of consultation and legislation such

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as the noble Lord, Lord McCarthy, mentioned—the Factories Act legislation and so on—in that while you can set up a standard suggesting a certain degree of safety at a place of work and enforce that, and while you can enforce provisions about the dissemination of information, the argument the Government have on this matter is quite different from the argument that would arise in spheres such as those. Incidentally—and the noble Lord explained to me that he would have to leave before the end of the debate—he went on to give us glimpses of a coming Bill. Whether his forecast is right or not we shall have to wait and see, but I was interested to see that he had to complete that forecast by suggesting that patriotism was the last refuge of the scoundrel. I felt that a very difficult proposition with which to agree.
The Government therefore believe that the right way to make progress is by persuasion and exhortation. Increasing efforts have been put into this policy over the past two years by the various organisations concerned, including for example, the CBI, the Industrial Society, the Institute of Personnel Management, the Industrial Participation Association and the British Institute of Management. There is now a wide range of guidance and example available to organisations which either lack knowledge of what is needed or doubt its value. The services of the Advisory, Conciliation and Arbitration Service are also available. The Government have made it abundantly clear that they strongly support these efforts. It is difficult to see that a governmental code of practice could add anything to all this advice.
My noble friend Lord Mottistone said that much had changed in this field, and it is perhaps worth reminding ourselves of what was said in the Donovan Report, which was not all that long ago, based on the research done for it by Dr. McCarthy, as he then was, in which it was concluded:
"joint consultative committees in the strict sense cannot survive the development of collective shop floor organisation. Either they must change their character and become essentially negotiating committees carrying out functions indistinguishable from collective bargaining or … fall into disuse".
That was not long ago. What a tremendous change has taken place even since then. That I think makes it possible to point out that the evidence on which the committee relied particularly for its findings on the stage which matters have reached in this country included the report of 1979 from the department, to which the noble Lord, Lord Underhill, referred. I think it worth pointing out that that report, though published in 1979, was the result of work done in 1976, and therefore there is considerable reason to question whether it represents the position at the present day.
In seeking to sum up the situation, I would say that I believe that the debate we have had today is not about objectives, but about methods. All appear to be very much agreed about the objectives. Accordingly, we feel that the position that the Government should take up at this stage is that the case has not yet been made out for any form of legal compulsion. So far as information and consultation procedures in multinational companies are concerned, as has already been said, there are in existence international voluntary guidelines which appear to be working well and which have not so far produced any
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evidence that legislation at the European level would be justified, and the committee has accepted that any attempt to impose a uniform pattern across national boundaries would be doomed to failure.
Our debate has therefore primarily been concerned with whether or not minimum standards should be applied in all companies above a certain size. In this connection I note that there has been no suggestion that large single-plant companies or headquarters staff of complex undertakings should be exempt which is of course the position under the present draft directive. In this connection I would respectfully endorse the very persuasive observations of the noble Lord, Lord Plowden, on the inappropriateness of legislation in this area, even of a code of practice backed by legislation. As I have already said, it is the attitude of managements which counts.
Once the present directive is reformulated, if that happens, the future of the draft European Community Fifth Directive in the company law harmonisation programme will become highly relevant. This draft directive, which was introduced in 1972 and is still being considered within the European Parliament, originally sought to acheive employee participation through the imposition of worker-directors. However, I understand that certainly in the discussions which have taken place within the committees of the European Parliament, it is now felt that this should be only one of a number of options designed to compel improved information dissemination and consultation procedure at company level. The interrelation and overlap between the draft Fifth Directive and the directive concerned with complex undertakings would therefore become much greater if the Commission accepted the recommendations of the committee's report. We understand that the opinions of the European Parliament on these draft directives might be available in the New Year. It would then be for the Commission to decide upon the proposals which it wished to put to the Council of Ministers.
It is also right to mention, as the noble Lord, Lord Plant, mentioned in the course of his speech, that the Department of Employment is presently conducting a workplace industrial relations survey, and the results of that, which should be fairly up-to-date so far as reflecting the present position is concerned, are expected early next year.
Against that background the Government believe that they must await any proposals for further action which may emerge from within the Community and consider at that time whether they are appropriate for the particular circumstances in the United Kingdom. Our primary concern will be to determine whether detailed proposals will improve the conduct of our industrial relations, or disrupt existing arrangements, and so cause unnecessary conflict. It would be quite wrong to attempt to anticipate whether that criterion would be met by any future initiative, although I foresee the greatest difficulty in any attempt at legal compulsion, for the reasons that I have sought to outline. Thus, on behalf of the Government, I join with the noble Lord, Lord Wolfenden, and other speakers in commending this report to your Lordships' House and to the Commission, but with one reservation: by the time we come to debate this matter again, I hope that voluntary efforts by management will remove

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any need in the United Kingdom for the suggestion that such a directive is necessary.
5.55 p.m.
Lord Wolfenden: My Lords, may I be allowed just a word or two of very sincere thanks, first to the noble and learned Lord the Minister for giving us a glimpse of the Government's present feeling on this matter. Whether that feeling will be altered by changes in the proposals that we have been considering remains to be seen. I should also like to be allowed to thank the noble Lords who have taken part in the debate, both colleagues of mine on the relevant sub-committee and others, and I would especially thank those noble Lords who were so generous in their references to the report itself. Finally, I should like to thank everybody who has contributed to this lively, wide-ranging and constructive, as I believe it has been, debate. Right at the beginning, I said that I was deeply aware that there are many of your Lordships who are infinitely more knowledgeable than I could ever hope to be in this field of industrial relations, and I think that that statement has been vindicated by the contributions made this afternoon.
I was particularly glad that the comments were not unanimously on one side, because the whole point of the debate, as I have understood it, as of the report itself, is that there should be opportunities for discussion for different points of view to be put in the hope, if I may presume to say so, that both Her Majesty's Government and even the Commission in Brussels might take some notice of what those of us who have been battling with this subject have presumed to say. Thank you very much indeed, my Lords; I am very happy that the debate has taken place.
On Question, Motion agreed to.

ECC 42nd Report: Cereal Substitutes
5.57 p.m.
Lord Cledwyn of Penrhos Lord Cledwyn of Penrhos rose to move, That this House takes note of the report of the European Communities Committee on cereal substitutes (42nd Report, H.L. 270).
The noble Lord said: My Lords, in presenting this report to the House, I should like to thank all those who have helped the committee to produce it, as well as the witnesses who gave evidence, both oral and in writing, who were very helpful to us. The subject under review might on the face of it seem to be one of secondary importance and of little interest to the lay observer. In this debate we must seek to correct such an impression, because the proposals that we have examined deal with an issue of important principle which affects both the Community and the developing countries. In fairness, I must say at the outset that the committee were not quite unanimous in their conclusions. My noble friend Lord Mackie of Benshie, whose experience and contributions are of great value to our committee, took a contrary view, and I hope that in due course he will present his arguments with characteristic energy.
The subject of the report is described clearly in the introduction, and I shall quote the second sentence
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because it points to the issue of principle to which I have just referred. I quote:
"… the subject provides a significant illustration of the problems of conflicting objectives, both internal and external, which arise from the operation of the Common Agricultural Policy, and of how the institutions of the Community may seek to resolve such conflicts".
The problem, or the issue, that the committee had to consider is whether the Commission's attitude and intentions towards the import of products, that is, cereal substitutes, and their competition with cereals produced in the Community in the composition of compound feedingstuffs are fair and proper. That was the cornerstone problem which we had to consider. In fact, the committee concluded that they could not agree with the Commission's approach, and they recommend other ways to resolve the dilemma.
It may be helpful if I refer your Lordships to the second paragraph, which clarifies the term "cereal substitutes". As it says, the term can be misleading because the products in question are in no way inferior to cereals. Many of them can be used as alternatives to cereals, and others as complements to cereals in compound animal feedingstuffs. Manioc, also known as cassava or tapioca, with a 95 per cent. starch content, is such a product, and there are others mentioned in this report. As we go on to say, the Community is heavily dependent on these imported proteins; the major part consists of soya beans, which come largely from the United States of America, and they enter the Community free of duties or levies. The nil rate is bound under the GATT.
Another factor is that the EEC produces more common wheat and barley than it eats. These are the cereals which provide the carbohydrates in animal feedingstuffs. The Community's production of these cereals has been growing rapidly and is estimated to have increased by over 40 per cent. for common wheat and 24 per cent. for barley during the last five years or so. Tariffs and levies are paid on the imported cereal substitutes, and they vary as between the different products. For example, cereal residues—bran, wheat offals and so on—are subject to a variable levy which now stands at a level equal to about a quarter of that on feed grains.
Molasses, which is also subject to a variable levy, in fact attracts no levy because the threshold price is set at a level which draws none. Other substitutes enter free, the rate being bound in the GATT at nil. Major exporters are the United States, Brazil, South Africa and Argentina. As to manioc, which is the main subject of the report, it is wholly imported. It comes mainly from a developing country—namely. Thailand—and is subject to an import duty not exceeding 6 per cent. ad valorem, which is also bound in the GATT. The tariff position is explained more fully in paragraph 6 of our report, and I will not go into it in any further detail at this time.
My Lords, I have tried to summarise the basic facts which were before us, but our committee's chief concern is of course the Commission's attitude to the imports of these substitutes into the Community. As the report reminds us in paragraph 7, they fired a warning shot in their paper of 11th December last, Reflections on the Common Agricultural Policy. They spoke of exercising,

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"more vigilance over the imports of certain feeding-stuffs or similar products".
This was followed by a more detailed examination in the Commission's report in 1980, which we refer to in paragraph 8 of our report. Here, the growth of imports of manioc is described dramatically as a
"destabilising factor in the cereals market".
They refer to the need to control manioc, bran and maize gluten feed—these are the three products specifically mentioned by the Commission—but it now seems that manioc alone is picked out for special attention. So far we have heard nothing of restricting maize gluten feed, and no action has resulted on bran or other milling residues. I think that is a point which your Lordships will wish to bear in mind as we proceed.
The provisions of the submission on manioc are detailed in paragraph 10 of our report, and the subsequent history in the following paragraphs. They describe the reaction of the Thai Government to the proposal and the action taken by them. Paragraph 19 enlarges on this as follows:
"It is to be particularly noted that imports of manioc into the Community increased between 1975 and 1979 by 3·2 million tonnes, or more than double; but they fell between 1978 and 1979; and they may subsequently have remained at around the 1979 level, latterly because of the actions of the government of Thailand".
It should also be noted that the imports of maize gluten feed more than doubled, and may increase further. There has been no suggestion whatsoever that this should be restricted, although, of course, the Commission could decide to control this as well in due course. It is perhaps interesting to note that this comes very largely from the United States of America.
My Lords, we seek to analyse the policy issues in Part VI of the report, and the House will note the reference again to "conflicting considerations". Our committee always listen with great care to the evidence of the National Farmers' Union, and we particularly appreciate their readiness to testify at our meetings on a range of the subjects which are drawn to our notice. On this occasion the committee are unable to accept the arguments of the National Farmers' Union, and we explain why in paragraph 30 and also in our concluson in paragraph 47. We say in the report:
"… the National Farmers' Union suggest that the conflicting considerations in the case of manioc should be resolved by bringing that product within the Common Agricultural Policy cereals régime and subjecting imports of it to variable levies. … One reason for this attitude appears to be the NFU's view that the very uneven usage of manioc … represents a distortion of competition for livestock producers".
The committee point out that "green" currency differentials have created an artificial situation, and I have no doubt that that was the case, as anyone who studies the situation at the time would agree. We argue, I believe with force, that the interests of producers and consumers of livestock, in which the Minister of State is I know concerned, should be given precedence at this time. Livestock producers have gone, and are going, through a difficult time. Livestock producers in Wales, certainly, as they said to me when I addressed the annual meeting of the Farmers' Union of Wales recently, are deeply concerned about their prospects and by the fact that the real income of livestock farmers has in no way compared with the real
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income of cereals farmers.
It seems to be self-evident, as the committee point out, that the lower the cost of animal feedingstuffs the lower the prices necessary to support livestock production; and, of course, meat prices should be lower, with a resultant improvement in demand. From this viewpoint the imports of cereals substitutes, including manioc, must in principle be beneficial to the Community, and certainly to the United Kingdom. We believe that those who want to restrict imports must prove that this would be beneficial, and we say that that proof was not provided at any time or in any of the reports which the Commission produced last year. We must also (and they must, as well) take account of the importance to a poor developing country of manioc exports.
My Lords, if it was the case that cereals producers were in financial difficulty at this time and had been in financial difficulty in the last few years, and if it was the case that cereals substitutes, including manioc, were pouring into the Community without any sort of control, then we might have to take a modified view. But as things are now we cannot accept that the proposed action is justified. I am glad to note that the National Farmers' Union, in their latest circular, which noble Lords will have received in preparation for this debate, agree that our conclusions are correct "in the short term", but they go on to say that our analysis is static rather than dynamic and:
"takes no account of the possible effects on the budget of large increases in manioc supplies in the future".
But the committee's function is to look at these proposals as they would affect a range of interest now, as things are now; and my experience of the National Farmers' Union (over a long period of appreciative observation, if I may say so to your Lordships) is that they are not slow to adopt a similar stance. They are static or dynamic as the situation demands.
We took the most careful account of all the evidence both oral and written; and I will do no more than call attention to the views of the feedingstuffs industry (GAFTA and UKASTA) and the Overseas Development Institute. The Brandt Report is very much in our minds at this time and we all hope that the talks which are starting today in Mexico will result in some hopeful initiatives for the developing countries. But we must also make sure that our Community policies do not run counter to the sympathetic expressions that we utter from time to time about the developing countries. As the committee have said in paragraph 35:
"… whilst recognising that the Thai authorities have voluntarily accepted the proposed agreement and that no Thai criticism has been seen, [the Committee] regret that the first recourse proposed to deal with an internal problem of the Community should be by restricting imports from developing countries".
The allegation that the internal cereals market might be disrupted is effectively dealt with in paragraph 38 and the effect on the budget in paragraphs 39 and 40. We say that the restriction of imports of manioc could simply have the effect of artificially promoting expansion of imports of other products or of compelling resort to an ever-widening series of restrictive measures. The Ministry of Agriculture made plain in the evidence to us that they certainly disliked this.
Our conclusions therefore in Part VII are short and

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clear. The committee are not in favour of the Commission's proposals, for reasons I have tried to explain. They believe that any benefit which might accrue would be at the expense of damage to the third world countries, to the Community's reputation as a trading partner and to its political relations. This short report therefore has far-reaching implications for the Community and for the United Kingdom and I hope that the Commission, the Council and Her Majesty's Government will give further careful consideration to the consequences of the proposals as they now stand. I beg to move.
Moved, That this House takes note of the report of the European Communities Committee on cereal substitutes (42nd Report, H.L. 270).—(Lord Cledwyn of Penrhos.)
6.12 p.m.
Lord Mackie of Benshie: My Lords, it is not often that I disagree with the noble Lord, Lord Cledwyn, and, indeed, I do not disagree too much with the other members of the committee. I think we are a very nicely balanced committee. We have every form of prejudice and self-interest within our ranks and up to now we have produced a fair balance and our reports have been acceptable to and always studied with great interest by the Government and, certainly, by the Commission. I can happily commend the report to your Lordships. It is beautifully printed, it is closely argued, well written and has a beautiful blue cover. The only thing is that I feel that the conclusions are wholly and absolutely wrong. I feel so not because I am a farmer and wholly prejudiced but for a number of reasons which I shall try to make clear to your Lordships.
The first is that we are now members of the European Economic Community. There were when we joined and are at present another eight members. The other eight members are quite happy with the system of supporting agriculture by intervention, by buying and keeping up the price to a level which would give the farmers a reasonable living and the consumers a good service; and the consumers in Europe (especially in the original Six) and the farmers have had an excellent deal. Production has risen to an enormous extent and the proportion of money spent by the public on food has fallen because of the rising incomes. There is no doubt at all that the other eight members of the Community regard the EEC, and the CAP in particular, with favour.
They look on it as needing, adjustment and tuning but not this sort of hankering that still exists in this country—and, I regret to say, in our committee—for an impossible reorganisation of the CAP which will make us once again have the enormous advantages which we think we enjoyed in the days when the members of the grain trade associations could roam the world buying their food for this country and for manufacture and resale at prices that impoverished the peon on the pampas and the "okies" in Kansas. Those days are gone and I hope that Members of this House realise it. Like it or not, we are in a Community that is wedded to the production of the major proportion of their food inside the Community and to the rewarding of the farmers by intervention buying.
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The whole point about this report of ours is that we hanker back to the days when we could buy this cheap food as and when we would and spread it around the country while we supported farming by direct payment to farmers. When we are inside the Community that system is largely gone, although remnants of it can remain and have remained.
The first thing about our report is that we totally ignore the general position that we are in and the position as felt by the other members of the Community. The second thing is that it is a wholly illogical situation that we take up. Cereal substitutes is not a good name for all the substances discussed—for example, soya bean, which is mainly protein and some of the others. But maize gluten and the manioc, tapioca, or cassava, whatever you like to call it, is a cereal substitute. It is totally illogical to have a policy for cereals whereby you exert a big levy on cereals to keep them up to the recommended price in the Community and a cereal substitute which can replace the cereals comes in at 6 per cent. of the tariff—or no tariff at all in the case of gluten—under the GATT. It may be right for other reasons, but it is wholly illogical in the face of the generally accepted policy on agriculture in the EEC; and such, indeed, appeared to be the opinion of MAFF, in parts of their evidence at least.
The position at the moment is that in 1975 96 million tonnes of cereals were grown inside the Community. That had risen to 119 million tonnes in 1980. That is a considerable achievement in the raising of production. In 1975 we imported 2.3 million tonnes of manioc. In 1978 it had gone up to 6 million tonnes and dropped to 5.5 million tonnes in 1979. There is no doubt that these imports are directly replacing the cereals which we are exporting with a big subsidy on to the world market. This export on to the world market is affecting cereal growers in the world because it is depressing the world price and cereal growers on the River Plate or on the fields of Iraq, or wherever they grow barley, are affected by the dumping of cereals on the world market with a subsidy by the EEC. So we are not really doing all that much good to the third world countries simply by taking in the manioc, which is the commodity I wish to talk about although maize gluten may be a distinct danger in the future.
Before I go on, I should like to say something about livestock producers. I have every sympathy, not so much with the farmers of Wales—for they come with the farmers of Scotland in the same bracket and deserve sympathy for other reasons—but certainly with the small farmers and the efficient stockfarmers of Northern Ireland. They were very badly hit by the EEC when we joined it. Previously they had imported their grain from the Americas into Belfast very efficiently and competently and at a reasonable price, and they converted it with great efficiency. Now instead they have an awkward and expensive route across England, more or less, through the ports and into Belfast. Therefore the cereals cost them far more than they did. The result is that an extremely efficient industry has been hard hit.
However, I do not think that the way to help is to import a cereals substitute such as manioc against the whole of the rest of the policy. In cases like that, there

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should be special help. In the case of cereals it may well be that prices are too high. If so, let us work the solution out and reduce them. If that is not the case, then let us put up the price of meat or meat products for the livestock farmer. It is wholly illogical to say, "They are having a bad time; let us break the system and import this substitute". Either you work the system, or you do not. But to say: "Somebody is suffering, let us go and bust it by buying in something from outside", in my view must be entirely wrong.
Now we come to the Third World and Thailand. I have taken a little trouble to find out about this. I asked for a report and received some figures from the FAO about Thailand. There are a number of curious things happening there. Other members of the committee may know more, and the noble Lord, Lord Walston, went to Thailand to see the situation. First, it appears to me that it is a highly dangerous road for Thailand to depend for such a large amount of its income from exports on a product which is busting the system in the EEC. It is highly dangerous and they themselves appear to think so.
Furthermore, I am told—and this is backed up by a number of people—that it is not a good product for the land in Thailand. In the North-East province, where it has been grown, there are already signs of a grave deterioration in the land. It is a very extractive crop and the Thai Government themselves are not entirely happy about it. Certainly the evidence from the overseas development body was against it and they spoke of the appallingly restrictive attitude of the EEC, and so on. But they also portrayed a remarkable ignorance of the problem and in their evidence said that they were unable to discover much about it.
I would very much doubt the long-term good to Thailand in depending on the export of manioc to the EEC. Certainly if we are to continue to be efficient and grow in this country, I would think that Thailand would be quite right to be looking voluntarily at a different attitude and to be looking at alternative measures in line with the EEC Commission's proposals. I do not think that the Commission's proposals are ungenerous or unwise; I think that they are extremely sensible. To offer to give money for development along proper lines of agriculture for the long-term good of Thailand, is certainly doing much more good to Thailand than continuing to supply a market to the detriment of the country's soil, to the detriment of the forests and very much to the detriment of the growing of rice, which is the staple food and has been a staple export. I may say that in Thailand the Government deliberately keep the price of rice 30 per cent. below the export price, I presume in order to get some money. There are a whole lot of things that could be put right.
I yield to no one in my concern for the Third World and developing countries, but I do not think that this is the way to help them. If I may come back to the conclusions of the committee—I much enjoy attending and disagreeing on occasions—I would say that the first conclusion that it is wrong is incorrect. The second conclusion that the increase,
"in imports of cereals substitutes in recent years, and of manioc in particular, has been stimulated by situations in which undervaluation of "green" conversion rates in certain Member States have made these imports relatively cheap",
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is of course right. But I very much doubt whether the Dutch or East Germans who led the way in taking in the cheaper product, have done very much good to the Commission or, long-term, to themselves by so doing.
Far from it being unimportant in Britain, I quote a headline from the Farmers' Weekly of 18th September: "Manioc pours in to feed UK mills". We are now in a position where barley is much more expensive in this country and manioc can come in. It is a distortion which will do no good in the long run.
The third conclusion is:
"Restriction of imports of cereal substitutes would be disadvantageous for Community producers and consumers of meat".
I submit that in the long term that is not so. There are other ways of putting it right. If the price of cereals is too high, then let us be courageous and say so. Do not say instead that we will nip in something which is destroying the ground in Thailand.
The fourth conclusion, that it does not benefit the budget, must be wrong. To export the amount we did—we spent £360 million or some such enormous figure—and, obviously, if we are going to dump wheat and barley on the world market as a result of importing some other cereal which we could have used here, must cost the budget very large sums of money.
That is not the major reason that I oppose this. I oppose it on the grounds of inconsistency. I think that the Commission have taken a sensible and a humane attitude, and I think that we should support them.
6.27 p.m.
Viscount Brookeborough: My Lords, I should like to start by paying a tribute—and a very genuine tribute—to our staff and to the drafters of this report. I have sent it round to a number of people in Northern Ireland to get their opinions on it. One and all have said that it is the best written report that they have ever read and explains a rather complicated subject well, especially when the phrase "cereal substitutes", which means something rather different from what we are discussing is used. My first point concerns the clarity with which this report is written.
When I came into the House I saw the television cameras filming for the "Nationwide" programme. Your Lordships have agreed that this should be done, and it was a great pleasure that I saw the noble Lord, Lord Mackie, exposing a huge expanse of his tartan waistcoat in front of the camera. I feel sure that, when the programme eventually appears on "Nationwide", everybody will feel that out committee has done credit to this House in the exposure of its various members.
I should like to pay tribute to the noble Lord, Lord Cledwyn of Penrhos, not only for his introduction but for his control uf the very many different aspects of concern of the members of his Committee. When one hears the noble Lord, Lord Mackie, explaining his particular position one knows the ability of the other members in the drawing up of the report and in taking part in the actions of this committee.
I can say that, because as regards this particular report, owing to various circumstances including nefarious problems in Northern Ireland, I do not feel that I have contributed personally as much as I should have liked to have done. Its interest to me, coming

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from Northern Ireland, is of the greatest importance.
There are three rather conflicting main arguments which are going on. The first is: Is Europe to have a "fortress" type of trade or is it to have a dynamic and expanding trade? The second is the question discussed by the noble Lord, Lord Mackie: the selfsufficiency of the EEC. Thirdly, there is the question of the imbalance between the prosperity being allowed under EEC pricing to the livestock producers and the cereal producers respectively.
While it would be unfair to talk about "barley barons" in this House, there is absolutely no doubt that the barley growers of this country have been doing extremely well compared with the livestock producers, and the CAP is for the prosperity of all producers and farmers at a proper price for the consumer. In paragraph 36 of our report there is what I believe to be a very important sentence. It says:
"The Committee are in no doubt that in present circumstances the latters"—
that is, the livestock producers—
"should be given greater weight: and … consumers' resistance to increased prices is adversely affecting consumption of meat".
Therefore it follows, to my mind, that if we are to restrict the import of anything which makes the input into livestock more expensive, unless something is done about the price of beef in the end we are going to reduce consumption in a very big way.
It is that aspect I should like to emphasise, not as regards the general high principles to which the noble Lord, Lord Mackie, referred, but coming down to the rather smaller area of Northern Ireland, for which the noble Lord, Lord Mackie, was kind enough to express sympathy. During the period of guaranteed prices, various Governments have maintained the balance between prosperity for livestock producers and cereal producers in a very careful way, and the balance was not really too wrong. But now under the CAP the balance is worse than it has ever been in my memory.
As an illustration of how it affects us in Northern Ireland, I should say that 89 per cent., or nearly 90 per cent., of the output of the Northern Ireland farmers, which is £500 million, comes from livestock. The noble Lord, Lord Mackie, has said that perhaps the price of cereals is too high, but the fact is that if the price of cereals had not been too high then cereals would have been used. Somehow the balance has become completely wrong and at the present moment the only way any prosperity can be maintained for the livestock producers of Northern Ireland is by not restricting manioc.
I am referring to manioc because it appears to be what we would call the most important cereal substitute, certainly as far as Northern Ireland is concerned. The Commission's proposal appears to be mild enough—that the import from Thailand will be 5.25 million tonnes this year, decreasing in 1983 to 4.75 million tonnes—but even that apparently minor restriction is unsatisfactory in the part of the world I come from. In paragraph 37 it says this:
"It is not possible to measure the benefit, in terms of the prices of meat, of the existing largely free access for cereal substitutes …"
The noble Lord, Lord Mackie, has explained that the livestock industry of Northern Ireland was based on an
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efficient industry importing from the Americas; but we can, with the use of manioc, say exactly how this is cheapening the price of our end products, because it is on our end products that we really have to make a decision.
In September this year, the price of grain was £14 per tonne more expensive in Belfast than in East Anglia. When that is converted into the compound feed, it works out at £5 per tonne for pigs and poultry and £8 per tonne for dairy cake. When you then translate that in terms of your end product, you find it is £1.30 per pig, ½p per pound for broilers and 1½p per gallon of milk. That is a total profit: remove that and you have a disaster. It is on that basis that I oppose even the minimum restriction of the importation of manioc.
We have other problems which I have already mentioned. Our markets, in spite of all the other problems involved in more expensive inputs, is more distant; but in spite of that the efficiency of the industry has always enabled us to overcome that particular disadvantage. Our industry is on a knife-edge, and if the pig industry alone, if I only take one part of it—and I must not get on to the ills of the pig industry, because we are talking about cereal substitutes—should collapse, we are talking in terms of 2,000 to 5,000 people becoming unemployed, which, translated into terms of unemployment benefit, would cost the country something like £20 million a year. As it is, the income of the farmers in Northern Ireland is down by 77 per cent., and out of a turnover of £500 million there is only £9 million termed as being surplus.
The proposal of the Commission may look harmless, but the problem is that if manioc is restricted at all we will not get it in Northern Ireland, because the Dutch and the Germans have invested a large amount of money in port facilities and a large amount of money in Thailand. The good manioc comes to Rotterdam in ships of 40,000 tonnes and it is then trans-shipped. The Dutch and the Germans are using vast quantities of it. If it is restricted, it will be more profitable to use all that manioc in Germany and Holland, and none will then come to Northern Ireland.
Therefore, if it is not available to Northern Ireland and if there is to be any restriction at all, I come back really to what the noble Lord, Lord Mackie, was saying: other actions must be taken in anticipation. The Government must accept that to have any restriction at all, either by quota or by raising the price of manioc, will have a disastrous effect on this industry in Northern Ireland. If restriction occurs, the Northern Ireland miller will not transfer to cereals because the cost of the compound will be too great. In fact, the amount of cereals used in Northern Ireland will decrease, because there will be no livestock industry to consume it. So I hope that the Government will read this report and agree with me that there should be no more restriction on manioc, either by quota or by price.
6.38 p.m.
Lord Sainsbury: My Lords, as is his custom, the noble Lord, Lord Cledwyn of Penrhos, has given a clear and thorough summary of the report. It is a most wide-reaching subject, but I must confine my brief remarks to two aspects of it. First, I should like to stress the importance of the cassava root, which,

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as has already been said, is also called manioc and tapioca, to the Thai economy. Secondly, I should like to ask how the Community, having encouraged the excess production of cereals through the price support system, can justify restricting competition from imports, particularly imports from a developing country. The Community cannot espouse protectionism at home while claiming to champion the interests of the third world. I cannot pretent to speak with the intimate knowledge of Thailand of my noble friend Lord Walston, but, as I understand it, cassava is an ideal crop for Thailand. My information is very different from that of the noble Lord, Lord Mackie, and perhaps my noble friend Lord Walston will adjudicate as to which view is nearer to the true facts.
As I said, cassava is an ideal crop for Thailand, and is well suited to a poor country and a poor soil. It requires little money to grow, yet can survive under soil and climatic conditions where other crops would fail. The sandy barns make harvesting this tuber particularly easy, while the pronounced wet and dry seasons make the drying and processing economic. Of more importance is the financial dependence of the country on tapioca. As a result of the demand from certain countries in the EEC, and direct encouragement in the processing, tapioca has become one of the country's main foreign currency earners. A large part of the population owes its livelihood to its production, transport, processing and export.
The Community is offering financial assistance to help Thailand diversify its agricultural production, but it will take time for new crops to become established. Even when new export crops have been produced, what guarantee will Thailand have that the markets of the European Community will stay open or, for that matter, whether satisfactory markets will be available in the rest of the world? The magazine Agribusiness Worldwide referred to a Thai merchant commenting on the aid, saying:
"If Thailand starts producing cashew nuts for export, is it not likely that the Community walnut growers will eventually seek to limit even these imports?"
From the evidence that the committee received, it has not been possible to judge the concern that Thais feel on this attempt to limit their exports. At present, the agreement is indeed informal and voluntary for Thailand. However, there is the threat of what is known under the GATT as "de-consolidation". In other words, the import levy on manioc fixed at 6 per cent. could be replaced with a much higher tax.
This brings me to another point of the increasingly protectionist stance of the Community. In my opinion, it is time that the policy makers acknowledged that the problem facing cereal farmers is that production is greater than Community demand, the reason for this being that support prices have been too high in relation to world prices for too long, although the gap between Community prices and world prices naturally fluctuates. It is this that has caused surpluses and not, as we are being led to believe, the importing of feed grain sub-substitutes. Of course, imported feedingstuffs will be attractive, if the price of feed grain grown in the Community is maintained at too high a price.
Part of the general problem of the CAP, in my view, arises from the policy of self-sufficiency which appears to be the primary aim of certain member states of the
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Community. If this is EEC policy, it seems inevitable that it will give rise to surpluses because of variations in supply and demand. There are many who argue—and I am one of them—that it would be better to aim at 80 or 90 per cent. sufficiency, buying the other 10 or 20 per cent. at a lower price from third world countries.
This proposal to restrain the imports of manioc stems from the hope of Community farmers that demand for their grain will increase. It is, therefore, valid to ask what will be the real effects of this move. The committee heard repeatedly in evidence that compound feedingstuffs are not direct substitutes for cereals. From the Grain and Feed Trades Association we learned that some ingredients in compound feedcake perform specific roles. Manioc itself is almost entirely carbohydrate, but mixed with proteins and fibre the nutritional balance and quality of feed compounds can be controlled.
The first possible result of this restriction of imports of manioc could, as we state at paragraph 44 of the report:
"…simply have the effect of artificially promoting expansion of imports of other products, or of compelling resort to an ever-widening series of restrictive measures".
The other products would include cereal residues, known as brans and sharps, wheat offals and grain screenings, fruit pulp, molasses and sugar beet pulp, and maize gluten. There is certainly no guarantee that there will be a corresponding increase in the demand for Community cereals. Manioc is the exception, but all other cereal substitutes are by-products of processing methods. They have no particular value and their price can be reduced to that which secures disposal.
Secondly, if feed prices increase as a result of the restriction on the imports of manioc, and other restrictive measures which might follow, it is bound to affect livestock producers and consumers of meat and poultry, although it is, of course, difficult to estimate the the exact increase. The Community, in their anxiety to deal with what can be an embarrassing and costly grain surplus, ignore the interests of the livestock industry which, as has already been said, has done relatively badly compared to cereal producers.
Finally, it is more than probable that there will be an increase in budgetary spending. Again there are no definite figures, but the Overseas Development Institute have estimated that the proposed financial assistance could amount to 50 million dollars. I am opposed to this attempt to restrain Thailand's exports. As the Overseas Development Institute state in their evidence:
"The story combines all those elements which so often bring the CAP into disrepute: misdirected public expenditure; insensitive protectionism and uncritical acceptance of the views of European farming interests at the expense of consumers and overseas suppliers".
On a more general level, it must make developing countries doubt the Community's commitment to aid the third world. Therefore, I believe that these proposals should be resisted.
6.51 p.m.
Lord Bishopston: My Lords, as previous speakers have indicated, I am sure your Lordships are indebted to my noble friend Lord Cledwyn of Penrhos, to the members of the European Communities Select Committee and to those who gave evidence for the report

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which we are discussing. May I add the tribute of the Opposition for the effort involved and, referring to the comments made by the noble Viscount, Lord Brooke-borough, the clarity shown in the presentation of the report by my noble friend Lord Cledwyn of Penrhos.
As the committee claims, the Commission's proposals raise important questions. It is right that we should be discussing these matters now in your Lordships' House. Some may think that it seems rather odd—the noble Lord, Lord Sainsbury, referred to it—that we are discussing manioc which is associated with cassava, a plant with tuberous roots. On the face of it, there appear to be much more important issues confronting the Community. These matters might be thought to be of less consequence. Yet, as the committee claims, matters of policy and principle are involved, affecting not only animal feedingstuffs but other aspects, too.
We are concerned not only with the composition and prices of compound animal feedingstuff but also with the constituents of the feedingstuffs, the sources and the conditions of procurement. However, the undertone of my comments this evening will be that there are much wider aspects which concern not only the effect of policies on EEC members but the wider canvas of human affairs farther afield. Reference has been made to the less developed countries. But this is not a simple matter, for as members of the Community we know that there are other considerations which we must take into account.
We were reminded by my noble friend Lord Cledwyn of Penrhos that cereal substitutes are not necessarily inferior to cereals. This is one factor, among many others, which we must take into account. There are some cereal substitutes which are alternatives, but there are also some which are complementary to cereals themselves. The EEC and its member states wish to ensure that their own producers are not undercut, that they are safeguarded, and that there is a fair trade between member states and non-member countries.
The objective of the EEC is to ensure maximum productivity with reasonable competition from inside, helped by policies to prevent internal production from being undermined or threatened by undue imports from non-EEC countries—hence the levy or the low duty system. If outside imports are not regulated, it is said, then unfair competition results. So the EEC wishes to restrict the importation of cereal substitutes. But what matters is the way in which it is done. This is one of the factors which we have to bear in mind. Yet, as the report claims, the Community is heavily dependent on imported proteins, the major part of which is derived from soya beans, the main source of these imports being the United States. But protection in the form of variable levies also keeps EEC prices high above those on world markets. As the report indicates, most of the cereal substitutes are both produced in the EEC and imported, produced as a by-product of the processing of either EEC-produced or imported raw materials, manioc, as we have been told several times, being wholly imported. Thailand is the main source of supply. Smaller amounts are obtained from Indonesia and China.
With regard to the Community's views and proposals, these are most important for they indicate the
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approach and the aims of the Community. The Community rightly points to the disadvantages of the use and input of cereal substitutes, including the disadvantageous effects on the Community budget and loss of revenue. My noble friend Lord Cledwyn of Penrhos referred to the growth of manioc imports, which has been called "spectacular". It is regarded as a
"destabilising factor in the cereals market".
Manioc gets special mention. The Community stresses that the policy objective in respect of manioc and other potential cereal substitutes must be to ensure that there is no disorderly development or growth of imports likely to cause imbalance in the cereals market or any addition to budgetary costs. It seems that it is on this basis that the Community seeks speedy action on manioc. An outline agreement text between the Community and Thailand was, as we have been told, negotiated about two years ago by Mr. Gundelach and has not yet been formally concluded. Despite non-conclusion, the Thai Government have acted, I understand voluntarily, to restrict their exports of manioc to the EEC. This restriction has caused some difficulty for the Thai Government through low farmgate prices and it has asked, quite naturally, that the Community should co-operate in overcoming some of the resulting problems. We note that the Council of Ministers' outline agreement includes provisions for the restriction of exports of manioc from Thailand to the Community—this point has been made by several speakers—the imposition of a maximum levy of 6 per cent. and the imposition, in effect, of import quotas. The aspect of help to Thailand was a proposal that Thailand's position as an exporter of manioc was not undermined by a substantial increase in manioc imports from other countries and the possibility of the Community doing its "utmost", whatever that may mean, to provide financial assistance for projects aimed at rural development and crop diversification in Thailand itself.
There is need for more orderly arrangements. We are told by MAFF that manioc production in Thailand during 1980–81 has risen substantially, with their producers suffering a significant fall in their income. This is a factor of very great importance to people in that country. In this way, Thai producers' incomes from their exports have fallen substantially below what they might have been.
With regard to the comments of the European Parliament, it seems apparent that the Parliament is also concerned and has called upon the Commission to review its trade policy to open up the Common Market to a much greater extent, not only for raw materials but for finished products as well. In addition, there is emphasis upon the need of the Community to consider trade policies which are compatible with Community development policy, particularly through long-term agreements with developing countries. This aspect is of very great importance, and reference has already been made to it.
With regard to other views which have been expressed, I am pleased to note that other agencies and bodies with not only a commercial and trading interest but with concern for the wider human aspects have commented. GAFTA/UKASTA, concerned as they are

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with the grain trade, argue that the issues in general amount to a choice between the concepts of a dynamic market economy and, as the noble Viscount, Lord Brookeborough, mentioned, the alternative of "Fortress Europe", urging the former. They go on to say that the main cause of the trouble is the high level of Community support prices for cereals. They want policies which are not piecemeal, unsound and impracticable attempts to restrict access of imported feedingstuffs but the discouraging of surplus production, and this of course is another indication of the diverse ways in which we can achieve the aims which will buttress and ensure good sound agriculture, both here and in other parts of the world.
As the report points out, there are conflicting considerations affecting policies towards cereal substitutes. They include agreements with exporting countries designed to restrict imports of manioc accompanied by financial and technical aid. This of course includes development matters, diversification and so on in Thailand. There are, of course, measures to limit budgetary costs and to discourage surplus production of EEC produced cereals. The latter aspect would be accompanied by reductions in cereal support prices if a standard quantity of production is exceeded. As I understand it, MAFF have supported the Commission's proposal for the restriction of manioc imports and would welcome further the restrictions which the Commission appear to have in mind while not contemplating very severe restrictions, and I think the House will await the comments from the noble Earl the Minister of State on this matter and to know what future policy proposals the Ministry and the Government have in mind.
The National Farmers' Union is naturally interested in some form of comprehensive protection for producers generally under the CAP while, as they say, seeking to avoid distortion and other undue factors. It is also commendably concerned with the interests of the developing countries. As one might expect, the Overseas Development Institute has commented that there are undesirable aspects in this matter including "elements which bring the CAP into disrepute". Also they speak about misdirected public expenditure, insensitive protectionism and uncritical acceptance of the views of the European farming interests at the expense of the others.
I think the point about looking at the interests of the Community overall and the CAP in particular, to see that it does not fall into disrepute or merit unwise criticism is one of great importance; but I think there is a danger in looking at one or two items in particular while ignoring the aspects of the economy of Thailand itself and indeed the economy and the conditions in non-EEC countries.
The ODI have pointed out also that other restrictions by the Community, for instance in textiles, which have adversely affected Thailand, should be borne in mind when these matters are considered in the agricultural aspect. Other countries in the South-East Asia area are also involved here. There is the danger of aggravated trade relations with that region if restrictions are clumsily applied.
The noble Lord, Lord Sainsbury, has mentioned his concern, which is a concern we all share, for the developing countries, and in your Lordships' House on
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3rd June last a debate took place on the report of the European Communities Committee on development aid policy, the 21st Report, and it was on that aspect that I made my maiden speech the day after entering your Lordships' Chamber. It is often thought that development aid, and indeed other forms of assistance, to the LDCs (or the less developed countries) in the third world have to be considered mainly in terms of what the rich North can do to help the poor and needy South. It is not a matter of what we can do for them and what we can give them; it is a matter of how we can work with them in partnership, not only in aid but in trade as well, and this surely is one of the basic points in our debate this evening.
The report to which I have just made reference considered the policies of the EEC in respect of the LDCs as a programme of assistance. But real aid must be seen not in terms of what the rich can give or do for the third world so much as what the North and South can do together for the mutual benefit of both. We do not see the interests of the South as being in conflict with our interests at all; indeed they are very much bound up together.
On that basis trade is as vital as, if not of more value than, aid. It is in negotiations with the CAP comprehensively including trade policies of the EEC with the non-EEC countries that some of the more noble aspirations can become reality. I think the danger is that we tend to look at the Brandt Report and the problems of aid in isolation and when Ministers—and I had five years as Minister of State for Agriculture in another place—enter into negotiations on occasion we tend to look at our interests and their interests, without realising sometimes that our interests may be in conflict with their interests in other respects, where we normally show much greater concern.
As the committee indicates, they have not examined the wider implications for policies in this report. It is so easy for Governments, Ministers and indeed the public to look at single issues—such as the one before us now—in a narrow way without regard to the wider perspectives. So it is no wonder that the Select Committee points out in paragraph 35 that it regrets that the first recourse proposed to deal with an internal problem of the Community should be by restricting imports from the developing countries, which is a case in point. I think also we should bear in mind, as the noble Viscount, Lord Brookeborough, from Northern Ireland has made known his concern about conditions in that country, that in many ways we are all developing countries to some extent and are deserving of the consideration of others. We know as members of the Community how often we plead our case and ask for the tolerance and understanding of our fellow Community workers.
The Committee goes on to say that lower cost of animal feedingstuffs and lower costs to support livestock production result in lower prices to the consumer, meaning of course more demand, and that means not only happier producers, workers, and processors but consumers as well, both inside and outside the Community. So fewer restrictions on international trade are therefore beneficial and preferable, especially as it represents freer trade and a valuable source of export earnings for certain developing countries, as well as for ourselves.

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Finally, to come to the conclusions of the committee, the Commission has not proposed that imports should be eliminated. The proposed draft agreement with Thailand envisages a progressive reduction in the volume of exports from that country. But I was interested to note that MAFF's evidence suggested that the Commission do not envisage doing much more than placing a lid on the present position. Perhaps the Minister may be able to give us a little more clarification of what they have in mind there. The report goes on to assert that no factual evidence has been advanced to show that imports of manioc have become "excessive" or that they involve any imbalance in the cereals market. These are points that we have to bear in mind. I was interested that the noble Viscount, Lord Brooke-borough, answered some of the points and the misgivings uttered by the noble Lord, Lord Mackie of Benshie, when he spoke as he did from his experience and as a member of the committee.
So the fact is that in these situations facing agriculture and food production in our various countries, as the noble Viscount, Lord Brooke-borough, has said, we live very much on a knife-edge and never quite know when we may need the consideration of others. Agriculture and food producing industries have many ways—we might call them weapons—by which the balance of interests can be protected. Some farmers want more money and, as I told them when I was Minister of State, and indeed since—because at that time I had both import and export responsibilities with many countries—if policies lead to higher prices, then of course consumption goes down and profits go down as well. If prices are not adequate to ensure fair returns, then farmers restrict production and shortages result, with higher prices, and so we have the swing of the pendulum there. On the other hand, if import levies protect home production unwisely or excessively then the EEC producers do not benefit from the soft breezes of competition. We want only soft breezes of competition and not the gale forces which unfair competition from outside the Community can sometimes bring. But again there are, of course, regional variations even within the Community. So a balance must be kept in all this.
I think in looking at the considerations of the report as they affect us within the Community we also must have concern for the third world. It is important that we help the third world in the ways in which they think we can help them best. On the EEC 21st Report, debated on 3rd June, in the comments made by our late noble friend Lord Goronwy-Roberts, who spoke for the Opposition, he said:
"I think it will be agreed that the paramount criterion to aid is that it must be determined by the development needs of the third world and not by the exigencies of the Community's internal agricultural policies. We must not be afraid of constructive criticism over the way in which the Community's economy is operated".—(Official Report; col. 1235.)
Having regard to the ways in which we can help other countries is one matter of great importance when we are so much involved, naturally and rightly so, with our own interests.
I go along with the committee's general conclusions, especially those in paragraph 49, which anticipates damage to the developing countries, to the Community's reputation as a trading partner and to its
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political relations, if the proposed measures were enacted. We are all grateful to the Select Committee for their work and I hope that those with responsibilities will heed their conclusions, because, as my noble friend Lord Cledwyn of Penrhos has said, their conclusions have far-reaching implications.
7.13 p.m.
Lord Stanley of Alderley: My Lords, I would like to start off by thanking the Select Committee and indeed agreeing with them that this report should be debated on the Floor of the House. After that, like the noble Lord, Lord Mackie, I fear I can find nothing else to agree with. I would like to put the points that worry and concern me. Paragraphs 45 and 50 suggest that cereal prices are relatively too high and support prices should be fixed at a lower level. If your Lordships are saying—and I think my noble friend Lord Brooke-borough was certainly saying—that livestock producers have fared worse than their cereal brothers, I would reply briefly in two ways. First, they will not achieve prosperity by improverishing their cereal brothers, and they will not achieve prosperity by throwing out lock, stock and barrel the whole of the CAP. What are they wanting? Are they wanting to go back to deficiency payments, or do they want a complete revision of the CAP, including Article 39, which I will be happy to give to any noble Lord who wants to read it afterwards? Perhaps in a lighter vein I might misquote the old beer advertisement by saying that all farming is bad but some is worse than others!
I would ask your Lordships to consider the case of a young man paying £50 an acre and 20 per cent. interest on his money, a section of our society that is so very vital to our country that the committee seem to have forgotten. I can assure your Lordships—and I am a cereal producer—that such a young man needs to average over 50 cwt. an acre merely to break even, while the national average is well below that figure. I challenge any noble Lord here regularly to exceed that figure of 50 cwt. by March.
The committee states that world cereal prices are lower than ours, to which I ask your Lordships what would be the result of dropping the support price, as was suggested, I think, by the noble Lord, Lord Sainsbury. I suggest the following would happen. First, labour would be further reduced to the detriment of our rural community. Secondly, there would be a switch to other forms of production, as indeed happened when there was an EEC subsidy to encourage dairy farmers to get rid of their cows, many of whom were forced into cereal production, so causing part of the problem we are discussing. That scheme, incidentally, was studied by this very Select Committee in 1980 in their 32nd Report. Thirdly, there would be even greater pressure on the farmer to increase his yield, which would involve a greater use of fertilisers and pesticides, rationalisation—by that I mean of field size; nothing less than 100 acres for me—causing further removal of hedges, ditches and other obstructions to the production of cereals at the lowest possible cost, because that is what we would be forced into.
That, I believe, is what your Lordships' committee is saying. I am sure I see in the eyes of my noble friend Lord Mottistone that that is what he wants us

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to do. That is what we would do. I am sure the noble Lord, Lord Cledwyn, would admit that we farmers are very easy to lead; we do exactly what we are told and we do get on with it. But, my Lords, at the back of my mind, way back in the distant past, did not your Lordships debate, maybe too briefly, a Bill called Wildlife and Countryside Bill? If my memory is not all that short and does not completely desert me, I had a feeling that somebody somewhere in this House had a different sentiment altogether over that particular point. So watch out, my Lords, if I may say so, before you force us into this very unpleasant and nasty road. If you do, I hope you will support me when those who do not want us to do these things attack me.
I ask your Lordships to accept that the prices set for cereals only conform to Article 39 of the Treaty of Rome, which among other things requires conditions for an efficient producer to earn a reasonable living. And even at today's prices he would, I believe, require an element of historic costs to achieve such a living. If substitutes are allowed in cheaply this support price will be undermined, with the consequences I have described. But they will also cause, as I believe the noble Lord, Lord Mackie, mentioned, great problems to the economics of the CAP, which would find itself paying more in restitutions. I would point out, in passing, that at the moment the EEC is only 92½ per cent. self-sufficient in feed grains without those cereal substitutes coming in.
The report suggests a greater degree of freedom for imports of cereal substitutes. Without considering the consequences I have mentioned. But my greatest criticism of the report is that such a policy is totally contrary to the CAP. While I accept that the CAP is far from perfect, this suggestion, or the suggestions in this report, completely and utterly destroy the basic concept, and worse still—and I am sorry to say it—put nothing in its place.
Your Lordships may gather that I am somewhat critical of this report, but it does not diminish my respect for the work and thought put into it by your Lordships' committee. Its controversial nature at least takes my mind off the wet weather. As the noble Lord, Lord Cledwyn, has known me all my life, though I have not known him quite all his, I am sure your committee will understand that I am not being particularly spiteful when I say that I hope its conclusions are not accepted.
7.20 p.m.
Lord Oram: My Lords, the noble Lord, Lord Stanley of Alderley, said that farmers—whose spokesman he eloquently is—are very good and do as they are told. It has been my experience in another place and here that they are very expert in making sure that they are told to do just what it is they want to do. I take a very different view from the noble Lord, Lord Stanley, about the report that we are debating. In particular, I think that it is a very good illustration—especially when we include the lucid speech of my noble friend Lord Cledwyn of Penrhos—of the great value of the work of the European committee and its subcommittees, not least because the committee procedure gives a full opportunity both for those with expert
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knowledge, such as we have heard on all sides in this debate, and laymen, such as I certainly confess myself to be on this particular question, to make contributions to the unravelling of these difficult problems.
On the question of manioc, let me admit that my only direct personal knowledge derives from the tapioca pudding that my mother used to make. As to the more abstruse statistics and analysis of the manioc situation in the report, I approach the matter without expert knowledge. However, it is clear to me, and I believe that it must now be clear to your Lordships from what we have read and from what we have heard in the debate, that there is here a very serious issue at stake, particularly—and this is the point that interests me—for the country of Thailand, and I believe it behoves us as a House to say so clearly, both to our own Government and to the powers that be in Brussels.
I do not propose to attempt more than to set this technical report against a non-technical background and to examine briefly just a few of the general principles which seem to me to be raised. The first part of the background against which I think that this proposal should be seen is the contrast between, on the one hand, the general propositions of the Treaty of Rome and its basic premises in favour of competition and freedom of trade, and, on the other hand, the restrictive practices which have emerged, particularly in relation to agricultural production. We have in the case of manioc a proposal to restrict its entry simply because it is an unwelcome competitor to some of Europe's farming interests.
Lord Mackie of Benshie: My Lords, will the noble Lord give way? I think that the freedom of trade talked about in the Treaty of Rome is a freedom of trade within the Community. The basic concept of the CAP—and we must not forget it, even if we dislike it—is that the Community has protection from outside.
Lord Oram: My Lords, I accept a good deal of what the noble Lord has said, but I am pointing to the fact that there is a contradiction of philosophy within the Treaty of Rome itself and the practices which have emerged in relation to the CAP. Of course, the whole of the common agricultural policy is subject to the criticism that I have made, but this is not the time for us to go into the general question. We have examined that through an earlier report produced under the chairmanship of my noble friend Lord Cledwyn.
Whatever may be our views about the CAP, I believe that we are entitled to insist that, so far as practicable, there should not be any unnecessary extensions of the restrictions, particularly when the well-being of third world countries is at stake. What is proposed in the principles of the agreement that we are asked to endorse would, as has been made clear by my noble friend Lord Cledwyn and others, have a detrimental effect on the basic economy of Thailand. Indeed, as the noble Lord, Lord Sainsbury, pointed out in his speech—with which I thoroughly agreed and which I admired—in paragraph 44 of the committee's report it is asserted that the restriction of imports of manioc (if we start along that road) will compel at later stages resort to an ever-widening series of restrictive measures.

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My second point is that, despite the criticisms that have hinted at about the CAP and the EEC in that respect, I am a firm admirer of much of the EEC's policies towards the third world. They do not go far enough by any means in my judgment, but what they do is soundly based. I particularly have in mind the STABEX scheme, which ensures that primary products from a wide range of third world countries are subject to the Lomé Convention's indexing arrangements, with compensatory payments to cushion those countries' economies from the vagaries of world commodity markets.
It seems to me regrettable, since the EEC has a good record in respect of its STABEX scheme, that it should now propose a quite contrary policy in respect of the import of manioc from Thailand. As my noble friend Lord Bishopston has pointed out, the evidence from the Overseas Development Institute expressed the view that this episode reflects badly on the EEC, and I think they had in mind that hitherto, as I have said, the EEC's policy in relation to developing countries has been a good one. I recognise that the proposed agreement includes some attempt to compensate Thailand, but, frankly, I doubt the wisdom of first creating a problem for a country and then trying to overcome it. In any case, in my judgment, more harm will be done to the Thai economy by the exclusion of their product than could be offset by the proposed compensation.
The proposed restriction is specific and the promise of compensation is, I would suggest, distinctly vague. The expression is that, "the EEC will do its utmost to provide financial assistance". That is a term of art that I have recognised on many earlier occasions in relation to the proposed 1 per cent. of GNP contribution that the United Nations set as a target for overseas aid programmes. In our own country the Government in which I had the privilege to serve as well as the present Government very often approach that 1 per cent. with terms of art such as, "do its utmost" and "make best endeavours". While the restriction is so specific I should like to see the compensation arrangements equally specific.
The noble Lord, Lord Mackie, made the point in his speech that it is dangerous for the Thai Government to rely as regards their agriculture so very much on one particular product. I would agree. It is a problem that is also to be found in other agricultural economies in other developing countries, be it cocoa in West Africa sugar in Mauritius, coffee in Kenya or copra in the Pacific islands. There is a widespread problem of economies relying on one commodity. I agree that long-term there is a need for their agricultural economies to be diversified. But surely we do not deliver a short-term blow at their economies and then promise them some long-term rectification of the damage that we have done.
Lord Mackie of Benshie: My Lords, the noble Lord has extraordinary courtesy in giving way. He has slightly taken my argument the wrong way. The single culture idea is, of course, very dangerous, but in this case much more dangerous than cocoa and copra, which we do not grow in this country. The point that I was making was that this is a substitute
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that we are taking in against the general policy, which is to be self-sufficient in barley, which is what it replaces. That makes it more dangerous.
Lord Oram: My Lords, I was looking at it from the point of view of the economies of the developing countries, and I think that there is a justified parallel in the instances that I have given.
It seems to me that the proposed directive which we are now considering really runs directly counter to all progressive thinking about the relationship between developing and developed countries. A theme that runs through the latest world development report, issued by the World Bank, is that industrialised countries need to keep protectionist measures under control and that they need to keep their markets open in order to help poorer countries. This theme is, of course, also a main part of the analysis of the Brandt Report, which is to be examined by Heads of Government at Cancun in Mexico tomorrow and the day following. It is also the considered view of almost all specialist bodies in this field of the welfare of developing countries, and notably, in connection with this particular report, the wise opinion of the Overseas Development Institute, which gave evidence to the committee and expressed itself in that forceful paragraph which both my noble friend Lord Bishopston and the noble Lord, Lord Sainsbury, quoted with such effect. As I say, what the EEC proposes to do in this connection runs counter to a great deal of really expert and honest opinion.
In the light of all this authoritative opinion, I suggest that we cannot let this proposed agreement pass without firmly endorsing—as I certainly do—the conclusions which the committee of the noble Lord, Lord Cledwyn, has reached, in examining this question and particularly the manioc situation.
7.33 p.m.
Lord Walston: My Lords, at the outset I should like to thank the noble Lord, Lord Cledwyn of Penrhos, not only for initiating this debate in such a clear manner, but for presiding over the work of the subcommittee, keeping us all in order—even the most difficult members of the sub-committee—and at the same time keeping his temper and enabling us to keep ours.
I support the conclusions of the committee. I believe them to be right; I believe them to be correct. However, that does not mean to say that I do not have a great deal of sympathy for the attitude of the noble Lord, Lord Stanley of Alderley, concerning the plight of the arable farmer. Some of your Lordships may know that I am one myself. So some may think that I speak with a certain amount of knowledge; others may think that I speak with a certain amount of prejudice. However, although without any doubt in the past years cereal farmers have, by and large, had a good time of it, that has been due in very large measure to the exceptionally high yields which have been obtained, which, in turn, are due both to the skill of the seed breeders and the experts, but largely to the climate. That profit has been gradually, but not very slowly, eroded by an inflation rate running at about 18½ per cent., with an increase in prices averaging about 4½ per cent. Therefore, even the

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very substantial margins which some of us enjoyed two or three years ago are now very close to disappearing, and in certain cases have already disappeared.
Therefore, I do not think that we can solve this problem simply by pushing the matter back and saying,"Let us have lower cereal prices and then everybody will be happy". That is no solution at all. I would just say to the noble Lord, Lord Stanley of Alderley, that so far as I know, nowhere in this report do we recommend that cereal prices should be lowered. In the last sentence in paragraph 45 it is stated:
"One method of dealing with such difficulties as may exist could be to fix support prices at lower levels …".
That is very different from saying that the best method, the only method, would be to fix prices. We had a certain amount of argument over that in the committee, as the noble Lord, Lord Cledwyn, will remember. So there is certainly nothing in this report which suggests or states that lower cereal prices are the answer to this problem.
I should like to deal briefly with the attitude taken by the noble Lord, Lord Mackie of Benshie. He praised the writing of the report; he praised its formation; he even praised the colour of its cover, which he said was blue. Mine happens to be red; I find that a more attractive colour. I hope that this is not a presage of any split that may jeopardise the result in Croydon tomorrow. The contents—whether they be in a blue or red cover—of our two reports are the same.
The noble Lord, Lord Mackie, took what I can only call a Luddite attitude towards this: we must not allow any new techniques, any new methods, any new materials to alter the existing balance, even though it may bring about increased efficiency, even though the price of feedingstuffs may be lower as a result of using, in this case, manioc; we must resist that because we have to protect our existing producers of cereals. It is exactly the same argument which was used in the days when the butter mountain was at its height: we must prevent people from buying cheaper margarine because, if we allow margarine to come in at lower prices or to be manufactured here at lower prices, the butter mountain will rise still higher. It has been used to keep out isoglucose—a new method of producing sweeteners—which will enable the consumer to have his or her fizzy drinks sweetened at a cheaper price than if sugar were used.
We cannot allow that sort of attitude to influence the overall workings of the common agricultural policy. Of course we need long-term, steady protection, but not the sort of protection which rigidly excludes the new techniques and the new materials which will make the overall industry of agriculture more efficient and which will benefit the consumer by lower prices. After all, if this attitude had been taken some time ago, I rather doubt whether the noble Lord, Lord Mackie of Benshie, would have gone along with it. It could well have been said that French wine is a competitor of English beer, which is made of English barley, and in order to protect the barley growers of England we must keep out claret; or, that French cognac is a competitor of Scottish whisky, also using barley, so in order to protect the barley growers we must not allow any cognac to come into this country. I do not think that the noble Lord would have taken
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exactly the same view had that arisen for the Select Committee to investigate.
Lord Mackie of Benshie: My Lords, I am sorry to keep interrupting, but I am being attacked. If the noble Lord takes that view it is slightly illogical then that we simply do not take the levy off imported barley and bring a little competition into it that way. What I object to is the total inconsistency of levying highly on imported barley, but a substitute you let in at nought or 6 per cent.
Lord Walston: My Lords, I know that is what the noble Lord expounded at considerable length with great fluency and persuasiveness earlier on in his speech. I was suggesting that the analogies I have given were not all that far-fetched. We must ensure that the Community is not restrictive in its world trading, and the proposals for those who wish to keep out manioc are undoubtedly restrictive; they are undoubtedly a blow against the third world and a blow against the general trading with the third world and improvement of conditions within the third world.
Perhaps the position of manioc in the Thai economy has got a little out of proportion. I had the opportunity of visiting Thailand in another capacity last month, during the Recess. While I was there I took the opportunity of talking with many people—the Minister of Agriculture, the Minister of Finance, the Minister of Industry, the head of the EEC delegation—and of visiting the North-East, which is the centre of the area in which manioc is grown, and has increased by the largest amount.
My noble friend Lord Sainsbury is absolutely right in recounting the merits of manioc as a crop. Is it growth suitable for that climate, and so on. The noble Lord, Lord Mackie of Benshie, is absolutely right in pointing out its drawbacks. It is bad for the soil. It puts very little back into it; far less than it takes out. It leaves it uncovered. It encourages erosion. But the important thing about manioc in this particular area is that its cultivation has increased enormously from about 1970.
Ten years ago the total exports of manioc from Thailand were 50,000 tonnes. Today, as we have heard, they are something over 500,000 tonnes. The great part of that increase has come in this particular area—not all of it, but the great part of it—of the North-East of Thailand. It has come partly from abandoning rice cultivation and growing manioc instead. About half the increase has come from that. The other half has come from cutting down trees, particularly the very valuable teak trees, and clearing the land and growing the crop on that cleared land.
This is giving great worry to the Thai Government and the Thai authorities because it is encouraging erosion, it is depleting fertility, and it is in fact already appearing to begin to change the actual climate of the area in reducing the rainfall, with devastating effects, if this continues, on the rice cultivation. So the Thai authorities themselves are just as anxious as anybody to move the farmers back into rice cultivation, which is already beginning to happen not through any action of the Community but simply by the force of market circumstances. The price has dropped significantly; the costs of transport and of handling have increased,

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and so the returns to the Thai farmer have diminished very substantially and he is now moving back towards rice cultivation.
That makes the situation easier. It does not alter the principle of the matter one iota. Therefore, I would suggest that while we are perfectly right in turning our faces against any move to prohibit the importation of manioc, or even to diminish it, any help that can be given, as is indeed being given by Brussels, to the Thai Government to diversify its crops, to find alternatives to manioc, and help it to move back into what its own experts consider to be a more balanced form of agriculture, will be very much to the advantage of Thailand, and incidentally will reduce the amount of manioc which is incorporated into the feedingstuffs in the Community as a whole.
What effect that will have on the price of feedingstuffs is another matter. My own guess is that it will have only a minimal effect. After all, the total amount consumed even at its peak was 5½ million tonnes. If that comes down to 4½ million tonnes the price differential will not be all that great, and, as we have heard, it is largely the German and Dutch compounders who make use of it, and the United Kingdom compounders to a very much smaller extent. Therefore, I do not think we need be too worried about that situation.
I shall repeat only once more my approval and support of this report and its conclusions, and to repeat again, because it is worth repeating, the overall need for us in the Community not to build a wall round "Fortress Europe" and keep out the products of foreign countries when they are likely to be permanent and cheaper, and to the advantage not only of the third world but of ourselves and of our own industry.
7.47 p.m.
Lord Mottistone: My Lords, I shall be brief. Like the noble Lord, Lord Walston, I should like first to congratulate the noble Lord, Lord Cledwyn, for his splendid chairmanship of Sub-Committee D, which is a pleasure to enjoy and indeed to be disciplined by, and also for the most clear way in which he introduced what is really quite a complicated subject. In fact, if I might say so, no other noble Lord has put it so clearly since. I should also like to extend my warm congratulations to the noble Lord, Lord Mackie, for the statesmanlike way in which he presented his case. It is so very different from how he presents his case in Sub-Committee D.
I shall not delay your Lordships because the main substance of what I have to say was, as is so often the case, said so skilfully by the noble Lord, Lord Sainsbury. If in due course you come to read the Official Report and you see what the noble Lord, Lord Sainsbury, has said you can imagine that I would have said it if he had not done so first. I am left therefore with two main ques ions which perhaps my noble friend the Minister might consider answering. They have stuck out strongly in the whole debate, and have not been really answered by subsequent speeches.
First, what is being done about the problems of Northern Ireland, so eloquently expressed by my noble friend Lord Brookeborough? It does not seem to me that we have got an answer. What this report which we
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are debating attempts to do is to push things in the direction of solving the problems of Northern Ireland, but of itself it does not. We took evidence on this at one stage during the past year. I am concerned that the whole balance of the Common Agricultural Policy and the effectiveness of this policy seem in various ways to be biased away from Northern Ireland. I feel that this is a real problem which the British Government should take up very forcefully, and I hope that my noble friend the Minister will be able to tell us they are doing so. Article 39 of the Treaty of Rome applies just as much to livestock farmers as to cereal producers, though from listening to my noble friend Lord Stanley of Alderley one would have thought that, somehow, livestock farmers were a lesser breed and excluded from Article 39.
Lord Stanley of Alderley: No.
Lord Mottistone: My Lords, my noble friend says, "no", but when he comes to read what he said, he will see that that is the sense one got from his remarks. I should therefore like reassurance that livestock farmers are ordinary people and just as worthy of receiving all the benefits from Article 39 of the Treaty of Rome as any other sort of farmer. If they ate, then the report which we are debating will be seen to have more sense to it than was implied by my noble friend.
Lord Stanley of Alderley: My Lords, if I made such a remark, it was certainly not my intention to do so. I think I said that both should be treated equally and that you do not make one rich by making the other poor. Certainly Article 39 applies to both.
Lord Mottistone: I am grateful to my noble friend, my Lords, and I am glad he has had an opportunity to correct what he said earlier. Perhaps the Minister will now give us the great wisdom he has to contribute to the debate.
7.51 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, I should hate to disappoint my noble friend Lord Mottistone after his offer that I should contribute wisdom to the debate; I do not know that I have ever contributed wisdom to anything, but I shall do my best to answer the points that have been made and put the Government's point of view on the subject. One would not think that a debate on cereals substitutes was necessarily the most stimulating of subjects on which to have a discussion, but it is extremely interesting, and we have had a fascinating debate in which a number of noble Lords have, fortunately, not always taken the same point of view.
We congratulate the noble Lord, Lord Cledwyn, and his committee for what they have done in producing this report, because they have painted a very clear picture of the issues which are raised by the European Commission's proposal for restricting imports of manioc and for identifying what issues would arise if the Community at some stage proposed to take action to control imports of the other so-called cereals substitutes. This is not the easiest of problems to

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analyse, but as usual Sub-Committee D has come out with a trenchant document and has put the matter most clearly, and for that not only the Government and your Lordships but many others throughout the agricultural world will be very grateful.
Being one who, basically, likes to find himself in a fairly harmonious existence with other people, I always like it when the department which I have the privilege to serve at the moment is in agreement with your Lordships' committee, and I do not like to find any cause for dissent. But, of course, the members of the committee were at odds with each other because of the presence of the noble Lord, Lord Mackie—I am sure the noble Lord will not take offence when I say there was nothing new in that—and he did his best this evening to make sure that your Lordships were at odds with each other as well. But, when the noble Lords, Lord Walston and Lord Mackie, had a discussion as to the relative benefits of claret and beer, I thought that that was going slightly wide of the mark, although I saw a scintilla of a thread of a connection. Nevertheless, I enjoyed the almost empirical judgment of Lord Mackie on the conclusion of the report, when he said, rather, I thought, as a teacher might have said to a schoolboy, "Wrong is wrong and right is right."
Before I explain to your Lordships what views the Government hold on the main issues, perhaps I may first recall the reasons why there is mounting concern in the Community about cereals substitutes and about manioc in particular, and I agree with the noble Lords, Lord Cledwyn and Lord Bishopston, that cereals substitutes are not inferior. There is nothing synthetic about them, rather like plastic sausage skins; they are entirely wholesome. Manioc is, as your Lordships know, the root of the tapioca plant, which in tropical countries is used for human food, but it can also be used as animal feed. It is also known as cassava.
Manioc was of little importance as an animal feedingstuff 10 years ago. Imports into the Community have increased from about 1¼ million tonnes in 1969 to between five and six million tonnes in the last year or so. The attraction of manioc is not that it has special nutrient value; it is almost pure starch or energy and it actually contains much less protein—2 to 3 per cent.—even than feedgrains like barley, which contain 9 to 11 per cent. It contributes nothing, therefore, to remedy the Community's shortage of protein. In fact it makes it worse because you have to import proteins to balance up against the manioc which has none, or virtually none. Its attraction is simply that it is not subject to the Community's cereal levy system which applies to imports and which is variable. Manioc pays a much lower and fixed import charge. It can, therefore, be imported into the Community much more cheaply than grain.
Imports of manioc at the present level have a significant effect on the Community's budget because if manioc is used in place of maize, the Community loses revenue, which is the difference between the rate of levy on maize and the much smaller import charge on manioc. If, alternatively, manioc is used in place of home-produced grain such as wheat or barley—and here I agreed with the noble Lord, Lord Mackie—the wheat or barley which is not used then has to go for export, and the Community budget incurs higher expenditure on export refunds. On the assumption
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that the main effect was on exports, my department's officials estimated in their evidence to the committee that the net cost to the Community budget might be about £150 million. The Commission have recently come up with a much higher estimate of about £280 million. This may be rather exaggerated, but it is clear that the cost is very substantial.
In addition, there is something in the argument—quoted, but somewhat dismissed, in paragraph 38 of the report—that, in so far as manioc replaces barley it makes it more difficult to maintain a stable cereals market in the Community. It is not always easy to find outlets for barley on the world market; but unless exports can be kept flowing, the market price in the Community may fall below the support level, and there will then be excessive sales into intervention, with a resulting cost to the budget and to national exchequers. We have seen this in recent seasons and it is a problem which affects the United Kingdom particularly, as a quarter of the Community's production of barley is in this country.
Then there are fears that the use of manioc, which has up till now been concentrated much more in some parts of the Community than others, may be giving an advantage to livestock producers in those areas over their competitors for whom manioc is not readily available. At different times livestock producers in this country and France have voiced this complaint.
Those, then, are the main concerns and I have related them to manioc, for it is there that the case is much stronger. My noble friend Lord Brookeborough referred to this, as did my noble friend Lord Mottistone, and Lord Brookeborough correctly drew attention to the differing prices of barley in Northern Ireland and East Anglia. He drew attention to the fact that conditions in Northern Ireland are very hard. I accept that entirely. I know that because of the special position of the livestock industry in Northern Ireland the incentive to take up cheaper feedingstuffs, such as manioc, may be even stronger there than in other parts of the United Kingdom. But the proposed agreement on manioc should not deny Northern Irish buyers the supplies that they want—
Lord Davies of Leek: My Lords, may I interrupt the noble Earl? I do so after exercising great control, since I did not put my name down to speak in this fascinating debate, in which no one has mentioned the consumer. I read all the report carefully. Can the Minister say what effect on the consumer the manioc position is creating?
Earl Ferrers: My Lords, if I may, I shall come to that point when I have finished dealing with the Northern Ireland problem. I thought that the noble Lord, Lord Davies of Leek, had temporarily transposed himself from Wales to Northern Ireland.
If I may continue to speak about the Northern Ireland position, I would say that the proposed agreement on manioc should not deny Northern Irish buyers the supplies which they want. The evidence is that even this year less than 100,000 tonnes of manioc will have been imported into Northern Ireland. Under the proposed terms the Community could still import from Thailand and elsewhere more than 5 million

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tonnes a year. That should leave ample room for imports into Northern Ireland to be maintained at recent levels, though we should remember that of course when sterling is weaker than it was earlier this year manioc might not be so attractive for our compounders in relation to other feedingstuffs.
The noble Lord, Lord Davies of Leek, asked what would be the position with regard to the consumer, and I think that the noble Lord, Lord Cledwyn of Penrhos, referred to this, too. In my judgment the position is one that would not affect the consumers greatly. The greatest effect which the introduction of a lower priced—if it is lower priced—cereal would have would be that the resultant carcase would be cheaper to produce. In that respect it would be likely to benefit the farmer more than it would benefit the consumer because of course the consumer pays the price at which the animal is purchased on the open market, which does not reflect the cost incurred in producing the animal.
The report rightly brings out the fact that similar arguments have been advanced in relation to quite a wide range of other so-called cereal substitutes. I very much agree with the Committee that the term "cereal substitutes" should be treated with great caution, for it has come to be used for a variety of different products with different properties—products of very different importance to the Community market, and with differing significance for the Community's international trading relations. Both the Commission and the French regularly use the term "cereal substitutes" to cover not only manioc but other non-cereal feedingstuffs, such as the residues from maize starch manufacture, which is known as "maize gluten feed", the by-products of the milling of wheat and other grains, citrus pulp, and molasses. All of these are referred to as "cereal substitutes", and yet the term is sometimes extended even to the residues of oilseed crushing, such as soya bean meal, which are certainly an important ingredient in feed rations but which in no normal sense could be considered as substitutes for cereals.
The noble Lord, Lord Mackie, referred to maize gluten feed as well as manioc as substitutes for cereals. I agree that manioc may be a substitute, but maize gluten is not, because that has 20 to 25 per cent. of protein, and the Community needs that. That is very different from manioc, which has under 2 per cent. of protein, and therefore I think that the noble Lord was making an error when he combined the two—
Lord Mackie of Benshie: My Lords, what I meant to say was that maize gluten, with the increased manufacture in certain countries of what I understand is called gasahol, might become an element which would be a danger to the Community policy in the future.
Earl Ferrers: My Lords, we should have the distinction that maize gluten and manioc cannot be associated together as similar properties. If these different cereal substitutes have anything in common, it is that with the exception of manioc (and molasses), they mostly contain a significantly higher percentage of protein than any cereals. The Community cannot meet the protein
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requirements of its livestock from home-produced feed, and it is therefore bound to import protein in some form. Therefore, it is not surprising if the livestock industry seeks to meet some part of its requirement for protein with the by-products of other industries, when these can be obtained at relatively low prices. Manioc is, therefore, alone among the so-called substitutes in contributing nothing towards meeting this shortage of protein. Thus it can be considered apart on that score.
Then again some, but not all, of the products concerned are imported into the Community at low import charges which are bound under the GATT. If the Community wished to vary these arrangements, it would have to enter into formal negotiations, and it would need to offer compensation to the supplying countries, or else risk retaliation by them. Those are the rules of the game, and they are important points to bear in mind.
Having drawn the picture of the problems as best I can, I should like to turn to the proposals that have been made. The noble Lord, Lord Bishopston, asked me to explain what "putting a lid on the top" means, and perhaps he will find that by the time I sit down I shall have explained it to him. The Commission has been instructed by the Council of Ministers to pursue negotiations with the countries from whom the Community imports manioc, with a view to setting some limits to that trade—the lid on the top. By last November the Commission had negotiated a draft agreement with Thailand, the country which in recent years had accounted for 85 to 95 per cent. of Community imports. The terms of the agreement were approved by the Council in the following month. It has not yet been formally signed, because it commits the Community to reaching parallel agreements with other supplying countries in order, quite understandably, to prevent them from moving in and taking advantage of the reduction in supplies from Thailand, and agreements with these other countries, such as Indonesia and Brazil, have not yet been negotiated. The Thai Government have said, however, that they will observe the terms of the draft agreement during 1981. So, evidently, they are content with their side of the bargain, provided that other suppliers accept equivalent restraints.
The effect of the agreement with Thailand, if it is concluded, will be to reduce the Community's imports of manioc over a period by perhaps 1 million tonnes. Even so, they should continue at a level which will be very much higher than had ever been reached until about three or four years ago.
The noble Lord, Lord Oram, was concerned that the agreement runs counter to attitudes which ought to be held and which are held towards developing countries. I take the noble Lord's speech as being very serious and very important, because without question we in the developed countries, and indeed the Community, have a responsibility towards developing countries, which we recognise and which we must accept. The noble Lord, Lord Oram, said that the Community is only obliged to do its utmost to provide assistance, and he did not feel that that was a very cast-iron assurance. I understand that that form of words is not unusual in international agreements and that the

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only doubt is that the specific amount of aid has not yet been agreed. The fact of the aid is not, I understand, in doubt.
My Lords, concern was expressed by the noble Lord and, indeed, by others that these proposals would deprive a developing country of a lucrative line of trade, but your Lordships will have noticed from the report that Thailand would be compensated by this aid for any loss of trade, and this does appear to be welcomed by Thailand. There are sound agricultural reasons for their attitude; and I am bound to say that I agree with the noble Lord, Lord Mackie, in his view and disagree with the noble Lord, Lord Sainsbury, if I may say so, because manioc production imposes severe stress on the land and it is not desirable for the long-term health of Thailand's agriculture that manioc should be grown too extensively or too continuously. The aid which is being offered by the Community for projects to diversify Thailand's agriculture is therefore in the best interests of Thailand's long-term agriculture.
Concern has been expressed that the cost of compensation might outweigh any possible gain to the Community's cereals budget. I think that that is probably also misplaced. It is true that the exact amount of aid to Thailand has not yet been settled, but provision for it would be found from the budget provision for aid to non-associated countries, which is large. It is about £85 million for 1981 and there is £120 million in the draft budget for 1982. It is to be expected that any new aid for Thailand under the manioc proposals would be found from this provision, which is already allocated under this budget heading, and that it would not mean higher total spending than would otherwise have occurred.
On the other side of the account, there could be distinct advantage for the Community budget if a limit were set to the imports of manioc. I respectfully think that possibly the Committee might have given too little weight to the prospect of this. I have already referred to the estimates that at current levels these imports cost the budget something in the region of £200 million a year. The proposals might reduce that, but, even if they did not, it would clearly be sensible to set a limit upon what is a fast-growing cost to the budget; and, in conjunction with the other efforts which are being made in order to contain expenditure on the common agricultural policy, any steps to limit an item of expenditure of this size must be regarded as worthwhile.
I know that the noble Lord, Lord Sainsbury, could not help taking his usual swipe at the CAP. He said that this brings the common agricultural policy into disrepute. My Lords, I do not think it is really quite as bad as that. He said, as indeed he always does, that the price of cereals is too high and that therefore we ate now producing surpluses, insisting that that was bad. The robust exposition by my noble friend Lord Stanley of the problem of cereal farmers was not totally inappropriate because, in a world which is short of food, if the European Community can contribute to alleviate that, that must be good. But, of course, the harm comes if such a disposal makes massive inroads into the common agricultural policy budget. That is the difficulty, and that is the balance which one has to try to get right. I agree with the
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noble Lord, Lord Bishopston, that our relations with developing countries should, where possible, be in the form of trade and not aid, and, if I may say so, he is quite right to refer to the Brandt Report and to underline the points which his noble friend Lord Oram made about this sensitive and highly important matter of aid and help to developing countries.
In paragraph 43 of their report the committee suggests that one reason why a limit on manioc imports might not bring budgetary savings is that it could lead to increased imports of some other substitute product rather than increased usage of Community-produced cereals. I rather doubt whether this would happen. As I have already said, the other so-called substitutes are not direct replacements for cereals in the same way as manioc. Moreover, all those which are currently imported by the Community are by-products of other processes—of flour milling, starch production, sugar manufacture and so forth. Output of the byproduct is determined by demand for the main product, and it would not therefore be increased in response to the modest reduction in manioc supplies for which the draft agreement with Thailand provides.
It will be clear to your Lordships from these remarks that Her Majesty's Government see much more of advantage than of disadvantage in what has been proposed on manioc. Clearly it is necessary—and I recognise it—to tread carefully where the interests of developing countries are concerned, and I fully understand and appreciate the concern which has been correctly expressed tonight on that issue. But I hope that I have explained why we do not think the proposals on manioc would be damaging to Thailand in the long run, or to the other suppliers; they would merely represent an attempt by the Community to set some moderate limits to a trade which has started to grow and produce problems.
If I might refer to the other so-called cereals substitutes, I would say only this. I explained that it is misleading to regard most of these as mere substitutes for cereals. They have other properties, notably a protein content, which cereals cannot match and which the Community badly needs. For that reason the Government do not see the same case for action on these other products. We share the view of the committee that the interests of the livestock sector come first here; that any proposals for constraining trade in maize gluten feed, in wheat brans or in other so-called substitutes should be looked at very cautiously indeed; and that tariff barriers should not be erected unless there is a real need for them. This is a view which many, though not all, of our Community partners share. I can assure your Lordships that the Government will continue to bear the interests of the livestock industry at heart—very much so—where this trade is concerned.
I should like, if I might, to end on a note of agreement with your Lordships' committee. It has quite rightly been said that underlying all the controversy about trade in cereals substitutes is the level of prices which the Community maintains for cereals themselves. The combination of a wide gap between the price of grain and other feedingstuffs on the world market and inside the Community, and the current recession through which the livestock industry is going, has spurred livestock feeders to look for any

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alternative to high-cost grain. If Community grain prices were closer to those on world markets—and here I know I carry the noble Lord, Lord Sainsbury, with me, even if I get stick from my noble friend Lord Stanley behind me—many of the problems we have been discussing tonight would disappear. The Government are conscious of this, and we sought in the last CAP price review to obtain a better balance between support prices for grain and livestock. We had some success in the settlement of prices for the current year, and we shall continue to give full attention to this in the next review.
8.18 p.m.
Lord Cledwyn of Penrhos: My Lords, we have had a constructive debate on the report, and I am grateful to all noble Lords in all parts of the House for the speeches they have made and for the kind things they have said about the report which Sub-Committee D has produced. I am also grateful to the noble Earl the Minister for the speech he has just made in which he explained the attitude and policies of his department towards this subject.
I was disappointed in his attitude towards the report when lie says that he and his right honourable friend and the Government are proposing to support this negotiation which will result in a reduction of manioc exports from Thailand by 1 million tonnes. I say to him that 1 million tonnes is not particularly significant as far as the Community is concerned but for the people of Thailand the reduction of 1 million tonnes may be very serious indeed. In these negotiations which he says the Government of Thailand are likely to agree to I hope that consideration will be given to the arguments advanced by the Government of Thailand; because the one thing that the committee did not receive and the one piece of evidence which the Minister of State was unable to give to the House was the attitude of the Government of Thailand towards these negotiations. While I and the House will appreciate the contribution of the noble Earl, there are certain matters in it which, if the time were available, I should like to analyse; but no doubt at some stage the opportunity will arise again in Sub-Committee D.
I am grateful to my noble friend Lord Bishopston for his contribution, and also I should like to refer in particular to the speech of my noble friend Lord Walston following his visit to Thailand. I thought that that was an interesting and valuable speech. I trust that the Government will take note of what he said and possibly make sure that a full report of his visit to that country will be made available to officials in the Department of Agriculture.
My Lords, I turn now to the two dissidents and, first, to the noble Lord, Lord Mackie of Benshie, who made the forceful speech that I expected but showed his unwillingness to be converted on the road to Bangkok, as it were. I hope that he will think again about this. I think that he and the noble Lord, Lord Stanley of Alderley, are unduly sensitive about the recommendations of the sub-committee. The noble Lord, Lord Stanley, said that I had known him for longer than he had known me. My Lords, the margin was very small. He is, as I know, a most efficient, practical farmer
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himself and when he speaks on agriculture in this House he is always worth listening to. On this occasion he must remember that if we temper the wind to the shorn lambs of Thailand, this will not affect the fat lambs of Anglesey. What we are proposing for Thailand in this instance is something very small against the background of the resources of the Community, but something very important to them.
Therefore, my Lords, I believe that this has been a valuable debate, but I think also that we shall come back to it from time to time because there are implications in this report in relation not only to manioc but to all the other so-called cereal substitutes which are of importance to British and Community agriculture.
On Question, Motion agreed to.

Companies (No. 2) Bill [H.L.]
Returned from the Commons agreed to with amendments; the said amendments to be printed.
  THE SELF-EMPLOYED: HEALTH CARE ABROAD
  THE SELF-EMPLOYED: HEALTH CARE ABROAD
  WELFARE RIGHTS OFFICERS: DEPLOYMENT
  WELFARE RIGHTS OFFICERS: DEPLOYMENT
  SOCIAL SECURITY BENEFITS: PERCENTAGE UPRATING
  SOCIAL SECURITY BENEFITS: PERCENTAGE UPRATING
  NUCLEAR AND CHEMICAL WARFARE: BMA INQUIRY
  NUCLEAR AND CHEMICAL WARFARE: BMA INQUIRY
  SUPPLEMENTARY BENEFIT SCALE RATES
  SUPPLEMENTARY BENEFIT SCALE RATES
  EL SALVADOR: FRENCH/MEXICAN GOVERNMENT DECLARATION
  EL SALVADOR: FRENCH/MEXICAN GOVERNMENT DECLARATION
  BUSH HOUSE HEALTH HAZARD
  BUSH HOUSE HEALTH HAZARD
  PROHIBITION OR RESTRICTIONS OF CERTAIN CONVENTIONAL WEAPONS: CONVENTION RATIFICATION
  PROHIBITION OR RESTRICTIONS OF CERTAIN CONVENTIONAL WEAPONS: CONVENTION RATIFICATION